Exhibit 10.7

 

OPEN MARKET SALE AGREEMENTSM

 

May 15, 2020

 

JEFFERIES LLC

520 Madison Avenue

New York, New York 10022

 

Ladies and Gentlemen:

 

Relmada Therapeutics, Inc., a Nevada corporation (the “Company”), proposes,
subject to the terms and conditions stated herein, to issue and sell from time
to time through Jefferies LLC, as sales agent and/or principal (the “Agent”),
shares of the Company’s common stock, par value $0.001 per share (the “Common
Shares”), on the terms set forth in this agreement (this “Agreement”).

 

Section 1. DEFINITIONS

 

(a) Certain Definitions. For purposes of this Agreement, capitalized terms used
herein and not otherwise defined shall have the following respective meanings:

 

“Affiliate” of a Person means another Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such first- mentioned Person. The term “control” (including
the terms “controlling,” “controlled by” and “under common control with”) means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

 

“Agency Period” means the period commencing on the date of this Agreement and
expiring on the earliest to occur of (x) the date on which the Agent shall have
placed the Maximum Program Amount pursuant to this Agreement and (y) the date
this Agreement is terminated pursuant to Section 7.

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder.

 

“Floor Price” means the minimum price set by the Company in the Issuance Notice
below which the Agent shall not sell Shares during the applicable period set
forth in the Issuance Notice, which may be adjusted by the Company at any time
during the period set forth in the Issuance Notice by delivering written notice
of such change to the Agent and which in no event shall be less than $1.00
without the prior written consent of the Agent, which may be withheld in the
Agent’s sole discretion.

 

 

SM “Open Market Sale Agreement” is a service mark of Jefferies LLC

 

 

 

 

“Issuance Amount” means the aggregate Sales Price of the Shares to be sold by
the Agent pursuant to any Issuance Notice.

 

“Issuance Notice” means a written notice delivered to the Agent by the Company
in accordance with this Agreement in the form attached hereto as Exhibit A that
is executed by its Chief Executive Officer, President or Chief Financial
Officer.

 

“Issuance Notice Date” means any Trading Day during the Agency Period that an
Issuance Notice is delivered pursuant to Section 3(b)(i).

 

“Issuance Price” means the Sales Price less the Selling Commission.

 

“Maximum Program Amount” means Common Shares with an aggregate Sales Price of
the lesser of (a) the number or dollar amount of Common Shares registered under
the effective Registration Statement (defined below) pursuant to which the
offering is being made, (b) the number of authorized but unissued Common Shares
(less Common Shares issuable upon exercise, conversion or exchange of any
outstanding securities of the Company or otherwise reserved from the Company’s
authorized capital stock), (c) the number or dollar amount of Common Shares
permitted to be sold under Form S-3 (including General Instruction I.B.6
thereof, if applicable), or (d) the number or dollar amount of Common Shares for
which the Company has filed a Prospectus (defined below).

 

“Person” means an individual or a corporation, partnership, limited liability
company, trust, incorporated or unincorporated association, joint venture, joint
stock company, governmental authority or other entity of any kind.

 

“Principal Market” means the Nasdaq Capital Market or such other national
securities exchange on which the Common Shares, including any Shares, are then
listed.

 

“Sales Price” means the actual sale execution price of each Share placed by the
Agent pursuant to this Agreement.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder.

 

“Selling Commission” means three percent (3.0%) of the gross proceeds of Shares
sold pursuant to this Agreement, or as otherwise agreed between the Company and
the Agent with respect to any Shares sold pursuant to this Agreement.

 

“Settlement Date” means the second business day following each Trading Day
during the period set forth in the Issuance Notice on which Shares are sold
pursuant to this Agreement, when the Company shall deliver to the Agent the
amount of Shares sold on such Trading Day and the Agent shall deliver to the
Company the Issuance Price received on such sales.

 

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“Shares” shall mean the Company’s Common Shares issued or issuable pursuant to
this Agreement.

 

“Trading Day” means any day on which the Principal Market is open for trading.

 

Section 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to, and agrees with, the Agent that as of
(1) the date of this Agreement, (2) each Issuance Notice Date, (3) each
Settlement Date, (4) each Triggering Event Date and (5) as of each Time of Sale
(each of the times referenced above is referred to herein as a “Representation
Date”), except as may be disclosed in the Prospectus (including any documents
incorporated by reference therein and any supplements thereto) on or before a
Representation Date:

 

(a) Registration Statement. The Company has prepared and filed with the
Commission a shelf registration statement on Form S-3 (File No. 333-234262) that
contains a base prospectus (the “Base Prospectus”). Such registration statement
registers the issuance and sale by the Company of the Shares under the
Securities Act. The Company may file one or more additional registration
statements from time to time that will contain a base prospectus and related
prospectus or prospectus supplement, if applicable, with respect to the Shares.
Except where the context otherwise requires, such registration statement(s),
including any information deemed to be a part thereof pursuant to Rule 430B
under the Securities Act, including all financial statements, exhibits and
schedules thereto and all documents incorporated or deemed to be incorporated
therein by reference pursuant to Item 12 of Form S-3 under the Securities Act as
from time to time amended or supplemented, is herein referred to as the
“Registration Statement,” and the prospectus constituting a part of such
registration statement(s), together with any prospectus supplement filed with
the Commission pursuant to Rule 424(b) under the Securities Act relating to a
particular issuance of the Shares, including all documents incorporated or
deemed to be incorporated therein by reference pursuant to Item 12 of Form S-3
under the Securities Act, in each case, as from time to time amended or
supplemented, is referred to herein as the “Prospectus,” except that if any
revised prospectus is provided to the Agent by the Company for use in connection
with the offering of the Shares that is not required to be filed by the Company
pursuant to Rule 424(b) under the Securities Act, the term “Prospectus” shall
refer to such revised prospectus from and after the time it is first provided to
the Agent for such use. The Registration Statement at the time it originally
became effective is herein called the “Original Registration Statement.” As used
in this Agreement, the terms “amendment” or “supplement” when applied to the
Registration Statement or the Prospectus shall be deemed to include the filing
by the Company with the Commission of any document under the Exchange Act after
the date hereof that is or is deemed to be incorporated therein by reference.

 

All references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in the Registration
Statement or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference in or
otherwise deemed under the Securities Act to be a part of or included in the
Registration Statement or the Prospectus, as the case may be, as of any
specified date; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include, without limitation, the filing of any document under the
Exchange Act which is or is deemed to be incorporated by reference in or
otherwise deemed under the Securities Act to be a part of or included in the
Registration Statement or the Prospectus, as the case may be, as of any
specified date.

 

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At the time the Original Registration Statement was or will be declared
effective and at the time the Company’s most recent annual report on Form 10-K
was filed with the Commission, if later, the Company met the then-applicable
requirements for use of Form S-3 under the Securities Act. During the Agency
Period, each time the Company files an annual report on Form 10-K the Company
will meet the then-applicable requirements for use of Form S-3 under the
Securities Act.

 

(b) Compliance with Registration Requirements. The Original Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has complied
to the Commission’s satisfaction with all requests of the Commission for
additional or supplemental information. 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 Prospectus when filed complied or will comply in all material respects with
the Securities Act and, if filed with the Commission through its Electronic Data
Gathering, Analysis and Retrieval system (“EDGAR”) (except as may be permitted
by Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Agent for use in connection with the issuance and sale of the
Shares. Each of the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendment thereto, at the time it became or
becomes effective and at each Representation Date, complied and will comply in
all material respects with the Securities Act and did not and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. As of the date of this Agreement, the Prospectus and any Free
Writing Prospectus (as defined below) considered together (collectively, the
“Time of Sale Information”) did not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
The Prospectus, as amended or supplemented, as of its date and at each
Representation Date, did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the three
immediately preceding sentences do not apply to statements in or omissions from
the Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with information
relating to the Agent furnished to the Company in writing by the Agent expressly
for use therein, it being understood and agreed that the only such information
furnished by the Agent to the Company consists of the information described in
Section 6 below. 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. The Registration
Statement and the offer and sale of the Shares as contemplated hereby meet the
requirements of Rule 415 under the Securities Act and comply in all material
respects with said rule.

 

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(c) Ineligible Issuer Status. The Company is not an “ineligible issuer” in
connection with the offering of the Shares pursuant to Rules 164, 405 and 433
under the Securities Act. Any Free Writing Prospectus that the Company is
required to file pursuant to Rule 433(d) under the Securities Act has been, or
will be, filed with the Commission in accordance with the requirements of the
Securities Act. Each Free Writing Prospectus that the Company has filed, or is
required to file, pursuant to Rule 433(d) under the Securities Act or that was
prepared by or on behalf of or used or referred to by the Company complies or
will comply in all material respects with the requirements of Rule 433 under the
Securities Act including timely filing with the Commission or retention where
required and legending, and each such Free Writing Prospectus, as of its issue
date and at all subsequent times through the completion of the issuance and sale
of the Shares did not, does not and will not include any information that
conflicted, conflicts with or will conflict with the information contained in
the Registration Statement or the Prospectus, including any document
incorporated by reference therein. Except for the Free Writing Prospectuses, if
any, and electronic road shows, if any, furnished to the Agent before first use,
the Company has not prepared, used or referred to, and will not, without the
Agent’s prior consent, prepare, use or refer to, any Free Writing Prospectus.

 

(d) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectus, at
the time they were filed with the Commission, complied in all material respects
with the requirements of the Exchange Act, as applicable, and, when read
together with the other information in the Prospectus, do 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 light of the
circumstances under which they were made, not misleading.

 

(e) 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, and any Free Writing Prospectus or amendment or
supplement thereto 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 time the Registration Statement and any
amendments thereto become effective and at each Time of Sale (as defined below),
as the case may be, will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the 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.

 

(f) This Agreement. This Agreement has been duly authorized, executed and
delivered by the Company.

 

(g) Authorization of the Shares. The Shares have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and delivered by
the Company against payment therefor pursuant to this Agreement, will be validly
issued, fully paid and nonassessable, and the issuance and sale of the Shares is
not subject to any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase the Shares, that have not been validly
waived in writing.

 

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(h) 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.

