Exhibit 10.1

EXECUTION VERSION

INTRA-CELLULAR THERAPIES, INC.

AT-THE-MARKET OFFERING PROGRAM

$50,000,000

SALES AGREEMENT

May 28, 2015

Cowen and Company, LLC

599 Lexington Avenue

New York, NY 10022

Ladies and Gentlemen:

Intra-Cellular Therapies, Inc., a Delaware corporation (the “Company”), confirms
its agreement (this “Agreement”) with Cowen and Company, LLC (“Cowen”), 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 Cowen, acting as agent and/or
principal, shares (the “Placement Shares”) of the Company’s common stock, par
value $0.0001 per share (the “Common Stock”), having an aggregate offering price
of up to $50,000,000. Notwithstanding anything to the contrary contained herein,
the parties hereto agree that compliance with the limitation set forth in this
Section 1 on the number of shares of Common Stock issued and sold under this
Agreement shall be the sole responsibility of the Company, and Cowen shall have
no obligation in connection with such compliance. The issuance and sale of
Common Stock through Cowen will be effected pursuant to the Registration
Statement (as defined below) to be filed by the Company and after such
Registration Statement has been 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 (as
defined below) to issue the Placement Shares.

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
(collectively, the “Securities Act”), with the Commission a registration
statement on Form S-3, including (a) a base prospectus, relating to certain
securities, including the Placement Shares, to be issued from time to time by
the Company, and which incorporates by reference certain documents that the
Company has filed or will file in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the “Exchange Act”), and (b) a sales agreement
prospectus specifically relating to the Placement Shares (the “Sales
Prospectus”) included as part of such registration statement. The Company will
make available to Cowen, for use by Cowen, copies of the Sales Prospectus
included as part of such registration statement. Except where the context
otherwise requires, such registration statement, as amended when it becomes
effective, including all documents filed as part thereof or

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incorporated by reference therein, and including any information contained in a
Prospectus (as defined below) subsequently filed with the Commission pursuant to
Rule 424(b) under the Securities Act or deemed to be a part of such registration
statement pursuant to Rule 430B or 462(b) of the Securities Act, is herein
called the “Registration Statement.” The base prospectus, including all
documents incorporated therein by reference, and the Sales Prospectus, including
all documents incorporated therein by reference, each of which is included in
the Registration Statement, as it or they may be supplemented by any additional
prospectus supplement, in the form in which such prospectus and/or Sales
Prospectus have most recently been filed by the Company with the Commission
pursuant to Rule 424(b) under the Securities Act, together with any “issuer free
writing prospectus,” as defined in Rule 433 of the Securities Act (“Rule 433”),
relating to the Placement Shares that (i) is required to be filed with the
Commission by the Company or (ii) is exempt from filing pursuant to Rule
433(d)(5)(i), in each case in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g), is herein called the “Prospectus.”
Any reference herein to the Registration Statement, the Prospectus or any
amendment or supplement thereto shall be deemed to refer to and include the
documents incorporated by reference therein, and any reference herein to the
terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement or the Prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission deemed to be
incorporated by reference therein. 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 any copy filed with the Commission
pursuant to either the Electronic Data Gathering Analysis and Retrieval System
or Interactive Data Electronic Applications (collectively “IDEA”) and all
references to any Section or Schedule shall be to such Section or Schedule of
this Agreement, unless the context indicates otherwise.

2. Placements. Each time that the Company wishes to issue and sell the Placement
Shares hereunder (each, a “Placement”), it will notify Cowen by email notice (or
other method mutually agreed to in writing by the parties) (a “Placement
Notice”) containing the parameters in accordance with which it desires such
Placement Shares to be sold, which shall at a minimum include 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 (1) Trading Day (as defined in Section 3) and any minimum price below
which sales may not be made, a form of which containing such necessary minimum
sales parameters is attached hereto as Schedule 1. The Placement Notice shall
originate from any of the individuals from the Company set forth on Schedule 2
(with a copy to each of the other individuals from the Company listed on such
schedule), and shall be addressed to each of the individuals from Cowen set
forth on Schedule 2, as such Schedule 2 may be amended in writing from time to
time in accordance herewith. The Placement Notice shall be effective upon
receipt by Cowen unless and until (i) in accordance with the notice requirements
set forth in Section 4, Cowen declines to accept the terms contained therein for
any reason, in its sole discretion, (ii) the entire amount of the Placement
Shares thereunder have been sold, (iii) in accordance with the notice
requirements set forth in Section 4, the Company suspends or terminates the
Placement Notice for any reason, in the Company’s sole discretion, (iv) the
Company issues a subsequent Placement Notice with parameters superseding those
contained in the earlier dated Placement Notice, or (v) this Agreement has been
terminated under the provisions of Section 11. The amount of any discount,
commission or other compensation to be paid by the Company to Cowen in
connection

 

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with the sale of the Placement Shares shall be calculated in accordance with the
terms set forth in Schedule 3. It is expressly acknowledged and agreed that
neither the Company nor Cowen will have any obligation whatsoever with respect
to a Placement or any Placement Shares unless and until the Company delivers a
Placement Notice to Cowen and Cowen 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 Cowen.

(a) Subject to the terms and conditions herein set forth, upon the Company’s
issuance 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, Cowen, 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 Stock Market, Inc.
(“Nasdaq”) to sell such Placement Shares up to the amount specified in, and
otherwise in accordance with, the terms of such Placement Notice. Cowen will
provide written confirmation to the Company (including by email correspondence
to each of the individuals of the Company set forth on Schedule 2, if receipt of
such correspondence is actually acknowledged by any of the individuals to whom
the notice is sent, other than via auto-reply) no later than the opening of the
Trading Day (as defined below) immediately following the Trading Day on which it
has made sales of Placement Shares hereunder, setting forth the number of
Placement Shares sold on such day, the compensation payable by the Company to
Cowen 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 Cowen (as set forth in Section 5(a)) from the gross proceeds that it
receives from such sales. Subject to the terms of the Placement Notice, Cowen
may sell Placement Shares by any method permitted by law deemed to be an “at the
market” offering as defined in Rule 415 under the Securities Act, including
without limitation sales made through Nasdaq, on any other existing trading
market for the Common Stock or to or through a market maker. If expressly
authorized by the Company in a Placement Notice, Cowen may also sell Placement
Shares in privately-negotiated transactions. Notwithstanding the provisions of
Section 6(ll), Cowen shall not purchase Placement Shares for its own account as
principal unless expressly authorized to do so by the Company in a Placement
Notice. The Company acknowledges and agrees that (i) there can be no assurance
that Cowen will be successful in selling Placement Shares, and (ii) Cowen 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 Cowen
to use its commercially reasonable efforts consistent with its normal trading
and sales practices and applicable law to sell such Placement Shares as required
under this Section 3. For the purposes hereof, “Trading Day” means any day on
which the Company’s Common Stock is purchased and sold on the principal market
on which the Common Stock is then listed or quoted.

(b) During the term of this Agreement and notwithstanding anything to the
contrary herein, neither Cowen nor any “affiliated purchaser” (as such term is
defined in Regulation M under the Exchange Act) of Cowen will engage in any
activity prohibited by Regulation M under the Exchange Act or other
anti-manipulation rules under the applicable securities laws.

 

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4. Suspension of Sales.

(a) The Company or Cowen may, upon notice to the other party in writing
(including by email correspondence to each of the individuals of the other party
set forth on Schedule 2, if receipt of such correspondence is actually
acknowledged by any of the individuals to whom the notice is sent, other than
via auto-reply) or by telephone (confirmed immediately by verifiable facsimile
transmission or email correspondence to each of the individuals of the other
party set forth on Schedule 2), suspend any sale of Placement Shares; provided,
however, that such suspension shall not affect or impair either party’s
obligations with respect to any Placement Shares sold hereunder prior to the
receipt of such notice. Each of the Parties agrees that no such notice under
this Section 4 shall be effective against the other unless it is made to one of
the individuals named on Schedule 2 hereto, as such schedule may be amended in
writing from time to time, and in accordance with Section 12 hereof.

