SINTX Technologies, Inc.

Up to $1,600,000 Shares of Common Stock

 

Equity Distribution Agreement

 

June 4, 2019

 

Maxim Group LLC
405 Lexington Avenue
New York, New York 10174

 

Ladies and Gentlemen:

 

SINTX Technologies, Inc., a Delaware corporation (the “Company”), proposes to
issue and sell through Maxim Group LLC (the “Agent”), as exclusive sales agent,
shares of common stock, par value $0.01 per share (“Common Stock”), of the
Company (the “Shares”) having an aggregate offering price of up to $1,600,000 on
terms set forth herein. The Shares consist entirely of authorized but unissued
shares of Common Stock to be issued and sold by the Company.

 

The Company hereby confirms its agreement with the Agent (this “Agreement”) with
respect to the sale of the Shares.

 

1. Representations and Warranties of the Company.

 

(a) The Company represents and warrants to, and agrees with, the Agent as
follows:

 

(i) A registration statement on Form S-3 (File No. 333-230492) was initially
declared effective by the Securities and Exchange Commission (the “Commission”)
on April 5, 2019, and is currently effective under the Securities Act of 1933,
as amended (the “Securities Act of 1933”), and the rules and regulations
promulgated thereunder (the “Rules and Regulations” and collectively with the
Securities Act of 1933, the “Securities Act”); since the date of effectiveness
of the registration statement, no additional or supplemental information was
requested by the Commission. No stop order of the Commission preventing or
suspending the use of the Base Prospectus (as defined below), the Prospectus
Supplement (as defined below), the Prospectus (as defined below) or any
Permitted Free Writing Prospectus (as defined below), or the effectiveness of
the Registration Statement, has been issued, and no proceedings for such purpose
have been instituted or, to the Company’s knowledge, are contemplated by the
Commission. Except where the context otherwise requires, “Registration
Statement,” as used herein, means the registration statement (Reg. No.
333-230492), as amended at the time of such registration statement’s
effectiveness for purposes of Section 11 of the Securities Act, as such section
applies to the Agent, including (1) all documents filed as a part thereof or
incorporated or deemed to be incorporated by reference therein, (2) any
information contained or incorporated by reference in a prospectus filed with
the Commission pursuant to Rule 424(b) under the Securities Act, to the extent
such information is deemed, pursuant to Rule 430B or Rule 430C under the
Securities Act, to be part of the registration statement at such time, and (3)
any registration statement filed to register the offer and sale of Shares
pursuant to Rule 462(b) under the Securities Act (the “462(b) Registration
Statement”). Except where the context otherwise requires, “Base Prospectus,” as
used herein, means the base prospectus filed as part of the Registration
Statement, together with any amendments or supplements thereto as of the date of
this Agreement. Except where the context otherwise requires, “Prospectus
Supplement,” as used herein, means the most recent prospectus relating to the
Shares, filed or to be filed by the Company with the Commission as part of the
Base Prospectus pursuant to Rule 424(b) under the Securities Act and in
accordance with the terms of this Agreement. Except where the context otherwise
requires, “Prospectus,” as used herein, means the Prospectus Supplement together
with the Base Prospectus attached to or used with the Prospectus Supplement, as
may be amended or supplemented from time to time. “Permitted Free Writing
Prospectus,” as used herein, means the documents, if any, listed on Schedule A
attached hereto and, after the date hereof, any “issuer free writing prospectus”
as defined in Rule 433 of the Securities Act, that is expressly agreed to by the
Company and the Agent in writing to be a Permitted Free Writing Prospectus. Any
reference herein to the Registration Statement, the Base Prospectus, the
Prospectus Supplement, the Prospectus or any Permitted Free Writing Prospectus
shall be deemed to refer to and include the documents, if any, incorporated by
reference, or deemed to be incorporated by reference, therein pursuant to Item
12 of Form S-3 (the “Incorporated Documents”), including, unless the context
otherwise requires, the documents, if any, filed as exhibits to such
Incorporated Documents. For purposes of this Agreement, all references to the
Registration Statement, the Rule 462(b) Registration Statement, the Base
Prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”). All
references in this Agreement to financial statements and schedules and other
information which is “described,” “contained,” “included” or “stated” in the
Registration Statement, the Base Prospectus, the Prospectus or any Permitted
Free Writing Prospectus (or other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which is incorporated by reference in or otherwise deemed by the
Rules and Regulations to be a part of or included in the Registration Statement,
the Base Prospectus, the Prospectus or Permitted Free Writing Prospectus as the
case may be. Any reference herein to the terms “amend,” “amendment” or
“supplement” with respect to the Registration Statement, any Base Prospectus,
the Prospectus, the Prospectus Supplement or any Permitted Free Writing
Prospectus shall be deemed to refer to and include the filing of any document
under the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively, the “Exchange Act”) on or after the
initial effective date of the Registration Statement, or the date of such Base
Prospectus, the Prospectus, the Prospectus Supplement or such Permitted Free
Writing Prospectus, if any, as the case may be, and incorporated or deemed to be
incorporated therein by reference pursuant to Item 12 of Form S-3. “Time of
Sale” means each time a Share is purchased pursuant to this Agreement.

 

 

 

 

(ii) (A) The Registration Statement complied when it became effective, complies
as of the date hereof, and will comply upon the effectiveness of any amendment
thereto and at each Time of Sale and each Settlement Date (as applicable), in
all material respects, with the requirements of the Securities Act; at all times
during which a prospectus is required by the Securities Act to be delivered
(whether physically or through compliance with Rule 172 under the Securities Act
or any similar rule) in connection with any sale of Shares (the “Prospectus
Delivery Period”), the Registration Statement, as may be amended, will comply,
in all material respects, with the requirements of the Securities Act; the
conditions to the use of Form S-3 in connection with the offering and sale of
the Shares as contemplated hereby (the “Offering”) have been satisfied, subject
to the limitations required by General Instruction I.B.6 of Form S-3; the
Registration Statement meets, and the Offering complies with, the requirements
of Rule 415 under the Securities Act (including, without limitation, Rule
415(a)(5)); the Registration Statement did not, as of the time of effectiveness
and as of the date hereof, and will not, as of the effective date of any
amendment thereto, at each Time of Sale, if any, and at all times during a
Prospectus Delivery Period, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.

 

(B) The Prospectus, as of the date of the Prospectus Supplement, as of the date
hereof (if filed with the Commission on or prior to the date hereof), at each
Settlement Date and Time of Sale (as applicable), and at all times during a
Prospectus Delivery Period, complied, complies or will comply, in all material
respects, with the requirements of the Securities Act; and the Prospectus, and
each supplement thereto, as of their respective dates, at each Settlement Date
or Time of Sale (as applicable), and at all times during a Prospectus Delivery
Period, did not and will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

 

 

 

 

(C) Each Permitted Free Writing Prospectus, if any, as of its date and as of
each Settlement Date and Time of Sale (as applicable), and at all times during a
Prospectus Delivery Period (when taken together with the Prospectus at such
time) will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

 

The representations and warranties set forth in subparagraphs (A), (B) and (C)
above shall not apply to any statement contained in the Registration Statement,
the Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus in
reliance upon and in conformity with information concerning the Agent that is
furnished in writing by or on behalf of the Agent expressly for use in the
Registration Statement, the Base Prospectus, the Prospectus or such Permitted
Free Writing Prospectus, if any, it being understood and agreed that only such
information furnished by the Agent as of the date hereof consists of the
information described in Section 5(b)(ii).

 

(iii) Prior to the execution of this Agreement, the Company has not, directly or
indirectly, offered or sold any Shares by means of any “prospectus” (within the
meaning of the Securities Act) or used any “prospectus” (within the meaning of
the Securities Act) in connection with the Offering, in each case other than the
Base Prospectus or any Permitted Free Writing Prospectus; the Company has not,
directly or indirectly, prepared, used or referred to any Permitted Free Writing
Prospectus except in compliance with Rules 164 and 433 under the Securities Act;
assuming that a Permitted Free Writing Prospectus, if any, is sent or given
after the Registration Statement was filed with the Commission (and after such
Permitted Free Writing Prospectus, if any, was, if required pursuant to Rule
433(d) under the Securities Act, filed with the Commission), the Company will
satisfy the provisions of Rule 164 or Rule 433 necessary for the use of a free
writing prospectus (as defined in Rule 405) in connection with the Offering; the
conditions set forth in one or more of subclauses (i) through (iv), inclusive,
of Rule 433(b)(1) under the Securities Act are satisfied, and the registration
statement relating to the Offering, as initially filed with the Commission,
includes a prospectus that, other than by reason of Rule 433 or Rule 431 under
the Securities Act, satisfies the requirements of Section 10 of the Securities
Act; neither the Company nor the Agent is disqualified, by reason of subsection
(f) or (g) of Rule 164 under the Securities Act, from using, in connection with
the Offering, “free writing prospectuses” (as defined in Rule 405 under the
Securities Act) pursuant to Rules 164 and 433 under the Securities Act; the
Company is not an “ineligible issuer” (as defined in Rule 405 under the
Securities Act) as of the eligibility determination date for purposes of Rules
164 and 433 under the Securities Act with respect to the offering of the Shares
contemplated by the Registration Statement; the parties hereto agree and
understand that the content of any and all “road shows” (as defined in Rule 433
under the Securities Act) related to the Offering is solely the property of the
Company.

 

 

 

 

(iv) Each Permitted Free Writing Prospectus, as of its issue date, each Time of
Sale and each Settlement Date occurring after such issue date and at all
subsequent times through the Prospectus Delivery Period (as defined below) or
until any earlier date that the Company notified or notifies the Agent as
described in Section 3(c)(iii), did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement, any Base Prospectus or the Prospectus.
The foregoing sentence does not apply to statements in or omissions from any
Permitted Free Writing Prospectus based upon and in conformity with written
information furnished to the Company by the Agent specifically for use therein,
it being understood and agreed that the only such information furnished by the
Agent as of the date hereof consists of the information described in Section
5(b) (ii).

 

(v) The financial statements, including the notes thereto, and the supporting
schedules incorporated by reference in the Registration Statement and the
Prospectus comply in all material respects with the requirements of the
Securities Act, the Exchange Act and the Rules and Regulations, and present
fairly the financial condition of the Company and its subsidiaries (as
identified in the Registration Statement and Prospectus, the “Subsidiaries”) and
financial position as of the dates indicated and the cash flows and results of
operations for the periods specified of the Company. Except as otherwise stated
in the Registration Statement and the Prospectus, said financial statements have
been prepared in conformity with United States generally accepted accounting
principles (“GAAP”) applied on a consistent basis throughout the periods
involved. Any selected financial data and summary financial information included
in the documents in the Registration Statement and in the Prospectus constitute
or will constitute a fair summary of the information purported to be summarized
and have been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. No other financial statements
or supporting schedules are required to be included or incorporated by reference
in the Registration Statement or the Prospectus. All disclosures, if any,
contained in the Registration Statement or the Prospectus or incorporated by
reference therein regarding “non-GAAP financial measures” (as such term is
defined by the applicable rules and regulations of the Commission) comply, in
all material respects, with Regulation G of the Exchange Act and Item 10 of
Regulation S-K of the Securities Act to the extent applicable. The other
financial information included in the Registration Statement and the Prospectus
present fairly the information included therein and have been prepared on a
basis consistent with that of the financial statements that are included in the
Registration Statement and the Prospectus and the books and records of the
Company.