 

(i) No Material Adverse Change. Except as otherwise disclosed in the
Registration Statement and the Prospectus, subsequent to the respective dates as
of which information is given in the Registration Statement and the Prospectus:
(i) there has been no material adverse change, or any development that could be
expected to result in a material adverse change, in (A) the condition, financial
or otherwise, or in the earnings, business, properties, operations, operating
results, assets, liabilities or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company and its
subsidiaries, considered as one entity or (B) the ability of the Company to
consummate the transactions contemplated by this Agreement or perform its
obligations hereunder (any such change being referred to herein as 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, including without limitation any losses or interference with
their business from fire, explosion, flood, earthquakes, accident or other
calamity, whether or not covered by insurance, or from any strike, labor dispute
or court or governmental action, order or decree, that are material,
individually or in the aggregate, to the Company and its subsidiaries,
considered as one entity, and have not entered into any transactions not in the
ordinary course of business; and (iii) there has not been any material decrease
in the capital stock or any material increase in any short-term or long-term
indebtedness of the Company or its subsidiaries and there has been no dividend
or distribution of any kind declared, paid or made by the Company or, except for
dividends paid to the Company or other subsidiaries, by any of the Company’s
subsidiaries on any class of capital stock, or any repurchase or redemption by
the Company or any of its subsidiaries of any class of capital stock.

 

(j) Independent Accountants. Marcum LLP, which has expressed its opinion with
respect to the financial statements (which term as used in this Agreement
includes the related notes thereto) filed with the Commission as a part of the
Registration Statement and the Prospectus, is (i) an independent registered
public accounting firm as required by the Securities Act, the Exchange Act, and
the rules of the Public Company Accounting Oversight Board (“PCAOB”), (ii) in
compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X under the Securities Act and (iii)
a registered public accounting firm as defined by the PCAOB whose registration
has not been suspended or revoked and who has not requested such registration to
be withdrawn.

 

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(k) Financial Statements. The financial statements filed with the Commission as
a part of the Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company and its subsidiaries as of the
dates indicated and the results of their operations, changes in stockholders’
equity and cash flows for the periods specified. Such financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. 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. No other financial statements or
supporting schedules are required to be included in the Registration Statement
or the Prospectus. To the Company’s knowledge, no person who has been suspended
or barred from being associated with a registered public accounting firm, or who
has failed to comply with any sanction pursuant to Rule 5300 promulgated by the
PCAOB, has participated in or otherwise aided the preparation of, or audited,
the financial statements, supporting schedules or other financial data filed
with the Commission as a part of the Registration Statement and the Prospectus.

 

(l) Company’s Accounting System. The Company and each of its subsidiaries make
and keep accurate books and records and maintain a system of internal accounting
controls sufficient to provide reasonable assurance that: (i) transactions are
executed in accordance with management’s general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as
applied in the United States and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization; (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences; and (v) the interactive data in eXtensible
Business Reporting Language included or incorporated by reference in the
Registration Statement and the Prospectus fairly presents the information called
for in all material respects and is prepared in accordance with the Commission’s
rules and guidelines applicable thereto.

 

(m) Disclosure Controls and Procedures; Deficiencies in or Changes to Internal
Control Over Financial Reporting. The Company has established and maintains
disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under
the Exchange Act), which (i) are designed to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made known
to the Company’s principal executive officer and its principal financial officer
by others within those entities, particularly during the periods in which the
periodic reports required under the Exchange Act are being prepared; (ii) have
been evaluated by management of the Company for effectiveness as of the end of
the Company’s most recent fiscal quarter; and (iii) are effective in all
material respects to perform the functions for which they were established.
Since the end of the Company’s most recent audited fiscal year, there have been
no significant deficiencies or material weakness in the Company’s internal
control over financial reporting (whether or not remediated) and no change in
the Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting. The Company is not aware of any change in its
internal control over financial reporting that has occurred during its most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting.

 

(n) Incorporation and Good Standing of the Company. The Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation and has the corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus and to enter into
and perform its obligations under this Agreement. The Company is duly qualified
as a foreign corporation to transact business and is in good standing in the
State of 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.

 

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(o) Subsidiaries. Each of the Company’s “subsidiaries” (for purposes of this
Agreement, as defined in Rule 405 under the Securities Act) has been duly
incorporated or organized, as the case may be, and is validly existing as a
corporation, partnership or limited liability company, as applicable, in good
standing under the laws of the jurisdiction of its incorporation or organization
and has the power and authority (corporate or other) to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectus. Each of the Company’s subsidiaries is duly
qualified as a foreign corporation, partnership or limited liability company, as
applicable, to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business. All of the issued and
outstanding capital stock or other equity or ownership interests of each of the
Company’s subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and are owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance or adverse claim. None of the outstanding capital stock or equity
interest in any subsidiary was issued in violation of preemptive or similar
rights of any security holder of such subsidiary. The constitutive or
organizational documents of each of the subsidiaries comply in all material
respects with the requirements of applicable laws of its jurisdiction of
incorporation or organization and are in full force and effect. The Company does
not own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in Exhibit 21 to the Company’s
most recent Annual Report on Form 10-K.

 

(p) Capitalization and Other Capital Stock Matters. The authorized, issued and
outstanding capital stock of the Company is as set forth in the Registration
Statement and the Prospectus (other than for subsequent issuances, if any,
pursuant to employee benefit plans, or upon the exercise of outstanding options
or warrants, in each case described in the Registration Statement and the
Prospectus). The Common Shares (including the Shares) conform in all material
respects to the description thereof contained in the Prospectus. All of the
issued and outstanding Common Shares have been duly authorized and validly
issued, are fully paid and nonassessable and have been issued in compliance with
all federal and state securities laws. None of the outstanding Common Shares was
issued in violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company. There are
no authorized or outstanding options, warrants, preemptive rights, rights of
first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of the
Company or any of its subsidiaries other than those described in the
Registration Statement and the Prospectus. The descriptions 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 Registration Statement and
the Prospectus accurately and fairly presents the information required to be
shown with respect to such plans, arrangements, options and rights.

 

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(q) Stock Exchange Listing. The Common Shares are registered pursuant to Section
12(b) or 12(g) of the Exchange Act and are listed on the Principal Market, and
the Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Shares under the Exchange Act or
delisting the Common Shares from the Principal Market, nor has the Company
received any notification that the Commission or the Principal Market is
contemplating terminating such registration or listing. To the Company’s
knowledge, it is in compliance with all applicable listing requirements of the
Principal Market.

 

(r) 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, partnership agreement or operating
agreement or similar organizational documents, as applicable, or is in default
(or, with the giving of notice or lapse of time, would be in default)
(“Default”) under any indenture, loan, credit agreement, note, lease, license
agreement, contract, franchise or other instrument (including, without
limitation, any pledge agreement, security agreement, mortgage or other
instrument or agreement evidencing, guaranteeing, securing or relating to
indebtedness) 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 their respective
properties or assets are subject (each, an “Existing Instrument”), except for
such Defaults as could not be expected, individually or in the aggregate, to
result in a Material Adverse Change. The Company’s execution, delivery and
performance of this Agreement, consummation of the transactions contemplated
hereby and by the Registration Statement and the Prospectus and the issuance and
sale of the Shares (including the use of proceeds from the sale of the Shares as
described in the Registration Statement and the Prospectus under the caption
“Use of Proceeds”) (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, partnership agreement or operating agreement or similar organizational
documents, as applicable, of the Company or any subsidiary (ii) will not
conflict with or constitute a breach of, or Default or a Debt Repayment
Triggering Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, or require the consent of any
other party to, any Existing Instrument and (iii) will not result in any
violation of any law, administrative regulation or administrative or court
decree applicable to the Company or any of its subsidiaries. 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 Registration
Statement and the Prospectus, except such as have been obtained or made by the
Company and are in full force and effect under the Securities Act and such as
may be required under applicable state securities or blue sky laws or the
Financial Industry Regulatory Authority (“FINRA”). As used herein, a “Debt
Repayment Triggering Event” means any event or condition which gives, or with
the giving of notice or lapse of time would give, the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any of its subsidiaries.

 

(s) Compliance with Laws. The Company and its subsidiaries have been and are in
compliance with all applicable laws, rules and regulations, except where failure
to be so in compliance could not be expected, individually or in the aggregate,
to result in a Material Adverse Change.

 

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(t) No Material Actions or Proceedings. There is no action, suit, proceeding,
inquiry or investigation brought by or before any legal or governmental entity
now pending or, to the knowledge of the Company, threatened, against or
affecting the Company or any of its subsidiaries, which could be expected,
individually or in the aggregate, to result in a Material Adverse Change. No
material labor dispute with the employees of the Company or any of its
subsidiaries, or with the employees of any principal supplier, manufacturer,
customer or contractor of the Company, exists or, to the knowledge of the
Company, is threatened or imminent.

 

(u) Intellectual Property Rights. The Company and its subsidiaries own, or have
obtained valid and enforceable licenses for, the inventions, patent
applications, patents, trademarks, trade names, service names, copyrights, trade
secrets and other intellectual property described in the Registration Statement
and the Prospectus as being owned or licensed by them or which are necessary for
the conduct of their respective businesses as currently conducted or as
currently proposed to be conducted (collectively, “Intellectual Property”) and,
to the Company’s knowledge, the conduct of their respective businesses does not
and will not infringe, misappropriate or otherwise conflict in any material
respect with any such rights of others. The Intellectual Property of the Company
has not been adjudged by a court of competent jurisdiction to be invalid or
unenforceable, in whole or in part, and the Company is unaware of any facts
which would form a reasonable basis for any such adjudication. To the Company’s
knowledge: (i) there are no third parties who have rights to any Intellectual
Property, except for reversionary rights of third-party licensors with respect
to Intellectual Property that is disclosed in the Registration Statement and the
Prospectus as licensed to the Company or one or more of its subsidiaries and the
Company and each of its subsidiaries, taken as a whole, have taken all
reasonable steps necessary to secure their respective interests in the
Intellectual Property from their respective employees and contractors; (ii) the
Company and its subsidiaries are the sole owners of the Intellectual Property
owned by them and have the valid right to use such Intellectual Property; and
(iii) there is no infringement by third parties of any Intellectual Property. To
the Company’s knowledge, there is no prior art material to any patent or patent
application of the Intellectual Property of the Company or its subsidiaries that
may render any U.S. patent held by the Company or its subsidiaries invalid or
any U.S. patent application held by the Company or any of its subsidiaries
unpatentable. There is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others: (A) challenging the Company’s
rights in or to any Intellectual Property, and the Company is unaware of any
facts which would form a reasonable basis for any such action, suit, proceeding
or claim; (B) challenging the validity, enforceability or scope of any
Intellectual Property, and the Company is unaware of any facts which would form
a reasonable basis for any such action, suit, proceeding or claim; or (C)
asserting that the Company or any of its subsidiaries infringes or otherwise
violates, or would, upon the commercialization of any product or service
described in the Registration Statement or the Prospectus as under development,
infringe or violate, any patent, trademark, trade name, service name, copyright,
trade secret or other proprietary rights of others, and the Company is unaware
of any facts which would form a reasonable basis for any such action, suit,
proceeding or claim. To the Company’s knowledge, the Company and its
subsidiaries have complied with the terms of each agreement pursuant to which
Intellectual Property has been licensed to the Company or any subsidiary, and
all such agreements are in full force and effect. To the Company’s knowledge,
there are no material defects in any of the patents or patent applications
included in the Intellectual Property. The Company and its subsidiaries have
taken all reasonable steps to protect, maintain and safeguard their Intellectual
Property, including the execution of appropriate nondisclosure, confidentiality
agreements and invention assignment agreements and invention assignments with
their employees, and no employee of the Company is in or has been in violation
of any term of any employment contract, patent disclosure agreement, invention
assignment agreement, non-competition agreement, non-solicitation agreement,
nondisclosure agreement, or any restrictive covenant to or with a former
employer where the basis of such violation relates to such employee’s employment
with the Company. All patents and patent applications owned by or exclusively
licensed to the Company or its subsidiaries or under which the Company or any of
its subsidiaries has rights have, to the knowledge of the Company, been duly and
properly filed and each issued patent is being diligently maintained. The duty
of candor and good faith as required by the United States Patent and Trademark
Office during the prosecution of the United States patents and patent
applications included in the Intellectual Property have been complied with; and
in all foreign offices having similar requirements, all such requirements have
been complied with. None of the Company owned Intellectual Property or
technology (including information technology and outsourced arrangements)
employed by the Company or its subsidiaries has been obtained or is being used
by the Company or its subsidiary in violation of any contractual obligation
binding on the Company or its subsidiaries or any of their respective officers,
directors or employees or otherwise in violation of the rights of any persons.
The product candidates described in the Registration Statement and the
Prospectus as under development by the Company or any subsidiary fall within the
scope of the claims of one or more patents or patent applications owned by, or
exclusively licensed to, the Company or any subsidiary.

