Exhibit 10.2

 

EXECUTION VERSION

 

PLACEMENT AGENCY AGREEMENT

 

November 14, 2017

 

Raymond James & Associates, Inc.

277 Park Avenue, Suite 410

New York, New York 10172

 

Ladenburg Thalmann & Co. Inc.

277 Park Avenue, 26th Floor

New York, New York 10172

 

Ladies and Gentlemen:

 

Leap Therapeutics, Inc., a Delaware corporation (the “Company”), proposes,
subject to the terms and conditions of this Placement Agency Agreement (the
“Agreement”) and the Purchase Agreements (defined below), to issue and sell to
certain institutional investors (each, a “Purchaser” and collectively, the
“Purchasers”) (i) up to an aggregate of 2,958,094 shares (the “Shares”) of the
Company’s common stock, par value $0.001 per share (the “Common Stock”), and
(ii) 2,958,094 warrants (the “Warrants”) to purchase up to an additional
2,958,094 shares of Common Stock.  The shares of Common Stock issuable upon
exercise of the Warrants are referred to herein as the “Warrant Shares.”  The
Shares and the Warrants are referred to herein, collectively, as the
“Securities.”  The Company desires to engage Raymond James & Associates, Inc.
and Ladenburg Thalmann & Co. Inc. as the placement agents in connection with
such issuance and sale of the Securities.

 

The Company hereby confirms its agreement with you as follows:

 

Section 1.              Agreement to Act as Placement Agent.

 

(a)             On the basis of the representations, warranties and agreements
of the Company herein contained, and subject to all the terms and conditions of
this Agreement, Raymond James & Associates, Inc. and Ladenburg Thalmann & Co.
Inc. shall be the Company’s exclusive placement agents (in such capacity, the
“Placement Agents”), acting on a reasonable best efforts basis, in connection
with the issuance and sale by the Company of the Securities to the Purchasers in
a private placement exempt from registration under the Securities Act of 1933,
as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof, with the
terms of the offering to be subject to market conditions and negotiations among
the Company, the Placement Agents and the prospective Purchasers (such offering
shall be referred to herein as the “Offering”).  As compensation for services
rendered, and provided that any of the Securities are sold to Purchasers in the
Offering, on the Closing Date (as defined in Section 1(c) hereof) of the
Offering, the Company shall pay to the Placement Agents an amount in the
aggregate equal to 2.2% of the gross proceeds received by the Company from the
sale of the Securities (the “Placement Fee”). The Placement Agents will not
receive any fees in connection with the exercise of the Warrants. The sale of
the Securities shall be made pursuant to purchase agreements in the form
included as Exhibit A-2 hereto (each, a “Purchase Agreement” and collectively,
the “Purchase Agreements”) on the terms described on Exhibit B hereto.  The
Company shall have the sole right to accept offers to purchase the Securities
and may reject any such offer in whole or in part.

 

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(b)             This Agreement shall not give rise to any commitment by the
Placement Agents to purchase any of the Securities, and the Placement Agents
shall have no authority to bind the Company to accept offers to purchase the
Securities.  The Placement Agents shall act on a reasonable best efforts basis
and do not guarantee that they will be able to raise new capital in the
Offering.  The Placement Agents may retain other brokers or dealers to act as
sub-agents on their behalf in connection with the Offering, the fees of which
shall be paid out of the Placement Fee.  Prior to the earlier of (i) the date on
which this Agreement is terminated and (ii) the Closing Date, the Company shall
not, without the prior written consent of the Placement Agents, solicit or
accept offers to purchase Securities (other than pursuant to the exercise of
options or warrants to purchase Common Stock that are outstanding at the date
hereof) otherwise than through the Placement Agents in accordance herewith.

 

(c)             Payment of the purchase price for, and delivery of, the
Securities shall be made at a closing (the “Closing”) at the offices of Morgan,
Lewis & Bockius LLP, counsel for the Company, located at One Federal Street,
Boston, Massachusetts 02110, promptly following the satisfaction of all
conditions for Closing set forth in the Purchase Agreements (the “Closing
Conditions”) or on such later date or at such different location as the parties
shall agree in writing, but not prior to or later than the third Business Day
(as defined herein) after, the date that the Closing Conditions have been
satisfied or waived by the appropriate party (such date of payment and delivery
being herein called the “Closing Date”).  All such actions taken at the Closing
shall be deemed to have occurred simultaneously.  No Shares and Warrants which
the Company has agreed to sell pursuant to this Agreement and the Purchase
Agreements shall be deemed to have been purchased and paid for, or sold by the
Company, until such Shares and Warrants shall have been delivered to the
Purchaser thereof against payment therefor by such Purchaser.  If the Company
shall default in its obligations to deliver the Shares and Warrants to a
Purchaser whose offer it has accepted, the Company shall indemnify and hold the
Placement Agents harmless against any loss, claim or damage incurred by the
Placement Agents arising from or as a result of such default by the Company.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies are authorized
or obligated by law to close in New York City.

 

(d)             On the Closing Date and on each closing date of the purchase and
sale of Warrant Shares, (i) the Company shall deliver, or cause to be delivered,
the Securities to the Purchasers or their designees, and the Purchasers shall
deliver, or cause to be delivered, the purchase price for their respective
Securities to the Company pursuant to the terms of the Purchase Agreements and
(ii) the Company will wire the amounts owed to the Placement Agents as provided
in this Agreement.

 

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

 

(f)              The Securities shall bear an appropriate restrictive legend
referring to the fact that the Securities were sold in reliance upon the
exemption from registration under the Securities Act provided by
Section 4(a)(2) thereof. At such time as the registration statement filed by the
Company pursuant to the Purchase Agreement (the “Resale Registration Statement”)
becomes effective, the Company shall deliver to the Company’s transfer agent
written instructions in proper form to the effect that, notwithstanding any
legend that is set forth in any certificate or certificates representing any of
the Securities being purchased pursuant to the Purchase Agreements, the
Company’s transfer agent can implement and effect any proposed sale by the
Purchasers of any of such Securities if such proposed sale is under the Resale
Registration Statement and is accompanied by a separate certificate of
subsequent sale from the applicable Purchaser in the form prescribed under the
Purchase Agreement certifying that (A) the Securities are being sold in
accordance with the Resale Registration Statement, the Securities Act and
applicable state securities or Blue Sky laws and (B) the prospectus delivery
requirements under the Securities Act have been satisfied.

 

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Section 2.              Representations, Warranties and Agreements of the
Company.

 

Except as disclosed in the reports, schedules, forms, statements and other
documents filed by the Company under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) (the foregoing materials, including the exhibits
thereto and documents incorporated by reference therein, and any amendment filed
in relation thereto, being collectively referred to herein as the “SEC
Reports”), which disclosures qualify these representations and warranties in
their entirety, the Company hereby represents, warrants and covenants to the
Placement Agents as of the date hereof, and as of the Closing Date, as follows:

 

(a)             Organization and Qualification.  The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and the Company is qualified to do business as a
foreign corporation in each jurisdiction in which qualification is required,
except where failure to so qualify would not have a Material Adverse Effect (as
defined herein). Each of the Company’s subsidiaries (each, a “Subsidiary” and
collectively, the “Subsidiaries”) is a direct or indirect wholly owned
subsidiary of the Company. Each Subsidiary is duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation and is
qualified to do business as a foreign corporation in each jurisdiction in which
qualification is required, except where failure to so qualify would not have a
Material Adverse Effect.

