Exhibit 10.27

ACHILLION PHARMACEUTICALS, INC.

$75,000,000 of

Shares of Common Stock

(par value $0.001 per share)

Controlled Equity OfferingSM

Sales Agreement

February 23, 2017

Cantor Fitzgerald & Co.

499 Park Avenue

New York, NY 10022

Ladies and Gentlemen:

Achillion Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
confirms its agreement (this “Agreement”) with Cantor Fitzgerald & Co. (the
“Agent”), as follows:

1.    Issuance and Sale of Shares. The Company agrees that, from time to time
during the term of this Agreement, on the terms and subject to the conditions
set forth herein, it may issue and sell through the Agent, shares of common
stock (the “Placement Shares”) of the Company, par value $0.001 per share (the
“Common Stock”) up to an aggregate offering price of $75,000,000; provided,
however, that in no event shall the Company issue or sell through the Agent such
number or dollar amount of Placement Shares that would (a) exceed the number or
dollar amount of shares of Common Stock registered on the effective Registration
Statement (defined below) pursuant to which the offering is being made,
(b) exceed the number of authorized but unissued shares of Common Stock (less
shares of Common Stock issuable upon exercise, conversion or exchange of any
outstanding securities of the Company or otherwise reserved from the Company’s
authorized capital stock), (c) exceed the number or dollar amount of shares of
Common Stock permitted to be sold under Form S-3 (including General Instruction
I.B.6 thereof, if applicable) or (d) exceed the number or dollar amount of
shares of Common Stock for which the Company has filed a Prospectus Supplement
(defined below) (the lesser of (a), (b), (c) and (d), the “Maximum Amount”).
Notwithstanding anything to the contrary contained herein, the parties hereto
agree that compliance with the limitations set forth in this Section 1 on the
amount of Placement Shares issued and sold under this Agreement shall be the
sole responsibility of the Company and that the Agent shall have no obligation
in connection with such compliance. The offer and sale of Placement Shares
through the Agent will be effected pursuant to the Registration Statement (as
defined below) filed by the Company and which will be declared effective by the
Securities and Exchange Commission (the “Commission”), although nothing in this
Agreement shall be construed as requiring the Company to use the Registration
Statement to issue Common Stock.

The Company has filed or will file, in accordance with the provisions of the
Securities Act of 1933, as amended and the rules and regulations thereunder (the
“Securities Act”), with the Commission a registration statement on Form S-3,
including a base prospectus, relating to certain securities, including the
Placement Shares to be issued from time to time by the

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Company, and which incorporates by reference documents that the Company has
filed or will file in accordance with the provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (the “Exchange
Act”). The Company has prepared a prospectus included as part of the
registration statement, which prospectus relates to the Placement Shares to be
issued from time to time by the Company (the “Prospectus Supplement”). The
Company will furnish to the Agent, for use by the Agent, copies of the
prospectus included as part of such registration statement, relating to the
Placement Shares to be issued from time to time by the Company. The Company may
file one or more additional registration statements from time to time that will
contain a base prospectus and related prospectus or prospectus supplement, if
applicable (which shall be a Prospectus Supplement), with respect to the
Placement Shares. Except where the context otherwise requires, such registration
statement(s), including all documents filed as part thereof or incorporated by
reference therein, and including any information contained in a Prospectus (as
defined below) subsequently filed with the Commission pursuant to Rule 424(b) or
deemed to be a part of such registration statement pursuant to Rule 430B of the
Securities Act, is herein called the “Registration Statement.” The base
prospectus or base prospectuses, including all documents incorporated therein by
reference, included in the Registration Statement, as it may be supplemented, if
necessary, by the Prospectus Supplement, in the form in which such prospectus or
prospectuses and/or Prospectus Supplement have most recently been filed by the
Company with the Commission pursuant to Rule 424(b), together with the then
issued Issuer Free Writing Prospectus(es) (as defined below), is herein called
the “Prospectus.”

Any reference herein to the Registration Statement, any Prospectus Supplement,
Prospectus or any Issuer Free Writing Prospectus shall be deemed to refer to and
include the documents, if any, incorporated by reference therein (the
“Incorporated Documents”), including, unless the context otherwise requires, the
documents, if any, filed as exhibits to such Incorporated Documents. Any
reference herein to the terms “amend,” “amendment” or “supplement” with respect
to the Registration Statement, any Prospectus Supplement, the Prospectus or any
Issuer Free Writing Prospectus shall be deemed to refer to and include the
filing of any document under the Exchange Act on or after the most-recent
effective date of the Registration Statement, or the date of the Prospectus
Supplement, Prospectus or such Issuer Free Writing Prospectus, as the case may
be, and incorporated therein by reference. For purposes of this Agreement, all
references to the Registration Statement, the Prospectus or to any amendment or
supplement thereto shall be deemed to include the most recent copy filed with
the Commission pursuant to its Electronic Data Gathering, Analysis, and
Retrieval system, or if applicable, the Interactive Data Electronic Applications
system when used by the Commission (collectively, “EDGAR”).

2.    Placements. Each time that the Company wishes to issue and sell Placement
Shares hereunder (each, a “Placement”), it will notify the Agent by email notice
(or other method mutually agreed to in writing by the parties) of the number of
Placement Shares to be issued, the time period during which sales are requested
to be made, any limitation on the number of Placement Shares that may be sold in
any one Trading Day (as defined below) and any minimum price below which sales
may not be made (a “Placement Notice”), the form of which is attached hereto as
Schedule 1. The Placement Notice shall originate from any of the individuals
from the Company set forth on Schedule 3 (with a copy to each of the other
individuals from the Company listed on such schedule), and shall be addressed to
each of the

 

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individuals from the Agent set forth on Schedule 3, as such Schedule 3 may be
amended from time to time. The Placement Notice shall be effective unless and
until (i) the Agent declines to accept the terms contained therein for any
reason, in its sole discretion, within two (2) Trading Days from the time the
Placement Notice was received, (ii) the entire amount of the Placement Shares
thereunder have been sold, (iii) the Company suspends or terminates the
Placement Notice or (iv) this Agreement has been terminated under the provisions
of Section 13. The amount of any discount, commission or other compensation to
be paid by the Company to Agent in connection with the sale of the Placement
Shares shall be calculated in accordance with the terms set forth in Schedule 2.
It is expressly acknowledged and agreed that neither the Company nor the Agent
will have any obligation whatsoever with respect to a Placement or any Placement
Shares unless and until the Company delivers a Placement Notice to the Agent and
the Agent does not decline such Placement Notice pursuant to the terms set forth
above, and then only upon the terms specified therein and herein. In the event
of a conflict between the terms of this Agreement and the terms of a Placement
Notice, the terms of the Placement Notice will control.

3.    Sale of Placement Shares by Agent.

(a)    Subject to the terms and provisions of Section 5(a), the Agent, for the
period specified in the Placement Notice, will use its commercially reasonable
efforts consistent with its normal trading and sales practices and applicable
state and federal laws, rules and regulations and the rules of the NASDAQ Global
Select Market (the “Exchange”), to sell the Placement Shares up to the amount
specified in, and otherwise in accordance with the terms of such Placement
Notice. The Agent will provide written confirmation to the Company no later than
the opening of the Trading Day immediately following the Trading Day on which it
has made sales of Placement Shares hereunder setting forth the number of
Placement Shares sold on such day, the compensation payable by the Company to
the Agent pursuant to Section 2 with respect to such sales, and the Net Proceeds
(as defined below) payable to the Company, with an itemization of the deductions
made by the Agent (as set forth in Section 5(b)) from the gross proceeds that it
receives from such sales. Subject to the terms of the Placement Notice, the
Agent may sell Placement Shares by any method permitted by law deemed to be an
“at the market offering” as defined in Rule 415(a)(4) of the Securities Act,
including sales made directly on or through the Exchange or any other existing
trading market for the Common Stock, in negotiated transactions at market prices
prevailing at the time of sale or at prices related to such prevailing market
prices and/or any other method permitted by law. “Trading Day” means any day on
which Common Stock is traded on the Exchange.