 

10

 

 

(v) All Necessary Permits, etc. The Company and its subsidiaries possess such
valid and current certificates, authorizations or permits required by state,
federal or foreign regulatory agencies or bodies to conduct their respective
businesses as currently conducted and as described in the Registration Statement
or the Prospectus (“Permits”). Neither the Company nor any of its subsidiaries
is in violation of, or in default under, any of the Permits or has received any
notice of proceedings relating to the revocation or modification of, or
non-compliance with, any such certificate, authorization or permit.

 

(w) Title to Properties. The Company and its subsidiaries have good and
marketable title to all of the real and personal property and other assets
reflected as owned in the financial statements referred to in Section 2(k) above
(or elsewhere in the Registration Statement or the Prospectus), in each case
free and clear of any security interests, mortgages, liens, encumbrances,
equities, adverse claims and other defects. The real property, improvements,
equipment and personal property held under lease by the Company or any of its
subsidiaries are held under valid and enforceable leases, with such exceptions
as are not material and do not materially interfere with the use made or
proposed to be made of such real property, improvements, equipment or personal
property by the Company or such subsidiary.

 

(x) Tax Law Compliance. The Company and its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns or have
properly requested extensions thereof and have paid all taxes required to be
paid by any of them and, if due and payable, any related or similar assessment,
fine or penalty levied against any of them except as may be being contested in
good faith and by appropriate proceedings. The Company has made adequate
charges, accruals and reserves in the applicable financial statements referred
to in Section 2(k) above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the Company or
any of its subsidiaries has not been finally determined. The Company and its
subsidiaries do not have any written notice or knowledge of any tax deficiency
which could reasonably be expected to be determined adversely to the Company or
its subsidiaries.

 

11

 

 

(y) Insurance. Each of the Company and its subsidiaries are insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses including, but not limited
to, policies covering real and personal property owned or leased by the Company
and its subsidiaries against theft, damage, destruction, acts of vandalism and
earthquakes and policies covering the Company and its subsidiaries for product
liability claims and clinical trial liability claims. The Company has no reason
to believe that it or any of its subsidiaries will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to obtain
comparable coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that could not be
expected to result in a Material Adverse Change. Neither the Company nor any of
its subsidiaries has been denied any insurance coverage which it has sought or
for which it has applied.

 

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

 

12

 

 

(aa) ERISA Compliance. The Company and its subsidiaries and any “employee
benefit plan” (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder
(collectively, “ERISA”)) established or maintained by the Company, its
subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance in
all material respects with ERISA. “ERISA Affiliate” means, with respect to the
Company or any of its subsidiaries, any member of any group of organizations
described in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of
1986, as amended, and the regulations and published interpretations thereunder
(the “Code”) of which the Company or such subsidiary is a member. No “reportable
event” (as defined under ERISA) has occurred or is reasonably expected to occur
with respect to any “employee benefit plan” established or maintained by the
Company, its subsidiaries or any of their ERISA Affiliates. No “employee benefit
plan” established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates, if such “employee benefit plan” were terminated, would have
any “amount of unfunded benefit liabilities” (as defined under ERISA). Neither
the Company, its subsidiaries nor any of their ERISA Affiliates has incurred or
reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any “employee benefit plan” or
(ii) Sections 412, 4971, 4975 or 4980B of the Code. Each employee benefit plan
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates that is intended to be qualified under Section 401(a) of the Code is
so qualified and nothing has occurred, whether by action or failure to act,
which would cause the loss of such qualification.

 

(bb) Company Not an “Investment Company.” The Company is not, and will not be,
either after receipt of payment for the Shares or after the application of the
proceeds therefrom as described under “Use of Proceeds” in the Registration
Statement or the Prospectus, required to register as an “investment company”
under the Investment Company Act of 1940, as amended (the “Investment Company
Act”).

 

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

 

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

 

(ee) FINRA Matters. All of the information provided to the Agent or to counsel
for the Agent by the Company, its counsel, its officers and directors and the
holders of any securities (debt or equity) or options to acquire any securities
of the Company in connection with the offering of the Shares is true, complete,
correct and compliant with FINRA’s rules and any letters, filings or other
supplemental information provided to FINRA pursuant to FINRA Rules or NASD
Conduct Rules is true, complete and correct.

 

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

 

(gg) Sarbanes-Oxley Act. There is and has been no failure on the part of the
Company or any of the Company’s directors or officers, in their capacities as
such, to comply with any provision of the Sarbanes-Oxley Act of 2002, as amended
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, in each case to the extent that they are
applicable to the Company.

 

13

 

 

(hh) No Unlawful Contributions or Other Payments. Neither the Company nor any of
its subsidiaries nor, to the best of the Company’s knowledge, any employee or
agent of the Company or any subsidiary, has made any contribution or other
payment to any official of, or candidate for, any federal, state or foreign
office in violation of any law or of the character required to be disclosed in
the Registration Statement or the Prospectus.

 

(ii) Anti-Corruption and Anti-Bribery Laws. Neither the Company nor any of its
subsidiaries nor any director, officer, or employee of the Company or any of its
subsidiaries, nor to the knowledge of the Company, any agent, affiliate or other
person acting on behalf of the Company or any of its subsidiaries has, in the
course of its actions for, or on behalf of, the Company or any of its
subsidiaries (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity; (ii)
made or taken any act in furtherance of an offer, promise, or authorization of
any direct or indirect unlawful payment or benefit to any foreign or domestic
government official or employee, including of any government-owned or controlled
entity or public international organization, or any political party, party
official, or candidate for political office; (iii) violated or is in violation
of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended
(the “FCPA”), the UK Bribery Act 2010, or any other applicable anti-bribery or
anti-corruption law; or (iv) made, offered, authorized, requested, or taken an
act in furtherance of any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment or benefit . The Company and its subsidiaries
and, to the knowledge of the Company, the Company’s affiliates have conducted
their respective businesses in compliance with the FCPA and applicable
anti-corruption laws and have instituted and maintain policies and procedures
designed to ensure, and which are reasonably expected to continue to ensure,
continued compliance therewith.

 

(jj) 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 applicable jurisdictions, the rules and regulations thereunder and any
related or similar applicable 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 best knowledge of the Company, threatened.

 

14

 

 

(kk) Sanctions. Neither the Company nor any of its subsidiaries, directors,
officers, or employees, nor, to the knowledge of the Company, after due inquiry,
any agent, affiliate or other person acting on behalf of the Company or any of
its subsidiaries is currently the subject or the target of, or 50% or more owned
or otherwise controlled by a person who is the subject or target of, any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury (“OFAC”) or the U.S. Department of State, the United
Nations Security Council, the European Union, Her Majesty’s Treasury of the
United Kingdom, or other relevant sanctions authority (collectively,
“Sanctions”); nor is the Company or any of its subsidiaries located, organized
or resident in a country or territory that is the subject or the target of
Sanctions, including, without limitation, Crimea, Cuba, Iran, North Korea, and
Syria (the “Sanctioned Countries”); and the Company will not directly or
indirectly use the proceeds of this offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, or any joint venture partner or
other person or entity, for the purpose of financing the activities of or
business with any person, or in any country or territory, that at the time of
such financing, is the subject or the target of Sanctions or in any other manner
that will result in a violation by any person (including any person
participating in the transaction whether as underwriter, advisor, investor or
otherwise) of applicable Sanctions. For the past five years, the Company and its
subsidiaries have not knowingly engaged in and are not now knowingly engaged in
any dealings or transactions with any person that at the time of the dealing or
transaction is or was the subject or the target of Sanctions or with any
Sanctioned Country.

 

(ll) Brokers. Except pursuant to 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.

 

(mm) Forward-Looking Statements. Each financial or operational projection or
other “forward-looking statement” (as defined by Section 27A of the Securities
Act or Section 21E of the Exchange Act) contained in the Registration Statement
or the Prospectus (i) was so included by the Company in good faith and with
reasonable basis after due consideration by the Company of the underlying
assumptions, estimates and other applicable facts and circumstances and (ii) is
accompanied by meaningful cautionary statements identifying those factors that
could cause actual results to differ materially from those in such
forward-looking statement. No such statement was made with the knowledge of an
executive officer or director of the Company that it was false or misleading.

 

(nn) No Outstanding Loans or Other Extensions of Credit. The Company does not
have any outstanding extension of credit, in the form of a personal loan, to or
for any director or executive officer (or equivalent thereof) of the Company
except for such extensions of credit as are expressly permitted by Section 13(k)
of the Exchange Act.