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

(c) If either Cowen or the Company has reason to believe that the exemptive
provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act
are not satisfied with respect to the Common Stock, it shall promptly notify the
other party, and Cowen may, at its sole discretion, suspend sales of the
Placement Shares under this Agreement. Cowen shall calculate on a weekly basis
the average daily trading volume (as defined by Rule 100 of Regulation M under
the Exchange Act) of the Common Stock.

5. Settlement.

(a) 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” and the first such settlement date, the “First Delivery
Date”). The amount of proceeds to be delivered to the Company on a Settlement
Date against receipt of the Placement Shares sold (the “Net Proceeds”) will be
equal to the aggregate sales price received by Cowen at which such Placement
Shares were sold, after deduction for (i) Cowen’s commission, discount or other
compensation for such sales payable by the Company pursuant to Section 2 hereof,
(ii) any other amounts due and payable by the Company to Cowen hereunder
pursuant to Section 7(g) (Expenses) hereof, and (iii) any transaction fees
imposed by any governmental or self-regulatory organization (other than FINRA)
in respect of such sales.

(b) 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 Cowen’s or its designee’s account (provided Cowen
shall

 

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have given the Company written notice of such designee at least one (1) Trading
Day prior to the Settlement Date) at The Depository Trust Company through its
Deposit and Withdrawal at Custodian System (“DWAC”) or by such other means of
delivery as may be mutually agreed upon by the parties hereto which in all cases
shall be freely tradeable, transferable, registered shares in good deliverable
form. Cowen will provide DWAC instructions or instructions for delivery by other
means with regard to the electronic transfer of the Placement Shares. On each
Settlement Date, Cowen 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 duly authorized Placement Shares on a
Settlement Date, the Company agrees that in addition to and in no way limiting
the rights and obligations set forth in Section 9(a) (Indemnification and
Contribution) hereof, it will (i) hold Cowen harmless against any loss, claim,
damage, or 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 and (ii) pay to Cowen (without
duplication) any commission, discount, or other compensation to which it would
otherwise have been entitled absent such default.

6. Representations and Warranties of the Company. The Company represents and
warrants to, and agrees with, Cowen that as of the date of this Agreement and as
of each Applicable Time (as defined in Section 20 (a)):

(a) Compliance with Registration Requirements. As of each Applicable Time other
than the date of this Agreement, the Registration Statement and any Rule 462(b)
Registration Statement shall have been declared effective by the Commission
under the Securities Act, the Company shall have complied to the Commission’s
satisfaction with all requests of the Commission for additional or supplemental
information relating to the Registration Statement or the Prospectus and no stop
order suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement is in effect and no proceedings for such purpose
have been instituted or are pending or, to the best knowledge of the Company,
are contemplated or threatened by the Commission. The Company meets the
requirements for use of Form S-3 under the Securities Act. The sale of the
Placement Shares hereunder meets the requirements of General Instruction I.B.1of
Form S-3.

(b) No Misstatement or Omission. The Prospectus when filed will comply or
complied and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act. Each of the Registration Statement,
any Rule 462(b) Registration Statement and any post-effective amendment thereto,
at the time it becomes effective, and, as of each of the Settlement Dates, if
any, will comply in all material respects with the Securities Act and did not
and, as of each of the Settlement Dates, if any, will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. The
Prospectus, as amended or supplemented, as of its date, did not and, as of each
of the Settlement Dates, if any, will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the two
immediately preceding sentences do not apply to statements in or omissions from
the

 

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Registration Statement, any Rule 462(b) Registration Statement or any
post-effective amendment thereto, or the Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with information
relating to Cowen furnished to the Company in writing by Cowen expressly for use
therein. There are no contracts or other documents required to be described in
the Prospectus or to be filed as exhibits to the Registration Statement which
have not been described or filed as required.

(c) Offering Materials Furnished to Cowen. The Company has made or will make
available to Cowen, except for those documents available via IDEA, one complete
copy of the Registration Statement and a copy of each consent and certificate of
experts filed as a part thereof, and conformed copies of the Registration
Statement (without exhibits) and the Prospectus, as amended or supplemented, in
such quantities and at such places as Cowen has reasonably requested.

(d) Distribution of Offering Material By the Company. The Company has not
distributed and will not distribute, prior to the completion of Cowen’s
distribution of the Placement Shares, any offering material in connection with
the offering and sale of the Placement Shares other than the Prospectus or the
Registration Statement.

(e) The Sales Agreement. This Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company, enforceable
against the Company in accordance with its terms, except as rights to
indemnification and contribution hereunder may be limited by applicable law and
public policy considerations and except as the enforcement hereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.

(f) Authorization of the Placement Shares. The Placement Shares to be sold by
Cowen, acting as agent and/or principal for the Company, have been duly
authorized for issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company to Cowen pursuant to this Agreement (including the
terms set forth in the applicable Placement Notice) against payment therefor as
provided herein, will be validly issued, fully paid and nonassessable.

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

(h) No Material Adverse Change. Except as otherwise disclosed in the Prospectus,
subsequent to the respective dates as of which information is given in the
Prospectus: (i) there has been no material adverse change, or any development
that could reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings, business, operations or
prospects, whether or not arising from transactions in the ordinary course of
business, of the Company and its subsidiaries, considered as one entity (any
such change is called a “Material Adverse Change”); (ii) the Company and its
subsidiaries, considered as one entity, have not incurred any material liability
or obligation, indirect, direct or contingent, not in the ordinary course of
business

 

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nor entered into any material transaction or agreement not in the ordinary
course of business: and (iii) there has been no dividend or distribution of any
kind declared, paid or made by the Company or, except for regular quarterly
dividends publicly announced by the Company or dividends paid to the Company or
other subsidiaries, by any of its subsidiaries on any class of capital stock or
repurchase or redemption by the Company or any of its subsidiaries of any class
of capital stock.

(i) Independent Accountants. Ernst & Young LLP, who have certified certain
financial statements of the Company and its subsidiaries is an independent
registered public accounting firm with respect to the Company and its
subsidiaries within the applicable rules and regulations adopted by the
Commission and the Public Company Accounting Oversight Board (United States)
(“PCAOB”) and as required by the Securities Act.

(j) Financial Statements. The financial statements (including the related notes
thereto) of the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus comply in all material respects with
the applicable requirements of the Securities Act and present fairly the
financial position of the Company and its consolidated subsidiaries as of the
dates indicated and the results of their operations and the changes in their
cash flows for the periods specified, it being understood that unaudited interim
financial statements are subject to normal year-end adjustments; such financial
statements have been prepared in conformity with generally accepted accounting
principles in the United States applied on a consistent basis throughout the
periods covered thereby, except as may be otherwise specified therein or to the
extent unaudited interim financial statements exclude footnotes or may be
condensed or summary statements, and any supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein; and the other financial information included in the Registration
Statement and the Prospectus has been derived from the accounting records of the
Company and its consolidated subsidiaries and presents fairly the information
shown thereby; and the pro forma financial information and the related notes
thereto included in the Registration Statement and the Prospectus have been
prepared in accordance with the applicable requirements of the Securities Act
and the assumptions underlying such pro forma financial information are
reasonable and are set forth in the Registration Statement and the Prospectus.

(k) XBRL. The interactive data in eXtensible Business Reporting Language
included or 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 in all material respects.

(l) Incorporation and Good Standing of the Company and its Subsidiaries. The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware and has corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform its
obligations under this Agreement. ITI, Inc. is the Company’s only significant
subsidiary (as defined in Rule 1-02 (w) of Regulation S-X of the Exchange Act)
(the “Significant Subsidiary”). The Significant Subsidiary has been duly
organized and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its organization and has the requisite power and
authority to own, lease

 

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and operate its properties and to conduct its business as described in the
Prospectus. Each of the Company and the Significant Subsidiary is duly qualified
as a foreign corporation or foreign partnership to transact business and is in
good standing in the State of New York and each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a Material Adverse Change. Except as described in the
Prospectus, all of the issued and outstanding equity interests of the
Significant Subsidiary have been duly authorized and validly issued, are fully
paid and nonassessable and are owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim. The Company
does not own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in Exhibit 21.1 to the Company’s
Annual Report on Form 10-K for the most recently ended fiscal year and other
than (i) those subsidiaries not required to be listed on Exhibit 21.1 by
Item 601 of Regulation S-K under the Exchange Act and (ii) those subsidiaries
formed since the last day of the most recently ended fiscal year.