 

 

 

 

(vi) The Company and each of its Subsidiaries has been duly incorporated and
validly exists as a corporation in good standing under the laws of its
jurisdiction of incorporation. The Company and each of its Subsidiaries has all
requisite corporate power and authority to own, lease and operate its respective
properties and carry on its business as it is currently being conducted and as
described in the Registration Statement and the Prospectus. The Company and each
of its Subsidiaries is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction in which the character or location of
its properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except, in each case, for those
failures to be so qualified or in good standing which (individually or in the
aggregate) would not reasonably be expected to have a Material Adverse Effect
(as defined below).

 

(vii) All of the issued shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable, have been
issued in compliance in all material respects with all applicable federal and
state securities laws and none of those shares was issued in violation of any
preemptive rights, rights of first refusal or other similar rights to the extent
any such rights were not waived; the Shares have been duly authorized and, when
issued and delivered against payment therefor as provided in this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance of the
Shares is not subject to any preemptive rights, rights of first refusal or other
similar rights that have not heretofore been waived (with copies of such waivers
provided or made available to the Agent). The Shares conform in all material
respects to the descriptions thereof contained in the Registration Statement and
the Prospectus under the heading “Description of Capital Stock.”

 

(viii) Tanner LLC (the “Auditor”), whose reports relating to the Company are
incorporated by reference into the Registration Statement and the Prospectus, is
an independent registered public accounting firm as required by the Securities
Act, the Exchange Act and the Rules and Regulations and the Public Company
Accounting Oversight Board (the “PCAOB”). To the Company’s knowledge, the
Auditor is not in violation of the auditor independence requirements of the
Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) as such requirements pertain to
the Auditor’s relationship with the Company. Except as disclosed in the
Registration Statement and the Prospectus, and except for any such non-audit
services that were pre-approved by the Audit Committee of the Company’s Board of
Directors in accordance with Sections 10A(h) and (i) of the Exchange Act, the
Auditor has not, during the periods covered by the financial statements included
in the Registration Statement and the Prospectus, provided to the Company any
non-audit services, as such term is used in Section 10A(g) of the Exchange Act.

 

 

 

 

(ix) Subsequent to the respective dates as of which information is presented in
the Registration Statement and the Prospectus, and except as disclosed in the
Registration Statement and the Prospectus: (i) the Company (including its
Subsidiaries) has not declared, paid or made any dividends or other
distributions of any kind on or in respect of its capital stock, and (ii) there
has been no material adverse change or, to the Company’s knowledge, any
development which could reasonably be expected to result in a material adverse
change in the future, whether or not arising from transactions in the ordinary
course of business, in or affecting: (A) the business, condition (financial or
otherwise), results of operations, stockholders’ equity, properties or prospects
of the Company or its Subsidiaries; (B) the long-term debt or capital stock of
the Company or its Subsidiaries; or (C) the Offering or consummation of any of
the other transactions contemplated by this Agreement, the Registration
Statement and the Prospectus (a “Material Adverse Effect”). Since the date of
the latest balance sheet included in the Registration Statement and the
Prospectus, the Company (including its Subsidiaries) has not incurred or
undertaken any liabilities or obligations, whether direct or indirect,
liquidated or contingent, matured or unmatured, or entered into any
transactions, including any acquisition or disposition of any business or asset,
which are material to the Company, except (I) for liabilities, obligations and
transactions which are disclosed in the Registration Statement and the
Prospectus and (II) as would not be reasonably expected (individually or in the
aggregate) to result in a Material Adverse Effect.

 

(x) There are no statutes, regulations, contracts or documents that are required
to be described in the Registration Statement and the Prospectus or to be filed
as exhibits to the Registration Statement by the Securities Act that have not
been so described or filed.

 

(xi) Neither the Company nor any of its Subsidiaries is: (i) in violation of its
certificate of incorporation or bylaws or other organizational documents, (ii)
in default under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or to
which any of its property or assets is subject; and no event has occurred which,
with notice or lapse of time or both, would constitute a default under or result
in the creation or imposition of any lien, security interest, charge or other
encumbrance (a “Lien”) upon any of its property or assets pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which any of its
property or assets is subject, or (iii) in violation in any respect of any
applicable law, rule, regulation, ordinance, directive, judgment, decree or
order of any judicial, regulatory or other legal or governmental agency or body,
foreign or domestic, except, in the case of subsections (ii) and (iii) above,
for such violations, defaults or Liens which (individually or in the aggregate)
would not reasonably be expected to have a Material Adverse Effect.

 

 

 

 

(xii) The Company has all requisite corporate power and authority to execute and
deliver this Agreement and all other agreements, documents, certificates and
instruments required to be delivered pursuant to this Agreement. The Company’s
execution, delivery and performance under this Agreement and each of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action. This Agreement has been duly and validly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company and is enforceable against the Company in accordance with its
terms, except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally; (ii) as enforceability of any indemnification or contribution
provision may be limited under federal and state securities laws; and (iii) that
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.

 

(xiii) The execution, delivery and performance of this Agreement and all other
agreements, documents, certificates and instruments required to be delivered
pursuant to this Agreement and the consummation of the transactions contemplated
hereby do not and will not: (i) conflict with, require consent under or result
in a breach of any of the terms and provisions of, or constitute a default (or
an event which with notice or lapse of time, or both, would constitute a
default) under, or result in the creation or imposition of any Lien upon any
property or assets of the Company pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement, instrument, franchise, license or
permit to which the Company is a party or by which the Company or any of its
properties, operations or assets may be bound, (ii) violate or conflict with any
provision of the certificate of incorporation, bylaws or other organizational
documents of the Company, or (iii) violate or conflict with any applicable law,
rule, regulation, ordinance, directive, judgment, decree or order of any
judicial, regulatory or other legal or governmental agency or body, domestic or
foreign, except in the case of subsections (i) and (iii) for any default,
conflict, violation or Lien for which the Company has received a waiver or that
would not reasonably be expected to result in a Material Adverse Effect.

 

 

 

 

(xiv) Except as disclosed in the Registration Statement and the Prospectus, the
Company and each of its Subsidiaries has all consents, approvals,
authorizations, orders, registrations, qualifications, licenses, filings,
grants, certificates and permits of, with and from all judicial, regulatory and
other legal or governmental agencies, self-regulatory agencies, authorities and
bodies and all third parties, foreign and domestic, including, without
limitation, the U.S. Food and Drug Administration (“FDA”) or equivalent in
non-U.S. jurisdictions (collectively, the “Consents”), to own, lease and operate
its properties and conduct its business as it is now being conducted and as
disclosed in the Registration Statement and the Prospectus, and each such
Consent is valid and in full force and effect, except which (individually or in
the aggregate), in each such case, would not reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries has
received notice of any investigation or proceedings which results in or, if
decided adversely to the Company or such Subsidiary, could reasonably be
expected to result in, the revocation of, or imposition of a restriction on, any
Consent, except such restriction or revocation of such Consent which
(individually or in the aggregate) would not reasonably be expected to have a
Material Adverse Effect. No Consent contains any material restriction not
adequately disclosed in the Registration Statement and the Prospectus.

 

(xv) The Company and each of its Subsidiaries is in compliance with all
applicable laws, rules, regulations, ordinances, directives, judgments, decrees
and orders, foreign and domestic, except for any non-compliance the consequences
of which would not have a Material Adverse Effect.

 

(xvi) Prior to the Settlement Date, the Shares shall have been approved for
listing on the NASDAQ Capital Market, subject to official notice of issuance
(the “Exchange”), and the Company has taken no action designed to, or likely to
have the effect of, delisting the Shares nor, except as disclosed in the
Registration Statement and the Prospectus, has the Company received any
notification that the Exchange is contemplating terminating such listing.

 

(xvii) No consent of, with or from any judicial, regulatory or other legal or
governmental agency or body or any third party, foreign or domestic is required
for the execution, delivery and performance of this Agreement or consummation of
each of the transactions contemplated by this Agreement, including the issuance,
sale and delivery of the Shares to be issued, sold and delivered hereunder,
except (i) such as may have previously been obtained (with copies of such
consents provided to the Agent), each of which is in full force and effect as of
the date hereof, (ii) the registration under the Securities Act of the Shares,
which has become effective and which remains in full force and effect as of the
date hereof, (iii) such consents as may be required under state securities or
blue sky laws or the bylaws and rules of the Exchange, and (iv) by the Financial
Industry Regulatory Authority, Inc. (“FINRA”) in connection with the purchase
and distribution of the Shares by the Agent.

 

 

 

 

(xviii) Except as disclosed in the Registration Statement and the Prospectus,
there is no judicial, regulatory, arbitral or other legal or governmental
proceeding or other litigation or arbitration, domestic or foreign, pending to
which the Company or any of its Subsidiaries is a party or of which any
property, operations or assets of the Company or its Subsidiaries is the subject
which (i) individually or in the aggregate, if determined adversely to the
Company or applicable Subsidiary would reasonably be expected to have a Material
Adverse Effect, or (ii) is reasonably likely to materially and adversely affect
the consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder. To the Company’s
knowledge, no such proceeding, litigation or arbitration is threatened or
contemplated against the Company or its Subsidiaries.

 

(xix) The statistical, industry-related and market-related data included in the
Registration Statement and the Prospectus are based on or derived from sources
which the Company reasonably and in good faith believes are reliable and
accurate, and the Company has obtained the written consent to the use of such
data from such sources, to the extent required, except for such failures to
obtain written consent which (individually or in the aggregate) would not
reasonably be expected to have a Material Adverse Effect.

 

(xx) Except as disclosed in the Registration Statement and the Prospectus, the
Company has established and maintains disclosure controls and procedures over
financial reporting (as defined in Rules 13a-15 and 15d-15 under the Exchange
Act) and such controls and procedures are designed to ensure that information
relating to the Company required to be disclosed in the reports that it files or
submits under the Exchange Act is accumulated and communicated to the Company’s
management, including its principal executive and financial officer, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure. The Company has utilized such controls and procedures in
preparing and evaluating the disclosures in the Registration Statement and in
the Prospectus.

 

(xxi) Except as disclosed in the Registration Statement and the Prospectus,
neither the board of directors nor the audit committee has been informed, nor is
the Company aware, of: (i) any significant deficiencies or material weaknesses
in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the Company’s ability to record,
process, summarize and report financial information; or (ii) any fraud, whether
or not material, that involves management or other employees who have a
significant role in the Company’s internal control over financial reporting.

 

 

 

 

(xxii) The Company has not taken, directly or indirectly, any action which
constitutes or is designed to cause or result in, or which could reasonably be
expected to constitute, cause or result in, the stabilization or manipulation of
the price of any security to facilitate the sale or resale of the Shares.

 

(xxiii) Neither the Company nor any of its Affiliates (within the meaning of the
Securities Act) has, prior to the date hereof, made any offer or sale of any
securities which are required to be “integrated” pursuant to the Securities Act
or the Rules and Regulations with the offer and sale of the Shares pursuant to
the Registration Statement. Except as disclosed in the Registration Statement
and the Prospectus, neither the Company nor any of its Affiliates has sold or
issued any securities during the six-month period preceding the date of the
Prospectus, including but not limited to any sales pursuant to Rule 144A,
Regulation D or Regulation S under the Securities Act, other than shares of
Common Stock issued pursuant to equity incentive plans, employee stock purchase
plans, employee benefit plans, qualified stock option plans or employee
compensation plans or pursuant to outstanding options, convertible notes,
convertible preferred stock, rights or warrants to purchase shares of Common
Stock.

 

(xxiv) To the knowledge of the Company, the biographies of the Company’s
officers and directors incorporated into the Registration Statement are true and
correct in all material respects and the Company has not become aware of any
information which would cause the information disclosed in the questionnaires
previously completed by the directors and officers of the Company to become
inaccurate and incorrect in any material respect.