 

15

 

 

(oo) Cybersecurity. The Company and its subsidiaries’ information technology
assets and equipment, computers, systems, networks, hardware, software,
websites, applications, and databases (collectively, “IT Systems”) are adequate
for, and operate and perform in all material respects as required in connection
with the operation of the business of the Company and its subsidiaries as
currently conducted, free and clear of all material bugs, errors, defects,
Trojan horses, time bombs, malware and other corruptants. The Company and its
subsidiaries have implemented and maintained commercially reasonable physical,
technical and administrative controls, policies, procedures, and safeguards to
maintain and protect their material confidential information and the privacy,
integrity, continuous operation, redundancy and security of all IT Systems and
data (including “Personal Data,” sensitive, confidential or regulated data,
collectively “Data”) used in connection with their businesses. “Personal Data”
means (i) a natural person’s name, street address, telephone number, e-mail
address, photograph, social security number or tax identification number,
driver’s license number, passport number, credit card number, bank information,
or customer or account number; (ii) any information which would qualify as
“personally identifying information” under the Federal Trade Commission Act, as
amended; (iii) “personal data” as defined by GDPR; (iv) any information which
would qualify as “protected health information” under the Health Insurance
Portability and Accountability Act of 1996, as amended by the Health Information
Technology for Economic and Clinical Health Act (collectively, “HIPAA”); and (v)
any other piece of information that identifies or allows the identification of
such natural person, or his or her family or household, or permits the
collection or analysis of any data related to an identified person’s health or
sexual orientation. There have been no breaches, violations, outages or
unauthorized uses of or accesses to or disclosure of the Data, except for those
that would not result in a Material Adverse Change or have been remedied without
material cost or liability or the duty to notify any person, governmental or
regulatory authority or third party, nor any incidents under internal review or
investigations relating to the same. The Company and its subsidiaries are
presently, and at all prior terms were, in material compliance with all
applicable laws or statutes and all judgments, orders, rules and regulations of
any court or arbitrator or governmental or regulatory authority, internal
policies and contractual obligations relating to the privacy and security of IT
Systems and Data and to the protection of such IT Systems and Data from
unauthorized use, access, misappropriation or modification.

 

(pp) Compliance with Data Privacy Laws. The Company and its subsidiaries are,
and at all prior times were, in material compliance with all applicable state,
federal, provincial, local and foreign data privacy and security laws,
regulations, ordinances, codes, rules, and binding guidance issued by any
governmental entity, including without limitation HIPAA, EU General Data
Protection Regulation (“GDPR”), the California Consumer Privacy Act, and those
that pertain to the privacy, protection or security of Personal Data
(collectively, the “Data Privacy Laws”). To ensure compliance with the Data
Privacy Laws, the Company and its subsidiaries have in place, comply with, and
take appropriate steps reasonably designed to ensure compliance in all material
respects with their policies and procedures relating to data privacy and
security and the collection, storage, use, disclosure, handling, and analysis of
Personal Data (the “Policies”). The Company and its subsidiaries have at all
times made all disclosures to all individuals required by applicable Data
Privacy Laws, and none of such disclosures made or contained in any Policy have,
to the knowledge of the Company, been inaccurate or in violation of any
applicable Data Privacy Laws in any material respect. The Company further
certifies that neither it nor any subsidiary: (i) has received notice of any
actual or potential liability under or relating to, or actual or potential
violation of, any applicable Data Privacy Laws, and has no knowledge of any
event or condition that would reasonably be expected to result in any such
notice; (ii) is currently conducting or paying for, in whole or in part, any
investigation, remediation, or other corrective action pursuant to any
applicable Data Privacy Law; or (iii) is a party to any order, decree, or
agreement that imposes any obligation or liability under any applicable Data
Privacy Laws.

 

16

 

 

(qq) Clinical Data and Regulatory Compliance. The preclinical tests and clinical
trials, and other studies (collectively, “studies”) that are described in, or
the results of which are referred to in, the Registration Statement or the
Prospectus were and, if still pending, are being conducted in all material
respects in accordance with the protocols, procedures and controls designed for
such studies and submitted to the relevant regulatory authorities; each
description of the results of such studies is accurate and complete in all
material respects and fairly presents the data derived from such studies, and
the Company and its subsidiaries have no knowledge of any other studies the
results of which are inconsistent with, or otherwise call into question, the
results described or referred to in the Registration Statement or the
Prospectus; the Company and its subsidiaries have made all such filings and
obtained all such approvals as may be required by the Food and Drug
Administration of the U.S. Department of Health and Human Services or any
committee thereof or from any other U.S. or foreign government or drug or
medical device regulatory agency, or health care facility Institutional Review
Board (collectively, the “Regulatory Agencies”); neither the Company nor any of
its subsidiaries has received any notice of, or correspondence from, any
Regulatory Agency requiring the termination, suspension or modification of any
clinical trials that are described or referred to in the Registration Statement
or the Prospectus; and the Company and its subsidiaries have each operated and
currently are in compliance in all material respects with all applicable rules
and regulations of the Regulatory Agencies.

 

(rr) Compliance with Health Care Laws. The Company and its subsidiaries are, and
at all times have been, in compliance with all Health Care Laws. For purposes of
this Agreement, “Health Care Laws” means: (i) the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. Section 301 et seq.), and the regulations promulgated
thereunder; (ii) all applicable federal, state, local and foreign health care
fraud and abuse laws, and applicable laws governing government funded or
sponsored healthcare programs; (iii) HIPAA, as amended by the Health Information
Technology for Economic and Clinical Health Act (42 U.S.C. Section 17921 et
seq.); and (iv) all other local, state, federal, national, supranational and
foreign laws, relating to the regulation of the Company or its subsidiaries, and
(v) the regulations promulgated pursuant to such statutes and any state or
non-U.S. counterpart thereof. Neither the Company nor any of its subsidiaries
has received written notice of any claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from any court or
arbitrator or governmental or regulatory authority alleging that any product
operation or activity is in violation of any Health Care Laws nor, to the
Company’s knowledge, is any such claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action threatened. The Company
and its subsidiaries have filed, maintained or submitted all material reports,
documents, forms, notices, applications, records, claims, submissions and
supplements or amendments as required by any Health Care Laws, and all such
reports, documents, forms, notices, applications, records, claims, submissions
and supplements or amendments were complete and accurate on the date filed in
all material respects (or were corrected or supplemented by a subsequent
submission). Neither the Company nor any of its subsidiaries is a party to any
corporate integrity agreements, monitoring agreements, consent decrees,
settlement orders, or similar agreements with or imposed by any governmental or
regulatory authority. Additionally, neither the Company, any of its subsidiaries
nor any of their respective employees, officers, directors, or agents has been
excluded, suspended or debarred from participation in any U.S. federal health
care program or human clinical research or, to the knowledge of the Company, is
subject to a governmental inquiry, investigation, proceeding, or other similar
action that could reasonably be expected to result in debarment, suspension, or
exclusion.

 

(ss) No Rights to Purchase Preferred Stock. The issuance and sale of the Shares
as contemplated hereby will not cause any holder of any shares of capital stock,
securities convertible into or exchangeable or exercisable for capital stock or
options, warrants or other rights to purchase capital stock or any other
securities of the Company to have any right to acquire any shares of preferred
stock of the Company.

 

17

 

 

(tt) Dividend Restrictions. Except as disclosed in the Prospectus, no subsidiary
of the Company is prohibited or restricted, directly or indirectly, from paying
dividends to the Company, or from making any other distribution with respect to
such subsidiary’s equity securities or from repaying to the Company or any other
subsidiary of the Company any amounts that may from time to time become due
under any loans or advances to such subsidiary from the Company or from
transferring any property or assets to the Company or to any other subsidiary.

 

(uu) Duties, Transfer Taxes, Etc. No stamp or other issuance or transfer taxes
or duties and no capital gains, income, withholding or other taxes are payable
by the Agent in the United States or any political subdivision or taxing
authority thereof or therein in connection with the execution, delivery or
performance of this Agreement by the Company or the sale and delivery by the
Company of the Shares.

 

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

 

Any certificate signed by any officer or representative of the Company or any of
its subsidiaries and delivered to the Agent or counsel for the Agent in
connection with an issuance of Shares shall be deemed a representation and
warranty by the Company to the Agent as to the matters covered thereby on the
date of such certificate.

 

The Company acknowledges that the Agent and, for purposes of the opinions to be
delivered pursuant to Section 4(o) hereof, counsel to the Company and counsel to
the Agent, will rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.

 

Section 3. ISSUANCE AND SALE OF COMMON SHARES

 

(a) Sale of Securities. On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company and the Agent agree that the Company may from time to time
seek to sell Shares through the Agent, acting as sales agent, or directly to the
Agent, acting as principal, as follows, with an aggregate Sales Price of up to
the Maximum Program Amount, based on and in accordance with Issuance Notices as
the Company may deliver, during the Agency Period.

 

(b) Mechanics of Issuances.

 

(i) Issuance Notice. Upon the terms and subject to the conditions set forth
herein, on any Trading Day during the Agency Period on which the conditions set
forth in Section 5(a) and Section 5(b) shall have been satisfied, the Company
may exercise its right to request an issuance of Shares by delivering to the
Agent an Issuance Notice; provided, however, that (A) in no event may the
Company deliver an Issuance Notice to the extent that (I) the sum of (x) the
aggregate Sales Price of the requested Issuance Amount, plus (y) the aggregate
Sales Price of all Shares issued under all previous Issuance Notices effected
pursuant to this Agreement, would exceed the Maximum Program Amount; and (B)
prior to delivery of any Issuance Notice, the period set forth for any previous
Issuance Notice shall have expired or been terminated. An Issuance Notice shall
be considered delivered on the Trading Day that it is received by e-mail to the
persons set forth in Schedule A hereto and confirmed by the Company by telephone
(including a voicemail message to the persons so identified), with the
understanding that, with adequate prior written notice, the Agent may modify the
list of such persons from time to time.

 

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(ii) Agent Efforts. Upon the terms and subject to the conditions set forth in
this Agreement, upon the receipt of an Issuance Notice, the Agent will use its
commercially reasonable efforts consistent with its normal sales and trading
practices to place the Shares with respect to which the Agent has agreed to act
as sales agent, subject to, and in accordance with the information specified in,
the Issuance Notice, unless the sale of the Shares described therein has been
suspended, cancelled or otherwise terminated in accordance with the terms of
this Agreement. For the avoidance of doubt, the parties to this Agreement may
modify an Issuance Notice at any time provided they both agree in writing to any
such modification.

 

(iii) Method of Offer and Sale. The Shares may be offered and sold (A) in
negotiated transactions with the consent of the Company or (B) by any other
method permitted by law deemed to be an “at the market offering” as defined in
Rule 415(a)(4) under the Securities Act, including block transactions, sales
made directly on the Principal Market or sales made into any other existing
trading market of the Common Shares. Nothing in this Agreement shall be deemed
to require either party to agree to the method of offer and sale specified in
the preceding sentence, and (except as specified in clause (A) above) the method
of placement of any Shares by the Agent shall be at the Agent’s discretion.