 

(b)             Authorized Capital Stock.  As of June 30, 2017, the Company had
duly authorized and validly issued outstanding capitalization as set forth in
the SEC Reports. The issued and outstanding shares of Common Stock have been
duly authorized and validly issued, are fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, were not issued
in violation of or subject to any preemptive rights or other rights to subscribe
for or purchase securities, and, as of the date of the Purchase Agreements,
conform in all material respects to the description contained in the SEC
Reports. The Company does not have outstanding, as of the date of the Purchase
Agreements, any options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations convertible into, or
any contracts or commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or obligations. With respect to
each of the Subsidiaries (i) all the issued and outstanding shares of such
Subsidiary’s capital stock have been duly authorized and validly issued, are
fully paid and nonassessable, have been issued in compliance with all federal
and state securities laws, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase securities, and
(ii) there are no outstanding options to purchase, or any preemptive rights or
other rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares of
such Subsidiary’s capital stock or any such options, rights, convertible
securities or obligations.

 

(c)             Issuance, Sale and Delivery of the Shares and the Warrants.  The
Securities being purchased pursuant to the Purchase Agreements have been duly
authorized and, when issued, delivered and paid for in the manner set forth in
the Purchase Agreements, and with respect to the Warrant Shares, upon payment of
the exercise price pursuant to the terms of the Warrants, will be validly
issued, fully paid and nonassessable and free and clear of all liens,
encumbrances and rights of refusal of any kind and the Purchaser shall be
entitled to all rights accorded to a holder of Common Stock.. The Warrant Shares
have been duly and validly reserved from the Company’s authorized capital stock.
Except as set forth in the Purchase Agreement, no stockholder of the Company has
any right to require the Company to register the sale of any capital stock owned
by such stockholder under the Resale Registration Statement. No further approval
or authority of the stockholders or the Board of Directors of the Company will
be required for the issuance and sale of the Shares and the Warrants to be sold
by the Company as contemplated in the Purchase Agreements.

 

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(d)             Due Execution, Delivery and Performance of the Agreement. The
Company has full legal right, corporate power and authority to enter into this
Agreement and the Purchase Agreements and perform the transactions contemplated
hereby and thereby.  This Agreement and the Purchase Agreements have been duly
authorized, executed and delivered by the Company.  This Agreement and the
Purchase Agreements constitute legal, valid and binding agreements of the
Company, enforceable against the Company in accordance with their terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting the enforcement of creditors’ rights and the application of equitable
principles relating to the availability of remedies, and except as rights to
indemnity or contribution, including but not limited to, indemnification
provisions set forth in Section 6 hereof may be limited by federal or state
securities law or the public policy underlying such laws.  The execution and
performance of this Agreement and the Purchase Agreements by the Company and the
consummation of the transactions herein and therein contemplated will not
violate any provision of the certificate of incorporation or bylaws of the
Company or the organizational documents of any Subsidiary and will not result in
the creation of any lien, charge, security interest or encumbrance upon any
assets of the Company or any Subsidiary pursuant to the terms or provisions of,
or will not conflict with, result in the breach or violation of, or constitute,
either by itself or upon notice or the passage of time or both, a default under
any agreement, mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument to which the Company or any Subsidiary is a party or
by which the Company or any Subsidiary or their respective properties may be
bound or affected and in each case that would have a Material Adverse Effect or
any statute or any authorization, judgment, decree, order, rule or regulation of
any court or any regulatory body, administrative agency or other governmental
agency or body applicable to the Company or any Subsidiary or any of their
respective properties.  No consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other governmental agency
or body is required for the execution and delivery of this Agreement, the
Purchase Agreements or the consummation of the transactions contemplated herein
and therein, except for compliance with the Blue Sky laws and federal securities
laws applicable to the offering of the Shares and the Warrants.  For the
purposes of this Agreement, the term “Material Adverse Effect” shall mean a
material adverse effect on the condition (financial or otherwise), properties,
business, prospects or results of operations of the Company and its
Subsidiaries, taken as a whole, except any of the following, either alone or in
combination, shall not be deemed a Material Adverse Effect:  (i) effects caused
by changes or circumstances affecting general economic or political conditions
or conditions in securities markets or that are generally applicable to the
industry in which the Company or its Subsidiaries operate, provided that such
effects do not adversely affect the Company and its Subsidiaries, taken as a
whole, in a disproportionate manner, or (ii) effects caused by any event,
occurrence or condition resulting from or relating to the taking of any action
in accordance with this Agreement and the Purchase Agreements.

 

(e)             Accountants.  EisnerAmper LLP, who have certified certain
financial statements of the Company, whose report is included in the SEC
Reports, are registered independent public accountants as required by the
Securities Act and the rules and regulations promulgated thereunder and by the
rules of the Public Accounting Oversight Board.  There are no disagreements of
any kind presently existing between the Company and EisnerAmper LLP.

 

(f)              No Defaults or Consents. Neither the execution, delivery and
performance of this Agreement or any Purchase Agreement by the Company nor the
consummation of any of the transactions contemplated hereby or thereby
(including, without limitation, the issuance and sale by the Company of the
Shares and the Warrants) will give rise to a right to terminate or accelerate
the due date of any payment due under, or conflict with or result in the breach
of any term or provision of, or constitute a default (or an event which with
notice or lapse of time or both would constitute a default) under, except such
defaults that individually or in the aggregate would not cause a Material
Adverse Effect, or require any consent or waiver under, or result in the
execution or imposition of any lien,

 

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charge or encumbrance upon any properties or assets of the Company or its
Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which either the Company or its Subsidiaries or any of its or
their properties or businesses is bound, or any franchise, license, permit,
judgment, decree, order, statute, rule or regulation applicable to the Company
or any of its Subsidiaries or violate any provision of the charter or by-laws of
the Company or any of its Subsidiaries, except for such consents or waivers
which have already been obtained and are in full force and effect.

 

(g)             Contracts.  Each contract that is material to the business of
the Company and its Subsidiaries has been duly and validly authorized, executed
and delivered by the Company or such Subsidiary, as applicable, and constitute
the legal, valid and binding agreements of the Company or such Subsidiary, as
applicable, enforceable by and against it in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws relating to enforcement of
creditors’ rights generally, and general equitable principles relating to the
availability of remedies, and except as rights to indemnity or contribution may
be limited by federal or state securities laws and the public policy underlying
such laws.

 

(h)             No Actions. There are no legal or governmental actions, suits or
proceedings pending or, to the Company’s knowledge, threatened against the
Company or any Subsidiary before or by any court, regulatory body or
administrative agency or any other governmental agency or body, domestic, or
foreign, which actions, suits or proceedings, individually or in the aggregate,
might reasonably be expected to have a Material Adverse Effect; and no labor
disturbance by the employees of the Company or its Subsidiaries exists or, to
the knowledge of the Company, is imminent, that might reasonably be expected to
have a Material Adverse Effect.  Neither the Company nor any Subsidiary is a
party to or subject to the provisions of any injunction, judgment, decree or
order of any court, regulatory body, administrative agency or other governmental
agency or body that might have a Material Adverse Effect.

 

(i)              Properties.  The Company and each Subsidiary has good and
marketable title to all the properties and assets described as owned by it in
the SEC Reports, free and clear of all liens, mortgages, pledges, or
encumbrances of any kind except those that are not material in amount and do not
adversely affect the use made and proposed to be made of such property by the
Company or its Subsidiaries.  The Company and each Subsidiary holds its leased
properties under valid and binding leases.  The Company and any Subsidiary owns
or leases all such properties as are necessary to its operations as now
conducted.