 

(xxv) To the knowledge of the Company, no director or officer of the Company is
subject to any non-competition agreement or non-solicitation agreement with any
employer or prior employer which could materially affect his or her ability to
be and act in his or her respective capacity of the Company.

 

(xxvi) The Company is not and, at all times up to and including the consummation
of the transactions contemplated by this Agreement, and after giving effect to
application of the Net Proceeds (as defined below), will not be, subject to
registration as an “investment company” under the Investment Company Act of
1940, as amended, and is not and will not be an entity “controlled” by an
“investment company” within the meaning of such act.

 

 

 

 

(xxvii) No relationship, direct or indirect, exists between or among any of the
Company or, to the Company’s knowledge, any Affiliate of the Company, on the one
hand, and any director, officer, stockholder, customer or supplier of the
Company or, to the Company’s knowledge, any Affiliate of the Company, on the
other hand, which is required by the Securities Act, the Exchange Act or the
Rules and Regulations to be described in the Registration Statement or the
Prospectus which is not so described as required. There are no outstanding
loans, advances (except normal advances for business expenses in the ordinary
course of business) or guarantees of indebtedness by the Company to or for the
benefit of any of the officers or directors of the Company or any of their
respective family members, except as described in the Registration Statement and
the Prospectus. The Company has not, in violation of Sarbanes-Oxley, directly or
indirectly extended or maintained credit, arranged for the extension of credit,
or renewed an extension of credit, in the form of a personal loan to or for any
director or executive officer of the Company.

 

(xxviii) Except as disclosed in the Registration Statement and the Prospectus,
the Company is in compliance with the rules and regulations promulgated by The
NASDAQ Stock Market LLC or any other governmental or self-regulatory entity or
agency having jurisdiction over the Company, except for such failures to be in
compliance which (individually or in the aggregate) would not reasonably be
expected to have a Material Adverse Effect. Without limiting the generality of
the foregoing: (i) all members of the Company’s board of directors who are
required to be “independent” (as that term is defined under the rules of The
NASDAQ Stock Market LLC), including, without limitation, all members of the
audit committee of the Company’s board of directors, meet the qualifications of
independence as set forth under applicable laws, rules and regulations and (ii)
the audit committee of the Company’s board of directors has at least one member
who is an “audit committee financial expert” (as that term is defined under
applicable laws, rules and regulations).

 

(xxix) The Company and each of its Subsidiaries owns or leases all such
properties (other than intellectual property, which is covered below) as are
necessary to the conduct of its business as presently operated and as described
in the Registration Statement and the Prospectus. The Company and each of its
Subsidiaries has good and marketable title in fee simple to all real property
and good and marketable title to all personal property owned by it, in each case
free and clear of all Liens except such as are described in the Registration
Statement and the Prospectus or such as would not (individually or in the
aggregate) have a Material Adverse Effect. Any real property and buildings held
under lease or sublease by the Company or its Subsidiaries are held by it under
valid, subsisting and, to the Company’s knowledge, enforceable leases with such
exceptions as are not material to, and do not materially interfere with, the use
made and proposed to be made of such property and buildings by the Company or
its Subsidiaries. Neither the Company nor its Subsidiaries has received any
written notice of any claim adverse to its ownership of any real or material
personal property or of any claim against the continued possession of any real
property, whether owned or held under lease or sublease by the Company or its
Subsidiaries, except for such claims that, if successfully asserted against the
Company or its Subsidiaries, would not (individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect.

 

 

 

 

(xxx) The Company (including all of its Subsidiaries): (i) owns, possesses or
has the right to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark registrations,
copyrights, licenses, formulae, customer lists and know-how and other
intellectual property (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures,
“Intellectual Property”) necessary for the conduct of its businesses as being
conducted and as described in the Registration Statement and the Prospectus,
except as disclosed in the Registration Statement or the Prospectus, and (ii)
has no knowledge that the conduct of its business conflicts or will conflict
with the rights of others, and it has not received any written notice of any
claim of conflict with, any right of others. To the Company’s knowledge, there
is no infringement by third parties of any such Intellectual Property. There is
no pending or, to the Company’s knowledge, threatened, action, suit, proceeding
or claim by others challenging the Company’s rights in or to any such
Intellectual Property, and the Company is unaware of any facts which would form
a reasonable basis for any such claim; and there is no pending or, to the
Company’s knowledge, threatened, action, suit, proceeding or claim by others
that the Company infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and the Company
is unaware of any other fact which would form a reasonable basis for any such
claim. Except as set forth in the Registration Statement and the Prospectus, the
Company has not received any claim for royalties or other compensation from any
person, including any employee of the Company who made inventive contributions
to Company’s technology or products that are pending or unsettled, and except as
set forth in the Registration Statement and the Prospectus the Company does not
and will not have any obligation to pay royalties or other compensation to any
person on account of inventive contributions.

 

(xxxi) The agreements and documents described in the Registration Statement and
the Prospectus conform in all material respects to the descriptions thereof
contained therein and there are no agreements or other documents required by the
applicable provisions of the Securities Act to be described in the Registration
Statement or the Prospectus or to be filed with the Commission as exhibits to
the Registration Statement, that have not been so described or filed. Each
agreement or other instrument (however characterized or described) to which the
Company (or its Subsidiaries) is a party or by which its property or business is
or may be bound or affected and (i) that is referred to in the Registration
Statement or the Prospectus or attached as an exhibit thereto, or (ii) is
material to the Company’s business, has been duly and validly executed by the
Company, is in full force and effect in all material respects and is enforceable
against the Company in accordance with its terms, except (x) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally, (y) as enforceability of any
indemnification or contribution provision may be limited under the foreign,
federal and state securities laws, and (z) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, and none of such agreements or instruments
has been assigned by the Company (including any Subsidiaries), and neither the
Company nor, to the Company’s knowledge, any other party is in material breach
or default thereunder and, to the Company’s knowledge, no event has occurred
that, with the lapse of time or the giving of notice, or both, would constitute
a breach or default thereunder, in any such case, which would result in a
Material Adverse Effect.

 

 

 

 

(xxxii) The disclosures in the Registration Statement and the Prospectus
concerning the effects of foreign, federal, state and local regulation on the
Company’s business as currently contemplated are correct in all material
respects.

 

(xxxiii) The Company has accurately prepared and filed all federal, state,
foreign and other tax returns that are required to be filed by it through the
date hereof, or has received timely extensions thereof, except where the failure
to so file would not (individually or in the aggregate) reasonably be expected
to have a Material Adverse Effect, and has paid or made provision for the
payment of all material taxes, assessments, governmental or other similar
charges, including without limitation, all sales and use taxes and all taxes
which the Company is obligated to withhold from amounts owing to employees,
creditors and third parties, with respect to the periods covered by such tax
returns, whether or not such amounts are shown as due on any tax return (except
as currently being contested in good faith and for which reserves required by
GAAP have been created in the financial statements of the Company) and except
for such taxes, assessments, governmental or other similar charges the
nonpayment of which would not (individually or in the aggregate) reasonably be
expected to have a Material Adverse Effect. No deficiency assessment with
respect to a proposed adjustment of the Company’s federal, state, local or
foreign taxes is pending or, to the Company’s knowledge, threatened. The
accruals and reserves on the books and records of the Company in respect of tax
liabilities for any taxable period not finally determined are adequate to meet
any assessments and related liabilities for any such period and, since the date
of the Company’s most recent audited financial statements, the Company has not
incurred any material liability for taxes other than in the ordinary course of
its business. There is no tax lien, whether imposed by any federal, state,
foreign or other taxing authority, outstanding against the assets, properties or
business of the Company.

 

 

 

 

(xxxiv) No labor disturbance or dispute by or with the employees of the Company
which, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect, currently exists or, to the Company’s knowledge, is
threatened. The Company is in compliance in all material respects with the labor
and employment laws and collective bargaining agreements and extension orders
applicable to its employees.

 

(xxxv) Except as would not be reasonably expected, individually or in the
aggregate, to have a Material Adverse Effect, the Company (and its Subsidiaries)
is in compliance with all material Environmental Laws (as hereinafter defined),
and, to the Company’s knowledge, no future material expenditures are or will be
required in order to comply therewith. The Company has not received any written
notice or communication that relates to or alleges any actual or potential
violation or failure to comply with any Environmental Laws that would,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect. As used herein, the term “Environmental Laws” means all
applicable laws and regulations, including any licensing, permits or reporting
requirements, and any action by a federal, state or local government entity,
pertaining to the protection of the environment, protection of public health,
protection of worker health and safety, or the handling of hazardous materials,
including without limitation, the Clean Air Act, 42 U.S.C. § 7401, et seq., the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. § 9601, et seq., the Federal Water Pollution Control Act, 33 U.S.C. §
1321, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 690-1, et seq.,
and the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq.

 

(xxxvi) As to each product or product candidate subject to the jurisdiction of
the U.S. Food and Drug Administration (FDA) under the Federal Food, Drug and
Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) and/or the
jurisdiction of the non-U.S. counterparts thereof that is currently being tested
by the Company (or any of its Subsidiaries) (each such product, a “Product”),
such Product is being tested by the Company in compliance with all applicable
requirements under FDCA and/or and similar laws, rules and regulations relating
to registration, investigational use, premarket clearance, licensure, or
application approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, advertising, record keeping
and filing of reports, except where the failure to be in compliance would not
have a Material Adverse Effect. Except as disclosed in the Registration
Statement and the Prospectus, the Company currently has no products that have
been approved by the FDA or any non-U.S. counterparts thereof to be
manufactured, packaged, labeled, distributed, sold and/or marketed. Except as
disclosed in the Registration Statement or the Prospectus, there is no pending,
completed or, to the Company’s knowledge, threatened, action (including any
lawsuit, arbitration, or legal or administrative or regulatory proceeding,
charge, complaint, or investigation) against the Company and the Company has not
received any written notice, warning letter or other communication from the FDA
or any other governmental entity or any non-U.S. counterparts thereof, in either
case which (i) contests the premarket clearance, licensure, registration or
approval of, the uses of, the distribution of, the manufacturing or packaging
of, the testing of, the sale of, or the labeling and promotion of any Product,
(ii) imposes a clinical hold on any clinical investigation by the Company, (iii)
enters or proposes to enter into a consent decree of permanent injunction with
the Company, or (iv) otherwise alleges any violation of any laws, rules or
regulations by the Company, and which, either individually or in the aggregate,
would have a Material Adverse Effect. The properties, business and operations of
the Company have been and are being conducted in all material respects in
accordance with all applicable laws, rules and regulations of the FDA and
non-U.S. counterparts thereof. The Company has not been informed by the FDA or
any non-U.S. counterparts thereof that such agency will prohibit the marketing,
sale, license or use of any Product nor has the FDA or a non-U.S. counterpart
thereof provided any written notice that could reasonably be expected to
preclude the approval or the clearing for marketing of any Product.

 

 

 

 

(xxxvii) The clinical, pre-clinical and other studies and tests (“Studies”)
conducted by or on behalf of or sponsored by the Company (including its
Subsidiaries) that are described or referred to in the Registration Statement
and the Prospectus were and, if still pending, are, being conducted in
accordance with all applicable statutes, laws, rules and regulations (including,
without limitation, those administered by the FDA or by any foreign, federal,
state or local governmental or regulatory authority performing functions similar
to those performed by the FDA), as well as the protocols, procedures and
controls designed and approved for such Studies and with standard medical and
scientific research procedures, except where the failure to be so conducted
would not have a Material Adverse Effect. The descriptions of the results of
such Studies that are described or referred to in the Registration Statement and
the Prospectus are accurate and complete in all material respects and fairly
present the data derived from such Studies. Except as disclosed in the
Registration Statement and the Prospectus, the Company has not received any
written notices or other correspondence from the FDA or any other foreign,
federal, state or local governmental or regulatory authority performing
functions similar to those performed by the FDA requiring the termination or
suspension of such Studies, other than ordinary course communications with
respect to modifications in connection with the design and implementation of
such Studies.