(m) Capital Stock Matters. The Common Stock conforms in all material respects to
the description thereof contained in the Prospectus. All of the issued and
outstanding shares of Common Stock have been duly authorized and validly issued,
are fully paid and nonassessable and have been issued in compliance with
applicable federal and state securities laws. None of the outstanding shares of
Common Stock were issued in violation of any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase securities of the
Company. There are no authorized or outstanding options, warrants, preemptive
rights, rights of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any capital
stock of the Company or any of its subsidiaries other than those accurately
described in all material respects in the Prospectus. The description of the
Company’s stock option, stock bonus and other stock plans or arrangements, and
the options or other rights granted thereunder, set forth in the Prospectus
accurately and fairly presents in all material respects the information required
to be presented with respect to such plans, arrangements, options and rights.

(n) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required. Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or is in default (or, with the giving of
notice or lapse of time, would be in default) (“Default”) under any indenture,
mortgage, loan or credit agreement, note, contract, franchise, lease or other
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or assets
of the Company or any of its subsidiaries is subject (each, an “Existing
Instrument”), except for such Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change. The Company’s execution,
delivery and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus (i) have been duly authorized by all
necessary corporate action and will not result in any violation of the
provisions of the charter or by-laws of the Company or any subsidiary, (ii) will
not conflict with or constitute a breach of, or Default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, or require the
consent of any other party to, any

 

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Existing Instrument, and (iii) will not result in any violation of any law,
administrative regulation or administrative or court decree applicable to the
Company or any subsidiary, except in the case of clauses (ii) and (iii) above,
for such conflicts, breaches, Defaults, liens, charges, encumbrances or
violations as would not, individually or in the aggregate, result in a Material
Adverse Change. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Company’s execution, delivery and
performance of this Agreement and consummation of the transactions contemplated
hereby and by the Prospectus, except such as have been obtained or made by the
Company and are in full force and effect under the Securities Act, the rules and
regulations of Nasdaq, applicable state securities or blue sky laws and from the
Financial Industry Regulatory Authority (“FINRA”).

(o) No Material Actions or Proceedings. Except as described in the Registration
Statement and the Prospectus, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company or
any of its subsidiaries is or may reasonably be expected to become a party or to
which any property of the Company or any of its subsidiaries is or may
reasonably be expected to become subject that, individually or in the aggregate,
if determined adversely to the Company or any of its subsidiaries, would
reasonably be expected to result in a Material Adverse Change; to the knowledge
of the Company, no such investigations, actions, suits or proceedings are
threatened or contemplated by any governmental or regulatory authority or
threatened by others; and (i) there are no current or pending legal,
governmental or regulatory actions, suits or proceedings that are required under
the Securities Act to be described in the Registration Statement or the
Prospectus that are not so described in the Registration Statement and the
Prospectus and (ii) there are no statutes, regulations or contracts or other
documents that are required under the Securities Act to be filed as exhibits to
the Registration Statement or described in the Registration Statement or the
Prospectus that are not so filed as exhibits to the Registration Statement or
described in the Registration Statement and the Prospectus.

(p) All Necessary Permits, etc. The Company and each subsidiary possess such
valid and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses, other than those the failure to possess or
own would not result in a Material Adverse Change, and neither the Company nor
any subsidiary has received any notice of proceedings relating to the revocation
or modification of, or non-compliance with, any such certificate, authorization
or permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would reasonably be expected to result in a
Material Adverse Change.

(q) Tax Law Compliance. The Company and its subsidiaries have paid all federal,
state, local and foreign taxes and filed all tax returns required to be paid or
filed through the date hereof; and except as otherwise disclosed in the
Registration Statement and the Prospectus, there is no material tax deficiency
that has been, or would reasonably be expected to be, asserted against the
Company or any of its subsidiaries or any of their respective properties or
assets.

 

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(r) Company Not an “Investment Company”. The Company is not and, after giving
effect to the offering and sale of the Placement Shares pursuant to this
Agreement and the application of the proceeds thereof as described in the
Registration Statement and the Prospectus, will not be required to register as
an “investment company” or an entity “controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission thereunder (collectively, the
“Investment Company Act”).

(s) Insurance. The Company and its subsidiaries have insurance covering their
respective properties, operations, personnel and businesses, including business
interruption insurance, which insurance is in such amounts and insures against
such losses and risks as the Company considers to be in accordance with
customary industry practice for companies of comparable size, market
capitalization and stage of business and clinical development to protect the
Company and its subsidiaries and their respective businesses; and neither the
Company nor any of its subsidiaries has (i) received notice from any insurer or
agent of such insurer that capital improvements or other expenditures are
required or necessary to be made in order to continue the effectiveness of such
insurance or (ii) any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage at reasonable cost from similar insurers as may be necessary to
continue its business.

(t) No Price Stabilization or Manipulation. The Company has not taken and will
not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Common Stock.

(u) Related Party Transactions. There are no business relationships or
related-party transactions involving the Company or any subsidiary or any other
person required to be described in the Prospectus which have not been described
as required.

(v) Exchange Act Compliance. The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material respects
with the requirements of the Exchange Act, and, when read together with the
other information in the Prospectus, at the Settlement Dates, will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

(w) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor,
to the knowledge of the Company, any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or any of its
subsidiaries has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or (iv) made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.

 

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

(y) Compliance with OFAC. None of the Company, any of its subsidiaries or, to
the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury (“OFAC”); and the Company will not, directly or
indirectly, use the proceeds of the offering of the Placement Shares hereunder,
or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.

(z) Compliance with ERISA. (i) Each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), for which the Company or any member of its “Controlled Group”
(defined as any organization which is a member of a controlled group of
corporations within the meaning of Section 414 of the Internal Revenue Code of
1986, as amended (the “Code”)) would have any liability (each, a “Plan”) has
been maintained in compliance with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited to
ERISA and the Code, except for noncompliance that would not reasonably be
expected to result in material liability to the Company or its subsidiaries;
(ii) no prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code, has occurred with respect to any Plan excluding
transactions effected pursuant to a statutory or administrative exemption that
would reasonably be expected to result in a material liability to the Company or
its subsidiaries; (iii) for each Plan that is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA, as applicable, has been
satisfied (without taking into account any waiver thereof or extension of any
amortization period) and is reasonably expected to be satisfied in the future
(without taking into account any waiver thereof or extension of any amortization
period); (iv) the fair market value of the assets of each Plan equals or exceeds
the present value of all benefits accrued under such Plan (determined based on
those assumptions used to fund such Plan); (v) no “reportable event” (within the
meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to
occur that either has resulted, or would reasonably be expected to result, in
material liability to the Company or its subsidiaries; (vi) neither the Company
nor any member of the Controlled Group has incurred, nor reasonably expects to
incur, any liability under Title IV of ERISA (other than contributions to the
Plan or premiums to the Pension Benefit Guaranty Corporation, in the ordinary
course and without default) in respect of a Plan (including a “multiemployer
plan”, within the meaning of Section 4001(a)(3) of ERISA); and (vii) there

 

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is no pending audit or investigation by the Internal Revenue Service, the U.S.
Department of Labor, the Pension Benefit Guaranty Corporation or any other
governmental agency or any foreign regulatory agency with respect to any Plan
that would reasonably be expected to result in material liability to the Company
or its subsidiaries. None of the following events has occurred or is reasonably
likely to occur: (x) a material increase in the aggregate amount of
contributions required to be made to all Plans by the Company or its
subsidiaries in the current fiscal year of the Company and its subsidiaries
compared to the amount of such contributions made in the Company and its
subsidiaries’ most recently completed fiscal year; or (y) a material increase in
the Company and its subsidiaries’ “accumulated post-retirement benefit
obligations” (within the meaning of Statement of Financial Accounting Standards
106) compared to the amount of such obligations in the Company and its
subsidiaries’ most recently completed fiscal year.