(b)    During the term of this Agreement, neither the Agent nor an affiliated
purchaser (as such term is defined in Regulation M) shall directly or indirectly
engage in (i) any short sale of any security of the Company, as defined in
Regulation SHO, (ii) any sale of any security of the Company that Agent does not
own or any sale which is consummated by the delivery of a security of the
Company borrowed by, or for the account of, Agent or (iii) any market making,
bidding, stabilization or other trading activity with regard to the Common Stock
or related derivative securities, in each case if such activity would be
prohibited under Regulation M or other anti-manipulation rules under the
Securities Act or any other law applicable to the Company.

4.    Suspension of Sales. The Company or the Agent may, upon notice to the
other party in writing (including by email correspondence to each of the
individuals of the other party

 

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set forth on Schedule 3, if receipt of such correspondence is actually
acknowledged by any of the individuals to whom the notice is sent, other than
via auto-reply) or by telephone (confirmed immediately by verifiable facsimile
transmission or email correspondence to each of the individuals of the other
party set forth on Schedule 3), suspend any sale of Placement Shares (a
“Suspension”); provided, however, that such Suspension shall not affect or
impair any party’s obligations with respect to any Placement Shares sold
hereunder prior to the receipt of such notice. While a Suspension is in effect
any obligation under Sections 7(l), 7(m), and 7(n) with respect to the delivery
of certificates, opinions, or comfort letters to the Agent, shall be waived,
provided, however, that such waiver shall not apply for the Representation Date
(defined below) occurring on the date that the Company files its annual report
on Form 10-K. Each of the parties agrees that no such notice under this
Section 4 shall be effective against any other party unless it is made to one of
the individuals named on Schedule 3 hereto, as such Schedule may be amended from
time to time.

5.    Sale and Delivery to the Agent; Settlement.

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

(b)    Settlement of Placement Shares. Unless otherwise specified in the
applicable Placement Notice, settlement for sales of Placement Shares will occur
on the third (3rd) Trading Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are made (each, a
“Settlement Date”). The Agent shall provide written confirmation to the Company
of each sale of Placement Shares as set forth in Section 3(a). The amount of
proceeds to be delivered to the Company on a Settlement Date against receipt of
the Placement Shares sold (the “Net Proceeds”) will be equal to the aggregate
sales price received by the Agent, after deduction for (i) the Agent’s
compensation for such sales payable by the Company pursuant to Section 2 hereof,
and (ii) any transaction fees imposed by any governmental or self-regulatory
organization in respect of such sales.

(c)     Delivery of Placement Shares. On or before each Settlement Date, the
Company will, or will cause its transfer agent to, electronically transfer the
Placement Shares being sold by crediting the Agent’s or its designee’s account
(provided the Agent shall have given the Company written notice of such designee
at least one Trading Day prior to the

 

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

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

6.    Representations and Warranties of the Company. The Company represents and
warrants to, and agrees with Agent that as of the date of this Agreement and as
of each Applicable Time (as defined below), unless such representation, warranty
or agreement specifies a different time:

(a)    Registration Statement and Prospectus. The Company and the transactions
contemplated by this Agreement meet the requirements for and comply with the
applicable conditions set forth in Form S-3 under the Securities Act. The
Registration Statement has been or will be filed with the Commission and will be
declared effective by the Commission under the Securities Act prior to the
issuance of any Placement Notices by the Company. The Prospectus Supplement will
name the Agent as the agent in the section entitled “Plan of Distribution.” The
Company has not received, and has no notice of, any order of the Commission
preventing or suspending the use of the Registration Statement, or threatening
or instituting proceedings for that purpose. The Registration Statement and the
offer and sale of Placement Shares as contemplated hereby meet the requirements
of Rule 415 under the Securities Act and comply in all material respects with
said Rule. Any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to

 

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be filed as exhibits to the Registration Statement have been so described or
filed. Copies of the Registration Statement, the Prospectus, and any such
amendments or supplements and all documents incorporated by reference therein
that were filed with the Commission on or prior to the date of this Agreement
have been delivered, or are available through EDGAR, to Agent and its counsel.
The Company has not distributed and, prior to the later to occur of each
Settlement Date and completion of the distribution of the Placement Shares, will
not distribute any offering material in connection with the offering or sale of
the Placement Shares other than the Registration Statement and the Prospectus
and any Issuer Free Writing Prospectus (as defined below) to which the Agent has
consented, any such consent not to be unreasonably withheld, conditioned or
delayed. The Common Stock is registered pursuant to Section 12(b) of the
Exchange Act and is currently listed on the Exchange under the trading symbol
“ACHN.” The Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act or delisting the Common Stock from the Exchange, nor has the Company
received any notification that the Commission or the Exchange is contemplating
terminating such registration or listing. To the Company’s knowledge, it is in
compliance with all applicable listing requirements of the Exchange.

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

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

(d)    Financial Information. The financial statements of the Company included
or incorporated by reference in the Registration Statement, the Prospectus and
the Issuer Free

 

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Writing Prospectuses, if any, together with the related notes and schedules,
present fairly, in all material respects, the financial position of the Company
as of the dates indicated and the results of operations, cash flows and changes
in stockholders’ equity of the Company for the periods specified (subject, in
the case of unaudited statements, to normal year-end audit adjustments) and have
been prepared in compliance with the requirements of the Securities Act and
Exchange Act, as applicable, and in conformity with GAAP (as defined below)
applied on a consistent basis (except for such adjustments to accounting
standards and practices as are noted therein) during the periods involved. The
financial data with respect to the Company contained or incorporated by
reference in the Registration Statement, the Prospectus and the Issuer Free
Writing Prospectuses, if any, fairly present in all material respects the
information shown therein as at the respective dates and for the respective
periods specified and are derived from the financial statements set forth in the
Registration Statement and the Prospectus and the other books and records of the
Company. No other schedules or financial statements are required to be included
or incorporated by reference in the Registration Statement or the Prospectus .
The Company does not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet obligations), not described in the
Registration Statement (excluding the exhibits thereto), and the Prospectus. All
disclosures contained or incorporated by reference in the Registration
Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any,
regarding “non-GAAP financial measures” (as such term is defined by the rules
and regulations of the Commission) comply in all material respects with
Regulation G of the Exchange Act and Item 10 of Regulation S-K under the
Securities Act, to the extent applicable. The interactive data in the eXtensible
Business Reporting Language incorporated by reference in the Registration
Statement fairly presents the information called for in all material respects
and has been prepared in accordance with the Commission’s rules and guidelines
applicable thereto.

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

(f)    Organization. The Company is duly organized, validly existing as a
corporation and in good standing under the laws of its jurisdiction of
organization. The Company is duly licensed or qualified as a foreign corporation
for transaction of business and in good standing under the laws of each other
jurisdiction in which its ownership or lease of property or the conduct of its
business requires such license or qualification, and has all corporate power and
authority necessary to own or hold its properties and to conduct its business as
described in the Registration Statement and the Prospectus, except where the
failure to be so qualified or in good standing or have such power or authority
would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the assets, business, operations, earnings,
properties, condition (financial or otherwise), prospects, stockholders’ equity
or results of operations of the Company, or prevent or materially interfere with
consummation of the transactions contemplated hereby (a “Material Adverse
Effect”).

(g)    Subsidiaries. The Company has no subsidiaries.