 

(xxxviii) Except as would not result in a Material Adverse Effect, the Company
(including its Subsidiaries) has not failed to file with the applicable
regulatory authorities (including the FDA or any foreign, federal, state or
local governmental or regulatory authority performing functions similar to those
performed by the FDA and having jurisdiction over the Company) any filing,
declaration, listing, registration, report or submission that is required to be
so filed for the Company’s business operation as currently conducted. All such
filings were in material compliance with applicable laws when filed and no
material deficiencies have been asserted in writing by any applicable regulatory
authority (including, without limitation, the FDA or any foreign, federal, state
or local governmental or regulatory authority performing functions similar to
those performed by the FDA) with respect to any such filings, declarations,
listings, registrations, reports or submissions.

 

(xxxix) The Registration Statement and the Prospectus identify each employment,
severance or other similar agreement, arrangement or policy and each material
arrangement providing for insurance coverage, benefits, bonuses, stock options
or other forms of incentive compensation, or post-retirement insurance,
compensation or benefits which: (i) is entered into, maintained or contributed
to, as the case may be, by the Company and (ii) covers any officer or director
or former officer or former director of the Company, in each case to the extent
required by the Rules and Regulations. These contracts, plans and arrangements
are referred to collectively in this Agreement as the “Benefit Arrangements.”
Each Benefit Arrangement has been maintained in material compliance with its
terms and with requirements prescribed by any and all statutes, orders, rules
and regulations that are applicable to that Benefit Arrangement in each case
except where the failure to comply is not reasonably likely to have a Material
Adverse Effect.

 

(xl) Except as set forth in the Registration Statement or the Prospectus, the
Company is not a party to or subject to any employment contract or arrangement
providing for annual future compensation, or the opportunity to earn annual
future compensation (whether through fixed salary, bonus, commission, options or
otherwise) of more than $120,000 to any executive officer or director.

 

(xli) The conditions for use of Form S-3 to register the Offering under the
Securities Act, as set forth in the General Instructions to such Form, have been
satisfied.

 

 

 

 

(xlii) Except as disclosed in the Registration Statement and the Prospectus,
neither the execution of this Agreement nor the consummation of the Offering,
constitutes a triggering event under any Benefit Arrangement or any other
employment contract, whether or not legally enforceable, which (either alone or
upon the occurrence of any additional or subsequent event) will or may result in
any payment (of severance pay or otherwise), acceleration, increase in vesting
or increase in benefits to any current or former participant, employee or
director of the Company other than an event that is not material to the
financial condition or business of the Company.

 

(xliii) Neither the Company nor, to the Company’s knowledge, any of its
employees or agents, has at any time during the last three (3) years: (i) made
any unlawful contribution to any candidate for foreign office, or failed to
disclose fully any contribution in violation of law, or (ii) made any payment to
any federal or state governmental officer or official or other person charged
with similar public or quasi-public duties in the United States, other than
payments that are not prohibited by the laws of the United States or any
jurisdiction thereof.

 

(xliv) The Company has not offered, or caused the Agent to offer, any Shares to
any person or entity with the intention of unlawfully influencing: (i) a
supplier of the Company to alter the supplier’s level or type of business with
the Company or (ii) a journalist or publication to write or publish favorable
information about the Company.

 

(xlv) The operations of the Company are and have been conducted at all times in
compliance in all material respects with applicable financial record keeping and
reporting requirements and money laundering statutes of the United States and,
to the Company’s knowledge, all other applicable jurisdictions to which the
Company is subject, 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 no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending or, to the Company’s knowledge, threatened.

 

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

 

 

 

 

(xlvii) None of the Company, its directors or officers or, to the Company’s
knowledge, any agent, employee, affiliate or other person acting on behalf of
the Company has engaged in any activities sanctionable under the Comprehensive
Iran Sanctions, Accountability, and Divestment Act of 2010, the Iran Sanctions
Act of 1996, the National Defense Authorization Act for Fiscal Year 2012, the
Iran Threat Reduction and Syria Human Rights Act of 2012 or any Executive Order
relating to any of the foregoing (collectively, and as each may be amended from
time to time, the “Iran Sanctions”); and the Company will not directly or
indirectly use the proceeds of the Offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of engaging in any activities sanctionable
under the Iran Sanctions.

 

(xlviii) Except as described in the Registration Statement and the Prospectus,
there are no claims, payments, arrangements, agreements or understandings
relating to the payment of a finder’s, consulting or origination fee by the
Company or any officer, director or stockholder of the Company (each, an
“Insider”) with respect to the sale of the Shares hereunder or any other
arrangements, agreements or understandings of the Company or, to the Company’s
knowledge, any of its stockholders that may affect the Agent’s compensation, as
determined by FINRA. Except as described in the Registration Statement and the
Prospectus, the Company has not made any direct or indirect payments (in cash,
securities or otherwise) to: (i) any person, as a finder’s fee, consulting fee
or otherwise, in consideration of such person raising capital for the Company or
introducing to the Company persons who raised or provided capital to the
Company; (ii) to any FINRA member; or (iii) to any person or entity that has any
direct or indirect affiliation or association with any FINRA member, within the
180 days prior to the Effective Date, other than the prior payment of $20,000 to
the Agent in connection with the Offering as an advance against the Agent’s
out-of-pocket expenses actually expected to be incurred, which advance shall be
reimbursed to the Company to the extent such expenses are not actually incurred
by the Agent. None of the Net Proceeds will be paid by the Company to any
participating FINRA member or its affiliates, except as specifically authorized
herein. No officer, director or, to the Company’s knowledge, any beneficial
owner of 5% or more of the Company’s securities (whether debt or equity,
registered or unregistered, regardless of the time acquired or the source from
which derived) (any such individual or entity, a “Company Affiliate”) has any
direct or indirect affiliation or association with any FINRA member (as
determined in accordance with the rules and regulations of FINRA); no Company
Affiliate is an owner of stock or other securities of any member of FINRA (other
than securities purchased on the open market); no Company Affiliate has made a
subordinated loan to any member of FINRA; and no Net Proceeds from the sale of
the Shares will be paid to any FINRA member, or any persons associated with or
affiliated with any member of FINRA. Except as disclosed in the Registration
Statement and the Prospectus, the Company has not issued any warrants or other
securities or granted any options, directly or indirectly, to anyone who is a
potential underwriter in the Offering or a related person (as defined by FINRA
rules) of such an underwriter within the 180-day period prior to the initial
filing date of the Registration Statement; no person to whom securities of the
Company have been privately issued within the 180-day period prior to the
initial filing date of the Registration Statement has any relationship or
affiliation or association with any member of FINRA; and no FINRA member
participating in the offering has a conflict of interest with the Company. For
this purpose, a “conflict of interest” has the meaning ascribed to such term in
FINRA Rule 5121(f)(5).

 

 

 

 

(xlix) The Company has not distributed and will not distribute any prospectus or
other offering material in connection with the Offering other than the
Registration Statement and the Prospectus or other materials permitted by the
Securities Act to be distributed by the Company; provided, however, that the
Company has not made and will not make any offer relating to the Shares that
would constitute a “free writing prospectus” as defined in Rule 405 under the
Securities Act, except any Permitted Free Writing Prospectus.

 

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

 

(c) At each Bringdown Date (as hereinafter defined) and each Time of Sale, the
Company shall be deemed to have affirmed each representation and warranty
contained in or made pursuant to this Agreement as of such date as though made
at and as of such date (except that such representations and warranties shall be
deemed to relate to the Registration Statement and the Prospectus as amended and
supplemented relating to such Shares on such date).

 

(d) As used in this Agreement, references to matters being “material” with
respect to the Company shall mean a material event, change, condition, status or
effect related to the condition (financial or otherwise), properties, assets
(including intangible assets), liabilities, business, prospects, operations or
results of operations of the Company, either individually or taken as a whole,
as the context requires.

 

(e) As used in this Agreement, the term “to the Company’s knowledge” (or similar
language) shall mean the knowledge of the executive officers and directors of
the Company who are named in the Prospectus, with the assumption that such
executive officers and directors shall have made reasonable and diligent inquiry
of the matters presented (with reference to what is customary and prudent for
the applicable individuals in connection with the discharge by the applicable
individuals of their duties as executive officers or directors of the Company).

 

 

 

 

2. Purchase, Sale and Delivery of Shares.

 

(a) At the Market Sales. On the basis of the representations, warranties and
agreements herein the Company agrees that, from time to time on the terms and
subject to the conditions set forth herein, it may issue and sell through the
Agent, acting as sales agent, Shares having an aggregate offering price of up to
$1,600,000 (the “Offering Size”); provided, however, that in no event shall the
Company issue or sell through the Agent such number of Shares that (a) exceeds
the number or dollar amount of shares of Common Stock registered on the
Registration Statement pursuant to which the Offering is being made, (b) exceeds
the number of authorized but unissued shares of Common Stock under the Company’s
Restated Certificate of Incorporation, as amended or (c) would cause the Company
or the Offering to not satisfy the eligibility and transaction requirements for
use of Form S-3 (including, if then applicable, General Instruction I.B.6 of
Form S-3) (the lesser of (a), (b) and (c), the “Maximum Amount”).
Notwithstanding anything to the contrary contained herein, the parties hereto
agree that compliance with the limitations set forth in this Section 2(a) on the
number and aggregate sales price of Shares issued and sold under this Agreement
shall be the sole responsibility of the Company and the Agent shall have no
obligation in connection with such compliance. Notwithstanding the foregoing,
the Company agrees that it will provide the Agent with written notice no less
than one (1) business day prior to the date on which it makes the initial sale
of Shares under this Agreement.

 

(i) For purposes of selling the Shares through the Agent, the Company hereby
appoints the Agent as exclusive agent of the Company (including in the event the
Company increases the Offering Size) for the purpose of soliciting purchases of
the Shares from the Company pursuant to this Agreement and the Agent agrees to
use its commercially reasonable efforts to sell the Shares on the terms and
subject to the conditions stated herein.

 

 

 

 

(ii) Each time the Company wishes to issue and sell the Shares hereunder (each,
a “Transaction”), it will notify the Agent by telephone (confirmed promptly by
e-mail to the appropriate individual listed on Schedule D hereto, using a form
substantially similar to that set forth on Schedule C hereto) (a “Transaction
Notice”) as to the maximum number of Shares to be sold by the Agent on such day
and in any event not in excess of the amount available for issuance under the
Prospectus and the currently effective Registration Statement, the time period
during which sales are requested to be made, any limitation on the number of
shares that may be sold in any one Trading Day (as defined below), and any
minimum price below which sales may not be made. The Transaction Notice shall
originate from any of the individuals from the Company set forth on Schedule B
(with a copy to each of the other individuals from the Company listed on such
Schedule), and shall be addressed to each of the individuals from the Agent set
forth on Schedule D, as such Schedule D may be amended from time to time.
Subject to the terms and conditions hereof and unless the sale of the Shares
described therein has been declined, suspended, or otherwise terminated in
accordance with the terms of this Agreement, the Agent shall promptly
acknowledge the Transaction Notice by e-mail (or by some other method mutually
agreed to in writing by the parties) and shall use its commercially reasonable
efforts to sell all of the Shares so designated by the Company in the
Transaction Notice and in accordance with the terms set forth herein; provided,
however, that any obligation of the Agent to use such commercially reasonable
efforts shall be subject to the continuing accuracy of the representations and
warranties of the Company herein, to the performance by the Company of its
obligations hereunder and to the continuing satisfaction of the additional
conditions specified in Section 4 of this Agreement. The gross sales price of
the Shares sold under this Section 2(a) shall be equal to the market price for
the Common Stock sold by the Agent under this Section 2(a) on the NASDAQ Capital
Market at the time of such sale. For the purposes hereof, “Trading Day” means
any day on which shares of Common Stock are purchased and sold on the principal
market on which the Common Stock is listed or quoted.