 

(j)              No Material Adverse Change.  Since June 30, 2017 (i) the
Company and its Subsidiaries have not incurred any material liabilities or
obligations, indirect, or contingent, or entered into any material agreement or
other transaction, in each case that are not or is not in the ordinary course of
business of the Company or its Subsidiaries; (ii) the Company and its
Subsidiaries have not sustained any material loss or interference with their
businesses or properties from fire, flood, windstorm, accident or other calamity
not covered by insurance; (iii) the Company and its Subsidiaries have not paid
or declared any cash dividends or other cash distributions with respect to their
capital stock and none of the Company or any Subsidiary is in default in the
payment of principal or interest on any outstanding debt obligations;
(iv) through the period ending on the date of the Purchase Agreements, there has
not been any change in the capital stock of the Company or its Subsidiaries
other than the sale of the Shares and the Warrants pursuant to the Purchase
Agreements and shares or options issued pursuant to employee equity incentive
plans or purchase plans approved by the Company’s Board of Directors, or
indebtedness material to the Company or its Subsidiaries (other than in the
ordinary course of business and any required scheduled payments); (v) no event,
liability, fact, circumstances, occurrence or development has occurred or exists
or is reasonably expected to occur or exist with respect to the Company or its
Subsidiaries or their respective businesses, properties, operations, assets or
financial condition that

 

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would be required to be disclosed by the Company under applicable securities
laws at the time this representation is made or deemed to be made that has not
been publically disclosed at least one (1) Business Day prior to the date that
this representation is made; and (vi) there has not occurred any event that has
caused or could reasonably be expected to cause a Material Adverse Effect.

 

(k)             Regulatory Authority. Except, in each case, where such event
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, the Company and each of its Subsidiaries: (i) has not
received any unresolved U.S. Food and Drug Administration (“FDA”) or similar
governmental agency or body (“Governmental Authority”) written notice of
inspectional observations, Form 483, written notice of adverse filing, warning
letter, untitled letter or other similar correspondence or notice from the FDA,
or any other court or arbitrator or federal, state, local or foreign
governmental or regulatory authority, alleging or asserting material
noncompliance with the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 301 et
seq.), or received any written requests or requirements to make material changes
to its products by the FDA or any other Governmental Authority; (ii) is and has
been in compliance with applicable health care laws, including, the Federal
Food, Drug and Cosmetic Act (21 U.S.C. § 301 et seq.), the federal Anti-kickback
Statute (42 U.S.C. § 1320a-7b(b)), the civil False Claims Act (31 U.S.C. §§ 3729
et seq.), the criminal False Claims Law (42 U.S.C. § 1320a-7b(a)), the Civil
Monetary Penalties Law (42 U.S.C. § 1320a-7a), the Physician Payment Sunshine
Act (42 U.S.C. § 1320a-7h), all criminal laws relating to health care fraud and
abuse, including but not limited to 18 U.S.C. Sections 286 and 287, and the
health care fraud criminal provisions under the Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. § 1320d et seq.) (“HIPAA”),  the exclusion
laws (42 U.S.C. § 1320a-7), Medicare (Title XVIII of the Social Security Act),
Medicaid (Title XIX of the Social Security Act), HIPAA, as amended by the Health
Information Technology for Economic and Clinical Health Act of 2009, and the
regulations promulgated pursuant to such laws, and comparable state laws, and
all other foreign, federal, state and local laws relating to the regulation of
the Company and its Subsidiaries (collectively, “Health Care Laws”); (iii) has
not engaged in activities which are, as applicable, cause for false claims
liability, civil penalties, or mandatory or permissive exclusion from Medicare,
Medicaid, or any other state health care program or federal health care program;
(iv) possesses all governmental permits and supplements or amendments thereto
required by any such Health Care Laws and/or to carry on its businesses as
currently conducted as described in the SEC Reports (“Authorizations”), and such
Authorizations are valid and in full force and effect and neither the Company
nor any of its Subsidiaries is in violation of any term of any such
Authorizations; (v) has not received written notice of any ongoing claim,
action, suit, proceeding, hearing, enforcement, investigation, arbitration or
other action from any Governmental Authority alleging that any product,
operation or activity is in material violation of any Health Care Laws or
Authorizations and has no knowledge that any such Governmental Authority has
threatened any such claim, litigation, arbitration, action, suit, investigation
or proceeding; (vi) has not received written notice that any Governmental
Authority has taken, is taking or intends to take action to limit, suspend,
modify or revoke any Authorizations and has no knowledge that any such
Governmental Authority has threatened such action; (vii) has filed, obtained,
maintained or submitted all reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments thereto as required
by any Health Care Laws or Authorizations and all such reports, documents,
forms, notices, applications, records, claims, submissions and supplements or
amendments were complete, correct and not misleading on the date filed (or were
corrected or supplemented by a subsequent submission); (viii) is not a party to
any corporate integrity agreement, deferred prosecution agreement, monitoring
agreement, consent decree, settlement order, or similar agreements, or has any
reporting obligations pursuant to any such agreement, plan or correction or
other remedial measure entered into with any Governmental Authority; (ix) has
not, nor has any officer, director, employee, agent or, to the knowledge of the
Company or any Subsidiary, any distributor of the Company or any Subsidiary,
made an untrue statement of a material fact or a fraudulent statement to the FDA
or any other Governmental Authority, failed to disclose a material fact required
to be disclosed to the FDA or any other Governmental Authority, or committed an
act, made a

 

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statement, or failed to make a statement, in each such case, related to the
business of the Company or its Subsidiaries that, at the time such disclosure
was made, would reasonably be expected to provide a basis for the FDA to invoke
its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and
Illegal Gratuities,” set forth in 56 Fed. Reg. 46191 (September 10, 1991) or for
the FDA or any other Governmental Authority to invoke any similar policy;
(x) has not, nor has any officer, director, employee, or, to the knowledge of
the Company or any Subsidiary, any agent or distributor of the Company or any
Subsidiary, been debarred or convicted of any crime or engaged in any conduct
for which debarment is mandated by 21 U.S.C. § 335a(a) or any similar law or
authorized by 21 U.S.C. § 335a(b) or any similar law applicable in other
jurisdictions in which the Company’s products or Subsidiary’s product candidates
are sold or intended by the Company to be sold; and (xi) neither the Company,
its Subsidiaries nor their officers, directors, employees, agents or contractors
has been or is currently debarred, suspended or excluded from participation in
the Medicare and Medicaid programs or any other state or federal health care
program.

 

(l)              Intellectual Property. The Company and/or its Subsidiaries own,
or have obtained valid and enforceable licenses for, or other rights to use, the
inventions, patent applications, patents, trademarks (both registered and
unregistered), tradenames, service names, copyrights, trade secrets and other
proprietary information described in the SEC Reports as being owned or licensed
by them or which are necessary for the conduct of their respective businesses as
currently conducted or as proposed to be conducted (including the
commercialization of products or services described in the SEC Reports as under
development), except where the failure to own, license or have such rights could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect (collectively, “Intellectual Property”); except as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (i) there are no third parties who have or, to the Company’s
knowledge will be able to establish rights to any of the Intellectual Property
of the Company or its Subsidiaries, except for, and to the extent of, the
ownership rights of the owners of the Intellectual Property which the SEC
Reports disclose are licensed to the Company or any of its Subsidiaries; (ii) to
the Company’s knowledge, there is no infringement by third parties of any
Intellectual Property; (iii) there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging the Company’s
or its Subsidiaries’ rights, as applicable, in or to any Intellectual Property,
and the Company and its Subsidiaries are unaware of any facts that could form a
reasonable basis for any such action, suit, proceeding or claim; (iv) there is
no pending or, to the Company’s knowledge, threatened action, suit, proceeding
or claim by others challenging the validity, enforceability or scope of any
Intellectual Property, and the Company is unaware of any facts that could form a
reasonable basis for any such action, suit, proceeding or claim; (v) there is no
pending or, to the Company’s knowledge, threatened action, suit, proceeding or
claim by others that the Company or any of its Subsidiaries infringes or
otherwise violates (or would, upon the commercialization of any product or
service described in the SEC Reports as under development, infringe or violate)
any patent, trademark, tradename, service name, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any facts that could
form a reasonable basis for any such action, suit, proceeding or claim; (vi) the
Company and/or its Subsidiaries have complied in all material respects with the
terms of each agreement pursuant to which Intellectual Property has been
licensed to the Company or any of its Subsidiaries, and all such agreements are
in full force and effect; (vii) to the Company’s knowledge, there is no patent
or patent application that contains claims that interfere with the issued or
pending claims of any of the Intellectual Property or that challenges the
validity, enforceability or scope of any of the Intellectual Property; and
(viii) to the Company’s knowledge, there is no prior art that may render any
patent application within the Intellectual Property unpatentable that has not
been disclosed to the U.S. Patent and Trademark Office.