(h)    No Violation or Default. The Company is not (i) in violation of its
charter or by-laws or similar organizational documents; (ii) in default, and no
event has occurred that, with notice or lapse of time or both, would constitute
such a default, in the due performance or

 

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observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company is a party or by which the Company is bound or to which any of
the property or assets of the Company is subject; or (iii) in violation of any
law or statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of each
of clauses (ii) and (iii) above, for any such violation or default that would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. To the Company’s knowledge, no other party under any material
contract or other agreement to which it is a party is in default in any respect
thereunder where such default would reasonably be expected to have a Material
Adverse Effect.

(i)    No Material Adverse Change. Subsequent to the respective dates as of
which information is given in the Registration Statement, the Prospectus and the
Issuer Free Writing Prospectuses, if any (including any document deemed
incorporated by reference therein), there has not been (i) any Material Adverse
Effect or the occurrence of any development that the Company reasonably expects
will result in a Material Adverse Effect, (ii) other than as contemplated by
this Agreement, any transaction which is material to the Company, (iii) any
obligation or liability, direct or contingent (including any off-balance sheet
obligations), incurred by the Company, which is material to the Company,
(iv) any material change in the capital stock or outstanding long-term
indebtedness of the Company (other than (a) as a result of the sale of Placement
Shares, (b) as described in a proxy statement filed on Schedule 14A or a
Registration Statement on Form S-4 and otherwise publicly announced, or
(c) changes in the number of shares of outstanding Common Stock of the Company
due to the issuance of shares upon the exercise or conversion of securities
exercisable for, or convertible into, shares of Common Stock outstanding on the
date hereof, or the vesting of restricted stock units outstanding on the date
hereof) or (v) any dividend or distribution of any kind declared, paid or made
on the capital stock of the Company, other than, in each case above, (A) in the
ordinary course of business or (B) as otherwise disclosed in the Registration
Statement or Prospectus (including any document deemed incorporated by reference
therein).

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

 

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

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

(m)    No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any Governmental Authority having
jurisdiction over the Company is required for the execution, delivery and
performance by the Company of this Agreement and the issuance and sale by the
Company of the Placement Shares as contemplated hereby, except for such
consents, approvals, authorizations, orders and registrations or qualifications
as may be required under applicable state securities laws or by the by-laws and
rules of the Financial Industry Regulatory Authority (“FINRA”) or the Exchange,
including any notices that may be required by the Exchange, in connection with
the sale of the Placement Shares by the Agent, and except for any consents,
approvals, authorizations, orders and registrations or qualifications that have
been obtained prior to the date of this Agreement or the issuance and sale by
the Company of the Placement Shares, as applicable.

(n)    No Preferential Rights. Except as set forth in the Registration Statement
and the Prospectus, (i) no person, as such term is defined in Rule 1-02 of
Regulation S-X promulgated under the Securities Act (each, a “Person”), has the
right, contractual or otherwise, to cause the Company to issue or sell to such
Person any Common Stock or shares of any other capital stock or other securities
of the Company (other than upon the exercise of options or warrants to purchase
Common Stock or upon the exercise of options or vesting of stock appreciation
rights, restricted stock, restricted stock units or other stock-based awards
that may be granted from time to time under the Company’s stock option plans and
which are disclosed in the Registration Statement and Prospectus), (ii) no
Person has any preemptive rights, resale rights, rights of first refusal, rights
of co-sale, or any other rights (whether pursuant to a “poison pill” provision
or otherwise) to purchase any Common Stock or shares of any other capital stock
or other securities of the Company which have not been duly waived with respect
to the

 

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transactions contemplated hereby on or prior to the date hereof, (iii) no Person
has the right to act as an underwriter or as a financial advisor to the Company
in connection with the offer and sale of the Placement Shares, and (iv) no
Person has the right, contractual or otherwise, to require the Company to
register under the Securities Act any Common Stock or shares of any other
capital stock or other securities of the Company, or to include any such shares
or other securities in the Registration Statement or the offering contemplated
thereby, whether as a result of the filing or effectiveness of the Registration
Statement or the sale of the Placement Shares as contemplated thereby or
otherwise, except for such rights as have been duly waived with respect to the
transactions contemplated hereby on or prior to the date hereof.

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

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

(q)    No Litigation. Except as set forth in the Registration Statement or the
Prospectus, there are no actions, suits, proceedings by or before any
Governmental Authority pending, nor, to the Company’s knowledge, any audits or
investigations by or before any Governmental Authority, to which the Company is
a party or to which any property of the Company is the subject that,
individually or in the aggregate, if determined adversely to the Company, would
reasonably be expected to have a Material Adverse Effect and to the Company’s
knowledge, no such actions, suits, proceedings, audits or investigations are
threatened or contemplated by any Governmental Authority or threatened by others
that, individually or in the aggregate, if determined adversely to the Company
would reasonably be expected to have a Material Adverse Effect; and (i) there
are no current or pending audits, investigations, actions, suits or proceedings
by or before any Governmental Authority that are required under the Securities
Act to be described in the Prospectus that are not so described; and (ii) there
are no contracts or other documents that are required under the Securities Act
to be filed as exhibits to the Registration Statement that are not so filed.

 

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(r)    Consents and Permits. Except as disclosed in the Registration Statement
and the Prospectus, the Company has made all filings, applications and
submissions required by, and possesses all approvals, licenses, certificates,
certifications, clearances, consents, grants, exemptions, marks, notifications,
orders, permits and other authorizations issued by, the appropriate federal,
state or foreign governmental or regulatory authorities (including, without
limitation, the United States Food and Drug Administration (the “FDA”), and any
other foreign, federal, state, provincial, court or local government or
regulatory authorities performing functions similar to those performed by the
FDA) necessary for the ownership or lease of its properties or to conduct its
business as described in the Registration Statement and the Prospectus
(collectively, “Permits”), except for such Permits the failure of which to
possess, obtain or make the same would not reasonably be expected to have a
Material Adverse Effect; the Company is in compliance with the terms and
conditions of all such Permits, except where the failure to be in compliance
would not reasonably be expected to have a Material Adverse Effect; all of the
Permits are valid and in full force and effect, except where any invalidity,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect; and the Company has not received any written notice of
proceedings relating to the limitation, revocation, cancellation, suspension,
modification or non-renewal of any such Permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a Material Adverse Effect, or has any reason to believe that any such
license, certificate, permit or authorization will not be renewed in the
ordinary course to the extent required. To the extent required by applicable
laws and regulations of the FDA, the Company has submitted to the FDA an
Investigational New Drug Application or amendment or supplement thereto for each
clinical trial it has conducted or sponsored or is conducting or sponsoring; all
such submissions were in material compliance with applicable laws and rules and
regulations when submitted and no material deficiencies have been asserted by
the FDA with respect to any such submissions.

(s)    Regulatory Filings. Except as disclosed in the Registration Statement and
the Prospectus, all such filings, declarations, listings, registrations, reports
or submissions were in compliance with applicable laws when filed and no
deficiencies have been asserted by any applicable Governmental Authority with
respect to any such filings, declarations, listings, registrations, reports or
submissions, except for any deficiencies that, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect. The Company
has operated and currently is, in all material respects, in compliance with the
United States Federal Food, Drug, and Cosmetic Act, all applicable rules and
regulations of the FDA and other federal, state, local and foreign governmental
bodies exercising comparable authority. The Company has no knowledge of any
studies or tests performed by or on behalf of the Company not described in the
Prospectus the aggregate results of which reasonably call into question in any
material respect the results of the clinical trials described in the Prospectus.