 

(iv) Confirmation to the Company. If acting as sales agent hereunder, the Agent
will provide written confirmation to the Company no later than the opening of
the Trading Day next following the Trading Day on which it has placed Shares
hereunder setting forth the number of shares sold on such Trading Day, the
corresponding Sales Price and the Issuance Price payable to the Company in
respect thereof.

 

(v) Settlement. Each issuance of Shares will be settled on the applicable
Settlement Date for such issuance of Shares and, subject to the provisions of
Section 5, on or before each Settlement Date, the Company will, or will cause
its transfer agent to, electronically transfer the Shares being sold by
crediting the Agent or its designee’s account at The Depository Trust Company
through its Deposit/Withdrawal At Custodian (DWAC) System, or by such other
means of delivery as may be mutually agreed upon by the parties hereto and, upon
receipt of such Shares, which in all cases shall be freely tradable,
transferable, registered shares in good deliverable form, the Agent will
deliver, by wire transfer of immediately available funds, the related Issuance
Price in same day funds delivered to an account designated by the Company prior
to the Settlement Date. The Company may sell Shares to the Agent as principal at
a price agreed upon at each relevant time Shares are sold pursuant to this
Agreement (each, a “Time of Sale”).

 

19

 

 

(vi) Suspension or Termination of Sales. Consistent with standard market
settlement practices, the Company or the Agent may, upon notice to the other
party hereto in writing or by telephone (confirmed immediately by verifiable
email), suspend any sale of Shares, and the period set forth in an Issuance
Notice shall immediately terminate; provided, however, that (A) such suspension
and termination shall not affect or impair either party’s obligations with
respect to any Shares placed or sold hereunder prior to the receipt of such
notice; (B) if the Company suspends or terminates any sale of Shares after the
Agent confirms such sale to the Company, the Company shall still be obligated to
comply with Section 3(b)(v) with respect to such Shares; and (C) if the Company
defaults in its obligation to deliver Shares on a Settlement Date, the Company
agrees that it will hold the Agent harmless against any loss, claim, damage or
expense (including, without limitation, penalties, interest and reasonable legal
fees and expenses), as incurred, arising out of or in connection with such
default by the Company. The parties hereto acknowledge and agree that, in
performing its obligations under this Agreement, the Agent may borrow Common
Shares from stock lenders in the event that the Company has not delivered Shares
to settle sales as required by subsection (v) above, and may use the Shares to
settle or close out such borrowings. The Company agrees that no such notice
shall be effective against the Agent unless it is made to the persons identified
in writing by the Agent pursuant to Section 3(b)(i).

 

(vii) No Guarantee of Placement, Etc. The Company acknowledges and agrees that
(A) there can be no assurance that the Agent will be successful in placing
Shares; (B) the Agent will incur no liability or obligation to the Company or
any other Person if it does not sell Shares; and (C) the Agent shall be under no
obligation to purchase Shares on a principal basis pursuant to this Agreement,
except as otherwise specifically agreed by the Agent and the Company.

 

(viii) Material Non-Public Information. Notwithstanding any other provision of
this Agreement, the Company and the Agent agree that the Company shall not
deliver any Issuance Notice to the Agent, and the Agent shall not be obligated
to place any Shares, during any period in which the Company is in possession of
material non-public information.

 

(c) Fees. As compensation for services rendered, the Company shall pay to the
Agent, on the applicable Settlement Date, the Selling Commission for the
applicable Issuance Amount (including with respect to any suspended or
terminated sale pursuant to Section 3(b)(vi)) by the Agent deducting the Selling
Commission from the applicable Issuance Amount.

 

20

 

 

(d) Expenses. The Company agrees to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including without limitation (i) all
expenses incident to the issuance and delivery of the Shares (including all
printing and engraving costs); (ii) all fees and expenses of the registrar and
transfer agent of the Shares; (iii) all necessary issue, transfer and other
stamp taxes in connection with the issuance and sale of the Shares; (iv) all
fees and expenses of the Company’s counsel, independent public or certified
public accountants and other advisors; (v) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Registration Statement (including financial statements, exhibits, schedules,
consents and certificates of experts), the Prospectus, any Free Writing
Prospectus (as defined below) prepared by or on behalf of, used by, or referred
to by the Company, and all amendments and supplements thereto, and this
Agreement; (vi) all filing fees, attorneys’ fees and expenses incurred by the
Company or the Agent in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Shares for offer and sale under the state securities or blue sky laws or the
provincial securities laws of Canada, and, if requested by the Agent, preparing
and printing a “Blue Sky Survey” or memorandum and a “Canadian wrapper”, and any
supplements thereto, advising the Agent of such qualifications, registrations,
determinations and exemptions; (vii) the reasonable fees and disbursements of
the Agent’s counsel, including the reasonable fees and expenses of counsel for
the Agent in connection with, FINRA review, if any, and approval of the Agent’s
participation in the offering and distribution of the Shares; (viii) the filing
fees incident to FINRA review, if any; (ix) the costs and expenses of the
Company relating to investor presentations on any “road show” undertaken in
connection with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the preparation or dissemination of any
electronic road show, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in connection
with the road show presentations with the prior approval of the Company, travel
and lodging expenses of the representatives, employees and officers of the
Company and, with the prior written approval of the Company, of the Agent and
any such consultants, and the cost of any aircraft chartered with the prior
written approval of the Company in connection with the road show; and (x) the
fees and expenses associated with listing the Shares on the Principal Market.
The fees and disbursements of Agent’s counsel pursuant to subsections (vi) and
(vii) above shall not exceed $50,000 in connection with the first Issuance
Notice.

 

Section 4. ADDITIONAL COVENANTS

 

The Company covenants and agrees with the Agent as follows, in addition to any
other covenants and agreements made elsewhere in this Agreement:

 

(a) Exchange Act Compliance. During the Agency Period, the Company shall (i)
file, on a timely basis, with the Commission all reports and documents required
to be filed under Section 13, 14 or 15 of the Exchange Act in the manner and
within the time periods required by the Exchange Act; and (ii) either (A)
include in its quarterly reports on Form 10-Q and its annual reports on Form
10-K, a summary detailing, for the relevant reporting period, (1) the number of
Shares sold through the Agent pursuant to this Agreement and (2) the net
proceeds received by the Company from such sales or (B) prepare a prospectus
supplement containing, or include in such other filing permitted by the
Securities Act or Exchange Act (each an “Interim Prospectus Supplement”), such
summary information and, at least once a quarter and subject to this Section 4,
file such Interim Prospectus Supplement pursuant to Rule 424(b) under the
Securities Act (and within the time periods required by Rule 424(b) and Rule
430B under the Securities Act)).

 

(b) Securities Act Compliance. After the date of this Agreement, the Company
shall promptly advise the Agent in writing (i) of the receipt of any comments
of, or requests for additional or supplemental information from, the Commission;
(ii) of the time and date of any filing of any post-effective amendment to the
Registration Statement, any Rule 462(b) Registration Statement or any amendment
or supplement to the Prospectus, any Free Writing Prospectus; (iii) of the time
and date that any post-effective amendment to the Registration Statement or any
Rule 462(b) Registration Statement becomes effective; and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto, any Rule 462(b)
Registration Statement or any amendment or supplement to the Prospectus or of
any order preventing or suspending the use of any Free Writing Prospectus or the
Prospectus, or of any proceedings to remove, suspend or terminate from listing
or quotation the Common Shares from any securities exchange upon which they are
listed for trading or included or designated for quotation, or of the
threatening or initiation of any proceedings for any of such purposes. If the
Commission shall enter any such stop order at any time, the Company will use its
best efforts to obtain the lifting of such order as soon as practicable.
Additionally, the Company agrees that it shall comply with the provisions of
Rule 424(b) and Rule 433, as applicable, under the Securities Act and will use
its reasonable efforts to confirm that any filings made by the Company under
such Rule 424(b) or Rule 433 were received in a timely manner by the Commission.

 

21

 

 

(c) Amendments and Supplements to the Prospectus and Other Securities Act
Matters. If any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus so that the Prospectus does not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if in the opinion of the Agent or counsel for the Agent it is otherwise
necessary to amend or supplement the Prospectus to comply with applicable law,
including the Securities Act, the Company agrees (subject to Section 4(d) and
4(f)) to promptly prepare, file with the Commission and furnish at its own
expense to the Agent, amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with applicable law
including the Securities Act. Neither the Agent’s consent to, or delivery of,
any such amendment or supplement shall constitute a waiver of any of the
Company’s obligations under Sections 4(d) and 4(f).

 

(d) Agent’s Review of Proposed Amendments and Supplements. Prior to amending or
supplementing the Registration Statement (including any registration statement
filed under Rule 462(b) under the Securities Act) or the Prospectus (excluding
any amendment or supplement through incorporation of any report filed under the
Exchange Act, and excluding any prospectus supplement not relating to the sale
of the Shares hereunder), the Company shall furnish to the Agent for review, a
reasonable amount of time prior to the proposed time of filing or use thereof, a
copy of each such proposed amendment or supplement, and the Company shall not
file or use any such proposed amendment or supplement without the Agent’s prior
consent, and to file with the Commission within the applicable period specified
in Rule 424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.

 

(e) Use of Free Writing Prospectus. Neither the Company nor the Agent has
prepared, used, referred to or distributed, or will prepare, use, refer to or
distribute, without the other party’s prior written consent, any “written
communication” that constitutes a “free writing prospectus” as such terms are
defined in Rule 405 under the Securities Act with respect to the offering
contemplated by this Agreement (any such free writing prospectus being referred
to herein as a “Free Writing Prospectus”).

 

22

 

 

(f) Free Writing Prospectuses. The Company shall furnish to the Agent for
review, a reasonable amount of time prior to the proposed time of filing or use
thereof, a copy of each proposed Free Writing Prospectus or any amendment or
supplement thereto to be prepared by or on behalf of, used by, or referred to by
the Company and the Company shall not file, use or refer to any proposed Free
Writing Prospectus or any amendment or supplement thereto without the Agent’s
consent. The Company shall furnish to the Agent, without charge, as many copies
of any Free Writing Prospectus prepared by or on behalf of, or used by the
Company, as the Agent may reasonably request. If at any time when a prospectus
is required by the Securities Act (including, without limitation, pursuant to
Rule 173(d)) to be delivered in connection with sales of the Shares (but in any
event if at any time through and including the date of this Agreement) there
occurred or occurs an event or development as a result of which any Free Writing
Prospectus prepared by or on behalf of, used by, or referred to by the Company
conflicted or would conflict with the information contained in the Registration
Statement or included or would include an untrue statement of a material fact or
omitted or would omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances prevailing at that
subsequent time, not misleading, the Company shall promptly amend or supplement
such Free Writing Prospectus to eliminate or correct such conflict or so that
the statements in such Free Writing Prospectus as so amended or supplemented
will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances prevailing at such subsequent time, not misleading, as the
case may be; provided, however, that prior to amending or supplementing any such
Free Writing Prospectus, the Company shall furnish to the Agent for review, a
reasonable amount of time prior to the proposed time of filing or use thereof, a
copy of such proposed amended or supplemented Free Writing Prospectus and the
Company shall not file, use or refer to any such amended or supplemented Free
Writing Prospectus without the Agent’s consent.