 

(m)            Compliance.  None of the Company nor its Subsidiaries have been
advised, nor do any of them have any reason to believe, that the Company and its
Subsidiaries are not conducting business in compliance with all applicable laws,
rules and regulations of the jurisdictions in which it is conducting

 

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business, including, without limitation, all applicable local, state and federal
environmental laws and regulations, except where failure to be so in compliance
would not have a Material Adverse Effect.

 

(n)             Taxes.  The Company and its Subsidiaries have filed on a timely
basis (giving effect to extensions) all required federal, state and foreign
income and franchise tax returns and has paid or accrued all taxes shown as due
thereon, and none of the Company or any Subsidiary has knowledge of a tax
deficiency that has been or might be asserted or threatened against it that
could have a Material Adverse Effect.  All tax liabilities accrued through the
date hereof have been adequately provided for on the books of the Company and
its Subsidiaries.

 

(o)             Transfer Taxes.  On the Closing Date, all stock transfer or
other taxes (other than income taxes) that are required to be paid in connection
with the sale and transfer of the Shares and the Warrants to be sold to the
Purchasers pursuant to the Purchase Agreements will have been, fully paid or
provided for by the Company and its Subsidiaries and all laws imposing such
taxes will have been fully complied with.

 

(p)             Investment Company. Neither the Company nor any Subsidiary is,
and, following the completion of the offering, will not be, an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for an investment company, within the meaning of the Investment Company Act of
1940, as amended (the “Investment Company Act”), and the rules and regulations
of the Securities and Exchange Commission (the “SEC”) promulgated thereunder.

 

(q)             Offering Materials. Neither the Company nor any Subsidiary has
in the past nor will it hereafter take any action independent of the Placement
Agents to sell, offer for sale or solicit offers to buy any securities of the
Company or its Subsidiaries that could result in the initial sale of the Shares
and the Warrants not being exempt from the registration requirements of
Section 5 of the Securities Act.

 

(r)              Insurance.  The Company and its Subsidiaries maintain insurance
underwritten by insurers of recognized financial responsibility, of the types
and in the amounts that such entities reasonably believe is adequate for their
respective businesses, including, but not limited to, insurance covering all
real and personal property owned or leased by such entities against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, with such deductibles as are customary for companies in the same or
similar businesses, all of which insurance is in full force and effect.

 

(s)              Use of Proceeds. The Company shall use the proceeds from the
sale of the Shares and the Warrants to continue to advance its clinical programs
and for working capital and general corporate purposes.

 

(t)              Non-Public Information.  Neither the Company nor its
Subsidiaries has disclosed to any Purchaser any information that would
constitute material non-public information as of the Closing Date other than the
existence of the transaction contemplated hereby.  All of the disclosure
furnished by or on behalf of the Company directly to the Purchaser and filed or
furnished in SEC Reports regarding the Company and its Subsidiaries, their
respective businesses and, if applicable, the transactions contemplated hereby,
is true and correct and does not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading. The Company acknowledges that the Purchaser has not made any
representations or warranties with respect to the transactions contemplated by
the Purchase Agreement other than those specifically set forth therein.

 

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(u)             Use of Purchaser Name.  Except as otherwise required by
applicable law or regulation, neither the Company nor its Subsidiaries shall use
any Purchaser’s name or the name of any of its affiliates in any advertisement,
announcement, press release or other similar public communication unless it has
received the prior written consent of such Purchaser for the specific use
contemplated.

 

(v)             Related Party Transactions.  No transaction has occurred between
or among the Company, on the one hand, and its affiliates, officers or directors
on the other hand, or between any Subsidiary, on the one hand, and its
affiliates, officers or directors on the other hand, that is required to have
been described under applicable securities laws in the SEC Reports, that is not
so described in such filings.

 

(w)            Off-Balance Sheet Arrangements.  There is no transaction,
arrangement or other relationship between the Company or any Subsidiary and an
unconsolidated or other off-balance sheet entity that is required to have been
described under applicable securities laws in the SEC Reports that is not so
disclosed or that otherwise would be reasonably likely to have a Material
Adverse Effect.  There are no such transactions, arrangements or other
relationships with the Company or any Subsidiary that may create contingencies
or liabilities that have not been otherwise disclosed by the Company in the SEC
Reports.

 

(x)             Governmental Permits, Etc.  The Company and each Subsidiary has
all franchises, licenses, certificates and other authorizations from such
federal, state or local government or governmental agency, department or body
that are currently necessary for the operation of the business of the Company
and its Subsidiaries as currently conducted, except where the failure to possess
currently such franchises, licenses, certificates and other authorizations is
not reasonably expected to have a Material Adverse Effect.  Neither the Company
nor any Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such permit that, if the subject of an
unfavorable decision, ruling or finding, could reasonably be expected to have a
Material Adverse Effect.

 

(y)             Financial Statements.  The financial statements of the Company,
and the related notes and schedules thereto, included in the SEC Reports fairly
present in all material respects the financial position, results of operations,
stockholders’ equity and cash flows of the Company at the dates and for the
periods specified therein.  Such financial statements and the related notes and
schedules thereto have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
(except as otherwise noted therein) and all adjustments necessary for a fair
presentation in all material respects of results for such periods have been
made; provided, however, that the unaudited financial statements are subject to
normal year-end audit adjustments (which are not expected to be material) and do
not contain all footnotes required under generally accepted accounting
principles.

 

(z)             Listing Compliance.  The Company complies with all requirements
of the NASDAQ Stock Exchange and shall cause the Shares and the Warrant Shares
to be approved for listing on the NASDAQ Stock Exchange on the Closing Date. 
The issuance and sale of the Shares and Warrants hereunder does not contravene
the rules and regulations of the NASDAQ Stock Exchange as of the Closing Date.

 

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

 

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compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.  The Company and each Subsidiary has
disclosure controls and procedures (as defined in Rules 13a 14 and 15d 14 under
the Exchange Act) that are designed to ensure that material information relating
to such entity is made known to such entity’s principal executive officer and
principal financial officer or persons performing similar functions.  The
Company and each Subsidiary is otherwise in compliance in all material respects
with all applicable provisions of the Sarbanes-Oxley Act of 2002, as amended,
and the rules and regulations promulgated thereunder.

 

(bb)           Foreign Corrupt Practices.  Neither the Company, nor any
Subsidiary, nor, to the Company’s knowledge, any director, officer, agent,
employee or other persons acting on behalf of the Company or any Subsidiary has,
in the course of its actions for, or on behalf of, the Company (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or
(iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful payment to any foreign or domestic government official or
employee.

 

(cc)           OFAC.  Neither the Company nor any Subsidiary nor, to the
Company’s knowledge, any director, officer, agent, employee, affiliate or person
acting on behalf of the Company or any Subsidiary is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”), and the Company will not knowingly, directly or
indirectly, use the proceeds of the sale of the Shares and the Warrants, or
lend, contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other person or entity, towards any sales or operations
in any country sanctioned by OFAC or for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.