(t)    Intellectual Property. Except as disclosed in the Registration Statement
or the Prospectus, the Company owns, possesses, licensees or has other
enforceable rights to use all foreign and domestic patents, patent applications,
trademarks (both registered and unregistered), service marks, trade names,
trademark registrations, service mark registrations, copyrights, licenses,
inventions and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures)
(collectively, the “Intellectual Property”), necessary for the conduct of its
business as conducted as of the date

 

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hereof, except to the extent that the failure to own or possess or acquire
adequate rights to use such Intellectual Property would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect; except
as disclosed in writing to the Agent, to the Company’s knowledge, there is no
infringement by third parties of any such Intellectual Property; the Company has
not received any written notice of any claim of infringement or conflict which
asserted Intellectual Property rights of others, which infringement or conflict,
if the subject of an unfavorable decision, would result in a Material Adverse
Effect; there are no pending, or to the Company’s knowledge, threatened judicial
proceedings or interference proceedings against the Company challenging the
Company’s rights in or to or the validity of the scope of any of the Company’s
patents, patent applications or proprietary information except such proceedings
that have been disclosed in writing to the Agent or would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect; no
other entity or individual has any right or claim in any of the Company’s
patents, patent applications or any patent to be issued therefrom by virtue of
any contract, license or other agreement entered into between such entity or
individual and the Company or by any non-contractual obligation of the Company,
other than by written licenses granted by the Company except for such right or
claim that would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect; the Company has not received any written
notice of any claim challenging the rights of the Company in or to any
Intellectual Property owned, licensed or optioned by the Company which claim, if
the subject of an unfavorable decision would reasonably be expected to result in
a Material Adverse Effect.

(u)    Clinical Studies. To the Company’s knowledge, the clinical, pre-clinical
and other studies and tests described in the Prospectus conducted by or, to the
knowledge of the Company, on behalf of the Company were, and, if still pending,
are being, to the Company’s knowledge, conducted in all material respects in
accordance with all statutes, laws, rules and regulations, as applicable
(including, without limitation, those administered by the FDA or by any foreign,
federal, state or local Governmental Authority performing functions similar to
those performed by the FDA), except where such noncompliance would not
reasonably be expected to have a Material Adverse Effect. Except as set forth in
the Registration Statement and Prospectus, the Company has not received any
written notices or other written correspondence from the FDA or any other
foreign, federal, state or local Governmental Authority performing functions
similar to those performed by the FDA requiring the Company to terminate or
suspend any ongoing clinical or pre-clinical studies or tests.

(v)    Market Capitalization. At the time the Registration Statement was or will
be originally declared effective, and at the time the Company’s most recent
Annual Report on Form 10-K was filed with the Commission, the Company met or
will meet the then applicable requirements for the use of Form S-3 under the
Securities Act, including, but not limited to, General Instruction I.B.1 of Form
S-3. The Company satisfies the pre-1992 eligibility requirements for the use of
a registration statement on Form S-3 in connection with this offering (the
pre-1992 eligibility requirements for the use of the registration statement on
Form S-3 include (i) having a non-affiliate, public common equity float of at
least $150 million or a non-affiliate, public common equity float of at least
$100 million and annual trading volume of at least three million shares and
(ii) having been subject to the Exchange Act reporting requirements for a period
of 36 months). The Company is not a shell company (as defined in Rule 405 under
the Securities Act) and has not been a shell company for at least 12 calendar
months previously.

 

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(w)    No Material Defaults. The Company has not defaulted on any installment on
indebtedness for borrowed money or on any rental on one or more long-term
leases, which defaults, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect. The Company has not filed a report
pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing of its
last Annual Report on Form 10-K, indicating that it (i) has failed to pay any
dividend or sinking fund installment on preferred stock or (ii) has defaulted on
any installment on indebtedness for borrowed money or on any rental on one or
more long-term leases, which defaults, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.

(x)    Certain Market Activities. Neither the Company nor, to the Company’s
knowledge, any of its directors, officers or controlling persons has taken,
directly or indirectly, any action designed, or that has constituted or would
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Placement Shares.

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

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

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

(bb)    Title to Real and Personal Property. Except as set forth in the
Registration Statement or the Prospectus, the Company has good and marketable
title to all items of real property owned by it, good and valid title to all
personal property (except Intellectual Property, which is discussed in Section
6(t) above) described in the Registration Statement or Prospectus as being owned
by it, in each case free and clear of all liens, encumbrances and claims, except
those matters that (i) do not materially interfere with the use made and
proposed to be made of such property by the Company or (ii) would not
individually or in the aggregate, reasonably be

 

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expected to have a Material Adverse Effect. Any real or tangible personal
property described in the Registration Statement or Prospectus as being leased
by the Company is held by the Company under valid, existing and enforceable
leases, except those that (A) do not materially interfere with the use made or
proposed to be made of such property by the Company or (B) would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect. The Company has not received from any Governmental Authorities any
notice of any condemnation of, or zoning change affecting, the properties of the
Company, and the Company knows of no such condemnation or zoning change which is
threatened, except for such that would not reasonably be expected to interfere
in any material respect with the use made and proposed to be made of such
property by the Company or otherwise have a Material Adverse Effect,
individually or in the aggregate.

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

(dd)    Disclosure Controls. The Company maintains systems of internal
accounting controls designed to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with U.S. generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company’s internal control over financial
reporting is effective at the reasonable assurance level and the Company is not
aware of any material weaknesses in its internal control over financial
reporting (other than as set forth in the Prospectus). Since the date of the
latest audited financial statements of the Company included in the Prospectus,
there has been no change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting (other than as
set forth in the Registration Statement or the Prospectus). The Company has
established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15 and 15d-15) for the Company and designed such disclosure controls and
procedures to provide reasonable assurance that material information relating to
the Company is made known to the certifying officers by others within those
entities, particularly during the period in which the Company’s Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, as the case may be, is being
prepared. The Company’s certifying officers have evaluated the effectiveness of
the Company’s disclosure controls and procedures as of a date within 90 days
prior to the filing date of the Form 10-K for the fiscal year

 

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most recently ended (such date, the “Evaluation Date”). The Company presented in
its Form 10-K for the fiscal year most recently ended the conclusions of the
certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date and the
disclosure controls and procedures are effective at the reasonable assurance
level. Since the Evaluation Date, there have been no significant changes in the
Company’s internal controls (as such term is defined in Item 307(b) of
Regulation S-K under the Securities Act) or, to the Company’s knowledge, in
other factors that could significantly affect the Company’s internal controls.

(ee)    Sarbanes-Oxley. There is and has been no failure on the part of the
Company or, to the knowledge of the Company, any of the Company’s directors or
officers, in their capacities as such, to comply in all material respects with
any applicable provisions of the Sarbanes-Oxley Act and the rules and
regulations promulgated thereunder. Each of the principal executive officer and
the principal financial officer of the Company (or each former principal
executive officer of the Company and each former principal financial officer of
the Company as applicable) has made all certifications required by Sections 302
and 906 of the Sarbanes-Oxley Act with respect to all reports, schedules, forms,
statements and other documents required to be filed by it or furnished by it to
the Commission during the twelve (12) months immediately preceding the date of
this Agreement. For purposes of the preceding sentence, “principal executive
officer” and “principal financial officer” shall have the meanings given to such
terms in the Sarbanes-Oxley Act.

(ff)    Finder’s Fees. The Company has not incurred any liability for any
finder’s fees, brokerage commissions or similar payments in connection with the
transactions herein contemplated, except as may otherwise exist with respect to
Agent pursuant to this Agreement.

(gg)    Labor Disputes. No labor disturbance by or dispute with employees of the
Company exists or, to the knowledge of the Company, is threatened which would
reasonably be expected to result in a Material Adverse Effect.

(hh)    Investment Company Act. The Company is not and, after giving effect to
the offering and sale of the Placement Shares, will not be an “investment
company” or an entity “controlled” by an “investment company,” as such terms are
defined in the Investment Company Act of 1940, as amended (the “Investment
Company Act”).