 

(g) Filing of Agent Free Writing Prospectuses. The Company shall not to take any
action that would result in the Agent or the Company being required to file with
the Commission pursuant to Rule 433(d) under the Securities Act a Free Writing
Prospectus prepared by or on behalf of the Agent that the Agent otherwise would
not have been required to file thereunder.

 

(h) Copies of Registration Statement and Prospectus. After the date of this
Agreement through the last time that a prospectus is required by the Securities
Act (including, without limitation, pursuant to Rule 173(d)) to be delivered in
connection with sales of the Shares, the Company agrees to furnish the Agent
with copies (which may be electronic copies) of the Registration Statement and
each amendment thereto, and with copies of the Prospectus and each amendment or
supplement thereto in the form in which it is filed with the Commission pursuant
to the Securities Act or Rule 424(b) under the Securities Act, both in such
quantities as the Agent may reasonably request from time to time; and, if the
delivery of a prospectus is required under the Securities Act or under the blue
sky or securities laws of any jurisdiction at any time on or prior to the
applicable Settlement Date for any period set forth in an Issuance Notice in
connection with the offering or sale of the Shares and if at such time any event
has occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it is necessary during such same
period to amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to comply with
the Securities Act or the Exchange Act, to notify the Agent and to request that
the Agent suspend offers to sell Shares (and, if so notified, the Agent shall
cease such offers as soon as practicable); and if the Company decides to amend
or supplement the Registration Statement or the Prospectus as then amended or
supplemented, to advise the Agent promptly by telephone (with confirmation in
writing) and to prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or the Prospectus as then
amended or supplemented that will correct such statement or omission or effect
such compliance; provided, however, that if during such same period the Agent is
required to deliver a prospectus in respect of transactions in the Shares, the
Company shall promptly prepare and file with the Commission such an amendment or
supplement.

 

23

 

 

(i) Blue Sky Compliance. The Company shall cooperate with the Agent and counsel
for the Agent to qualify or register the Shares for sale under (or obtain
exemptions from the application of) the state securities or blue sky laws or
Canadian provincial securities laws of those jurisdictions designated by the
Agent, shall comply with such laws and shall continue such qualifications,
registrations and exemptions in effect so long as required for the distribution
of the Shares. The Company shall not be required to qualify as a foreign
corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where it
would be subject to taxation as a foreign corporation. The Company will advise
the Agent promptly of the suspension of the qualification or registration of (or
any such exemption relating to) the Shares for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best efforts to obtain the
withdrawal thereof as soon as practicable.

 

(j) Earnings Statement. As soon as practicable, the Company will make generally
available to its security holders and to the Agent an earnings statement (which
need not be audited) covering a period of at least twelve months beginning with
the first fiscal quarter of the Company occurring after the date of this
Agreement which shall satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 under the Securities Act.

 

(k) Listing; Reservation of Shares. (a) The Company will maintain the listing of
the Shares on the Principal Market; and (b) the Company will reserve and keep
available at all times, free of preemptive rights, Shares for the purpose of
enabling the Company to satisfy its obligations under this Agreement.

 

(l) Transfer Agent. The Company shall engage and maintain, at its expense, a
registrar and transfer agent for the Shares.

 

(m) Due Diligence. During the term of this Agreement, the Company will
reasonably cooperate with any reasonable due diligence review conducted by the
Agent in connection with the transactions contemplated hereby, including,
without limitation, providing information and making available documents and
senior corporate officers, during normal business hours and at the Company’s
principal offices, as the Agent may reasonably request from time to time.

 

24

 

 

(n) Representations and Warranties. The Company acknowledges that each delivery
of an Issuance Notice and each delivery of Shares on a Settlement Date shall be
deemed to be (i) an affirmation to the Agent that the representations and
warranties of the Company contained in or made pursuant to this Agreement are
true and correct as of the date of such Issuance Notice or of such Settlement
Date, as the case may be, as though made at and as of each such date, except as
may be disclosed in the Prospectus (including any documents incorporated by
reference therein and any supplements thereto); and (ii) an undertaking that the
Company will advise the Agent if any of such representations and warranties will
not be true and correct as of the Settlement Date for the Shares relating to
such Issuance Notice, as though made at and as of each such date (except that
such representations and warranties shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented relating
to such Shares).

 

(o) Deliverables at Triggering Event Dates; Certificates. The Company agrees
that on or prior to the date of the first Issuance Notice and, during the term
of this Agreement after the date of the first Issuance Notice, upon:

 

(A) the filing of the Prospectus or the amendment or supplement of any
Registration Statement or Prospectus (other than a prospectus supplement
relating solely to an offering of securities other than the Shares or a
prospectus filed pursuant to Section 4(a)(ii)(B)), by means of a post-effective
amendment, sticker or supplement, but not by means of incorporation of documents
by reference into the Registration Statement or Prospectus;

 

(B) the filing with the Commission of an annual report on Form 10-K or a
quarterly report on Form 10-Q (including any Form 10-K/A or Form 10-Q/A
containing amended financial information or a material amendment to the
previously filed annual report on Form 10-K or quarterly report on Form 10-Q),
in each case, of the Company; or

 

(C) the filing with the Commission of a current report on Form 8-K of the
Company containing amended financial information (other than information
“furnished” pursuant to Item 2.02 or 7.01 of Form 8-K or to provide disclosure
pursuant to Item 8.01 of Form 8-K relating to reclassification of certain
properties as discontinued operations in accordance with Statement of Financial
Accounting Standards No. 144) that is material to the offering of securities of
the Company in the Agent’s reasonable discretion;

 

(any such event, a “Triggering Event Date”), the Company shall furnish the Agent
(but in the case of clause (C) above only if the Agent reasonably determines
that the information contained in such current report on Form 8-K of the Company
is material) with a certificate as of the Triggering Event Date, in the form and
substance satisfactory to the Agent and its counsel, substantially similar to
the form previously provided to the Agent and its counsel, modified, as
necessary, to relate to the Registration Statement and the Prospectus as amended
or supplemented, (A) confirming that the representations and warranties of the
Company contained in this Agreement are true and correct, (B) that the Company
has performed all of its obligations hereunder to be performed on or prior to
the date of such certificate and as to the matters set forth in Section
5(a)(iii) hereof, and (C) containing any other certification that the Agent
shall reasonably request. The requirement to provide a certificate under this
Section 4(o) shall be waived for any Triggering Event Date occurring at a time
when no Issuance Notice is pending or a suspension is in effect, which waiver
shall continue until the earlier to occur of the date the Company delivers
instructions for the sale of Shares hereunder (which for such calendar quarter
shall be considered a Triggering Event Date) and the next occurring Triggering
Event Date. Notwithstanding the foregoing, if the Company subsequently decides
to sell Shares following a Triggering Event Date when a suspension was in effect
and did not provide the Agent with a certificate under this Section 4(o), then
before the Company delivers the instructions for the sale of Shares or the Agent
sells any Shares pursuant to such instructions, the Company shall provide the
Agent with a certificate in conformity with this Section 4(o) dated as of the
date that the instructions for the sale of Shares are issued.

 

25

 

 

(p) Legal Opinions. On or prior to the date of the first Issuance Notice and on
or prior to each Triggering Event Date with respect to which the Company is
obligated to deliver a certificate pursuant to Section 4(o) for which no waiver
is applicable and excluding the date of this Agreement, a negative assurances
letter and the written legal opinion of Sichenzia Ross Ference LLP, counsel to
the Company, Wood Herron & Evans LLP, intellectual property counsel to the
Company, and Hyman, Phelps & McNamara, P.C., regulatory counsel to the Company,
each dated the date of delivery, in form and substance reasonably satisfactory
to Agent and its counsel, substantially similar to the form previously provided
to the Agent and its counsel, modified, as necessary, to relate to the
Registration Statement and the Prospectus as then amended or supplemented. In
lieu of such opinions for subsequent periodic filings, in the discretion of the
Agent, the Company may furnish a reliance letter from such counsel to the Agent,
permitting the Agent to rely on a previously delivered opinion letter, modified
as appropriate for any passage of time or Triggering Event Date (except that
statements in such prior opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented as of such Triggering
Event Date).

 

(q) Comfort Letter. On or prior to the date of the first Issuance Notice and on
or prior to each Triggering Event Date with respect to which the Company is
obligated to deliver a certificate pursuant to Section 4(o) for which no waiver
is applicable and excluding the date of this Agreement, the Company shall cause
Marcum LLP, the independent registered public accounting firm who has audited
the financial statements included or incorporated by reference in the
Registration Statement, to furnish the Agent a comfort letter, dated the date of
delivery, in form and substance reasonably satisfactory to the Agent and its
counsel, substantially similar to the form previously provided to the Agent and
its counsel; provided, however, that any such comfort letter will only be
required on the Triggering Event Date specified to the extent that it contains
financial statements filed with the Commission under the Exchange Act and
incorporated or deemed to be incorporated by reference into a Prospectus. If
requested by the Agent, the Company shall also cause a comfort letter to be
furnished to the Agent within ten (10) Trading Days of the date of occurrence of
any material transaction or event requiring the filing of a current report on
Form 8-K containing material amended financial information of the Company,
including the restatement of the Company’s financial statements. The Company
shall be required to furnish no more than one comfort letter hereunder per
calendar quarter.

 

(r) Secretary’s Certificate. On or prior to the date of the first Issuance
Notice and on or prior to each Triggering Event Date, the Company shall furnish
the Agent a certificate executed by the Secretary of the Company, signing in
such capacity, dated the date of delivery (i) certifying that attached thereto
are true and complete copies of the resolutions duly adopted by the Board of
Directors of the Company authorizing the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
(including, without limitation, the issuance of the Shares pursuant to this
Agreement), which authorization shall be in full force and effect on and as of
the date of such certificate, (ii) certifying and attesting to the office,
incumbency, due authority and specimen signatures of each Person who executed
this Agreement for or on behalf of the Company, and (iii) containing any other
certification that the Agent shall reasonably request.