 

(iii) The Company or the Agent may, upon notice to the other party hereto by
telephone (confirmed promptly by e-mail to the respective individuals of the
other party set forth on Schedule D hereto, which confirmation shall be promptly
acknowledged by the other party), suspend the Offering for any reason and at any
time, whereupon the Agent shall so suspend the offering of Shares until further
notice is provided by the other party to the contrary; provided, however, that
such suspension or termination shall not affect or impair the parties’
respective obligations with respect to the Shares sold hereunder prior to the
receipt by the Agent of such notice. Each of the parties agrees that no such
notice under this Section 2(a)(iii) shall be effective against the other unless
it is made to one of the individuals named on Schedule D hereto, as such
Schedule may be amended from time to time. Notwithstanding the foregoing, if the
Agent suspends the Offering for any three (3) consecutive business days or on
more than three (3) separate occasions (in each instance other than as a result
of the Company’s breach of its obligations hereunder), the Company, in its sole
discretion, may elect to terminate this Agreement.

 

 

 

 

(iv) The Company acknowledges and agrees that (A) there can be no assurance that
the Agent will be successful in selling the Shares, (B) the Agent will incur no
liability or obligation to the Company or any other person or entity if it does
not sell Shares for any reason other than a failure by the Agent to use its
commercially reasonable efforts consistent with its normal trading and sales
practices and applicable law and regulations to sell such Shares as required
under this Agreement, and (C) the Agent shall be under no obligation to purchase
shares on a principal basis pursuant to this Agreement.

 

(v) The Agent may sell Shares by any method permitted by law to be an
“at-the-market offering” as defined in Rule 415 of the Securities Act including
without limitation sales made directly on the NASDAQ Capital Market, on any
other existing trading market for the Common Stock or to or through a market
maker. With the prior written consent of the Company, which may be provided in a
Transaction Notice, the Agent may also sell Shares in privately negotiated
transactions.

 

(vi) The compensation to the Agent for sales of the Shares, as an agent of the
Company, shall be 4.25% (the “Transaction Fee”) of the gross sales price of all
of Shares sold pursuant to this Section 2(a). The remaining proceeds, after
further deduction for any transaction or other fees imposed by any governmental
or self-regulatory organization in respect of such sales, shall constitute the
net proceeds to the Company for such Shares (the “Net Proceeds”). The Agent
shall notify the Company as promptly as practicable if any deduction referenced
in the preceding sentence will be required.

 

(vii) The Agent shall provide written confirmation to the Company following the
close of trading on the NASDAQ Capital Market each day in which the Shares are
sold under this Section 2(a) setting forth the number of the Shares sold on such
day, the aggregate gross sale proceeds, the Net Proceeds to the Company, and the
compensation payable by the Company to the Agent with respect to such sales.

 

(viii) All Shares sold pursuant to this Section 2(a) will be delivered by the
Company to Agent for the accounts of the Agent on the second full business day
following the date on which such Shares are sold, or at such other time and date
as Agent and the Company determine pursuant to Rule 15c6-1(a) under the Exchange
Act, each such time and date of delivery being herein referred to as a
“Settlement Date.” On each Settlement Date, the Shares sold through the Agent
for settlement on such date shall be issued and delivered by the Company to the
Agent against payment of the Net Proceeds from the sale of such Shares.
Settlement for all such Shares shall be effected by free delivery of the Shares
by the Company or its transfer agent (i) to the Agent or its designee’s account
(provided the Agent shall have given the Company written notice of such designee
prior to the Settlement Date) at The Depository Trust Company (“DTC”) or (ii) by
such other means of delivery as may be mutually agreed upon by the parties
hereto, which in all cases shall be freely tradable, transferable, registered
shares in good deliverable form, in return for payment in same day funds
delivered to an account designated by the Company. If the Company or its
transfer agent (if applicable) shall default on its obligation to deliver the
Shares on any Settlement Date, the Company shall (A) indemnify and hold the
Agent harmless against any loss, claim or damage arising from or as a result of
such default by the Company and (B) pay the Agent any commission to which it
would otherwise be entitled absent such default. If the Agent breaches this
Agreement by failing to deliver the Net Proceeds on any Settlement Date for the
shares delivered by the Company, the Agent will pay the Company interest based
on the effective prime rate until such proceeds, together with such interest,
have been fully paid.

 

 

 

 

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

 

(x) The Company agrees that any offer to sell, any solicitation of an offer to
buy, or any sales of Shares shall only be effected by or through the Agent;
provided, however, that the foregoing limitation shall not apply to the exercise
of any outstanding option or warrant or conversion of any outstanding
convertible preferred stock or convertible notes described in the Registration
Statement and the Prospectus.

 

(b) Nothing herein contained shall constitute the Agent an unincorporated
association or partner with the Company. Under no circumstances shall any Shares
be sold pursuant to this Agreement after the date which is three years after the
Registration Statement was first declared effective by the Commission.

 

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

 

 

 

 

(d) Unless the exceptive provisions set forth in Rule 101(c)(1) of Regulation M
under the Exchange Act are satisfied with respect to the Shares, the Company
shall give the Agent at least one Business Day’s prior notice of its intent to
sell any Shares in order to allow the Agent time to comply with Regulation M.

 

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

 

(a) After the date hereof and through any Prospectus Delivery Period, prior to
amending or supplementing the Registration Statement (including any Rule 462(b)
Registration Statement), Base Prospectus, the Prospectus or any Permitted Free
Writing Prospectus, the Company shall furnish to the Agent for review a copy of
each such proposed amendment or supplement, allow the Agent a reasonable amount
of time to review and comment on such proposed amendment or supplement, and the
Company shall not file any such proposed amendment or supplement to which the
Agent or counsel to the Agent reasonably object; provided that the foregoing
shall not apply with regards to the filing by the Company of any Form 10-K,
10-Q, 8-K, proxy statement or other Incorporated Document. Subject to this
Section 3(a), immediately following execution of this Agreement, if not
previously prepared, the Company will prepare a prospectus supplement describing
the selling terms of the Shares hereunder, the plan of distribution thereof and
such other information as may be required by the Securities Act or the Rules and
Regulations or as the Agent and the Company may deem appropriate, and if
requested by the Agent, a Permitted Free Writing Prospectus containing the
selling terms of the Shares hereunder and such other information as the Company
and the Agent may deem appropriate, and will file or transmit for filing with
the Commission, in accordance with Rule 424(b) or Rule 433, as the case may be,
copies of the Prospectus as supplemented and each such Permitted Free Writing
Prospectus.

 

 

 

 

(b) After the date of this Agreement, the Company shall promptly advise the
Agent in writing (i) of the receipt of any comments of, or requests for
additional or supplemental information from, the Commission or for any
amendments or supplements to the Registration Statement, the Base Prospectus,
the Prospectus or any Permitted Free Writing Prospectus (excluding any
Incorporated Documents), (ii) of the time and date of any filing of any
post-effective amendment to the Registration Statement or any amendment or
supplement to any Base Prospectus, the Prospectus or any Permitted Free Writing
Prospectus (excluding any Incorporated Documents), (iii) of the time and date
that any post-effective amendment to the Registration Statement becomes
effective, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or any post-effective amendment
thereto or of any order preventing or suspending its use or the use of any Base
Prospectus, the Prospectus or any Permitted Free Writing Prospectus, or (v) of
any proceedings to remove, suspend or terminate from listing or quotation the
Common Stock from any securities exchange upon which it is listed for trading or
included or designated for quotation, or of the threatening or initiation of any
proceedings for any of such purposes. If the Commission shall enter any such
stop order at any time, the Company may terminate this Agreement. Additionally,
the Company agrees that it shall comply with the provisions of Rules 424(b),
430B and 430C, as applicable, under the Securities Act and will use its
reasonable efforts to confirm that any filings made by the Company under Rule
424(b), Rule 433 or Rule 462 were received in a timely manner by the Commission
(without reliance on Rule 424(b)(8) or Rule 164(b)).

 

(c) From the date hereof through the later of (A) the termination of this
Agreement and (B) the end of any applicable Prospectus Delivery Period, the
Company will comply in all material respects with all requirements imposed upon
it by the Securities Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, and by the Exchange Act so far as
necessary to permit the continuance of sales of or dealings in the Shares as
contemplated by the provisions hereof, the Base Prospectus, the Prospectus and
any Permitted Free Writing Prospectus. If during any applicable Prospectus
Delivery Period any event occurs as a result of which the Base Prospectus, the
Prospectus, or any Permitted Free Writing Prospectus would include an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances then existing, not
misleading, or if during any applicable Prospectus Delivery Period it is
necessary or appropriate in the opinion of the Company or its counsel or in the
reasonable opinion of the Agent or counsel to the Agent to amend the
Registration Statement or supplement the Base Prospectus, the Prospectus or any
Permitted Free Writing Prospectus, to comply with the Securities Act or to file
under the Exchange Act any document which would be deemed to be incorporated by
reference in the Prospectus in order to comply with the Securities Act or the
Exchange Act, the Company will promptly notify Agent (or the Agent will notify
the Company, as applicable), and the Agent shall suspend the offering and sale
of any such Shares, and the Company will amend the Registration Statement or
supplement the Base Prospectus, the Prospectus or any Permitted Free Writing
Prospectus or file such document (at the expense of the Company) so as to
correct such statement or omission or effect such compliance within the time
period prescribed by the Securities Act or the Exchange Act.

 

 

 

 

(i) In case the Agent is required to deliver (whether physically or through
compliance with Rule 172 under the Securities Act or any similar rule), in
connection with the sale of the Shares, a Prospectus after the nine-month period
referred to in Section 10(a)(3) of the Securities Act, or after the time a
post-effective amendment to the Registration Statement is required pursuant to
Item 512(a) of Regulation S-K under the Securities Act, the Company will
prepare, at its expense, promptly upon request such amendment or amendments to
the Registration Statement and the Prospectus as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Securities Act or
Item 512(a) of Regulation S-K under the Securities Act, as the case may be. The
Company shall cause each amendment or supplement to any Base Prospectus or the
Prospectus to be filed with the Commission as required pursuant to the
applicable paragraph of Rule 424(b) of the Securities Act or, in the case of any
document which would be deemed to be incorporated by reference therein, to be
filed with the Commission as required pursuant to the Exchange Act, within the
time period prescribed. The Company shall promptly notify the Agent if any
Material Contract is terminated or if the other party thereto gives written
notice of its intent to terminate any such Material Contract.

 

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

 

(d) The Company shall use commercially reasonable efforts to take or cause to be
taken all necessary action to qualify the Shares for sale under the securities
laws of such jurisdictions as Agent reasonably designates and to continue such
qualifications in effect so long as required for the distribution of the Shares,
except that the Company shall not be required in connection therewith to qualify
as a foreign corporation or to execute a general consent to service of process
in any state. The Company shall promptly advise the Agent of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Shares for offer or sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.

 

(e) The Company will furnish to the Agent and counsel for the Agent, to the
extent requested, copies of the Registration Statement, the Base Prospectus, the
Prospectus, any Permitted Free Writing Prospectus, and all amendments and
supplements to such documents, in each case as soon as available and in such
quantities as the Agent may from time to time reasonably request.