(ii)    Operations. The operations of the Company are and have been conducted at
all times in compliance with applicable financial record keeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions to which the Company
is subject, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
Governmental Authority (collectively, the “Money Laundering Laws”), except as
would not reasonably be expected to result in a Material Adverse Effect; and no
action, suit or proceeding by or before any Governmental Authority involving the
Company with respect to the Money Laundering Laws is pending or, to the
knowledge of the Company, threatened.

(jj)    Off-Balance Sheet Arrangements. There are no transactions, arrangements
and other relationships between and/or among the Company and/or, to the

 

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knowledge of the Company, any of its affiliates and any unconsolidated entity,
including, but not limited to, any structural finance, special purpose or
limited purpose entity (each, an “Off-Balance Sheet Transaction”) that would
reasonably be expected to affect materially the Company’s liquidity or the
availability of or requirements for its capital resources, including those
Off-Balance Sheet Transactions described in the Commission’s Statement about
Management’s Discussion and Analysis of Financial Conditions and Results of
Operations (Release Nos. 33-8056; 34-45321; FR-61), required to be described in
the Registration Statement or the Prospectus which have not been described as
required.

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

(ll)    ERISA. To the knowledge of the Company, (i) each material employee
benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), that is maintained,
administered or contributed to by the Company (other than a Multiemployer Plan,
within the meaning of Section 3(37) of ERISA)or any of its affiliates for
employees or former employees of the Company has been maintained in material
compliance with its terms and the requirements of any applicable statutes,
orders, rules and regulations, including but not limited to ERISA and the
Internal Revenue Code of 1986, as amended (the “Code”) (except to the extent
where any non-compliance would not result in material liability to the Company);
during the last six (6) plan years, (ii) no prohibited transaction, within the
meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred which
would result in a material liability to the Company with respect to any such
plan excluding transactions effected pursuant to a statutory or administrative
exemption; and (iii) for each such plan that is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, no “accumulated funding
deficiency” as defined in Section 412 of the Code has been incurred, whether or
not waived, and the fair market value of the assets of each such plan (excluding
for these purposes accrued but unpaid contributions) equals or exceeds the
present value of all benefits accrued under such plan determined using
reasonable actuarial assumptions.

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

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

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

 

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(pp)    Insurance. The Company carries, or is covered by, insurance in such
amounts and covering such risks as the Company reasonably believes are adequate
for the conduct of its properties and as is customary for companies of similar
size engaged in similar businesses in similar industries.

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

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

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

 

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

(uu)    Sanctions.

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

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

(B) located, organized or resident in a country or territory that is the subject
of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, North
Korea, Sudan and Syria).

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

(A) to fund or facilitate any activities or business of or with any Person or in
any country or territory in violation of any applicable Sanctions; or

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

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

 

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

(ww)    Statistical and Market-Related Data. Any statistical and market-related
data included in the Registration Statement or the Prospectus are based on or
derived from sources that the Company believes, after reasonable inquiry, to be
reliable and accurate and, to the extent required, the Company has obtained the
written consent to the use of such data from such sources.

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

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

(a)    Registration Statement Amendments. After the date of this Agreement and
during any period in which a Prospectus relating to any Placement Shares is
required to be delivered by Agent under the Securities Act (including in
circumstances where such requirement may be satisfied pursuant to Rule 172 under
the Securities Act or similar rule), (i) the Company will notify the Agent
promptly of the time when any subsequent amendment to the Registration
Statement, other than documents incorporated by reference or amendments or
supplements that do not name the Agent or do not relate to the transactions
contemplated by this Agreement, has been filed with the Commission and/or has
become effective or any subsequent supplement to the Prospectus has been filed
and of any request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus related to the transactions contemplated by
this Agreement or for additional information related to the transactions
contemplated by this Agreement, (ii) the Company will prepare and file with the
Commission, promptly upon the Agent’s request, any amendments or supplements to
the Registration Statement or Prospectus that, in such Agent’s reasonable
opinion, may be necessary or advisable in connection with the distribution of
the Placement Shares by the Agent (provided, however, that the failure of the
Agent to make such request shall not relieve the Company of any obligation or
liability hereunder, or affect the Agent’s right to rely on the representations
and warranties made by the Company in this Agreement and provided, further, that
the only remedy the Agent shall have with respect to the failure to make such
filing shall be to cease making sales under this Agreement until such amendment
or supplement is filed); (iii) the Company will not file any amendment or
supplement to the Registration Statement or Prospectus relating to the Placement
Shares unless a copy thereof has been submitted to Agent within a reasonable
period of time before the filing and the Agent has not reasonably objected in
writing thereto within two (2) Business Days (provided, however, that the
failure of the Agent to make such objection shall not relieve the Company of any
obligation or liability hereunder, or affect the Agent’s right to rely on the
representations and warranties made by the Company in this Agreement and
provided,

 

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further, that the only remedy the Agent shall have with respect to the failure
by the Company to obtain such consent shall be to cease making sales under this
Agreement) and the Company will furnish to the Agent at the time of filing
thereof a copy of any document that upon filing is deemed to be incorporated by
reference into the Registration Statement or Prospectus, except for those
documents available via EDGAR; and (iv) the Company will cause each amendment or
supplement to the Prospectus that relates to the transactions contemplated by
this Agreement to be filed with the Commission as required pursuant to the
applicable paragraph of Rule 424(b) of the Securities Act or, in the case of any
document to be incorporated therein by reference, to be filed with the
Commission as required pursuant to the Exchange Act, within the time period
prescribed (the determination to file or not file any amendment or supplement
with the Commission under this Section 7(a), based on the Company’s reasonable
opinion or reasonable objections, shall be made exclusively by the Company).

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

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

 

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reasonable judgment of the Company, it is in the best interests of the Company
to do so. Until such time as the Company shall have corrected such statement or
omission or effected such compliance, the Company shall not notify the Agent to
resume the offering of Placement Shares.

(d)    Listing of Placement Shares. Prior to the date of the first Placement
Notice, the Company will use its reasonable best efforts to cause the Placement
Shares to be listed on the Exchange.

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

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

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

(h)    Notice of Other Sales. Without the prior written consent of the Agent,
the Company will not, directly or indirectly, offer to sell, sell, contract to
sell, grant any option to sell or otherwise dispose of any Common Stock (other
than the Placement Shares offered pursuant to this Agreement) or securities
convertible into or exchangeable for Common Stock, warrants or any rights to
purchase or acquire, Common Stock during the period beginning on the fifth (5th)
Trading Day immediately prior to the date on which any Placement Notice is
delivered to Agent hereunder and ending on the fifth (5th) Trading Day
immediately following the final Settlement Date with respect to Placement Shares
sold pursuant to such Placement Notice (or, if the Placement Notice has been
terminated or suspended prior to the sale of all Placement Shares covered by a
Placement Notice, the date of such suspension or termination); and will not
directly or indirectly in any other “at-the-market” or continuous equity
transaction offer to sell, sell, contract to sell, grant any option to sell or
otherwise dispose of any Common Stock (other than the Placement Shares offered
pursuant to this Agreement) or securities convertible into or exchangeable for
Common Stock, warrants or any rights to purchase or acquire, Common Stock prior
to the later of the termination of this Agreement and the sixtieth (60th) day
immediately following the final Settlement Date with respect to Placement Shares
sold pursuant to such Placement Notice; provided, however, that such
restrictions will not apply in connection with the Company’s issuance or sale of
(i) Common Stock, options to purchase Common Stock, stock appreciation rights,
restricted stock units or other stock-based awards or Common Stock issuable

 

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upon the exercise of options, or the vesting of any of the foregoing, pursuant
to any employee or director stock option or benefits plan, stock ownership plan
or dividend reinvestment plan (but not Common Stock subject to a waiver to
exceed plan limits in its dividend reinvestment plan) of the Company whether now
in effect or hereafter implemented, (ii) Common Stock issuable upon conversion
of securities or the exercise of warrants, options or other rights in effect or
outstanding, and disclosed in filings by the Company available on EDGAR or
otherwise in writing to the Agent and (iii) Common Stock or securities
convertible into or exchangeable for shares of Common Stock as consideration for
mergers, acquisitions, other business combinations or strategic alliances or
offered and sold in privately negotiated transactions with vendors, customers,
strategic partners or potential strategic partners, joint ventures, marketing or
distribution arrangements, collaboration agreements, co-promotion agreements or
intellectual property license agreements occurring after the date of this
Agreement which are not issued for capital raising purposes and connected in a
manner so as not to be integrated with the offering of Placement Shares hereby.