(aa) Disclosure Controls. The Company and its subsidiaries maintain an effective
system of “disclosure controls and procedures” (as defined in Rule 13a-15(e)
under the Exchange Act) that complies with the requirements of the Exchange Act
and that has been designed to ensure that information required to be disclosed
by the Company in 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 controls and procedures designed
to ensure that such information is accumulated and communicated to the Company’s
management as appropriate to allow timely decisions regarding required
disclosure.

(bb) Company’s Accounting System. The Company and its subsidiaries maintain
systems of “internal control over financial reporting” (as defined in Rule
13a-15(f) under the Exchange Act) that comply with the requirements of the
Exchange Act and have been designed by, or under the supervision of, their
respective principal executive and principal financial officers, or persons
performing similar functions, 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, including, but not limited to, internal accounting controls
sufficient to provide reasonable assurance that (A) transactions are executed in
accordance with management’s general or specific authorizations;
(B) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (C) access to assets is permitted only in
accordance with management’s general or specific authorization; (D) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences and
(E) interactive data in eXtensible Business Reporting Language included or
incorporated by reference in the Registration Statement fairly presents the
information called for in all material respects and is prepared in accordance
with the Commission’s rules and guidelines applicable thereto. Except as
disclosed in the Registration Statement and the Prospectus, there are no
material weaknesses in the Company’s internal controls. The Company’s auditors
and the Audit Committee of the Board of Directors of the Company have been
advised of: (Y) all significant deficiencies and material weaknesses in the
design or operation of internal controls over financial reporting which have
adversely affected or are reasonably likely to adversely affect the Company’s
ability to record, process, summarize and report financial information; and
(Z) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s internal controls over
financial reporting.

 

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(cc) Compliance with Environmental Laws. (i) The Company and its subsidiaries
(A) are in compliance with any and all applicable federal, state, local and
foreign laws, rules, regulations, requirements, decisions, judgments, decrees
and orders relating to pollution or the protection of the environment, natural
resources or human health or safety, including those relating to the generation,
storage, treatment, use, handling, transportation, Release (as defined below) or
threat of Release of Hazardous Materials (collectively, “Environmental Laws”),
(B) have received and are in compliance with all permits, licenses, certificates
or other authorizations or approvals required of them under applicable
Environmental Laws to conduct their respective businesses, (C) have not received
notice of any actual or potential liability under or relating to, or actual or
potential violation of, any Environmental Laws, including for the investigation
or remediation of any Release or threat of Release of Hazardous Materials, and
have no knowledge of any event or condition that would reasonably be expected to
result in any such notice, (D) are not conducting or paying for, in whole or in
part, any investigation, remediation or other corrective action pursuant to any
Environmental Law at any location owned, operated or leased by the Company or
any of its subsidiaries, and (E) are not a party to any order, decree or
agreement that imposes any obligation or liability under any Environmental Law,
and (ii) there are no costs or liabilities associated with Environmental Laws of
or relating to the Company or its subsidiaries other than in the ordinary course
of business, except in the case of each of (i) and (ii) above, for any such
matter, as would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Change; and (iii) except as described in the
Registration Statement and the Prospectus, (X) there are no proceedings that are
pending, or that are known to be contemplated, against the Company or any of its
subsidiaries under any Environmental Laws in which a governmental entity is also
a party, other than such proceedings regarding which it is reasonably believed
no monetary sanctions of $100,000 or more will be imposed, (Y) the Company and
its subsidiaries are not aware of any facts or issues regarding compliance with
Environmental Laws, or liabilities or other obligations under Environmental
Laws, including the Release or threat of Release of Hazardous Materials, that
would reasonably be expected to have a Material Adverse Change, and (Z) none of
the Company and its subsidiaries anticipates material capital expenditures
relating to compliance with any Environmental Laws.

(dd) Hazardous Materials. There has been no storage, generation, transportation,
use, handling, treatment, Release or threat of Release of Hazardous Materials by
the Company or any of its subsidiaries (or, to the knowledge of the Company and
its subsidiaries, any other entity (including any predecessor) for whose acts or
omissions the Company or any of its subsidiaries is or would reasonably be
expected to be liable) at, on, under or from any property or facility now or
previously owned, operated or leased by the Company or any of its subsidiaries
in violation of any Environmental Laws or in a manner or amount or to a location
that would reasonably be expected to result in any liability of the Company or
any of its subsidiaries under any Environmental Law, except for any violation or
liability which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Change. “Hazardous Materials” means any
material, chemical, substance, waste, pollutant, contaminant, compound, mixture,
or constituent thereof, in any

 

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form or amount, including petroleum (including crude oil or any fraction
thereof) and petroleum products, natural gas liquids, asbestos and asbestos
containing materials, naturally occurring radioactive materials, brine, and
drilling mud, regulated or which can give rise to liability under any
Environmental Law. “Release” means any spilling, leaking, seepage, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into or through the environment, or in, into from or through any
building or structure.

(ee) Title to Real and Personal Property. The Company and its subsidiaries have
good and marketable title in fee simple (in the case of real property) to, or
have valid and marketable rights to lease or otherwise use, all items of real
and personal property and assets that are material to the respective businesses
of the Company and its subsidiaries, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title except those that
(i) do not materially interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries or (ii) would not reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Change.

(ff) Intellectual Property. The Company and its subsidiaries own or possess the
right to use all inventions, patents, trademarks, service marks, trade names,
domain names, copyrights, licenses, technology, know-how, trade secrets and
other intellectual property and proprietary or confidential information, systems
or procedures (including all goodwill associated with, and all registrations and
applications for registration of, the foregoing) (collectively, “Intellectual
Property”) necessary for or material to the conduct of their respective
businesses as currently conducted and as proposed to be conducted, in each case
as described in the Registration Statement and the Prospectus, and, to the
knowledge of the Company, the conduct of their respective businesses has not
infringed, misappropriated or otherwise violated any Intellectual Property of
others in any material respect. There is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or claim (i) challenging the
Company’s or any subsidiary of the Company’s rights in or to any of their owned
or licensed Intellectual Property; (ii) alleging that the Company or any of its
subsidiaries has infringed, misappropriated or otherwise violated or conflicted
with any Intellectual Property of any third party; or (iii) challenging the
validity, scope or enforceability of any Intellectual Property of the Company or
any of its subsidiaries, and in the case of each of (i), (ii) and (iii), the
Company is unaware of any facts which would form a reasonable basis for any such
action, suit, proceeding or claim. All Intellectual Property owned by the
Company or its subsidiaries is valid and enforceable to the knowledge of the
Company, is owned solely by the Company or its subsidiaries, is owned free and
clear of all liens, encumbrances, defects and other restrictions, except as may
be limited by a court in equity or pursuant to the laws of bankruptcy,
insolvency or other similar laws, and to the knowledge of the Company, no third
party has infringed, misappropriated or otherwise violated any Intellectual
Property owned by or exclusively licensed to the Company or any of its
subsidiaries. The Company and its subsidiaries have at all times maintained the
confidentiality of all Intellectual Property, the value of which to the Company
or any of its subsidiaries is contingent upon maintaining the confidentiality
thereof. All founders, current and former employees, contractors, consultants
and other parties involved in the development of Intellectual Property for the
Company or any of its subsidiaries have signed confidentiality and invention
assignment agreements with the Company pursuant to which

 

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the Company either (i) has obtained ownership of and is the exclusive owner of
such Intellectual Property, or (ii) has obtained a valid right to exploit such
Intellectual Property, sufficient for the conduct of its business as currently
conducted and as proposed to be conducted, in each case as described in the
Registration Statement and the Prospectus.