 

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

 

(ee)           Employee Relations.  Neither the Company nor any Subsidiary is a
party to any collective bargaining agreement or employs any member of a union. 
The Company and each Subsidiary believes that their relations with their
employees are good.  No executive officer of the Company (as defined in
Rule 501(f) promulgated under the Securities Act) has notified the Company, as
applicable, that such officer intends to leave the Company or any Subsidiary, as
applicable, or otherwise terminate such officer’s employment with the Company or
any Subsidiary, as applicable.  To the knowledge of the Company, no executive
officer of the Company or any Subsidiaries is, or is now expected to be, in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or
any other agreement or any restrictive covenant, and the continued employment of
each such executive officer does not subject the Company or any Subsidiary to
any liability with respect to any of the foregoing matters.

 

(ff)            ERISA.  The Company and each Subsidiary is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder (herein called “ERISA”); no

 

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“reportable event” (as defined in ERISA) has occurred with respect to any
“pension plan” (as defined in ERISA) for which the Company or its Subsidiaries
would have any liability; neither the Company nor its Subsidiaries have incurred
and do not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan”; or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the “Code”); and each “Pension Plan”
for which the Company or its Subsidiaries would have liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.

 

(gg)           Environmental Matters.  There has been no storage, disposal,
generation, manufacture, transportation, handling or treatment of toxic wastes,
hazardous wastes or hazardous substances by the Company or any Subsidiary (or,
to the knowledge of the Company, any of their predecessors in interest) at, upon
or from any of the property now or previously owned or leased by the Company or
any Subsidiary in violation in any material respect of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or that would
require material remedial action under any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any kind
into such property or into the environment surrounding such property of any
toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or any Subsidiary or with respect to
which the Company or any Subsidiary have knowledge; the terms “hazardous
wastes,” “toxic wastes,” “hazardous substances” and “medical wastes” shall have
the meanings specified in any applicable local, state, federal and foreign laws
or regulations with respect to environmental protection.

 

(hh)           Integration; Other Issuances of Securities.  Neither the Company
nor its Subsidiaries or any affiliates, nor any persons acting on its or their
behalf, has issued any shares of Common Stock or shares of any series of
preferred stock or other securities or instruments convertible into,
exchangeable for or otherwise entitling the holder thereof to acquire shares of
Common Stock which would be integrated with the sale of the Shares and the
Warrants to the Purchasers pursuant to the Purchase Agreements (i) for purposes
of the Securities Act and would thereby result in the Shares and the Warrants
being sold to the Purchasers pursuant to the Purchase Agreements not to be
exempt from the registration requirements of the Securities Act or (ii) for
purposes of any applicable stockholder approval provisions, including, without
limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or
designated, nor will the Company or its Subsidiaries or affiliates take any
action or steps that would require registration of any of the Shares or the
Warrants under the Securities Act or cause the offering of the Shares and the
Warrants to be integrated with other offerings.  Assuming the accuracy of the
representations and warranties of Purchasers, the offer and sale of the Shares
and the Warrants by the Company to the Purchasers pursuant to the Purchase
Agreements will be exempt from the registration requirements of the Securities
Act.

 

(ii)             No Disqualification Events. With respect to the Securities to
be offered and sold hereunder in reliance on Rule 506 under the Securities Act,
none of the Company, any of its predecessors, any affiliated issuer, any
director, executive officer, other officer of the Company participating in the
offering hereunder, any beneficial owner of 20% or more of the Company’s
outstanding voting equity securities, calculated on the basis of voting power,
nor any promoter (as that term is defined in Rule 405 under the Securities Act)
connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of
the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under
the Securities Act (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable
care to determine whether any Issuer Covered Person is subject to a
Disqualification Event. The Company has complied, to the extent applicable, with
its disclosure

 

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obligations under Rule 506(e), and has furnished to the Purchaser a copy of any
disclosures provided thereunder.

 

(jj)             Other Covered Persons. Other than the Placement Agents, the
Company is not aware of any person (other than any Issuer Covered Person) that
has been or will be paid (directly or indirectly) remuneration for solicitation
of purchasers in connection with the sale of any Securities.

 

(kk)           Notice of Disqualification Events. The Company will notify the
Purchaser and the Placement Agents in writing, prior to the Closing Date of
(i) any Disqualification Event relating to any Issuer Covered Person and
(ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person.

 

(ll)             Shell Company Status; Compliance with Financial Statement
Requirements.  The Company has never been an issuer subject to Rule 144(i) under
the Securities Act.  The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the SEC with respect thereto as in effect at
the time of filing.

 

Section 3.              Covenants.

 

The Company covenants and agrees with the Placement Agents as follows:

 

(a)             Use of Proceeds.  The Company shall use the net proceeds from
the sale of the Shares and the Warrants to continue to advance its clinical
programs and for working capital and general corporate purposes.

 

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

 

(c)             Lock-Up Period.  For a period of 90 days after the date hereof
(the “Lock-Up Period”), the Company will not directly or indirectly, (1) offer
to sell, hypothecate, pledge, announce the intention to sell, contract to sell,
or otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock, or any securities convertible into or exercisable or exchangeable
for shares of Common Stock; (2) except for the Resale Registration Statement,
file or cause to become effective a registration statement under the Securities
Act relating to the offer and sale of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for shares of Common Stock; or
(3) enter into any swap or other agreement that transfers, in whole or in part,
any of the economic consequences of ownership of the Common Stock, whether any
such transaction described in clauses (1), (2) or (3) above is to be settled by
delivery of shares of Common Stock or such other securities, in cash or
otherwise, without the prior written consent of the Placement Agents (which
consent may be withheld in their sole discretion), other than (i) the Securities
to be sold pursuant to the Purchase Agreements, (ii) the issuance of shares of
Common Stock pursuant to the exercise of the Warrants and other warrants or
rights to purchase the shares of Common Stock outstanding or in existence on the
date hereof and any Exempt Issuance (as defined herein); provided that the
Company may seek any and all waivers that may be

 

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required in connection with the performance of its obligations under this
Section 3(c), and such action by the Company and the execution of any such
waivers shall not violate this Section 3(c). The Company agrees not to make any
public announcement during the Lock-Up Period of any intention to undertake any
of the transactions described in clauses (1), (2) or (3) above.  For purposes of
this Section 3(c), “Exempt Issuance” shall mean the issuance of (A) shares of
Common Stock or options to employees, consultants, officers or directors of the
Company pursuant to any stock or option plan duly adopted for such purpose by
the Company’s Board of Directors or a majority of the members of a committee
established for such purpose; (B) securities exercisable or exchangeable for or
convertible into shares of Common Stock issued and outstanding on the Issuance
Date, provided that such securities have not been amended since the Issuance
Date to increase the number of such securities or to decrease the exercise,
exchange or conversion price of such securities; (C) securities in accordance
with existing obligations of the Company to Company employees, consultants,
officers, directors or agents; (D) securities to any current or former
employees, consultants, officers, directors or agents of the Company in
satisfaction of or in settlement of any disputes or controversies concerning the
terms of such person’s employment, consulting or other service relationship with
the Company or the terms of such person’s separation from the Company;
(E) securities pursuant to a merger, consolidation, acquisition, business
combination, licensing, joint venture, strategic alliance, corporate partnering
or similar transaction the primary purpose of which is not to raise equity
capital; (F) securities in connection with any stock split, stock dividend,
recapitalization or similar transaction by the Company; (G) securities as
consideration, whether in whole or in part, to any person or entity for
providing services or supplying goods to the Company; (H) securities to any
entity which is or will be, itself or through its subsidiaries or affiliates, an
operating company in a business related to or complementary with the business of
the Company and in which the Company receives material benefits in addition to
the investment of funds; (I) securities pursuant to any equipment leasing
arrangement; (J) securities to any commercial bank, finance company or similar
institution in connection with any loan, credit facility or lending arrangement
entered into by the Company with any such bank finance company or similar
institution; (K) securities to pay all or a portion of any investment banking,
finders or similar fee or commission, which entitles the holders thereof to
acquire shares of Common Stock at a price not less than the market price of the
Common Stock on the date of such issuance and which is not subject to any
adjustments other than on account of stock splits and reverse stock splits; and
(L) securities as may be mutually agreed in writing prior to their issuance by
the Company and either (I) those holders of Warrants issued pursuant to the
Purchase Agreements that represent a majority of the shares of Common Stock
issuable upon exercise of all outstanding Warrants issued pursuant to the
Purchase Agreements or (II) the Purchaser.