 

26

 

 

(s) Agent’s Own Account; Clients’ Account. The Company consents to the Agent
trading, in compliance with applicable law, in the Common Shares for the Agent’s
own account and for the account of its clients at the same time as sales of the
Shares occur pursuant to this Agreement.

 

(t) Investment Limitation. The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in such a manner as
would require the Company or any of its subsidiaries to register as an
investment company under the Investment Company Act.

 

(u) Market Activities. The Company 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 the Shares or any other reference
security, whether to facilitate the sale or resale of the Shares or otherwise,
and the Company will, and shall cause each of its affiliates to, comply with all
applicable provisions of Regulation M. If the limitations of Rule 102 of
Regulation M (“Rule 102”) do not apply with respect to the Shares or any other
reference security pursuant to any exception set forth in Section (d) of Rule
102, then promptly upon notice from the Agent (or, if later, at the time stated
in the notice), the Company will, and shall cause each of its affiliates to,
comply with Rule 102 as though such exception were not available but the other
provisions of Rule 102 (as interpreted by the Commission) did apply. The Company
shall promptly notify the Agent if it no longer meets the requirements set forth
in Section (d) of Rule 102.

 

(v) Notice of Other Sale. Without the written consent of the Agent, the Company
(A) will not, directly or indirectly, (i) offer to sell, sell, contract to sell,
grant any option to sell or otherwise dispose of any Common Shares or securities
convertible into or exchangeable for Common Shares (other than Shares
hereunder), warrants or any rights to purchase or acquire Common Shares, (ii)
effect a reverse stock split, recapitalization, share consolidation,
reclassification or similar transaction affecting the outstanding Common Shares,
(iii) submit or file any registration statement under the Securities Act in
respect of any Common Shares or securities convertible into or exchangeable for
Common Shares (other than as contemplated by this Agreement with respect to the
Shares), or (iv) publicly announce the intention to do any of the foregoing,
during the period beginning on the third Trading Day immediately prior to the
date on which any Issuance Notice is delivered to the Agent hereunder and ending
on the third Trading Day immediately following the Settlement Date with respect
to Shares sold pursuant to such Issuance Notice; and (B) will not, directly or
indirectly, enter into any other “at the market” or continuous equity
transaction to offer to sell, sell, contract to sell, grant any option to sell
or otherwise dispose of any Common Shares (other than the Shares offered
pursuant to this Agreement) or securities convertible into or exchangeable for
Common Shares, warrants or any rights to purchase or acquire, Common Shares in
connection with such “at the market” or continuous equity transactions prior to
the termination of this Agreement; provided, however, that such restrictions in
clauses (A) and (B) above will not be required in connection with the Company’s
(i) issuance or sale of Common Shares, options to purchase Common Shares or
Common Shares issuable upon the exercise of options or other equity awards
pursuant to any employee or director share option, incentive or benefit plan,
share purchase or ownership plan, long-term incentive plan, dividend
reinvestment plan, inducement award under Nasdaq rules or other compensation
plan of the Company or its subsidiaries, as in effect on the date of this
Agreement, (ii) issuance or sale of Common Shares issuable upon exchange,
conversion or redemption of securities or the exercise or vesting of warrants,
options or other equity awards outstanding at the date of this Agreement, and
(iii) modification of any outstanding options, warrants of any rights to
purchase or acquire Common Shares.

 

27

 

 

Section 5. CONDITIONS TO DELIVERY OF ISSUANCE NOTICES AND TO SETTLEMENT

 

(a) Conditions Precedent to the Right of the Company to Deliver an Issuance
Notice and the Obligation of the Agent to Sell Shares. The right of the Company
to deliver an Issuance Notice hereunder is subject to the satisfaction, on the
date of delivery of such Issuance Notice, and the obligation of the Agent to use
its commercially reasonable efforts to place Shares during the applicable period
set forth in the Issuance Notice is subject to the satisfaction, on each Trading
Day during the applicable period set forth in the Issuance Notice, of each of
the following conditions:

 

(i)Accuracy of the Company’s Representations and Warranties; Performance by the
Company. The Company shall have delivered the certificate required to be
delivered pursuant to Section 4(o) on or before the date on which delivery of
such certificate is required pursuant to Section 4(o). The Company shall have
performed, satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to such date, including, but not limited to, the covenants
contained in Section 4(p), Section 4(q) and Section 4(r).

 

(ii)No Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby that
prohibits or directly and materially adversely affects any of the transactions
contemplated by this Agreement, and no proceeding shall have been commenced that
may have the effect of prohibiting or materially adversely affecting any of the
transactions contemplated by this Agreement.

 

(iii)Material Adverse Changes. Except as disclosed in the Prospectus and the
Time of Sale Information, (a) in the judgment of the Agent there shall not have
occurred any Material Adverse Change; and (b) there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any securities of the
Company or any of its subsidiaries by any “nationally recognized statistical
rating organization” as such term is defined for purposes of Section 3(a)(62) of
the Exchange Act.

 

28

 

 

(iv)No Suspension of Trading in or Delisting of Common Shares; Other Events. The
trading of the Common Shares (including without limitation the Shares) shall not
have been suspended by the Commission, the Principal Market or FINRA and the
Common Shares (including without limitation the Shares) shall have been approved
for listing or quotation on and shall not have been delisted from the the Nasdaq
Stock Market, the New York Stock Exchange or any of their constituent markets.
There shall not have occurred (and be continuing in the case of occurrences
under clauses (i) and (ii) below) any of the following: (i) trading or quotation
in any of the Company’s securities shall have been suspended or limited by the
Commission or by the Principal Market or trading in securities generally on
either the Principal Market shall have been suspended or limited, or minimum or
maximum prices shall have been generally established on any of such stock
exchanges by the Commission or the FINRA; (ii) a general banking moratorium
shall have been declared by any of federal or New York, authorities; or
(iii) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United
States or international financial markets, or any substantial change or
development involving a prospective substantial change in United States’ or
international political, financial or economic conditions, as in the judgment of
the Agent is material and adverse and makes it impracticable to market the
Shares in the manner and on the terms described in the Prospectus or to enforce
contracts for the sale of securities.

 

(b) Documents Required to be Delivered on each Issuance Notice Date. The Agent’s
obligation to use its commercially reasonable efforts to place Shares hereunder
shall additionally be conditioned upon the delivery to the Agent on or before
the Issuance Notice Date of a certificate in form and substance reasonably
satisfactory to the Agent, executed by the Chief Executive Officer, President or
Chief Financial Officer of the Company, to the effect that all conditions to the
delivery of such Issuance Notice shall have been satisfied as at the date of
such certificate (which certificate shall not be required if the foregoing
representations shall be set forth in the Issuance Notice).

 

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

 

(d) Agent Counsel Legal Opinion. Agent shall have received from Cooley LLP,
counsel for Agent, such opinion or opinions, on or before the date on which the
delivery of the Company counsel legal opinion is required pursuant to Section
4(p), with respect to such matters as Agent 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.

 

29

 

 

Section 6. INDEMNIFICATION AND CONTRIBUTION

 

(a) Indemnification of the Agent. The Company agrees to indemnify and hold
harmless the Agent, its officers and employees, and each person, if any, who
controls the Agent within the meaning of the Securities Act or the Exchange Act
against any loss, claim, damage, liability or expense, as incurred, to which the
Agent or such officer, employee or controlling person may become subject, under
the Securities Act, the Exchange Act, other federal or state statutory law or
regulation, or the laws or regulations of foreign jurisdictions where Shares
have been offered or sold or at common law or otherwise (including in settlement
of any litigation), insofar as such loss, claim, damage, liability or expense
(or actions in respect thereof as contemplated below) arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any amendment thereto, including any
information deemed to be a part thereof pursuant to Rule 430B under the
Securities Act, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any Free Writing Prospectus that the Company has
used, referred to or filed, or is required to file, pursuant to Rule 433(d) of
the Securities Act or the Prospectus (or any amendment or supplement thereto),
or the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading and to reimburse the Agent and each such
officer, employee and controlling person for any and all expenses (including the
fees and disbursements of counsel chosen by the Agent) as such expenses are
reasonably incurred by the Agent or such officer, employee or controlling person
in connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided, however,
that the foregoing indemnity agreement shall not apply to any loss, claim,
damage, liability or expense to the extent, but only to the extent, arising out
of or based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the Agent expressly for use in the
Registration Statement, any such Free Writing Prospectus or the Prospectus (or
any amendment or supplement thereto), it being understood and agreed that the
only such information furnished by the Agent to the Company consists the
information described in subsection (b) below. The indemnity agreement set forth
in this Section 6(a) shall be in addition to any liabilities that the Company
may otherwise have.

 

(b) Indemnification of the Company, its Directors and Officers. The Agent agrees
to indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act against any loss, claim, damage, liability or expense, as incurred, to which
the Company or any such director, officer or controlling person may become
subject, under the Securities Act, the Exchange Act, or other federal or state
statutory law or regulation, or the laws or regulations of foreign jurisdictions
where Shares have been offered or sold or at common law or otherwise (including
in settlement of any litigation), arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430B under the Securities Act, or
the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading; or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any Free Writing Prospectus that the Company has used, referred to
or filed, or is required to file, pursuant to Rule 433(d) of the Securities Act
or the Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; but, for each of (i) and (ii) above, only to the extent
arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by the Agent expressly for use in
the Registration Statement, any such Free Writing Prospectus or the Prospectus
(or any amendment or supplement thereto), it being understood and agreed that
the only such information furnished by the Agent to the Company consists of the
information set forth in the first sentence of the ninth paragraph under the
caption “Plan of Distribution” in the Prospectus, and to reimburse the Company
and each such director, officer and controlling person for any and all expenses
(including the fees and disbursements of one counsel chosen by the Company) as
such expenses are reasonably incurred by the Company or such officer, director
or controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. The indemnity agreement set forth in this Section 6(b) shall be in
addition to any liabilities that the Agent or the Company may otherwise have.

 

30

 

 

(c) Notifications and Other Indemnification Procedures. Promptly after receipt
by an indemnified party under this Section 6 of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 6, notify the indemnifying
party in writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party for contribution or otherwise than under the indemnity
agreement contained in this Section 6 or to the extent it is not prejudiced as a
proximate result of such failure. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party and the indemnified party
in conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party’s election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 6 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the fees and expenses of more than
one separate counsel (together with local counsel), representing the indemnified
parties who are parties to such action), which counsel (together with any local
counsel) for the indemnified parties shall be selected by the indemnified party
(in the case of counsel for the indemnified parties referred to in Section 6(a)
and Section 6(b) above), (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party, in each of which
cases the fees and expenses of counsel shall be at the expense of the
indemnifying party and shall be paid as they are incurred.