 

 

 

 

(f) The Company will make generally available to its security holders as soon as
practicable an earnings statement (which need not be audited) covering a
12-month period that shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Rules and Regulations. If the Company makes
any public announcement or release disclosing its results of operations or
financial condition for a completed quarterly or annual fiscal period (each, an
“Earnings Release”) and the Company has not yet filed an Annual Report on Form
10-K or a Quarterly Report on Form 10-Q or a Form 8-K with respect to such
information, as applicable, then, prior to any sale of Shares, the Company shall
be obligated to (x) file a prospectus supplement with the Commission under the
applicable paragraph of Rule 424(b), which prospectus supplement shall include
the applicable financial information or (y) file a Report on Form 8-K, which
Form 8-K shall include the applicable financial information.

 

(g) The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, will pay or cause to be paid (i)
all expenses (including stock or transfer taxes and stamp or similar duties
allocated to the respective transferees) incurred in connection with the
registration, issue, sale and delivery of the Shares, (ii) all reasonable
expenses and fees (including, without limitation, fees and expenses of the
Company’s accountants and counsel) in connection with the preparation, printing,
filing, delivery, and shipping of the Registration Statement (including the
financial statements therein and all amendments, schedules, and exhibits
thereto), the Base Prospectus, each Prospectus, any Permitted Free Writing
Prospectus, and any amendment thereof or supplement thereto, and the producing,
word-processing, printing, delivery, and shipping of this Agreement and other
closing documents, including blue sky memoranda (covering the states and other
applicable jurisdictions) and including the cost to furnish copies of each
thereof to the Agent, (iii) all filing fees, (iv) listing fees, if any, and (v)
all other costs and expenses of the Company incident to the performance of its
obligations hereunder that are not otherwise specifically provided for herein
(including the costs and expenses related to any investor presentations or
“roadshow” undertaken in connection with marketing of the Shares as agreed to by
the Company). The Company shall have advanced prior to, or shall advance
concurrently with, the execution of this Agreement the sum of $20,000 (the
“Advance”) to the Agent, which pursuant to Rule 5110(f)(2)(C) of FINRA shall be
returned to the Company to the extent the expenses have not been actually
incurred. The Company shall reimburse the Agent upon request for its actual,
reasonable and documented costs and out-of-pocket expenses incurred in
connection with this Agreement, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, including the actual,
reasonable and documented fees and out-of-pocket expenses of its legal counsel
up to $50,000 (inclusive of the Advance), with the balance of the $50,000 above
the Advance being paid in installments, with the first installment of $20,000
due when the Company has received gross proceeds from the Offering equal to $1.5
million and the remaining $10,000 due when the Company has received gross
proceeds equal to $2.5 million. In addition, the Company shall pay the Agent
$5,000 for its legal fees for each Bringdown Date.

 

 

 

 

(h) The Company will apply the net proceeds from the sale of the Shares in the
manner set forth under the caption “Use of Proceeds” in the Base Prospectus, the
Prospectus, and any Permitted Free Writing Prospectus.

 

(i) The Company will not, without (1) giving the Agent at least three business
days’ prior written notice specifying the nature of the proposed sale and the
date of such proposed sale, and (2) the Agent suspending activity under this
Agreement for such period of time as requested by the Company or as reasonably
deemed appropriate by the Agent in light of the proposed sale, offer for sale,
sell, contract to sell, pledge, grant any option for the sale of, enter into any
transaction which is designed to, or might reasonably be expected to, result in
the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) by the Company or any Subsidiary, or
otherwise issue or dispose of, directly or indirectly (or publicly disclose the
intention to make any such offer, sale, pledge, grant, issuance or other
disposition), of any Common Stock or any securities convertible into or
exchangeable for, or any options or rights to purchase or acquire, Common Stock,
or permit the registration under the Securities Act of any Common Stock, such
securities, options or rights, except for (i) the registration of the Shares and
the sales through the Agent pursuant to this Agreement, (ii) the issuance of
securities issuable upon exercise or conversion of any options, convertible
preferred stock, convertible notes and warrants that are outstanding as of the
date of this Agreement and described in the Registration Statement and the
Prospectus, (iii) a registration statement on Form S-8 relating to employee
benefit plans, (iv) the issuance of securities pursuant to any employee stock
incentive plan, stock ownership plan or employee stock purchase plan of the
Company in effect at the time of this Agreement or any compensatory inducement
grants made by the Company and approved by the Board consistent with past
practice, and (v) the issuance of Common Stock or any securities convertible
into or exchangeable for, or any options or rights to purchase or acquire Common
Stock pursuant to any agreement or transaction of which the primary purpose is
not to raise capital.

 

(j) The Company shall not, at any time at or after the execution of this
Agreement, offer or sell any of the Shares by means of any “prospectus” (within
the meaning of the Securities Act), or use any “prospectus” (within the meaning
of the Securities Act) in connection with the offer or sale of the Shares, in
each case other than the Prospectus or any Permitted Free Writing Prospectus.

 

(k) The Company has not taken and will not take, directly or indirectly, any
action designed to or which might reasonably be expected to cause or result in,
or which has constituted, (i) the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares or
(ii) a violation of Regulation M. The Company shall notify the Agent of any
violation of Regulation M by the Company or any of its officers or directors
promptly after the Company has received notice or obtained knowledge of any such
violation.

 

 

 

 

(l) The Company will not incur any liability for any finder’s or broker’s fee or
agent’s commission in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby or
thereby, except as contemplated herein.

 

(m) During any applicable Prospectus Delivery Period, the Company will file on a
timely basis with the Commission such periodic and current reports as required
by the Rules and Regulations.

 

(n) Except as disclosed in the Registration Statement and the Prospectus, the
Company has maintained, and will maintain, such controls and procedures,
including without limitation those required by Sections 302 and 906 of
Sarbanes-Oxley and the applicable regulations thereunder, that are designed to
ensure that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Commission’s
rules and forms, including without limitation, controls and procedures designed
to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is accumulated and
communicated to the Company’s management, including its principal executive
officer and its principal financial officer, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure, to ensure that material information relating to Company is made
known to them by others within those entities.

 

(o) The Company hereby agrees that the Agent shall be entitled to a Transaction
Fee with respect to any public or private offering or other financing or
capital-raising transaction of any kind (a “Tail Financing”) to the extent such
financing or capital is provided to the Company by investors introduced for the
first time by the Agent, directly, to the Company any time beginning on April
12, 2019 (the execution date of that certain engagement agreement by and between
the Company and the Agent) if such Tail Financing is consummated at any time
within the six (6) month period following the earlier of (i) April 12, 2020 and
(ii) the termination of this Agreement.

 

(p) Each of the Company and Agent hereby represent and agree that, neither the
Company nor the Agent has made and will make any offer relating to the Shares
that would constitute an “issuer free writing prospectus,” as defined in Rule
433 under the Securities Act, or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405 under the Securities Act, required to be
filed with the Commission other than a Permitted Free Writing Prospectus. The
Company represents that it has treated or agrees that it will treat each
Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as
defined in Rule 433, and has complied and will comply with the requirements of
Rule 433 applicable to any Permitted Free Writing Prospectus, including timely
Commission filing where required, legending and record keeping.

 

 

 

 

(q) (1) On the date hereof, the Company shall cause (A) Dorsey & Whitney LLP,
counsel for the Company, to furnish to the Agent its written opinion and
negative assurance letter, in form and substance stating in effect the matters
set forth on Annex A-1 hereto, (B) Life Science Law PC, legal counsel to the
Company, to furnish to the Agent its negative assurance letter, in form and
substance stating in effect the matters set forth on Annex A-2 and (C)
Polsinelli PC, intellectual property legal counsel to the Company, to furnish to
the Agent its written opinion, in form and substance stating in effect the
matters set forth on Annex A-3, and the Agent shall cause (D) Ellenoff Grossman
& Schole LLP, as counsel for the Agent to furnish to the Agent its negative
assurance letter, in form and substance stating in effect the matters set forth
on Annex A-4.

 

(2) On each date that the Company (i) amends or supplements the Registration
Statement or the Prospectus (other than by means of incorporation by reference);
(ii) files an annual report on Form 10-K under the Exchange Act; (iii) files its
quarterly reports on Form 10-Q under the Exchange Act; (iv) files a report under
Item 4.02 of Form 8-K under the Exchange Act containing amended financial
information; or (v) otherwise after each reasonable request by Agent (each of
such date referred to herein as a “Bringdown Date”), the Company shall cause (X)
Dorsey & Whitney LLP, counsel for the Company, to furnish to the Agent its
negative assurance letter, in form and substance stating in effect the matters
set forth on Annex A-1 hereto, and (Y) Life Science Law PC, legal counsel to the
Company, to furnish to the Agent its written opinion, in form and substance
stating in effect the matters set forth on Annex A-2, and the Agent shall cause
(Z) Ellenoff Grossman & Schole LLP, as counsel for the Agent to furnish to the
Agent its negative assurance letter, in form and substance stating in effect the
matters set forth on Annex A-3, each dated as of a date within ten (10) days
after the applicable Bringdown Date, addressed to the Agent and modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such opinions. With respect to this
Section 3(q)(2), in lieu of delivering such opinions or letters for Bringdown
Dates subsequent to the date of effectiveness of the Registration Statement,
such counsel may furnish agent with a letter (a “Reliance Letter”) to the effect
that Agent may rely upon a prior opinion or letter delivered under Section
3(q)(1) or this Section 3(q)(2) to the same extent as if it were dated the date
of such letter (except that statements in such prior opinion shall be deemed to
relate to the Registration Statement and the Prospectus as amended or
supplemented as of the date of Reliance Letter). Provided, however, the
requirement to provide opinions and letters under this Section 3(q)(2) is hereby
waived for any Bringdown Date occurring at a time at which no Transaction Notice
is pending, which waiver shall continue until the earlier to occur of the date
the Company delivers a Transaction Notice hereunder and the next occurring
Bringdown Date. Notwithstanding the foregoing, if the Company subsequently
decides to sell Shares following a Bringdown Date when the Company relied on
such waiver and did not provide Agent with opinions and letters under this
Section 3(q)(2), then before the Company delivers the Transaction Notice or
Agent sells any Shares, the Company shall cause each of Dorsey & Whitney LLP to
furnish to the Agent a written opinion and negative assurance letter, and Life
Science Law PC to furnish to the agent its written opinion, and the Agent shall
cause Ellenoff Grossman & Schole LLP to furnish to the Agent its negative
assurance letter, dated the date of the Transaction Notice.

 

 

 

 

(r) On the date hereof and within ten (10) days after each Bringdown Date, the
Company shall cause the Auditor, or other independent accountants satisfactory
to the Agent, to deliver to the Agent (x) a customary comfort letter (the
initial letter, the “Initial Comfort Letter,” and each subsequent letter, a
“Bringdown Comfort Letter”) addressed to Agent, in form and substance
satisfactory to Agent, confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualifications of accountants under Rule
2-01 of Regulation S-X of the Commission, and stating the conclusions and
findings of said firm with respect to the financial information and other
matters and (y) a letter updating the Initial Comfort Letter with any
information that would have been included in the Initial Comfort Letter had it
been given on such date and as modified as necessary to relate to the date of
such letter. Provided, however, the requirement to provide a Bringdown Comfort
Letter under this Section 3(r) is hereby waived for any Bringdown Date occurring
at a time at which no Transaction Notice is pending, which waiver shall continue
until the earlier to occur of the date the Company delivers a Transaction Notice
hereunder and the next occurring Bringdown Date. Notwithstanding the foregoing,
if the Company subsequently decides to sell Shares following a Bringdown Date
when the Company relied on such waiver and did not provide Agent with a
Bringdown Comfort Letter under this Section 3(r), then before the Company
delivers the Transaction Notice or Agent sells any Shares, the Company shall
cause the Auditor, or other independent accountants satisfactory to the Agent,
to deliver to the Agent a Bringdown Comfort Letter dated the date of the
Transaction Notice.