 

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

 

(e)             Investment Company Act.  Neither the Company nor any Subsidiary
shall invest or otherwise use the proceeds received by the Company from its sale
of the Securities in such a manner as would require the Company to register as
an investment company under the Investment Company Act.

 

Section 4.              Costs and Expenses.

 

The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, will pay or reimburse, if paid by
the Placement Agents, all costs and expenses incident to the performance of the
Company’s obligations under this Agreement and in connection with the
transactions contemplated hereby, including but not limited to costs and
expenses of or relating to (i) the issue, sale and delivery of the Securities
including any stock or transfer taxes and stamp or similar duties payable upon
the sale, issuance or delivery of the Securities and any printing, delivery,
shipping of

 

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the certificates representing the Securities, (ii) the fees and expenses of any
transfer agent or registrar for the Securities, (iii) fees, disbursements and
other charges of counsel to the Company, (iv) listing fees for the listing or
quotation of the Shares and Warrant Shares on the NASDAQ Stock Exchange, and
(v) the costs and expenses of the Company in connection with the marketing of
the Offering and the sale of the Securities to prospective investors including,
but not limited to, those related to any presentations or meetings undertaken in
connection therewith; provided that the amounts reimbursed to the Placement
Agents by the Company pursuant to this Section 4 and Section 7, if applicable,
shall not exceed $75,000 in the aggregate.

 

It is understood that except as provided in this Section 4, Section 6 and
Section 7 hereof, the Placement Agents shall pay all of their own expenses.

 

Section 5.              Conditions of Placement Agents’ Obligations.

 

The obligations of the Placement Agents hereunder are subject to the following
conditions:

 

(a)             No Action Preventing Issuance.  No action shall have been taken
and no statute, rule, regulation or order shall have been enacted, adopted or
issued by any governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities, and no injunction, restraining
order or order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would prevent
the issuance or sale of the Securities.

 

(b)             No Material Adverse Change.

 

(i)            Prior to the Closing, there shall not have occurred any change,
or any development involving a prospective change, in the condition, financial
or otherwise, or in the earnings, business or operations of the Company and its
Subsidiaries from that set forth in the SEC Reports that, in the Placement
Agents’ judgment, is material and adverse and that makes it, in the Placement
Agents’ judgment, impracticable to market the Securities.

 

(ii)           There shall not have occurred any of the following:  (A) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange, the NASDAQ Stock Market, the NASDAQ Global Select Market,
the NASDAQ Global Market, the NASDAQ Capital Market, the NYSE American or the
over-the-counter market or the establishing on such exchanges or markets by the
SEC or by such exchanges or markets of minimum or maximum prices that are not in
force and effect on the date hereof; (B) a suspension or material limitation in
trading in the Company’s securities on the NASDAQ Stock Exchange or any other
exchange or market or the establishing on any such market or exchange by the SEC
or by such market of minimum or maximum prices that are not in force and effect
on the date hereof; (C) a general moratorium on commercial banking activities
declared by either federal or any state authorities; (D) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, which in the Placement Agents’
judgment makes it impracticable or inadvisable to proceed with the Offering or
the delivery of the Securities in the manner contemplated in the Purchase
Agreements; or (E) any calamity or crisis, change in national, international or
world affairs, act of God, change in the international or domestic markets, or
change in the existing financial, political or economic conditions in the United
States or elsewhere, that in the Placement Agents’ judgment makes it
impracticable or inadvisable to proceed with the Offering or the delivery of the
Securities in the manner contemplated in the Purchase Agreements.

 

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(c)             Representations and Warranties.  Each of the representations and
warranties of the Company contained herein shall be true and correct when made
and on and as of the date hereof and the Closing Date, as if made on such date
(except that those representations and warranties that address matters only as
of a particular date shall remain true and correct as of such date), and all
covenants and agreements herein contained to be performed on the part of the
Company on or prior to the Closing Date and all conditions herein contained to
be fulfilled or complied with by the Company at or prior to the Closing Date
shall have been duly performed, fulfilled or complied with in all material
respects.

 

(d)             Lock-Up Agreements.  On or before the Closing Date, the Company
shall have obtained for the benefit of the Placement Agents the agreement, in
the form set forth as Exhibit C hereto, of its directors and officers listed on
Schedule I hereto (each, a “Lock-Up Agreement” and collectively, the “Lock-Up
Agreements”).

 

(e)             Opinion of Counsel to the Company.  The Placement Agents shall
have received from Morgan, Lewis & Bockius LLP, counsel to the Company, such
counsel’s written opinion in form and substance as is reasonably satisfactory to
the Placement Agents.

 

(f)              Officers’ Certificate.  The Placement Agents shall have
received on the Closing Date a certificate of the Company, addressed to the
Placement Agents and dated the Closing Date, signed by the Chief Executive
Officer or the President and the principal financial or accounting officer of
the Company to the effect that the signers of such certificate have carefully
examined the SEC Reports, as well as any marketing materials used in connection
with the offering of the Securities and this Agreement, and that:

 

(i)            each of the representations, warranties and agreements of the
Company in this Agreement were true and correct when originally made and are
true and correct as of the date hereof and the Closing Date (except that those
representations and warranties that address matters only as of a particular date
shall remain true and correct as of such date); and the Company has complied
with all agreements and satisfied all the conditions on its part required under
this Agreement to be performed or satisfied at or prior to the Closing Date; and

 

(ii)           since the date of the most recent financial statements included
in the SEC Reports, there has been no material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of the
Company and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.

 

(g)             Additional Documents.  Prior to the Closing Date, the Company
shall have furnished to the Placement Agents such further information,
certificates and documents as the Placement Agents may reasonably request.

 

The documents required to be delivered by this Section 5 shall be delivered at
the office of Morgan, Lewis & Bockius LLP, counsel to the Company, at One
Federal Street, Boston, Massachusetts 02110, on the Closing Date.

 

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

 

If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Placement
Agents by notice to the Company at any time prior to the Closing Date, which
termination shall be without liability on the part of any party to any other
party, except that Section 4, Section 6 and Section 7 hereof shall at all times
be effective and shall survive such

 

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termination.

 

Section 6.              Indemnification and Contribution.

 

(a)             Indemnification of the Placement Agents.  The Company agrees to
indemnify and hold harmless the Placement Agents, their respective affiliates,
directors, officers and employees, and agents who have or who are alleged to
have participated in the distribution of the Securities as Placement Agents and
each respective person who controls the Placement Agents within the meaning of
either the Securities Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act or other Federal
or state statutory law or regulation, at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based on (i) the breach of
any representation, warranty, covenant or agreement made by the Company herein
or in the Purchase Agreements or (ii) any untrue statement or alleged untrue
statement of a material fact or a material omission by or on behalf of the
Company for the purpose of offering and selling the Securities pursuant to the
Purchase Agreements; provided that this indemnity shall not apply (x) to the
extent that such loss, claim, liability, expense or damage resulted from the bad
faith, willful misconduct or gross negligence of the Placement Agents or (y) to
any matter for which the Placement Agents agree to indemnify the Company
hereunder. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.