(gg) Compliance with Healthcare Laws. The Company and its subsidiaries have
operated at all times and are currently in compliance with all statutes, rules
and regulations applicable to the ownership, testing, development, manufacture,
packaging, processing, use, distribution, storage, import, export or disposal of
any product manufactured or distributed by the Company and its subsidiaries
(“Applicable Regulatory Laws”) of the U.S. Food and Drug Administration and
comparable regulatory agencies outside of the United States to which they are
subject (collectively, the “Regulatory Authorities”), except where the failure
to so comply would not, individually or in the aggregate, result in a Material
Adverse Change. Neither the Company nor any of its subsidiaries has received any
written notices, correspondence or other communications from, nor do they have
knowledge that any of their collaboration partners has received, any written
notices, correspondence or other communications from Regulatory Authorities
alleging or asserting material non-compliance with any Applicable Regulatory
Laws.

(hh) Regulatory Filings. The Company has not failed to file with the Regulatory
Authorities any required material filing, declaration, listing, registration,
report or submission with respect to the Company’s products that are described
in the Registration Statement and the Prospectus; all such filings,
declarations, listings, registrations, reports or submissions were in material
compliance with Applicable Regulatory Laws when filed; and no material
deficiencies regarding compliance with Applicable Regulatory Law have been
asserted by any Regulatory Authorities with respect to any such filings,
declarations, listings, registrations, reports or submissions.

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

(jj) No Outstanding Loans or Other Indebtedness. Except as described in the
Prospectus, there are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees or
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of the members of any of them.

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

(ll) Cowen Purchases. The Company acknowledges and agrees that Cowen has
informed the Company that Cowen may, to the extent permitted under applicable
law, purchase and sell shares of Common Stock for its own account while this
Agreement is in effect; provided, that no such purchase or sale shall take place
as would violate Regulation M under the Exchange Act or other anti-manipulation
rules under the applicable securities laws.

 

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(mm) Reserved.

(nn) Compliance with Laws. The Company has not been advised, and has no reason
to believe, that it and each of its subsidiaries are not conducting business in
compliance with all applicable laws, rules and regulations of the jurisdictions
in which it is conducting business, except where failure to be so in compliance
would not result in a Material Adverse Change.

(oo) Margin Rules. The application of the proceeds received by the Company from
the issuance, sale and delivery of the Placement Shares as described in the
Registration Statement and the Prospectus will not 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.

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

(qq) Statistical and Market Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and
market-related data included in the Registration Statement and the Prospectus is
not based on or derived from sources that are reliable and accurate in all
material respects.

(rr) Sarbanes-Oxley Act. 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 with any effective and
applicable provision of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”),
including Section 402 related to loans and Sections 302 and 906 related to
certifications.

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

The Company acknowledges that Cowen and, for purposes of the opinions to be
delivered pursuant to Section 7 hereof, counsel to the Company and counsel to
Cowen, will rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.

7. Covenants of the Company. The Company covenants and agrees with Cowen 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 Cowen under the Securities Act (including in
circumstances where such requirement may be satisfied pursuant to Rule 172 under
the Securities Act)(the “Prospectus Delivery Period”), (i) the Company will
notify Cowen promptly of the time when any subsequent amendment to the
Registration Statement, other than documents

 

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incorporated by reference, 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 (insofar as it relates to the transactions contemplated
by this Agreement) or Prospectus or for additional information, (ii) the Company
will prepare and file with the Commission, promptly upon Cowen’s reasonable
request, any amendments or supplements to the Registration Statement (insofar as
it relates to the transactions contemplated hereby) or Prospectus that, in
Cowen’s reasonable opinion, may be necessary or advisable to comply with law in
connection with the distribution of the Placement Shares by Cowen (provided,
however, that the failure of Cowen to make such request shall not relieve the
Company of any obligation or liability hereunder, or affect Cowen’s right to
rely on the representations and warranties made by the Company in this
Agreement, and provided, further, that the only remedy Cowen shall have with
respect to the failure by the Company 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, other than documents incorporated by reference,
relating to the Placement Shares or a security convertible into the Placement
Shares unless a copy thereof has been submitted to Cowen within a reasonable
period of time before the filing and Cowen has not reasonably objected thereto
(provided, however, that the failure of Cowen to make such objection shall not
relieve the Company of any obligation or liability hereunder, or affect Cowen’s
right to rely on the representations and warranties made by the Company in this
Agreement, and provided, further, that the only remedy Cowen 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 Cowen 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 IDEA; and (iv) the Company will cause each
amendment or supplement to the Prospectus, other than documents incorporated by
reference, to be filed with the Commission as required pursuant to the
applicable paragraph of Rule 424(b) under the Securities Act.

(b) Notice of Commission Stop Orders. The Company will advise Cowen, 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.

(c) Delivery of Prospectus; Subsequent Changes. During the Prospectus Delivery
Period, the Company will 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 (taking into account any extensions available under the
Exchange Act that would permit the Company to continue to meet the eligibility
requirements of Form S-3) all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14, 15(d) or any other provision of or under the Exchange
Act. If during such period any event occurs as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a

 

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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 Cowen 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 the filing of any amendment or supplement if, in the 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 request that Cowen resume the offering of
Placement Shares.

(d) Listing of Placement Shares. During the Prospectus Delivery Period, the
Company will use its commercially reasonable efforts to cause the Placement
Shares to be listed on Nasdaq and to qualify the Placement Shares for sale under
the securities laws of such jurisdictions in the United States as Cowen
reasonably designates and to continue such qualifications in effect so long as
required for the distribution of the Placement Shares; provided, however, that
the Company shall not be required in connection therewith to qualify as a
foreign corporation or dealer in securities or file a general consent to service
of process in any jurisdiction.

(e) Delivery of Registration Statement and Prospectus. The Company will furnish
to Cowen and its counsel (at the reasonable 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 the Prospectus
Delivery Period (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 Cowen may from time to
time reasonably request and, at Cowen’s request, will also furnish copies of the
Prospectus to each exchange or market on which sales of the Placement Shares may
be made; provided, however, that the Company shall not be required to furnish
any document (other than the Prospectus) to Cowen to the extent such document is
available on IDEA.

(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. The Company’s compliance with
the periodic reporting requirements of the Exchange Act shall be deemed to
satisfy the requirements of this Section 7(f).

(g) Expenses. The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, in accordance with
the provisions of Section 11 hereunder, will pay the following expenses all
incident to the performance of its obligations hereunder, including, but not
limited to, expenses relating to (i) the preparation, printing and filing of the
Registration Statement and each amendment and supplement thereto and of each
Prospectus and of each amendment and supplement thereto, (ii) the preparation,
issuance and delivery of the Placement Shares, (iii) the

 

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qualification of the Placement Shares under securities laws in accordance with
the provisions of Section 7(d) of this Agreement, including filing fees
(provided, however, that any fees or disbursements of counsel for Cowen in
connection therewith shall be paid by Cowen except as set forth in (vii) below),
(iv) the printing and delivery to Cowen of copies of the Prospectus and any
amendments or supplements thereto, and of this Agreement, (v) the fees and
expenses incurred in connection with the listing or qualification of the
Placement Shares for trading on Nasdaq, (vi) the filing fees and expenses, if
any, of the Commission, (vii) the filing fees and associated legal expenses of
Cowen’s outside counsel for filings with the FINRA Corporate Financing
Department, such legal expense reimbursement not to exceed $15,000 and,
(viii) the reasonable fees and disbursements of Cowen’s counsel incurred in
connection with entering into this Agreement in an amount not to exceed $50,000.