 

(d) Settlements. The indemnifying party under this Section 6 shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by Section 6(c) hereof,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request; and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement, compromise or consent to the entry
of judgment in any pending or threatened action, suit or proceeding in respect
of which any indemnified party is or could have been a party and indemnity was
or could have been sought hereunder by such indemnified party, unless such
settlement, compromise or consent includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.

 

(e) Contribution. If the indemnification provided for in this Section 6 is for
any reason held to be unavailable to or otherwise insufficient to hold harmless
an indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Agent, on the other
hand, from the offering of the Shares pursuant to this Agreement; or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, on
the one hand, and the Agent, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the Agent,
on the other hand, in connection with the offering of the Shares pursuant to
this Agreement shall be deemed to be in the same respective proportions as the
total gross proceeds from the offering of the Shares (before deducting expenses)
received by the Company bear to the total commissions received by the Agent. The
relative fault of the Company, on the one hand, and the Agent, on the other
hand, shall be determined by reference to, among other things, whether any such
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, on the one hand, or the Agent, on the other hand, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

 

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The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 6(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 6(c) with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 6(e); provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 6(c) for purposes of indemnification.

 

The Company and the Agent agree that it would not be just and equitable if
contribution pursuant to this Section 6(e) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in this Section 6(e).

 

Notwithstanding the provisions of this Section 6(e), the Agent shall not be
required to contribute any amount in excess of the Selling Commission received
by the Agent in connection with the offering contemplated hereby. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section
6(e), each officer and employee of the Agent and each person, if any, who
controls the Agent within the meaning of the Securities Act or the Exchange Act
shall have the same rights to contribution as the Agent, and each director of
the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of the
Securities Act and the Exchange Act shall have the same rights to contribution
as the Company.

 

Section 7. TERMINATION & SURVIVAL

 

(a) Term. Subject to the provisions of this Section 7, the term of this
Agreement shall continue from the date of this Agreement until the end of the
Agency Period, unless earlier terminated by the parties to this Agreement
pursuant to this Section 7.

 

(b) Termination; Survival Following Termination.

 

(i)Either party may terminate this Agreement prior to the end of the Agency
Period, by giving written notice as required by this Agreement, upon ten (10)
Trading Days’ notice to the other party; provided that, (A) if the Company
terminates this Agreement after the Agent confirms to the Company any sale of
Shares, the Company shall remain obligated to comply with ‎Section 3(b)(v) with
respect to such Shares and (B) ‎Section 2, ‎Section 3(d), Section 6, ‎Section 7
and ‎Section 8 shall survive termination of this Agreement. If termination shall
occur prior to the Settlement Date for any sale of Shares, such sale shall
nevertheless settle in accordance with the terms of this Agreement.

 

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(ii)In addition to the survival provision of Section 7(b)(i), the respective
indemnities, agreements, representations, warranties and other statements of the
Company, of its officers and of the Agent set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Agent or the Company or any of its or their
partners, officers or directors or any controlling person, as the case may be,
and, anything herein to the contrary notwithstanding, will survive delivery of
and payment for the Shares sold hereunder and any termination of this Agreement.

 

Section 8. MISCELLANEOUS

 

(a) Press Releases and Disclosure. The Company may issue a press release
describing the material terms of the transactions contemplated hereby as soon as
practicable following the date of this Agreement, and may file with the
Commission a Current Report on Form 8-K, with this Agreement attached as an
exhibit thereto, describing the material terms of the transactions contemplated
hereby, and the Company shall consult with the Agent prior to making such
disclosures, and the parties hereto shall use all commercially reasonable
efforts, acting in good faith, to agree upon a text for such disclosures that is
reasonably satisfactory to all parties hereto. No party hereto shall issue
thereafter any press release or like public statement (including, without
limitation, any disclosure required in reports filed with the Commission
pursuant to the Exchange Act) related to this Agreement or any of the
transactions contemplated hereby without the prior written approval of the other
party hereto, except as may be necessary or appropriate in the reasonable
opinion of the party seeking to make disclosure to comply with the requirements
of applicable law or stock exchange rules. If any such press release or like
public statement is so required, the party making such disclosure shall consult
with the other party prior to making such disclosure, and the parties shall use
all commercially reasonable efforts, acting in good faith, to agree upon a text
for such disclosure that is reasonably satisfactory to all parties hereto.

 

(b) No Advisory or Fiduciary Relationship. The Company acknowledges and agrees
that (i) the transactions contemplated by this Agreement, including the
determination of any fees, are arm’s-length commercial transactions between the
Company and the Agent, (ii) when acting as a principal under this Agreement, the
Agent is and has been acting solely as a principal is not the agent or fiduciary
of the Company, or its stockholders, creditors, employees or any other party,
(iii) the Agent has not assumed nor will assume an advisory or fiduciary
responsibility in favor of the Company with respect to the transactions
contemplated hereby or the process leading thereto (irrespective of whether the
Agent has advised or is currently advising the Company on other matters) and the
Agent does not have any obligation to the Company with respect to the
transactions contemplated hereby except the obligations expressly set forth in
this Agreement, (iv) the Agent and its affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the
Company, and (v) the Agent has not provided any legal, accounting, regulatory or
tax advice with respect to the transactions contemplated hereby and the Company
has consulted its own legal, accounting, regulatory and tax advisors to the
extent it deemed appropriate.

 

33

 

 

(c) Research Analyst Independence. The Company acknowledges that the Agent’s
research analysts and research departments are required to and should be
independent from their respective investment banking divisions and are subject
to certain regulations and internal policies, and as such the Agent’s research
analysts may hold views and make statements or investment recommendations and/or
publish research reports with respect to the Company or the offering that differ
from the views of their respective investment banking divisions. The Company
understands that the Agent is a full service securities firm and as such from
time to time, subject to applicable securities laws, may effect transactions for
its own account or the account of its customers and hold long or short positions
in debt or equity securities of the companies that may be the subject of the
transactions contemplated by this Agreement.

 

(d) Notices. All communications hereunder shall be in writing and shall be
mailed, hand delivered, sent by electronic mail or telecopied and confirmed to
the parties hereto as follows:

 

If to the Agent:

 

Jefferies LLC

520 Madison Avenue

New York, NY 10022

Facsimile: (646) 619-4437

Attention: General Counsel

 

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

 

Cooley LLP

55 Hudson Yards

New York, NY 10001

Facsimile: (212) 479-6275

Attention: Daniel I. Goldberg, Esq.

 

If to the Company:

 

Relmada Therapeutics, Inc.

880 Third Avenue, 12th Floor

New York, New York 10022

Attention: Chief Executive Officer

Email: st@relmada.com

 

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

 

Sichenzia Ross Ference LLP

1185 Avenue of the Americas, 37th Floor

New York, New York 10036

Attention: Gregory Sichenzia

Facsimile: (212) 930-9725

 

34

 

 

Any party hereto may change the address for receipt of communications by giving
written notice to the others in accordance with this Section 8(d).

 

(e) Successors. This Agreement will inure to the benefit of and be binding upon
the parties hereto, and to the benefit of the employees, officers and directors
and controlling persons referred to in Section 6, and in each case their
respective successors, and no other person will have any right or obligation
hereunder. The term “successors” shall not include any purchaser of the Shares
as such from the Agent merely by reason of such purchase.

 

(f) Partial Unenforceability. The invalidity or unenforceability of any Article,
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Article, Section, paragraph or provision hereof.
If any Article, Section, paragraph or provision of this Agreement is for any
reason determined to be invalid or unenforceable, there shall be deemed to be
made such minor changes (and only such minor changes) as are necessary to make
it valid and enforceable.

 

(g) Governing Law Provisions. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in such state. Any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby may be instituted in the federal courts of the United States
of America located in the Borough of Manhattan in the City of New York or the
courts of the State of New York in each case located in the Borough of Manhattan
in the City of New York (collectively, the “Specified Courts”), and each party
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court, as to
which such jurisdiction is non-exclusive) of such courts in any such suit,
action or proceeding. Service of any process, summons, notice or document by
mail to such party’s address set forth above shall be effective service of
process for any suit, action or other proceeding brought in any such court. The
parties irrevocably and unconditionally waive any objection to the laying of
venue of any suit, action or other proceeding in the Specified Courts and
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.

 

(h) General Provisions. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in two or more
counterparts, each one of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument, and may be
delivered by facsimile transmission or by electronic delivery of a portable
document format (PDF) file. This Agreement may not be amended or modified unless
in writing by all of the parties hereto, and no condition herein (express or
implied) may be waived unless waived in writing by each party whom the condition
is meant to benefit. The Article and Section headings herein are for the
convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.

 

[Signature Page Immediately Follows]

 

35

 

 

If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms

 

  Very truly yours,       RELMADA THERAPEUTICS, INC.         By: /s/ Maged
Shenouda     Name: Maged Shenouda     Title: Chief Financial Officer

 

 

The foregoing Agreement is hereby confirmed and accepted by the Agent in New
York, New York as of the date first above written.

 

JEFFERIES LLC       By:

 /s/ Michael Magarro

    Name: Michael Magarro     Title: Managing Director  

 

 

 

 

EXHIBIT A

 

ISSUANCE NOTICE

 

May 15, 2020

 

Jefferies LLC

520 Madison Avenue

New York, New York 10022

 

Attn: [__________]

 

Reference is made to the Open Market Sale Agreement between Relmada
Therapeutics, Inc. (the “Company”) and Jefferies LLC (the “Agent”) dated as of
May 15, 2020. The Company confirms that all conditions to the delivery of this
Issuance Notice are satisfied as of the date hereof.

 

Date of Delivery of Issuance Notice (determined pursuant to Section 3(b)(i)):
_______________________

 

Issuance Amount (equal to the total Sales Price for such Shares):

 

  $             Number of days in selling period:               First date of
selling period:               Last date of selling period:      

 

Settlement Date(s) if other than standard T+2 settlement:

 

       

 

Floor Price Limitation (in no event less than $1.00 without the prior written
consent of the Agent, which consent may be withheld in the Agent’s sole
discretion): $ ____ per share

 

Comments:  

 

     

 

  By:       Name:     Title:  

 

A-1

 

 

Schedule A

 

Notice Parties

 

The Company

 

Sergio Traversa

Maged Shenouda

Chuck Ence

 

The Agent

 

Mike Magarro

Don Lynaugh

Jack Fabbri