 

(b)             Indemnification of the Company.  On a several and no joint
basis, the Placement Agents agree to indemnify and hold harmless the Company,
each of its directors, each of its senior executive officers and each person who
controls the Company within the meaning of either the Securities Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
the Placement Agents, but only with respect to any losses, claims, damages or
liabilities that arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with any information relating to the Placement Agents furnished to
the Company expressly for use in facilitating the offer and sale of the
Securities.

 

(c)             Notice and Procedures.  Promptly after receipt by an indemnified
party under this Section 6 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph (a) or
(b) above unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above.  The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party’s choice at the indemnifying party’s expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party.  Notwithstanding the indemnifying party’s
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (w) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (x) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other

 

16

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indemnified parties which are different from or additional to those available to
the indemnifying party, (y) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (z) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party; provided,
however, that an indemnifying party shall not be liable for the fees and
expenses of more than one such separate counsel (in addition to local counsel)
in connection with any proceeding or related proceeding in the same
jurisdiction. An indemnifying party shall not be liable for any settlement of
any proceeding effected without its consent (which consent shall not be
unreasonably withheld).  Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
Section 6(a) or (b) hereof, the indemnifying party agrees that it shall be
liable for such fees and expenses in connection with any settlement of any
proceeding effected without its written consent if (A) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request, (B) such indemnifying party shall have received notice of the
terms of such settlement at least 30 days before such settlement is entered into
and (C) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request or disputed in good faith the indemnified
party’s entitlement to such reimbursement prior to the date of such settlement. 
An indemnifying party will not, without the prior written consent (which consent
shall not be unreasonably withheld) of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding and does not include an admission of fault.

 

(d)             Contribution.  In the event that the indemnity provided in
paragraph (b) or (c) of this Section 6 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company and the Placement
Agents severally agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending the same) (collectively “Losses”) to
which the Company and the Placement Agents may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and by the Placement Agents on the other from the offering of the
Securities.  If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Placement Agents severally shall
contribute 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
of the Placement Agents on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations.  Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the Offering (before deducting expenses) received by
it, and benefits received by the Placement Agents shall be deemed to be equal to
the Placement Fee.  Relative fault shall be determined by reference to, among
other things, whether any untrue or any alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information provided by the Company on the one hand or the Placement Agents on
the other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission.  The Company and the Placement Agents agree that it would not be just
and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above.  Notwithstanding the provisions of this
paragraph (d), in no event shall the Placement Agents be required to contribute
any amount in excess of the amount by which the Placement Fee received by the
Placement Agents with respect to the offering of the Securities exceeds the
amount of any damages that the Placement Agents have otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.  Notwithstanding the provisions of this paragraph (d), no

 

17

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person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.  For purposes of
this Section 6, each respective person who controls the Placement Agents within
the meaning of either the Securities Act or the Exchange Act and each respective
director, officer, employee, affiliate and agent of the Placement Agents shall
have the same rights to contribution as the Placement Agents, and each person
who controls the Company within the meaning of either the Securities Act or the
Exchange Act, each senior executive officer of the Company and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).

 

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

 

Section 7.              Termination.

 

(a)             If (1) this Agreement shall be terminated by the Placement
Agents pursuant to Section 5 hereof or (2) the sale of the Securities to
Purchasers is not consummated because of any failure, refusal or inability on
the part of the Company to comply with the terms or perform any agreement or
obligation of this Agreement or any Purchase Agreement, other than by reason of
a default by the Placement Agents, the Company will, in addition to paying the
amounts described in Section 4 hereof, reimburse the Placement Agents for all of
its reasonable, documented and actual out-of-pocket disbursements (including,
but not limited to, the reasonable and documented fees and disbursements of its
outside counsel); provided that the amounts reimbursed to the Placement Agents
by the Company pursuant to Section 4 and this Section 7(a) shall not exceed
$75,000 in the aggregate.

 

(b)             If the Closing has not occurred as of 12:01 a.m., New York time,
on January 1, 2018, this Agreement shall automatically terminate.

 

Section 8.              Notices.

 

All statements, requests, notices and agreements hereunder shall be in writing
or by facsimile or email transmission, and:

 

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

 

Raymond James & Associates, Inc.
277 Park Avenue, Suite 410
New York, New York 10172
Attention:  Ed Newman
Facsimile No.: (212) 885-1808

 

18

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Email: Ed.Newman@RaymondJames.com

 

and

 

Ladenburg Thalmann & Co. Inc.
277 Park Avenue, 26th Floor
New York, New York 10172
Attention:  Joseph Giovanniello
Facsimile No.: (212) 409-2169
Email: JGiovanniello@ladenburg.com

 

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

 

Morrison & Foerster LLP
250 West 55th Street
New York, New York 10019
Attention:  Anna Pinedo, Esq.
Facsimile No.: (212) 468-7900
Email:  APinedo@mofo.com

 

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

 

Leap Therapeutics, Inc.
47 Thorndike Street, Suite B1-1
Cambridge, Massachusetts 02141
Attention: Chief Financial Officer
Facsimile No.:  (617) 252-4342
Email:  DOnsi@leaptx.com

 

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

 

Morgan, Lewis & Bockius LLP
One Federal Street
Boston, Massachusetts 02110
Attention: Julio E. Vega, Esq.

William S. Perkins, Esq.

Facsimile No.:  (617) 341-7701
Email: Julio.Vega@morganlewis.com

William.Perkins@morganlewis.com

 

Any such notice shall be effective only upon receipt.  Any party to this
Agreement may change such address for notices by sending to the parties to this
Agreement written notice of a new address for such purpose.

 

Section 9.              Persons Entitled to Benefit of Agreement.

 

This Agreement shall inure to the benefit of and shall be binding upon the
Placement Agents, the Company and their respective successors and assigns and
the controlling persons, officers and directors referred to in Section 6
hereof.  Nothing in this Agreement is intended or shall be construed to give to
any other person, firm or corporation, other than the persons, firms or
corporations mentioned in the preceding sentence, any legal or equitable remedy
or claim under or in respect of this Agreement, or any provision

 

19

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herein contained.  The term “successors and assigns” as herein used shall not
include any purchaser of the Securities by reason merely of such purchase.

 

Section 10.            Governing Law.

 

This Agreement is to be construed in accordance with and governed by the federal
law of the United States of America and the internal laws of the State of New
York without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the
State of New York to the rights and duties of the parties.

 

Section 11.            No Fiduciary Relationship.

 

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

 

Section 12.            Headings.

 

The headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this
Agreement.

 

Section 13.            Amendments and Waivers.

 

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

 

20

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Section 14.            Submission to Jurisdiction.

 

By the execution and delivery of this Agreement, the Company submits to the
non-exclusive jurisdiction of United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to the
Securities or this Agreement. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of venue of any such proceeding brought in such a
court and any claim that any such proceeding brought in such court has been
brought in an inconvenient forum. In the event of any legal proceeding arising
out of or relating to the Securities or this Agreement, the prevailing party in
any such legal proceeding shall be entitled to recover out-of-pocket costs and
expenses (including reasonable fees and disbursements of attorneys and experts)
from the non-prevailing party in addition to any damage award that the
non-prevailing party may be entitled to recover under applicable law.

 

Section 15.            Counterparts.