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

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

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

(l)    Representation Dates; Certificate. (1) Prior to the date of the first
Placement Notice given hereunder and (2) each time the Company:

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

 

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

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

(iv) files a current report on Form 8-K containing amended financial information
(other than information “furnished” pursuant to Items 2.02 or 7.01 of Form 8-K
or to provide disclosure pursuant to Item 8.01 of Form 8-K relating to the
reclassification of certain properties as discontinued operations in accordance
with Statement of Financial Accounting Standards No. 144) under the Exchange Act
(each date of filing of one or more of the documents referred to in clauses
(i) through (iv) shall be a “Representation Date”);

the Company shall furnish the Agent (but in the case of clause (iv) above only
if the Agent reasonably determines that the information contained in such Form
8-K is material) with a certificate, in the form and substance reasonably
satisfactory to the Agent and its counsel, substantially similar to the form
previously provided to the Agent and its counsel, modified, as necessary, to
relate to the Registration Statement and the Prospectus as amended or
supplemented. The requirement to provide a certificate under this Section 7(l)
shall be waived for any Representation Date occurring at a time when no
Placement Notice is pending, which waiver shall continue until the earlier to
occur of the date the Company delivers instructions for the sale of Placement
Shares hereunder (which for such calendar quarter shall be considered a
Representation Date) and the next occurring Representation Date. Notwithstanding
the foregoing, if the Company subsequently decides to sell Placement Shares
following a Representation Date when the Company relied on such waiver and did
not provide the Agent with a certificate under this Section 7(l), then before
the Company delivers the instructions for the sale of Placement Shares or the
Agent sells any Placement Shares pursuant to such instructions, the Company
shall provide the Agent with a certificate in conformity with this Section 7(l)
dated as of the date that the instructions for the sale of Placement Shares are
issued.

(m)    Legal Opinion. (1) On or prior to the date of the first Placement Notice
given hereunder and (2) within five (5) Trading Days of each Representation Date
with respect to which the Company is obligated to deliver a certificate pursuant
to Section 7(l) for which no waiver is applicable, the Company shall cause to be
furnished to the Agent a written opinion of Wilmer Cutler Pickering Hale and
Dorr LLP (“Company Counsel”), or other counsel reasonably satisfactory to the
Agent, in form and substance satisfactory to the Agent and its counsel,
substantially similar to the form previously provided to the Agent and its
counsel. Thereafter, within five (5) Trading Days of each Representation Date
with respect to which the Company is obligated to deliver a certificate pursuant
to Section 7(l) for which no waiver is applicable, the Company shall cause to be
furnished to the Agent a written letter of Company Counsel, or other counsel
satisfactory to the Agent, in form and substance satisfactory to the Agent and
its counsel, substantially similar to the form previously provided to the Agent
and its counsel, modified, as necessary, to relate to the Registration Statement
and the Prospectus as then amended or supplemented; provided, however, the
Company shall be required to furnish to Agent no more than one opinion hereunder
per calendar quarter.

 

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(n)    Comfort Letter. (1) On or prior to the date of the first Placement Notice
given hereunder and (2) within five (5) Trading Days of each Representation Date
with respect to which the Company is obligated to deliver a certificate pursuant
to Section 7(l) for which no waiver is applicable and excluding the date of this
Agreement, the Company shall cause its independent registered public accounting
firm to furnish the Agent letters (the “Comfort Letters”), dated the date the
Comfort Letter is delivered, which shall meet the requirements set forth in this
Section 7(n), provided, that if requested by the Agent, the Company shall cause
a Comfort Letter to be furnished to the Agent within ten (10) Trading Days of
the date of occurrence of any material transaction or event which necessitates
the filing of additional or revised financial statements, including the
restatement of the Company’s financial statements. The Comfort Letter from the
Company’s independent registered public accounting firm shall be in a form and
substance reasonably satisfactory to the Agent, (i) confirming that they are an
independent registered public accounting firm within the meaning of the
Securities Act and the PCAOB, (ii) stating, as of such date, the conclusions and
findings of such firm with respect to the financial information and other
matters ordinarily covered by accountants’ “comfort letters” to underwriters in
connection with registered public offerings (the first such letter, the “Initial
Comfort Letter”) and (iii) updating the Initial Comfort Letter with any
information that would have been included in the Initial Comfort Letter had it
been given on such date and modified as necessary to relate to the Registration
Statement and the Prospectus, as amended and supplemented to the date of such
letter.

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

(p)    Investment Company Act. The Company will conduct its affairs in such a
manner so as to reasonably ensure that it will not be or become, at any time
prior to the termination of this Agreement, required to register as an
“investment company,” as such term is defined in the Investment Company Act.

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

(r)    Blue Sky and Other Qualifications. The Company will use its commercially
reasonable efforts, in cooperation with the Agent, to qualify the Placement
Shares for offering and sale, or to obtain an exemption for the Placement Shares
to be offered and sold, under the applicable securities laws of such states and
other domestic jurisdictions or, with the Company’s prior written consent,
foreign jurisdictions as the Agent may designate and to

 

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maintain such qualifications and exemptions in effect for so long as required
for the distribution of the Placement Shares (but in no event for less than one
year from the date of this Agreement); provided, however, that the Company shall
not be obligated to file any general consent to service of process or to qualify
as a foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Placement Shares have been so qualified or
exempt, the Company will file such statements and reports as may be required by
the laws of such jurisdiction to continue such qualification or exemption, as
the case may be, in effect for so long as required for the distribution of the
Placement Shares (but in no event for less than one year from the date of this
Agreement).

(s)    Sarbanes-Oxley Act. The Company will maintain and keep accurate books and
records reflecting its assets and maintain internal accounting controls in a
manner designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and
including those policies and procedures that (i) pertain to the maintenance of
records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of the assets of the Company, (ii) provide reasonable assurance
that transactions are recorded as necessary to permit the preparation of the
Company’s financial statements in accordance with generally accepted accounting
principles, (iii) that receipts and expenditures of the Company are being made
only in accordance with management’s and the Company’s directors’ authorization,
and (iv) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the Company’s assets that
could have a material effect on its financial statements. The Company will
maintain such controls and other procedures, including, without limitation,
those required by Sections 302 and 906 of the Sarbanes-Oxley Act, and the
applicable regulations thereunder that are designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Commission’s rules and forms, including,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is accumulated and communicated to the Company’s
management, including its principal executive officer and principal financial
officer, or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure and to ensure that material information
relating to the Company is made known to it by others within the organization,
particularly during the period in which such periodic reports are being
prepared.

(t)    Secretary’s Certificate; Further Documentation. On or prior to the date
of the first Placement Notice given hereunder, the Company shall deliver to the
Agent a certificate of the Secretary of the Company and attested to by an
executive officer of the Company, dated as of such date, certifying as to
(i) the Certificate of Incorporation of the Company, (ii) the By-laws of the
Company, (iii) the resolutions of the Board of Directors of the Company, or a
duly authorized committee thereof, authorizing the execution, delivery and
performance of this Agreement and the issuance of the Placement Shares and
(iv) the incumbency of the officers duly authorized to execute this Agreement
and the other documents contemplated by this Agreement. Within five (5) Trading
Days of each Representation Date, the Company shall have furnished to the Agent,
upon the Agent’s request, such further information, certificates and documents
as are customarily provided in similar transactions.