 

(s) On the date hereof and each Bringdown Date, the Company shall furnish to the
Agent an officer’s certificate, dated as of a date within ten (10) days after
the applicable Bringdown Date and addressed to Agent, signed by the chief
executive officer and by the chief financial officer of the Company, to the
effect that:

 

(i) The representations and warranties of the Company in this Agreement are true
and correct in all material respects as if made at and as of the date of the
certificate, and the Company has complied in all material respects with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the date of the certificate;

 

 

 

 

(ii) No stop order or other order suspending the effectiveness of the
Registration Statement or any part thereof or any amendment thereof or the
qualification of the Shares for offering or sale or notice that would prevent
use of the Registration Statement, nor suspending or preventing the use of the
Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus, has
been issued, and no proceeding for that purpose has been instituted or, to the
best of their knowledge, is contemplated by the Commission or any state or
regulatory body;

 

(iii) The Shares to be sold on that date have been duly and validly authorized
by the Company and all corporate action required to be taken for the
authorization, issuance and sale of the Shares on that date has been validly and
sufficiently taken;

 

(iv) Subsequent to the respective dates as of which information is given in the
Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus, as
amended and supplemented, and except for pending transactions disclosed therein,
the Company has not incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, not in the ordinary
course of business, or declared or paid any dividends or made any distribution
of any kind with respect to its capital stock, and there has not been any change
in the capital stock or any issuance of options, warrants, convertible
securities or other rights to purchase the capital stock (other than as a result
of the exercise of any currently outstanding options, warrants, preferred stock
and notes that are disclosed in the Registration Statement or the Prospectus or
the issuance of securities pursuant to the Company’s equity incentive plans or
employee stock purchase plans described in the Registration Statement or the
Prospectus), or any material change in the short-term or long-term debt, of the
Company, or any Material Adverse Effect or any development that would reasonably
be likely to result in a Material Adverse Effect (whether or not arising in the
ordinary course of business), or any material loss by strike, fire, flood,
earthquake, accident or other calamity, whether or not covered by insurance,
incurred by the Company; and

 

(v) Except as stated in the Prospectus and any Permitted Free Writing
Prospectus, as amended and supplemented, there is not pending, or, to the
knowledge of the Company, threatened or contemplated, any action, suit or
proceeding to which the Company is a party before or by any court or
governmental agency, authority or body, or any arbitrator, which would
reasonably be likely to result in any Material Adverse Effect;

 

 

 

 

provided, however, the requirement to provide a certificate under this Section
3(s) is hereby waived for any Bringdown Date occurring at a time at which no
Transaction Notice is pending, which waiver shall continue until the earlier to
occur of the date the Company delivers a Transaction Notice hereunder and the
next occurring Bringdown Date. Notwithstanding the foregoing, if the Company
subsequently decides to sell Shares following a Bringdown Date when the Company
relied on such waiver and did not provide Agent with a certificate under this
Section 3(s), then before the Company delivers the Transaction Notice or Agent
sells any Shares, the Company shall provide Agent with a certificate dated the
date of the Transaction Notice.

 

(t) A reasonable time prior to each Bringdown Date, the Company, if so requested
by the Agent, shall conduct a due diligence session, in form and substance,
satisfactory to the Agent, which shall include representatives of the management
and the accountants of the Company.

 

(u) The Company shall disclose in its annual report on Form 10-K and its
quarterly reports on Form 10-Q the number of Shares sold through the Agent under
this Agreement, the Net Proceeds to the Company and the compensation paid by the
Company with respect to sales of the Shares pursuant to this Agreement.

 

(v) The Company shall ensure that there are at all times sufficient shares of
Common Stock to provide for the issuance, free of any preemptive rights, out of
its authorized but unissued Common Stock, of the maximum aggregate number of
Shares authorized for issuance by the Board pursuant to the terms of this
Agreement. The Company will use its reasonable best efforts to cause the Shares
to be listed on the NASDAQ Capital Market, and to maintain such listing. The
Company shall cooperate with Agent and use its reasonable efforts to permit
Shares to be eligible for clearance and settlement through the facilities of
DTC.

 

(w) At any time during the term of this Agreement, the Company will advise the
Agent promptly after it receives notice or obtains knowledge of any information
or fact that would alter or affect any opinion, certificate, letter and other
document provided to the Agent pursuant to Section 3.

 

(x) Subject to compliance with any applicable requirements of Regulation M under
the Exchange Act and compliance with applicable securities laws, the Company
consents to the Agent trading in the Common Stock for the Agent’s own account
and for the account of its clients (in compliance with all applicable laws) at
the same time as sales of the Shares occur pursuant to this Agreement.

 

(y) If to the knowledge of the Company, any condition set forth in Section 4
shall not have been satisfied on the applicable Settlement Date or will not be
satisfied on or prior to the date required by this Agreement, the Company will
offer to any person who has agreed to purchase the Shares on such Settlement
Date from the Company as the result of an offer to purchase solicited by the
Agent the right to refuse to purchase and pay for such Shares.

 

 

 

 

(z) On the date hereof and each Bringdown Date, the Company shall furnish to the
Agent an incumbency certificate, dated as of such date and addressed to Agent,
signed by the secretary of the Company.

 

(aa) Each acceptance by the Company of an offer to purchase the Shares hereunder
shall be deemed to be an affirmation to the Agent that the representations and
warranties of the Company contained in or made pursuant to this Agreement are
true and correct as of the date of such acceptance as though made at and as of
such date, and an undertaking that such representations and warranties will be
true and correct as of the Settlement Date for the Shares relating to such
acceptance, as though made at and as of such date (except that such
representations and warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented relating to such
Shares).

 

(bb) During any period when the delivery of a prospectus relating to the Shares
is required (including in circumstances where such requirement may be satisfied
pursuant to Rule 172, 173 or any similar rule) to be delivered under the
Securities Act, the Company will file all documents required to be filed with
the Commission pursuant to the Exchange Act within the time periods required by
the Exchange Act and the regulations thereunder.

 

(cc) The Company shall cooperate with Agent and use its reasonable efforts to
permit the Shares to be eligible for clearance and settlement through the
facilities of DTC.

 

(dd) The Company will apply the Net Proceeds from the sale of the Shares in the
manner set forth in the Prospectus.

 

(ee) To the extent that the Registration Statement is not available for the
sales of the Shares as contemplated by this Agreement, the Company shall file a
new registration statement with respect to any additional shares of Common Stock
necessary to complete such sales of the Shares and shall cause such registration
statement to become effective as promptly as practicable. After the
effectiveness of any such registration statement, all references to
“Registration Statement” included in this Agreement shall be deemed to include
such new registration statement, including all documents incorporated by
reference therein pursuant to Item 12 of Form S-3, and all references to “Base
Prospectus” included in this Agreement shall be deemed to include the final form
of prospectus, including all documents incorporated therein by reference,
included in any such registration statement at the time such registration
statement became effective.

 

 

 

 

4. Conditions of Agent’s Obligations. The obligations of the Agent hereunder are
subject to (i) the accuracy of, as of the date hereof, each Bringdown Date, and
each Time of Sale (in each case, as if made at such date), and compliance with,
all representations, warranties and agreements of the Company contained herein,
(ii) the performance by the Company of its obligations hereunder and (iii) the
following additional conditions:

 

(a) If filing of the Prospectus, or any amendment or supplement thereto, or any
Permitted Free Writing Prospectus, is required under the Securities Act or the
Rules and Regulations, the Company shall have filed the Prospectus (or such
amendment or supplement) or such Permitted Free Writing Prospectus with the
Commission in the manner and within the time period so required (without
reliance on Rule 424(b)(8) or Rule 164(b)); the Registration Statement shall
remain effective; no stop order suspending the effectiveness of the Registration
Statement or any part thereof, any Rule 462(b) Registration Statement, or any
amendment thereof, nor suspending or preventing the use of the Base Prospectus,
the Prospectus or any Permitted Free Writing Prospectus shall have been issued;
no proceedings for the issuance of such an order shall have been initiated or
threatened; and any request of the Commission for additional information (to be
included in the Registration Statement, the Base Prospectus, the Prospectus, any
Permitted Free Writing Prospectus or otherwise) shall have been complied with to
the Agent’s satisfaction.

 

(b) The Agent shall not have advised the Company that the Registration
Statement, the Base Prospectus, the Prospectus, or any amendment or supplement
thereto, or any Permitted Free Writing Prospectus, contains an untrue statement
of fact which, in the Agent’s opinion, is material, or omits to state a fact
which, in the Agent’s opinion, is material and is required to be stated therein
or is necessary to make the statements therein (i) with respect to the
Registration Statement, not misleading and (ii) with respect to the Base
Prospectus, the Prospectus or any Permitted Free Writing Prospectus, in light of
the circumstances under which they were made, not misleading.

 

(c) Except as set forth or contemplated in the Prospectus and any Permitted Free
Writing Prospectus, subsequent to the respective dates as of which information
is given therein, the Company shall not have incurred any material liabilities
or obligations, direct or contingent, or entered into any material transactions,
or declared or paid any dividends or made any distribution of any kind with
respect to its capital stock and there shall not have been any change in the
capital stock, or any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock (other than as a result of the
exercise of any currently outstanding options, preferred stock, notes or
warrants that are disclosed in the Registration Statement or the Prospectus or
the issuance of securities pursuant to the Company’s equity incentive plans or
employee stock purchase plans described in the Registration Statement or the
Prospectus), or any material change in the short-term or long-term debt, of the
Company, or any Material Adverse Effect or any development that would be
reasonably likely to result in a Material Adverse Effect (whether or not arising
in the ordinary course of business), or any material loss by strike, fire,
flood, earthquake, accident or other calamity, whether or not covered by
insurance, incurred by the Company, the effect of which, in any such case
described above, in the Agent’s judgment, makes it impractical or inadvisable to
offer or deliver the Shares.

 

 

 

 

(d) The Company shall have performed each of its obligations under Section 3(q).

 

(e) The Company shall have performed each of its obligations under Section 3(r).

 

(f) The Company shall have performed each of its obligations under Section 3(s).

 

(g) FINRA shall have raised no objection to the fairness and reasonableness of
the underwriting terms and arrangements.

 

(h) All filings with the Commission required by Rule 424 under the Securities
Act to have been filed by the Settlement Date shall have been made within the
applicable time period prescribed for such filing by Rule 424.

 

(i) The Company shall have furnished to Agent and the Agent’s counsel such
additional documents, certificates and evidence as they may have reasonably
requested.

 

(j) Trading in the Common Stock shall not have been suspended on the NASDAQ
Capital Market. The Shares shall have been listed and authorized for trading on
the NASDAQ Capital Market prior to the first Settlement Date, and satisfactory
evidence of such actions shall have been provided to the Agent and its counsel,
which may include oral confirmation from a representative of the NASDAQ Capital
Market.

 

All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to Agent and the Agent’s counsel. The Company will furnish
Agent with such conformed copies of such opinions, certificates, letters and
other documents as Agent shall reasonably request.