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

(i) Notice of Other Sales. During the pendency of any Placement Notice given
hereunder, and for five (5) Trading Days following the termination of any
Placement Notice given hereunder, the Company shall provide Cowen notice as
promptly as reasonably possible before it offers to sell, contracts to sell,
sells, grants any option to sell or otherwise disposes of any shares of Common
Stock (other than Placement Shares offered pursuant to the provisions of this
Agreement) or securities convertible into or exchangeable for Common Stock,
warrants or any rights to purchase or acquire Common Stock; provided, that such
notice shall not be required in connection with (i) the issuance, grant or sale
of Common Stock, options to purchase shares of Common Stock, restricted shares
of Common Stock, restricted stock units, other equity awards, or Common Stock
issuable upon the exercise or vesting of options, restricted stock units or
other equity awards pursuant to any stock option, stock bonus or other stock
plan or arrangement for bona fide compensatory purposes, (ii) the issuance of
securities in connection with an acquisition, merger or sale or purchase of
assets, (iii) the issuance or sale of Common Stock pursuant to any dividend
reinvestment plan that the Company may adopt from time to time provided the
implementation of such plan is disclosed to Cowen in advance, (iv) the issuance
or sale of any shares of Common Stock issuable upon the exchange, conversion or
redemption of securities or the exercise of warrants, options or other rights in
effect or outstanding or disclosed in filings by the Company available on IDEA
or otherwise in writing to Cowen prior to the date of the applicable Placement
Notice, or (v) the issuance or sale of Common Stock, or securities convertible
into or exercisable for Common Stock, offered and sold in a privately-negotiated
transaction to vendors, customers, investors, strategic partners or potential
strategic partners and otherwise conducted in a manner so as not to be
integrated with the offering of Common Stock hereby. Notwithstanding the
foregoing provisions, nothing herein shall be construed to restrict the
Company’s ability, or require the Company to provide notice to Cowen, to file a
registration statement under the Securities Act.

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

 

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(k) Due Diligence Cooperation. During the term of the Agreement, the Company
will cooperate with any reasonable due diligence review conducted by Cowen or
its agents 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 Cowen may reasonably request.

(l) Required Filings Relating to Placement of Placement Shares. The Company
agrees that on or before 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 under Rule 424(b), a “Filing Date”), which prospectus supplement will set
forth, within the relevant period, the amount of Placement Shares sold through
Cowen, the Net Proceeds to the Company and the compensation payable by the
Company to Cowen with respect to such Placement Shares (provided that the
Company may also satisfy its obligations under this Section 7(l)(i) by including
such information in a filing under the Exchange Act), 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.

(m) Representation Dates; Certificate. On or prior to the First Delivery Date
and each time the Company subsequently thereafter during the term of the
Agreement (i) files the Sales Prospectus or amends or supplements the
Registration Statement or the Sales Prospectus (other than a prospectus
supplement filed in accordance with Section 7(l) of this Agreement) by means of
a post-effective amendment, sticker, or supplement but not by means of
incorporation of document(s) by reference to the Registration Statement or the
Sales Prospectus; (ii) files an annual report on Form 10-K under the Exchange
Act; (iii) files its quarterly reports on Form 10-Q under the Exchange Act; or
(iv) files a current report on Form 8-K containing amended financial information
(other than a filing made in connection with the issuance of an earnings release
or other information “furnished” under Item 2.02 or Item 7.01 of Form 8-K) 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 Cowen with a certificate, in the form attached hereto as Exhibit
7(m) within three (3) Trading Days of any Representation Date if requested by
Cowen. The requirement to provide a certificate under this Section 7(m) shall be
automatically waived for any Representation Date occurring at a time at which no
Placement Notice is pending, which waiver shall continue until the earlier to
occur of the date the Company delivers a Placement Notice hereunder (which for
such calendar quarter shall be considered a Representation Date) and the next
occurring Representation Date; provided, however, that such waiver shall not
apply for any Representation Date on which the Company files its annual report
on Form 10-K. 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 Cowen with a certificate under this
Section 7(m), then before the Company delivers the Placement Notice or Cowen
sells any Placement Shares, the Company shall provide Cowen with a certificate,
in the form attached hereto as Exhibit 7(m), dated the date of the Placement
Notice.

 

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(n) Legal Opinions. On or prior to the First Delivery Date and within five
(5) Trading Days of each Representation Date with respect to which the Company
is obligated to deliver a certificate in the form attached hereto as Exhibit
7(m) for which no waiver is applicable, the Company shall cause to be furnished
to Cowen a written opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C. (“Company Counsel”), or other counsel satisfactory to Cowen, in form and
substance reasonably satisfactory to Cowen and its counsel, dated the date that
the opinion is required to be delivered, substantially similar to the form
attached hereto as Exhibit 7(n)(i) and Exhibit 7(n)(ii), respectively, modified,
as necessary, to relate to the Registration Statement and the Prospectus as then
amended or supplemented; provided, the Company shall not be required to furnish
to Cowen more than one opinion of Company Counsel hereunder per calendar
quarter, unless there is a material change in circumstance that, in Cowen’s
reasonable judgment, would necessitate an additional opinion of Company Counsel;
provided, further, that in lieu of such opinions for subsequent Representation
Dates, counsel may furnish Cowen with a letter (a “Reliance Letter”) to the
effect that Cowen may rely on a prior opinion delivered under this Section 7(n)
to the same extent as if it were dated the date of such letter (except that
statements in such prior opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented at such Representation
Date). In addition, on or prior to the First Delivery Date and within three
(3) Trading Days of each Representation Date with respect to which the Company
is obligated to deliver a certificate in the form attached hereto as Exhibit
7(m) for which no waiver is applicable, the Company shall cause to be furnished
to Cowen a written opinion of Hoxie & Associates LLC (“Company IP Counsel”), or
other counsel satisfactory to Cowen, in form and substance reasonably
satisfactory to Cowen and its counsel, dated the date that the opinion is
required to be delivered, substantially similar to the form attached hereto as
Exhibit 7(n)(iii), respectively, modified, as necessary, to relate to the
Registration Statement and the Prospectus as then amended or supplemented;
provided, the Company shall not be required to furnish to Cowen more than one
opinion of Company IP Counsel hereunder per calendar quarter, unless there is a
material change in circumstance that, in Cowen’s reasonable judgment, would
necessitate an additional opinion of Company IP Counsel; provided, further, that
in lieu of such opinions for subsequent Representation Dates, counsel may
furnish Cowen with a Reliance Letter to the effect that Cowen may rely on a
prior opinion delivered under this Section 7(n) to the same extent as if it were
dated the date of such letter (except that statements in such prior opinion
shall be deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented at such Representation Date).

(o) Comfort Letter. On or prior to the First Delivery Date and within five
(5) Trading Days of each Representation Date with respect to which the Company
is obligated to deliver a certificate in the form attached hereto as Exhibit
7(m) for which no waiver is applicable, the Company shall cause its independent
accountants to furnish Cowen letters (the “Comfort Letters”), dated the date the
Comfort Letter is delivered, in form and substance reasonably satisfactory to
Cowen, (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

 

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financial information and other matters ordinarily covered by accountants’
“comfort letters” to Cowen 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; provided, that the Company shall not be
required to furnish to Cowen more than one Comfort Letter per calendar quarter,
unless there is a material change in circumstance that, in Cowen’s reasonable
judgment, would necessitate an additional Comfort Letter.

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

(q) Insurance. The Company and its Subsidiaries shall maintain, or cause to be
maintained, insurance in such amounts and covering such risks as is reasonable
and customary for the business in which it is engaged.

(r) Compliance with Laws. The Company and each of its Subsidiaries shall use
commercially reasonable efforts to maintain, or cause to be maintained, all
material environmental permits, licenses and other authorizations required by
federal, state and local law in order to conduct their businesses as described
in the Prospectus, and the Company and each of its Subsidiaries shall conduct
their businesses, or cause their businesses to be conducted, in substantial
compliance with such permits, licenses and authorizations and with applicable
environmental laws, except where the failure to maintain or be in compliance
with such permits, licenses and authorizations would not reasonably be expected
to result in a Material Adverse Change.

(s) Investment Company Act. The Company will conduct its affairs in such a
manner so as to reasonably ensure that neither it nor the Subsidiaries will be
or become, at any time prior to the termination of this Agreement, an
“investment company,” as such term is defined in the Investment Company Act,
assuming no change in the Commission’s current interpretations as to entities
that are not considered an investment company.