 

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8.    Payment of Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation and filing of the Registration Statement, including any fees
required by the Commission, and the printing or electronic delivery of the
Prospectus as originally filed and of each amendment and supplement thereto, in
such number as the Agent shall reasonably deem necessary, (ii) the printing and
delivery to the Agent of this Agreement and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Placement Shares, (iii) the preparation, issuance and delivery of the
certificates, if any, for the Placement Shares to the Agent, including any stock
or other transfer taxes and any capital duties, stamp duties or other duties or
taxes payable upon the sale, issuance or delivery of the Placement Shares to the
Agent, (iv) the fees and disbursements of the counsel, accountants and other
advisors to the Company, (v) the reasonable and documented fees and
disbursements of the counsel to the Agent, payable upon the execution of this
Agreement, in an amount not to exceed $50,000, (vi) the qualification or
exemption of the Placement Shares under state securities laws in accordance with
the provisions of Section 7(r) hereof, including filing fees, but excluding fees
of the Agent’s counsel, (vii) the printing and delivery to the Agent of copies
of any Permitted Issuer Free Writing Prospectus and the Prospectus and any
amendments or supplements thereto in such number as the Agent shall reasonably
deem necessary, (viii) the preparation, printing and delivery to the Agent of
copies of the blue sky survey, (ix) the fees and expenses of the transfer agent
and registrar for the Common Stock, (x) the filing and other fees incident to
any review by FINRA of the terms of the sale of the Placement Shares including
the fees of the Agent’s counsel (subject to the cap, set forth in clause
(v) above), and (xi) the fees and expenses incurred in connection with the
listing of the Placement Shares on the Exchange.

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

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

(a)    Registration Statement Effective. The Registration Statement shall have
become effective and shall be available for the (i) resale of all Placement
Shares issued to the Agent and not yet sold by the Agent and (ii) sale of all
Placement Shares contemplated to be issued by any Placement Notice.

 

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

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

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

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

 

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

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

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

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

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

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

(l)    FINRA. If applicable, FINRA shall have raised no objection to the terms
of this offering and the amount of compensation allowable or payable to the
Agent as described in the Prospectus.

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

11.    Indemnification and Contribution.

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

(i)    against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, joint or several, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or alleged
omission therefrom of a material fact required to

 

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be stated therein or necessary to make the statements therein not misleading, or
arising out of any untrue statement or alleged untrue statement of a material
fact included in any related Issuer Free Writing Prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;

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

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

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made solely in
reliance upon and in conformity with the Agent Information (as defined below).

(b)    Agent Indemnification. Agent agrees to indemnify and hold harmless the
Company and its 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 against any and all loss, liability, claim, damage and expense described in
the indemnity contained in Section 11(a), as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendments thereto), the Prospectus (or
any amendment or supplement thereto) or any Issuer Free Writing Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
information relating to the Agent and furnished to the Company in writing by the
Agent expressly for use therein. The Company hereby acknowledges that the only
information that the Agent has furnished to the Company expressly for use in the
Registration Statement, the Prospectus or any Issuer Free Writing Prospectus (or
any amendment or supplement thereto) are the statements set forth in the seventh
and eighth paragraphs under the caption “Plan of Distribution” in the Prospectus
(the “Agent Information”).

(c)    Procedure. Any party that proposes to assert the right to be indemnified
under this Section 11 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 11, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve the indemnifying party from (i) any liability that it might have to any

 

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

(d)    Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 11 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Agent, the Company
and the Agent will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses

 

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reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted) to which the Company and
the Agent may be subject in such proportion as shall be appropriate to reflect
the relative benefits received by the Company on the one hand and the Agent on
the other hand. The relative benefits received by the Company on the one hand
and the Agent on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the sale of the Placement Shares (before deducting
expenses) received by the Company bear to the total compensation received by the
Agent (before deducting expenses) from the sale of Placement Shares on behalf of
the Company. If, but only if, the allocation provided by the foregoing sentence
is not permitted by applicable law, the allocation of contribution shall be made
in such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the
Company, on the one hand, and the Agent, on the other hand, with respect to the
statements or omission that resulted in such loss, claim, liability, expense or
damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the Agent, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Agent agree that it would not be just and equitable if contributions
pursuant to this Section 11(d) were to be determined by pro rata allocation or
by any other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense, or damage, or action
in respect thereof, referred to above in this Section 11(d) shall be deemed to
include, for the purpose of this Section 11(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim to the extent consistent with Section
11(c) hereof. Notwithstanding the foregoing provisions of this Section 11(d),
the Agent shall not be required to contribute any amount in excess of the
commissions received by it under this Agreement and no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 11(d),
any person who controls a party to this Agreement within the meaning of the
Securities Act, any affiliates of the Agent and any officers, directors,
partners, employees or agents of the Agent or any of its affiliates, will have
the same rights to contribution as that party, and each director of the Company
and each officer of the Company who signed the Registration Statement will have
the same rights to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action against such party in respect of which a
claim for contribution may be made under this Section 1l(d), will notify any
such party or parties from whom contribution may be sought, but the omission to
so notify will not relieve that party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 11(d)
except to the extent that the failure to so notify such other party materially
prejudiced the substantive rights or defenses of the party from whom
contribution is sought. Except for a settlement entered into pursuant to the
last sentence of Section 11(c) hereof, no party will be liable for contribution
with respect to any action or claim settled without its written consent if such
consent is required pursuant to Section 11(c) hereof.

 

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

13.    Termination.

(a)    The Agent may terminate this Agreement, by notice to the Company, as
hereinafter specified at any time (1) if there has been, since the time of
execution of this Agreement or since the date as of which information is given
in the Prospectus, any change, or any development or event involving a
prospective change, in the condition, financial or otherwise, or in the
business, properties, earnings, results of operations or prospects of the
Company, whether or not arising in the ordinary course of business, which
individually or in the aggregate, in the sole judgment of the Agent is material
and adverse and makes it impractical or inadvisable to market the Placement
Shares or to enforce contracts for the sale of the Placement Shares, (2) if
there has occurred any material adverse change in the financial markets in the
United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Agent, impracticable or inadvisable
to market the Placement Shares or to enforce contracts for the sale of the
Placement Shares, (3) if trading in the Common Stock has been suspended or
limited by the Commission or the Exchange, or if trading generally on the
Exchange has been suspended or limited, or minimum prices for trading have been
fixed on the Exchange, (4) if any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market shall have occurred
and be continuing, (5) if a major disruption of securities settlements or
clearance services in the United States shall have occurred and be continuing,
or (6) if a banking moratorium has been declared by either U.S. Federal or New
York authorities. Any such termination shall be without liability of any party
to any other party except that the provisions of Section 8 (Payment of
Expenses), Section 11 (Indemnification and Contribution), Section 12
(Representations and Agreements to Survive Delivery), Section 18 (Governing Law
and Time; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction) hereof
shall remain in full force and effect notwithstanding such termination. If the
Agent elects to terminate this Agreement as provided in this Section 13(a), the
Agent shall provide the required notice as specified in Section 14 (Notices).

(b)    The Company shall have the right, by giving ten (10) days notice as
hereinafter specified to terminate this Agreement in its sole discretion at any
time after the date of this Agreement. Any such termination shall be without
liability of any party to any other party except that the provisions of
Section 8, Section 11, Section 12, Section 18 and Section 19 hereof shall remain
in full force and effect notwithstanding such termination.