 

 

 

 

5. Indemnification and Contribution.

 

(a) The Company agrees to indemnify and hold harmless the Agent and each of the
other Indemnified Parties (as defined below) from and against any losses,
claims, damages, obligations, penalties, judgments, awards, liabilities, costs,
expenses and disbursements, and any and all actions suits proceedings and
investigations in respect thereof and any and all legal and other costs,
expenses and disbursements in giving testimony or furnishing documents in
response to subpoena or otherwise (including, without limitation, the costs,
expenses and disbursements, as and when incurred, of investigating, preparing,
pursuing or defending any such action, suit, proceeding or investigation
(whether or not in connection with litigation in which any Indemnified Party is
a party)) (collectively, “Losses”), directly or indirectly, caused by, relating
to, based upon, arising out of, or in connection with this Agreement, including,
without limitation, any act or omission by the Agent in connection with its
acceptance of or the performance or non-performance of its obligations under the
Agreement, any breach by the Company of any representation, warranty, covenant
or agreement contained in the Agreement (or in any instrument, document or
agreement relating thereto, including any agency agreement), or the enforcement
by the Agent of its rights under the Agreement or these indemnification
provisions, except to the extent that any such Losses are found in a final
judgment by a court of competent jurisdiction (not subject to further appeal) to
have resulted primarily and directly from the gross negligence or willful
misconduct of the Indemnified Party seeking indemnification hereunder. The
Company also agrees that no Indemnified Party shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to the Company for or in
connection with this Agreement for any other reason, except to the extent that
any such liability is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) to have resulted primarily and
directly from such Indemnified Party’s gross negligence or willful misconduct
This indemnity agreement will be in addition to any liability that the Company
otherwise might have.

 

(i) These indemnification provisions shall extend to the following persons
(collectively, the “Indemnified Parties”): the Agent, its present and former
affiliated entities, managers, members, officers, employees, legal counsel,
agents and controlling persons (within the meaning of the federal securities
laws), and the officers, directors, partners, stockholders, members, managers,
employees, legal counsel, agents and controlling persons of any of them. These
indemnification provisions shall be in addition to any liability which the
Company may otherwise have to any Indemnified Party.

 

(ii) If any action, suit, proceeding or investigation is commenced, as to which
an Indemnified Party proposes to demand indemnification, it shall notify the
Company with reasonable promptness; provided, however, that any failure by an
Indemnified Party to notify the Company shall not relieve the Company from its
obligations hereunder except to the extent that the Company is actually and
materially prejudiced by such failure to notify. An Indemnified Party shall have
the right to retain counsel of its own choice to represent it, and the fees,
expenses and disbursements of such counsel shall be borne by the Company. Any
such counsel shall, to the extent consistent with its professional
responsibilities, cooperate with the Company and any counsel designated by the
Company. The Company shall be liable for any settlement of any claim against any
Indemnified Party made with the Company’s written consent. The Company shall
not, without the prior written consent of the Agent, settle or compromise any
claim, or permit a default or consent to the entry of any judgment in respect
thereof, unless such settlement, compromise or consent (i) includes, as an
unconditional term thereof, the giving by the claimant to all of the Indemnified
Parties of an unconditional release from all liability in respect of such claim,
and (ii) does not contain any factual or legal admission by or with respect to
an Indemnified Party or an adverse statement with respect to the character,
professionalism, expertise or reputation of any Indemnified Party or any action
or inaction of any Indemnified Party.

 

 

 

 

(iii) In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification in such case,
then the Company shall contribute to the Losses to which any Indemnified Party
may be subject (i) in accordance with the relative benefits received by the
Company and its stockholders, Subsidiaries and affiliates, on the one hand, and
the Indemnified Party, on the other hand, and (ii) if (and only if) the
allocation provided in clause (i) of this sentence is not permitted by
applicable law, in such proportion as to reflect not only the relative benefits,
but also the relative fault of the Company, on the one hand, and the Indemnified
Party, on the other hand, in connection with the statements, acts or omissions
which resulted in such Losses as well as any relevant equitable considerations.
No person found liable for a fraudulent misrepresentation shall be entitled to
contribution from any person who is not also found liable for fraudulent
misrepresentation. The relative benefits received (or anticipated to be
received) by the Company and its stockholders, Subsidiaries and affiliates shall
be deemed to be equal to the aggregate consideration payable or receivable by
such parties in connection with the transaction or transactions to which the
Agreement relates relative to the amount of fees actually received by the Agent
in connection with such transaction or transactions. Notwithstanding the
foregoing, in no event shall the amount contributed by all Indemnified Parties
exceed the amount of fees previously received by the Agent pursuant to the
Agreement.

 

(b) (i) The Agent will indemnify and hold harmless the Company and its
affiliates and directors and each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act (the “Company Indemnified Parties”) from and against any Losses to which the
Company or the Company Indemnified Parties may become subject, under the
Securities Act or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Agent), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or omission or alleged untrue statement
or omission of a material fact contained in the Registration Statement, any Base
Prospectus, the Prospectus, or any amendment or supplement thereto or any
Permitted Free Writing Prospectus, to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Base Prospectus, the Prospectus, or any amendment or
supplement thereto, or any Permitted Free Writing Prospectus in reliance upon
and in conformity with written information furnished to the Company by Agent
expressly for use in the preparation thereof, it being understood and agreed
that the only information furnished by the Agent consists of the information
described as such in Section 5(b)(ii), by the Company in connection with
investigating or defending against any such loss, claim, damage, liability or
action. (ii) The Agent confirms and the Company acknowledges that as of the date
hereof no information has been furnished in writing to the Company by or on
behalf of the Agent specifically for inclusion in the Registration Statement,
any Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus,
other than information about the Agent included in the Prospectus Supplement
under the heading “Plan of Distribution”.

 

 

 

 

(c) If the indemnification provided for in this Section 5 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Agent on the other from the Offering or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Agent on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Agent on the other shall be deemed to be
in the same proportion as the total net proceeds from the Offering (before
deducting expenses) received by the Company and the total underwriting discounts
and commissions received by the Agent, bear to the total public offering price
of the Shares. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Agent and the parties’ relevant
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Agent agree that it would
not be just and equitable if contributions pursuant to this subsection (c) were
to be determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the
first sentence of this subsection (c). The amount paid by an indemnified party
as a result of the losses, claims, damages or liabilities referred to in the
first sentence of this subsection (c) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the subject of
this subsection (c). Notwithstanding the provisions of this subsection (c), the
Agent shall not be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that the
Agent has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

 

(d) Neither the termination of this Agreement nor completion of the Offering
shall affect these indemnification provisions, which shall remain operative and
in full force and effect. The indemnification provisions shall be binding upon
the Company and the Agent and their respective successors and assigns and shall
inure to the benefit of the Indemnified Parties and the Company Indemnified
Parties and their respective successors, assigns, heirs and personal
representatives.

 

6. Representations and Agreements to Survive Delivery. All representations and
warranties of the Company herein or in certificates delivered pursuant hereto,
and agreements of the Agent and the Company herein, including but not limited to
the agreements of the Agent and the Company contained in Section 5, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Agent or any controlling person thereof, or the Company or
any of its officers, directors, or controlling persons, and shall survive
delivery of, and payment for, the Shares to and by the Agent hereunder.

 

7. Termination of this Agreement. The term of this Agreement shall begin on the
date hereof, and shall continue until the earlier of (i) the sale of Shares
having an aggregate offering price of $1,600,000, (ii) the termination by either
the Agent or the Company upon the provision of fifteen (15) days written notice,
or (iii) one year from the date hereof. Any such termination by mutual agreement
shall in all cases be deemed to provide that Section 3(g), Section 5 and Section
6 shall remain in full force and effect. Notwithstanding the foregoing, the
Agent shall have the right, in its sole discretion, to terminate this Agreement
if at any time from the date of this Agreement to the effectiveness of the
Registration Statement, the Agent is not fully satisfied, in its sole
discretion, with the results of its and its representatives’ review of the
Company and the Company’s business.

 

8. Default by the Company. If the Company shall fail at any Settlement Date to
sell and deliver the number of Shares which it is obligated to sell hereunder,
then this Agreement shall terminate without any liability on the part of the
Agent or, except as provided in Section 3(g), any non-defaulting party. No
action taken pursuant to this Section 8 shall relieve the Company from
liability, if any, in respect of such default, and the Company shall (A) hold
the Agent harmless against any loss, claim or damage arising from or as a result
of such default by the Company and (B) pay the Agent any commission to which it
would otherwise be entitled absent such default.

 

 

 

 

9. Notices. Except as otherwise provided herein, all communications under this
Agreement shall be in writing and, if to the Agent, shall be mailed, delivered
or telecopied to Maxim Group LLC, 405 Lexington Avenue, New York, New York
10174, (fax: (212) 895-3783), Attention: Clifford A. Teller and James Siegel,
with a required copy (which shall not constitute notice) to Ellenoff Grossman &
Schole LLP, counsel for the Agent, at 1345 Avenue of the Americas, New York, New
York 10105 Attention: Sarah Williams, Esq. Notices to the Company shall be given
to it at 1885 West 2100 South, Salt Lake City, UT 84119 Attention: Chief
Executive Officer, with required copies (which shall not constitute notice) to
Dorsey & Whitney LLP, 111 South Main Street, Suite 2100, Salt Lake City, UT
84111 Attention: David Marx and Michael Newton. Any party to this Agreement may
change such address for notices by sending to the parties to this Agreement
written notice of a new address for such purpose.

 

10. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 5. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term “successors and assigns” as herein used shall not
include any purchaser, as such purchaser, of any of the Shares from the Agent.

 

11. Absence of Fiduciary Relationship. The Company acknowledges and agrees that:
(a) the Agent has been retained solely to act as an sales agent and/or principal
in connection with the sale of the Shares and that no fiduciary, advisory or
agency relationship between the Company and the Agent has been created in
respect of any of the transactions contemplated by this Agreement, irrespective
of whether the Agent has advised or are advising the Company on other matters;
(b) the price and other terms of the Shares set forth in this Agreement were
established by the Company following discussions and arms-length negotiations
with the Agent and the Company is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement; (c) it has been advised that the Agent and its
affiliates are engaged in a broad range of transactions which may involve
interests that differ from those of the Company and that the Agent has no
obligation to disclose such interest and transactions to the Company by virtue
of any fiduciary, advisory or agency relationship; (d) it has been advised that
the Agent is acting, in respect of the transactions contemplated by this
Agreement, solely for the benefit of the Agent, and not on behalf of the
Company; and (e) it waives to the fullest extent permitted by law, any claims it
may have against the Agent for breach of fiduciary duty or alleged breach of
fiduciary duty in respect of any of the transactions contemplated by this
Agreement and agrees that the Agent shall have no liability (whether direct or
indirect) to the Company in respect of such a fiduciary duty claim on behalf of
or in right of the Company, including stockholders, employees or creditors of
the Company.

 

 

 

 

12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, including Section 5-1401 of
the General Obligations Law of the State of New York, but otherwise without
regard to conflict of laws rules that would apply the laws of any other
jurisdiction.

 

13. Counterparts. This Agreement may be executed in one or more counterparts
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original and all such counterparts shall together
constitute one and the same instrument.

 

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

 

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

 

16. Waiver of Jury Trial. Each of the Company and the Agent hereby waives any
right it may have to a trial by jury in respect of any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.

 

 

 

 

Please sign and return to the Company the enclosed duplicates of this letter
whereupon this letter will become a binding agreement between the Company and
the Agent in accordance with its terms.

 

Very truly yours,       SINTX TECHNOLOGIES, INC.         By: /s/ B. Sonny Bal  
Name: B. Sonny Bal   Title: Chief Executive Officer         MAXIM GROUP LLC    
    By: /s/ Clifford A. Teller   Name: Clifford A. Teller   Title: Executive
Managing Director,   Investment Banking