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

(u) No Offer to Sell. Other than the Prospectus and a free writing prospectus
(as defined in Rule 405 under the Act) approved in advance by the Company and
Cowen in its capacity as principal or agent hereunder, neither Cowen nor the
Company (including its

 

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agents and representatives, other than Cowen in its capacity as such) will make,
use, prepare, authorize, approve or refer to any written communication (as
defined in Rule 405 under the Act), required to be filed with the Commission,
that constitutes an offer to sell or solicitation of an offer to buy Placement
Shares hereunder.

(v) Sarbanes-Oxley Act. The Company and the Subsidiaries will use their
reasonable best efforts to comply with all effective and applicable provisions
of the Sarbanes-Oxley Act.

8. Conditions to Cowen’s Obligations. The obligations of Cowen 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 Cowen of a due diligence review satisfactory to Cowen in its
reasonable judgment, and to the continuing satisfaction (or waiver by Cowen in
its sole discretion) of the following additional conditions:

(a) Registration Statement Effective. The Registration Statement shall be
effective and shall be available for the sale of all Placement Shares
contemplated to be issued by any Placement Notice.

(b) No Material Notices. None of the following events shall have occurred and be
continuing: (i) receipt by the Company or any of its Subsidiaries of any request
for additional information from the Commission or any other federal or state
governmental authority during the period of effectiveness of the Registration
Statement, the response to which would require any post-effective amendments or
supplements to the Registration Statement or the Prospectus to be filed with the
Commission; (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, related Prospectus or such documents so that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and, that in the case
of the Prospectus, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

(c) No Misstatement or Material Omission. Cowen 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 Cowen’s
reasonable opinion is material, or omits to state a fact that in Cowen’s
reasonable opinion is material and is required to be stated therein or is
necessary to make the statements therein not misleading.

 

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(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, on a consolidated basis, in the authorized capital
stock of the Company or any Material Adverse Change or any development that
could reasonably be expected to result in a Material Adverse Change, or any
downgrading in or withdrawal of the rating assigned to any of the Company’s
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, the effect of which, in the case of any such action by a
rating organization described above, in the reasonable judgment of Cowen
(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) Company Counsel Legal Opinions. Cowen shall have received the opinions and
negative assurance statement of Company Counsel and the opinions of Company IP
Counsel required to be delivered pursuant Section 7(n) on or before the date on
which such delivery of such opinion is required pursuant to Section 7(n).

(f) Cowen Counsel Legal Opinion. Cowen shall have received from Proskauer Rose
LLP, counsel for Cowen, such opinion or opinions and negative assurance
statement, on or before the date on which the delivery of the Company Counsel
legal opinion is required pursuant to Section 7(n), with respect to such matters
as Cowen may reasonably require, and the Company shall have furnished to such
counsel such documents as they request for enabling them to pass upon such
matters.

(g) Comfort Letter. Cowen shall have received the Comfort Letter required to be
delivered pursuant to Section 7(o) on or before the date on which such delivery
of such Comfort Letter is required pursuant to Section 7(o).

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

(i) Secretary’s Certificate. On or prior to the First Delivery Date, Cowen shall
have received a certificate, signed on behalf of the Company by its corporate
Secretary or Assistant Secretary (if authorized by the bylaws of the Company or
resolutions of the board of directors of the Company), in form and substance
satisfactory to Cowen and its counsel.

(j) No Suspension. Trading in the Common Stock shall not have been suspended on
Nasdaq.

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

 

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(l) Securities Act Filings Made. All filings with the Commission required by
Rule 424 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.

(m) Approval for Listing. The Placement Shares shall either have been
(i) approved for listing on Nasdaq, subject only to notice of issuance, or
(ii) the Company shall have filed an application for listing of the Placement
Shares on Nasdaq at, or prior to, the issuance of any Placement Notice.

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

9. Indemnification and Contribution.

(a) Company Indemnification. The Company agrees to indemnify and hold harmless
Cowen, the directors, officers, partners, employees and agents of Cowen and each
person, if any, who (i) controls Cowen within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or (ii) is controlled by or is
under common control with Cowen (a “Cowen Affiliate”) from and against any and
all losses, claims, liabilities, expenses and damages (including, but not
limited to, any and all reasonable investigative, legal and other expenses
incurred in connection with, and any and all amounts paid in settlement (in
accordance with Section 9(c)) of, any action, suit or proceeding between any of
the indemnified parties and any indemnifying parties or between any indemnified
party and any third party, or otherwise, or any claim asserted), as and when
incurred, to which Cowen, or any such person, may become subject under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based, directly or
indirectly, on (x) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus or in
any free writing prospectus or in any application or other document executed by
or on behalf of the Company in connection with this Agreement or based on
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Common Stock under the securities laws
thereof or filed with the Commission, (y) the omission or alleged omission to
state in any such document a material fact required to be stated in it or
necessary to make the statements in it not misleading in light of the
circumstances under which they were made, or (z) any breach by any of the
indemnifying parties of any of their respective representations, warranties and
agreements contained in this Agreement; provided, however, that this indemnity
agreement shall not apply to the extent that such loss, claim, liability,
expense or damage arises from the sale of the Placement Shares pursuant to this
Agreement and is caused directly or indirectly by an untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information relating to Cowen and furnished to the
Company by Cowen expressly for inclusion in the Registration Statement or
Prospectus or in any free writing prospectus, which information the parties
hereto agree is limited to the Specified Information as defined in
Section 20(b). This indemnity agreement will be in addition to any liability
that the Company might otherwise have.

 

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(b) Cowen Indemnification. Cowen agrees to indemnify and hold harmless the
Company and its directors and each officer of the Company that signed the
Registration Statement, and each person, if any, who (i) controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act or (ii) is controlled by or is under common control with the
Company (a “Company Affiliate”) from and against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 9(a),
as and when incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendments thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information relating to
Cowen and furnished to the Company by Cowen expressly for inclusion in the
Registration Statement or Prospectus or in any free writing prospectus, which
information the parties hereto agree is limited to the Specified Information as
defined in Section 20(b).

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

 

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party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred after the indemnifying party receives a written invoice relating to
fees, disbursements and other charges. An indemnifying party will not, in any
event, be liable for any settlement of any action or claim effected without its
written consent (which consent shall not be unreasonably withheld or delayed).
No indemnifying party shall, without the prior written consent of each
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section 9 (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party. In addition, if at any time an
indemnified party shall have requested that an indemnifying party reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Sections 9(a) or 9(b) effected without its written consent if (i) such
settlement is entered into more than thirty (30) days after receipt by such
indemnifying party of the request for reimbursement, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least thirty
(30) days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.

(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 9 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or Cowen, the Company and
Cowen will contribute to the total losses, claims, liabilities, expenses and
damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than Cowen, such as persons who
control the Company within the meaning of the Securities Act, officers of the
Company who signed the Registration Statement and directors of the Company, who
also may be liable for contribution) to which the Company and Cowen may be
subject in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and Cowen on the other. The
relative benefits received by the Company on the one hand and Cowen 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 Cowen (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

 

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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 Cowen, on the other, 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 Cowen, 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 Cowen agree that it would not be just and equitable if
contributions pursuant to this Section 9(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 9(d)
shall be deemed to include, for the purpose of this Section 9(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 9(c) hereof. Notwithstanding the foregoing provisions of this
Section 9(d), Cowen shall not be required to contribute any amount in excess of
the commissions received by it under this Agreement and no person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 9(d),
any person who controls a party to this Agreement within the meaning of the
Securities Act, and any officers, directors, partners, employees or agents of
Cowen, will have the same rights to contribution as that party, and each officer
and director of the Company who signed the Registration Statement will have the
same rights to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action against such party in respect of which a
claim for contribution may be made under this Section 9(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 9(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 9(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 9(c) hereof.

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

 

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11. Termination.