(c)    The Agent shall have the right, by giving ten (10) days notice as
hereinafter specified to terminate this Agreement in its sole discretion at any
time after the date of this Agreement. Any such termination shall be without
liability of any party to any other party except that the provisions of
Section 8, Section 11, Section 12, Section 18 and Section 19 hereof shall remain
in full force and effect notwithstanding such termination.

 

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(d)    Unless earlier terminated pursuant to this Section 13, this Agreement
shall automatically terminate upon the issuance and sale of all of the Placement
Shares through the Agent on the terms and subject to the conditions set forth
herein; provided that the provisions of Section 8, Section 11, Section 12,
Section 18 and Section 19 hereof shall remain in full force and effect
notwithstanding such termination.

(e)    This Agreement shall remain in full force and effect unless terminated
pursuant to Sections 13(a), (b) or (c) above or otherwise by mutual agreement of
the parties; provided, however, that any such termination by mutual agreement
shall in all cases be deemed to provide that Section 8, Section 11, Section 12,
Section 18 and Section 19 shall remain in full force and effect.

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

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

Cantor Fitzgerald & Co.

499 Park Avenue

New York, NY 10022

Attention:    Capital Markets/Jeffrey Lumby

Facsimile:    (212) 307-3730

and:

Cantor Fitzgerald & Co.

499 Park Avenue

New York, NY 10022

Attention:    General Counsel

Facsimile:    (212) 829-4708

 

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with a copy to:

Cooley LLP

1114 Avenue of the Americas

New York, NY 10036

Attention:        Daniel I. Goldberg, Esq.

Facsimile:        (212) 479-6275

and if to the Company, shall be delivered to:

Achillion Pharmaceuticals, Inc.

300 George Street

New Haven, CT 06511

Attention:       Mary Kay Fenton, Executive Vice President and Chief Financial
Officer

Facsimile:      (203) 624-7003

with a copy to:

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, MA 02109

Attention:    Steven D. Singer, Esq.

                    Cynthia T. Mazareas, Esq.

Facsimile:    (617) 526-5000

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

An electronic communication (“Electronic Notice”) shall be deemed written notice
for purposes of this Section 14 if sent to the electronic mail address specified
by the receiving party under separate cover. Electronic Notice shall be deemed
received at the time the party sending Electronic Notice receives verification
of receipt by the receiving party. Any party receiving Electronic Notice may
request and shall be entitled to receive the notice on paper, in a nonelectronic
form (“Nonelectronic Notice”) which shall be sent to the requesting party within
ten (10) days of receipt of the written request for Nonelectronic Notice.

15.    Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the Company and the Agent and their respective successors and
the affiliates, controlling persons, officers, employees, agents and directors
referred to in Section 11 hereof.

 

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

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

17.    Entire Agreement; Amendment; Severability; Waiver. This Agreement
(including all schedules and exhibits attached hereto and Placement Notices
issued pursuant hereto) constitutes the entire agreement and supersedes all
other prior and contemporaneous agreements and undertakings, both written and
oral, among the parties hereto with regard to the subject matter hereof. Neither
this Agreement nor any term hereof may be amended except pursuant to a written
instrument executed by the Company and the Agent. In the event that any one or
more of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable as written by a court of
competent jurisdiction, then such provision shall be given full force and effect
to the fullest possible extent that it is valid, legal and enforceable, and the
remainder of the terms and provisions herein shall be construed as if such
invalid, illegal or unenforceable term or provision was not contained herein,
but only to the extent that giving effect to such provision and the remainder of
the terms and provisions hereof shall be in accordance with the intent of the
parties as reflected in this Agreement. No implied waiver by a party shall arise
in the absence of a waiver in writing signed by such party. No failure or delay
in exercising any right, power, or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power, or privilege
hereunder.

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

19.    CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF
NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR
IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND

 

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HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR
PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF
ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED)
TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT
AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF
PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN
ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

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

21.    Construction.

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

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

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

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

(e)    references herein to any gender shall include each other gender;

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

(g)    if the last day for the giving of any notice or the performance of any
act required or permitted under this Agreement is a day that is not a Trading
Day, then the time for the giving of such notice or the performance of such
action shall be extended to the next succeeding Trading Day.

 

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22.    Permitted Free Writing Prospectuses. The Company represents, warrants and
agrees that, unless it obtains the prior written consent of the Agent, which
consent shall not be unreasonably withheld, conditioned or delayed, and the
Agent represents, warrants and agrees that, unless it obtains the prior written
consent of the Company, which consent shall not be unreasonably withheld,
conditioned or delayed, it has not made and will not make any offer relating to
the Placement Shares that would constitute an Issuer Free Writing Prospectus, or
that would otherwise constitute a “free writing prospectus,” as defined in Rule
405, required to be filed with the Commission. Any such free writing prospectus
consented to by the Agent or by the Company, as the case may be, is hereinafter
referred to as a “Permitted Free Writing Prospectus.” The Company represents and
warrants that it has treated and agrees that it will treat each Permitted Free
Writing Prospectus as an “issuer free writing prospectus,” 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 filing
with the Commission where required, legending and record keeping. For the
purposes of clarity, the parties hereto agree that all free writing
prospectuses, if any, listed in Exhibit 22 hereto are Permitted Free Writing
Prospectuses.

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

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

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

(c)    neither the Agent nor its affiliates have provided any legal, accounting,
regulatory or tax advice with respect to the transactions contemplated by this
Agreement and it has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate;

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

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

 

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24.    Definitions.

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

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

“Governmental Authority” means (i) any federal, provincial, state, local,
municipal, national or international government or governmental authority,
regulatory or administrative agency, governmental commission, department, board,
bureau, agency or instrumentality, court, tribunal, arbitrator or arbitral body
(public or private); (ii) any self-regulatory organization; or (iii) any
political subdivision of any of the foregoing.

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

“Rule 164,” “Rule 172,” “Rule 405,” “Rule 415,” “Rule 424,” “Rule 424(b),”
“Rule 430B,” and “Rule 433” refer to such rules under the Securities Act.

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

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

[Signature Page Follows]

 

-38-

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

 

Very truly yours, ACHILLION PHARMACEUTICALS, INC. By:  

/s/ Mary Kay Fenton

Name:   Mary Kay Fenton Title:   Executive Vice Present and Chief Financial
Officer ACCEPTED as of the date first-above written: CANTOR FITZGERALD & CO. By:
 

/s/ Jeffrey Lumby

Name:   Jeffrey Lumby Title:   Senior Managing Director

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SCHEDULE 1

 

 

Form of Placement Notice

 

 

 

From:    Achillion Pharmaceuticals, Inc. To:    Cantor Fitzgerald & Co.   
Attention: [●] Subject:    Placement Notice Date:    [●], 201[7]

Ladies and Gentlemen:

Pursuant to the terms and subject to the conditions contained in the Sales
Agreement between Achillion Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), and Cantor Fitzgerald & Co. (“Agent”), dated February 23, 2017, the
Company hereby requests that the Agent sell up to [●] of the Company’s common
stock, par value $0.001 per share, at a minimum market price of $[●] per share,
during the time period beginning [month, day, time] and ending [month, day,
time].

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SCHEDULE 2

 

 

Compensation

 

 

The Company shall pay to the Agent in cash, upon each sale of Placement Shares
pursuant to this Agreement, an amount equal to 3.0% of the aggregate gross
proceeds from each sale of Placement Shares.

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SCHEDULE 3

 

 

Notice Parties

 

 

The Company

Milind Deshpande

Mary Kay Fenton

The Agent

Jeffrey Lumby (jlumby@cantor.com)

Joshua Feldman (jfeldman@cantor.com)

Sameer Vasudev (svasudev@cantor.com)

With copies to:

CFControlledEquityOffering@cantor.com

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SCHEDULE 4

 

 

Subsidiaries

 

 

None.

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Exhibit 22

Permitted Free Writing Prospectus

None.