 

This Agreement may be executed in counterparts, each of which shall constitute
an original, but all of which, when taken together, shall constitute but one
instrument, and shall become effective when one or more counterparts have been
signed by each party hereto and delivered to the other parties.  Signatures
transmitted by facsimile or email shall be deemed original signatures.

 

Section 16.            Entire Agreement.

 

This Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and supersedes all prior agreements of the parties (including, for the
avoidance of doubt, any engagement letter previously executed by and among the
Company and the Placement Agents) with respect to the matters covered herein and
therein. Except as specifically set forth herein or therein, neither the Company
nor the Purchaser makes any representation, warranty, covenant or undertaking
with respect to such matters. Each party expressly represents and warrants that
it is not relying on any oral or written representations, warranties, covenants
or agreements outside of this Agreement.

 

[Signature page(s) follow]

 

21

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

 

 

 

 

Very truly yours,

 

 

 

 

 

LEAP THERAPEUTICS, INC., a Delaware corporation

 

 

 

 

 

 

 

 

By:

/s/ Christopher Mirabelli, Ph.D.

 

 

 

Name:

Christopher Mirabelli, Ph.D.

 

 

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

Accepted as of the date first above written:

 

 

 

 

 

RAYMOND JAMES & ASSOCIATES, INC.

 

 

 

 

 

 

 

 

By:

/s/ Ed Newman

 

 

 

Name:

Ed Newman

 

 

 

Title:

Managing Director

 

 

 

 

 

 

 

 

 

 

LADENBURG THALMANN & CO. INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ David J. Strupp, Jr.

 

 

 

Name:

David J. Strupp, Jr.

 

 

 

Title:

Managing Director

 

 

 

[Signature Page to Placement Agency Agreement]

 

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Schedule I

 

Directors and Officers Executing Lock-Up Agreements

 

Christopher K. Mirabelli

Augustine Lawlor

Douglas E. Onsi

Dr. James Cavanaugh

Dr. Thomas Dietz

Dr. William Li

John Littlechild

Dr. Joseph Loscalzo

Nissim Mashiach

 

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Exhibit A

 

Form of Purchase Agreement

 

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Exhibit B

 

Pricing Information

 

Number of Shares of Common Stock: 2,958,094

 

Offering Price per Share of Common Stock:  $6.085

 

Number of shares of Common Stock Underlying the Warrants: 2,958,094

 

Exercise Price of the Warrants: $6.085

 

Placement Fee:  2.2% of the gross proceeds from the sale of the Shares

 

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Exhibit C

 

Form of Lock-Up Agreement

 

November [•], 2017

 

RAYMOND JAMES & ASSOCIATES, INC.
277 Park Avenue, Suite 410
New York, New York 10172

 

LADENBURG THALMANN & CO. INC.
277 Park Avenue, 26th Floor
New York, New York 10172

 

Re:          Leap Therapeutics, Inc.

 

Ladies and Gentlemen:

 

The undersigned understands that you propose to enter into a placement agency
agreement (the “Placement Agency Agreement”) with Leap Therapeutics, Inc., a
Delaware corporation (the “Company”), providing for the offering (the
“Offering”) by the Company of (i) shares (the “Shares”) of its common stock, par
value $0.001 (the “Common Stock”), and (ii) warrants to purchase Common Stock
(the “Warrants” and, together with the Shares, the “Securities”). Capitalized
terms used herein and not otherwise defined shall have the meanings set forth in
the Placement Agency Agreement.

 

In consideration of the Placement Agents’ agreement to participate in the
Offering of the Securities, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees that,
without the prior written consent of each of Raymond James & Associates, Inc.
and Ladenburg Thalmann & Co. Inc. (together, the “Placement Agents”), the
undersigned will not, during the period ending 90 days after the Closing of the
Offering, (1) offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for shares of Common Stock (including without
limitation, Common Stock or such other securities which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the SEC and securities which may be issued upon exercise of a
stock option or warrant), or publicly disclose the intention to make any offer,
sale, pledge or disposition, (2) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
Common Stock or such other securities, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of shares of Common Stock
or such other securities, in cash or otherwise or (3) make any demand for or
exercise any right with respect to the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for shares
of Common Stock, in each case other than (A) transfers of shares of Common Stock
as a bona fide gift or gifts, (B) shares of Common Stock

 

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sold by the undersigned pursuant to a trading plan under Rule 10b5-1 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) in existence on
the date hereof, (C) distributions of shares of Common Stock to members or
stockholders of the undersigned, (D) transfers or dispositions of shares of
capital stock of the Company or any securities convertible into, or exercisable
or exchangeable for such capital stock to any trust for the direct or indirect
benefit of the undersigned or the immediate family of the undersigned in
transactions not involving a disposition for value, (E) transfers or
dispositions of shares of capital stock of the Company or any securities
convertible into, or exercisable or exchangeable for such capital stock to any
corporation, partnership, limited liability company or other entity all of the
beneficial ownership interests of which are held by the undersigned or the
immediate family of the undersigned in a transaction not involving a disposition
for value, (F) transfers or dispositions of shares of capital stock of the
Company or any securities convertible into, or exercisable or exchangeable for
such capital stock by will, other testamentary document or intestate succession
to the legal representative, heir, beneficiary or a member of the immediate
family of the undersigned and (G) distributions of shares of capital stock of
the Company or any securities convertible into, or exercisable or exchangeable
for such capital stock to partners, members or stockholders of the undersigned;
provided that in the case of any transfer or distribution pursuant to clause
(A), (B), (D), (E), (F) and (G), each donee or distributee shall execute and
deliver to the Placement Agents a lock-up letter in the form of this paragraph. 
The undersigned agrees not to make any public announcement during the Lock-Up
Period of any intention to undertake any of the transactions described in
clauses (1), (2) or (3) above.

 

The restrictions described in this Lock-Up Agreement shall not apply to (i) the
sale of any Securities acquired by the undersigned pursuant to any Purchase
Agreement or any exercise of the Warrants, (ii) the purchase and sale of any
shares of Common Stock purchased after the date of this Lock-Up Agreement in an
open market transaction, and (iii) the establishment of a trading plan pursuant
to Rule 10b5-1 under the Exchange Act.  No provision of this Lock-Up Agreement
shall restrict or prohibit the exercise, exchange or conversion by the
undersigned of any option or warrant to acquire shares of Common Stock, or any
other security convertible into or exchangeable or exercisable for shares of
Common Stock; provided, further, that any shares of Common Stock and any of such
other securities acquired in connection with any such exercise, exchange or
conversion will be subject to the restrictions provided for in this Lock-Up
Agreement.

 

In furtherance of the foregoing, the Company and any duly appointed transfer
agent for the registration or transfer of the securities described herein are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Agreement.

 

The undersigned hereby represents and warrants that the undersigned has full
power and authority to enter into this Lock-Up Agreement.  All authority herein
conferred or agreed to be conferred and any obligations of the undersigned shall
be binding upon the successors, assigns, heirs or personal representatives of
the undersigned.

 

The undersigned understands that, if the Placement Agency Agreement does not
become effective by December 31, 2017, or if the Placement Agency Agreement
(other than the provisions thereof which survive termination) shall terminate or
be terminated prior to payment for and delivery of the Securities to be sold
thereunder, the undersigned shall be released from, all obligations under this
Lock-Up Agreement.  The undersigned understands that the Placement Agents are
entering into the Placement Agency Agreement and participating in the Offering
in reliance upon this Lock-Up Agreement.

 

This Lock-Up Agreement and any claim, controversy or dispute arising under or
related to this Lock-Up Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflict of laws principles thereof.

 

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Very truly yours,

 

[NAME OF STOCKHOLDER]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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