(a) Cowen shall have the right by giving written notice as hereinafter specified
at any time to terminate this Agreement if (i) any Material Adverse Change, or
any development that could reasonably be expected to result in a Material
Adverse Change has occurred that, in the reasonable judgment of Cowen, may
materially impair the ability of Cowen to sell the Placement Shares hereunder,
(ii) the Company shall have failed, refused or been unable to perform any
agreement on its part to be performed hereunder; provided, however, in the case
of any failure of the Company to deliver (or cause another person to deliver)
any certification, opinion, or letter required under Sections 7(m), 7(n), or
7(o), Cowen’s right to terminate shall not arise unless such failure to deliver
(or cause to be delivered) continues for more than thirty (30) days from the
date such delivery was required; (iii) any other condition of Cowen’s
obligations hereunder is not fulfilled; provided, however, Cowen’s right to
terminate pursuant to this Section 11(a)(iii) shall not arise unless such
condition, if capable of being fulfilled, is not fulfilled within ten (10) days
after the date the Company is provided with written notice by Cowen that such
condition has not been fulfilled, or (iv), any suspension or limitation of
trading in the Placement Shares or in securities generally on Nasdaq shall have
occurred. Any such termination shall be without liability of any party to any
other party except that the provisions of Section 7(g) (Expenses), Section 9
(Indemnification and Contribution), Section 10 (Representations and Agreements
to Survive Delivery), Section 16 (Applicable Law; Consent to Jurisdiction) and
Section 17 (Waiver of Jury Trial) hereof shall remain in full force and effect
notwithstanding such termination. If Cowen elects to terminate this Agreement as
provided in this Section 11(a), Cowen shall provide the required written notice
as specified in Section 12 (Notices).

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

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

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

(e) This Agreement shall remain in full force and effect unless terminated
pursuant to Sections 11(a), (b), (c), or (d) above or otherwise by mutual
agreement of the parties; provided, however, that any such termination by mutual
agreement shall in all cases be deemed to provide that Section 7(g), Section 9,
Section 10, Section 16 and Section 17 shall remain in full force and effect.
Upon termination of this Agreement, the Company shall not have any liability to
Cowen for any discount, commission or other compensation with respect to any
Placement Shares not otherwise placed by Cowen pursuant to this Agreement.

 

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(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 Cowen 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.

(g) Subject to the additional limitations set forth in Section 7(g) of this
Agreement, in the event of termination of this Agreement prior to the sale of
any Placement Shares, Cowen shall be entitled only to reimbursement of its
out-of-pocket expenses actually incurred; provided, that if such termination of
this Agreement is pursuant to Section 11(c), then Cowen shall not be entitled to
any reimbursement of its out-of-pocket expenses.

12. Notices. All notices or other communications required or permitted to be
given by any party to any other party pursuant to the terms of this Agreement
shall be in writing, unless otherwise specified in this Agreement, and if sent
to Cowen, shall be delivered to Cowen at Cowen and Company, LLC, 599 Lexington
Avenue, New York, NY 10022, fax no. 646-562-1124, Attention: General Counsel; or
if sent to the Company, shall be delivered to Intra-Cellular Therapies, Inc.,
430 East 29th Street, New York, New York 10016, Attention: Michael Halstead,
Senior Vice President and General Counsel, fax: (646) 259-3212, with a copy to
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., One Financial Center,
Boston, Massachusetts, 02111, Attention: Megan N. Gates, fax: (617) 542-2241.
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 (as defined
below), 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 NYSE and commercial banks in the City of
New York are open for business.

13. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the Company and Cowen and their respective successors and the
affiliates, controlling persons, officers and directors referred to in Section 9
hereof. References to any of the parties contained in this Agreement shall be
deemed to include the successors and permitted assigns of 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 Cowen may assign its rights
and obligations hereunder to an affiliate of Cowen without obtaining the
Company’s consent so long as such affiliate is a registered broker-dealer.

 

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

15. Entire Agreement; Amendment; Severability. 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 Cowen. 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.

16. Applicable Law; Consent to Jurisdiction. This Agreement shall be governed
by, and construed in accordance with, the internal laws of the State of New York
without regard to the principles of conflicts of laws. Each party hereby
irrevocably submits to the non-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 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.

17. Waiver of Jury Trial. The Company and Cowen each hereby irrevocably waives
any right it may have to a trial by jury in respect of any claim based upon or
arising out of this Agreement or any transaction contemplated hereby.

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

(a) Cowen has been retained solely to act as sales agent in connection with the
sale of the Placement Shares and that no fiduciary, advisory or agency
relationship between the Company and Cowen has been created in respect of any of
the transactions contemplated by this Agreement, irrespective of whether Cowen
has advised or is advising the Company on other matters;

 

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

(c) the Company has been advised that Cowen and its affiliates are engaged in a
broad range of transactions which may involve interests that differ from those
of the Company and that Cowen has no obligation to disclose such interests and
transactions to the Company by virtue of any fiduciary, advisory or agency
relationship; and

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

19. 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.

20. Definitions. As used in this Agreement, the following term has the meaning
set forth below:

(a) “Applicable Time” means the date of this Agreement, each Representation
Date, the date on which a Placement Notice is given, and any date on which
Placement Shares are sold hereunder.

(b) “Specified Information” means the statements concerning Cowen contained in
the eighth paragraph under the heading “Plan of Distribution.”

21. Headings. The section and exhibit headings herein are for convenience only
and shall not affect the construction hereof.

[Remainder of Page Intentionally Blank]

 

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

 

Very truly yours, COWEN AND COMPANY, LLC By:

/s/ Grant Miller

Name: Grant Miller Title: Managing Director ACCEPTED as of the date first-above
written: INTRA-CELLULAR THERAPIES, INC. By:

/s/ Lawrence J. Hineline

Name: Lawrence J. Hineline Title: V.P. Finance

 

33

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SCHEDULE 1

FORM OF PLACEMENT NOTICE

 

From:

[                                          ]

Cc:

[                                          ]

To:

[                                          ]

Subject:

Cowen at the Market Offering—Placement Notice

Gentlemen:

Pursuant to the terms and subject to the conditions contained in the Sales
Agreement between Intra-Cellular Therapies, Inc., a Delaware corporation (the
“Company”), and Cowen and Company, LLC (“Cowen”) dated May 28, 2015 (the
“Agreement”), I hereby request on behalf of the Company that Cowen sell up to [
] shares of the Company’s common stock, par value $0.0001 per share, at a
minimum market price of $             per share. Sales should begin on the date
of this Notice and shall continue until [DATE] [all shares are sold] [the
aggregate sales price of the shares reaches $            ].

[The Company may include such other sales parameters as it deems appropriate]

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SCHEDULE 2

Intra-Cellular Therapies, Inc.

Sharon Mates, Ph.D., Chairman, President and Chief Executive Officer

Lawrence J. Hineline, Vice President, Chief Financial Officer and Treasurer

Michael Halstead, Senior Vice President and General Counsel

Cowen and Company, LLC

Robert Sine, Director

William Follis, Director

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SCHEDULE 3

Compensation

Cowen shall be paid compensation equal to 3.0% of the gross proceeds from the
sales of Placement Shares pursuant to the terms of this Agreement.

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Exhibit 7(m)

OFFICER CERTIFICATE

The undersigned, the duly qualified and elected                     , of
Intra-Cellular Therapies, Inc., a Delaware corporation (“Company”), does hereby
certify in such capacity and on behalf of the Company, pursuant to Section 7(m)
of the Sales Agreement dated             .    , 2015 (the “Sales Agreement”)
between the Company and Cowen and Company, LLC, that to the best of the
knowledge of the undersigned.

(i) The representations and warranties of the Company in Section 6 of the Sales
Agreement (A) to the extent such representations and warranties are subject to
qualifications and exceptions contained therein relating to materiality or
Material Adverse Change, are true and correct on and as of the date hereof with
the same force and effect as if expressly made on and as of the date hereof,
except for those representations and warranties that speak solely as of a
specific date and which were true and correct as of such date, and (B) to the
extent such representations and warranties are not subject to any qualifications
or exceptions, are true and correct in all material respects as of the date
hereof as if made on and as of the date hereof with the same force and effect as
if expressly made on and as of the date hereof except for those representations
and warranties that speak solely as of a specific date and which were true and
correct as of such date; and

(ii) The Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied pursuant to the Sales Agreement at or
prior to the date hereof.

Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Sales Agreement.

 

By:

 

Name:

Title:

Date: