Exhibit 10.32

 

Peregrine Pharmaceuticals, Inc.

Common Stock
(par value $0.001 per share)

At Market Issuance Sales Agreement

December 27, 2012

 

MLV & CO. LLC

1251 Avenue of the Americas

41st Floor
New York, NY 10020

 

Ladies and Gentlemen:

Peregrine Pharmaceuticals, Inc. a Delaware corporation (the “Company”), confirms
its agreement (this “Agreement”) with ”)MLV & Co. LLC, a Delaware limited
liability company (“MLV”), as follows:

 

1.                  Issuance and Sale of Shares. The Company agrees that, on the
terms and subject to the conditions set forth herein, it may issue and sell
through MLV, acting as agent and/or principal, shares of the Company’s common
stock (the “Common Stock”) up to an aggregate offering price of $75,000,000 (the
“Placement Shares”), provided, however, that in no event shall the Company issue
or sell through MLV such number of Placement Shares that (a) exceeds the number
of shares of Common Stock registered on the effective Registration Statement (as
defined below) pursuant to which the offering is being made, or (b) exceeds the
number of authorized but unissued shares of the Company’s Common Stock (the
“Maximum Amount”). Notwithstanding anything to the contrary contained herein,
the parties hereto agree that compliance with the limitations set forth in this
Section 1 on the amount of Placement Shares issued and sold under this Agreement
shall be the sole responsibility of the Company and that MLV shall have no
obligation in connection with such compliance. The issuance and sale of
Placement Shares through MLV will be effected pursuant to the Registration
Statement (as defined below) filed by the Company and declared effective by the
Securities and Exchange Commission (the “Commission”), although nothing in this
Agreement shall be construed as requiring the Company to use the Registration
Statement to issue Common Stock.

 

 

 

The Company has filed with the Securities and Exchange Commission
(“Commission”), in accordance with the provisions of the Securities Act of 1933,
as amended (the “Securities Act”), and the rules and regulations thereunder (the
“Securities Act Regulations”), a registration statement on Form S-3, including a
base prospectus, relating to certain securities, including, generally, the
Placement Shares, to be issued from time to time by the Company, and which
incorporates by reference documents that the Company has filed or will file in
accordance with the provisions of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and the rules and regulations thereunder (the
“Exchange Act Regulations”). The Company will prepare a prospectus or prospectus
supplement specifically relating to the Placement Shares (the “Prospectus” or
“Prospectus Supplement”) to the base prospectus included as part of such
registration statement. The Company will furnish to MLV upon request, for use by
MLV, copies of the prospectus included as part of such registration statement,
as supplemented by the Prospectus or Prospectus Supplement, relating to the
Placement Shares. Except where the context otherwise requires, such registration
statement, including all documents filed as part thereof or incorporated by
reference therein, and including any information contained in a Prospectus (as
defined below) subsequently filed with the Commission pursuant to Rule 424(b)
under the Securities Act Regulations or deemed to be a part of such registration
statement pursuant to Rule 430B of the Securities Act Regulations, is herein
called the “Registration Statement.” The base prospectus, including all
documents incorporated therein by reference, included in the Registration
Statement, as it may be supplemented by the Prospectus or Prospectus Supplement,
in the form in which such Prospectus and/or Prospectus Supplement have most
recently been filed by the Company with the Commission pursuant to Rule 424(b)
under the Securities Act Regulations is hereinafter called the “Prospectus”. Any
reference herein to the Registration Statement, the Prospectus or any amendment
or supplement thereto shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference herein to the terms
“amend,” “amendment” or “supplement” with respect to the Registration Statement
or the Prospectus shall be deemed to refer to and include the filing after the
execution hereof of any document with the Commission deemed to be incorporated
by reference therein (the “Incorporated Documents”).

For purposes of this Agreement, all references to the Registration Statement,
the Prospectus or to any amendment or supplement thereto shall be deemed to
include the most recent copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval System, or if applicable, the
Interactive Data Electronic Application system when used by the Commission
(collectively, “EDGAR”).

2.                  Placements. Each time that the Company wishes to issue and
sell Shares hereunder (each, a “Placement”), it will notify MLV by email notice
(or other method mutually agreed to in writing by the Parties) of the number of
Placement Shares to be issued, the time period during which sales are requested
to be made, any limitation on the number of Shares that may be sold in any one
day and any minimum price below which sales may not be made (a “Placement
Notice”), the form of which is attached hereto as Schedule 1. The Placement
Notice shall originate from any of the individuals from the Company set forth on
Schedule 3 (with a copy to each of the other individuals from the Company listed
on such schedule), and shall be addressed to each of the individuals from MLV
set forth on Schedule 3, as such Schedule 3 may be amended from time to time.
The Placement Notice shall be effective unless and until (i) MLV declines to
accept the terms contained therein as a result of any suspension or limitation
of trading in the Placement Shares or in securities generally on the Exchange
(as defined below) or any occurrence or event that causes a material adverse
change in the operation or prospects of the Company, (ii) the entire amount of
the Placement Shares have been sold, (iii) the Company suspends or terminates
the Placement Notice or (iv) the Agreement has been terminated under the
provisions of Section 12. The amount of any commission to be paid by the Company
to MLV in connection with the sale of the Placement Shares shall be calculated
in accordance with the terms set forth in Schedule 2. The Company acknowledges
that MLV may share the commission with other broker-dealers. It is expressly
acknowledged and agreed that neither the Company nor MLV will have any
obligation whatsoever with respect to a Placement or any Placement Shares unless
and until the Company delivers a Placement Notice to MLV and MLV does not
decline such Placement Notice pursuant to the terms set forth above, and then
only upon the terms specified therein and herein. In the event of a conflict
between the terms of this Agreement and the terms of a Placement Notice, the
terms of the Placement Notice will control.

2

 

 

3.                  Sale of Placement Shares by MLV.

(a)                Subject to the terms and conditions herein set forth, upon
the Company’s issuance of a Placement Notice, and unless the sale of the
Placement Shares described therein has been declined, suspended, or otherwise
terminated in accordance with the terms of this Agreement, MLV will use its
commercially reasonable efforts consistent with its normal trading and sales
practices to sell such Placement Shares up to the amount specified, and
otherwise in accordance with the terms of such Placement Notice. MLV will
provide written confirmation to the Company no later than the opening of the
Trading Day (as defined below) immediately following the Trading Day on which it
has made sales of Placement Shares hereunder setting forth the number of
Placement Shares sold on such day, the compensation payable by the Company to
MLV pursuant to Section 2 with respect to such sales, and the Net Proceeds (as
defined below) payable to the Company. MLV may sell Placement Shares by any
method permitted by law deemed to be an “at-the-market” offering as defined in
Rule 415 of the Securities Act, including without limitation sales made directly
on the NASDAQ Capital Market (the “Exchange”), on any other existing trading
market for the Common Stock or to or through a market maker. MLV may also sell
Placement Shares in privately negotiated transactions, subject to approval by
the Company. The Company acknowledges and agrees that (i) there can be no
assurance that MLV will be successful in selling Placement Shares, and (ii) MLV
will incur no liability or obligation to the Company or any other person or
entity if it does not sell Placement Shares for any reason other than a failure
by MLV to use its commercially reasonable efforts consistent with its normal
trading and sales practices to sell such Placement Shares as required under this
Section 3. For the purposes hereof, “Trading Day” means any day on which Common
Stock is purchased and sold on the principal market on which the Common Stock is
listed or quoted.

(b)               Under no circumstances shall the Company cause or request the
offer or sale of any Placement Shares if, after giving effect to the sale of
such Placement Shares, the aggregate gross sales proceeds of Placement Shares
sold pursuant to this Agreement would exceed the lesser of (A) together with all
sales of Placement Shares under this Agreement, the Maximum Amount or (B)  the
amount authorized from time to time to be issued and sold under this Agreement
by the Company’s board of directors, a duly authorized committee thereof or a
duly authorized executive committee, and notified to MLV in writing. Under no
circumstances shall the Company cause or request the offer or sale of any
Placement Shares pursuant to this Agreement at a price lower than the minimum
price authorized from time to time by the Company’s board of directors, a duly
authorized committee thereof or a duly authorized executive committee, and
notified to MLV in writing.

(c)                During the term of this Agreement, neither MLV nor any of its
affiliates or subsidiaries shall engage in (i) any short sale of any security of
the Company or (ii) any sale of any security of the Company that MLV does not
own or any sale which is consummated by the delivery of a security of the
Company borrowed by, or for the account of, MLV. Neither MLV nor any of its
affiliates or subsidiaries, shall engage in any proprietary trading or trading
for MLV’s (or its affiliates’ or subsidiaries’) own account.

3

 

 

 

4.                  Suspension of Sales. The Company or MLV may, upon notice to
the other party in writing (including by email correspondence to each of the
individuals of the other Party set forth on Schedule 3, if receipt of such
correspondence is actually acknowledged by any of the individuals to whom the
notice is sent, other than via auto-reply) or by telephone (confirmed
immediately by verifiable facsimile transmission or email correspondence to each
of the individuals of the other Party set forth on Schedule 3), suspend any sale
of Placement Shares; provided, however, that such suspension shall not affect or
impair either party’s obligations with respect to any Placement Shares sold
hereunder prior to the receipt of such notice. Each of the Parties agrees that
no such notice under this Section 4 shall be effective against the other unless
it is made to one of the individuals named on Schedule 3 hereto, as such
Schedule may be amended from time to time.

5.                  Settlement.

(a)                Settlement of Placement Shares. Unless otherwise specified in
the applicable Placement Notice, settlement for sales of Placement Shares will
occur on the third (3rd) Trading Day (or such earlier day as is industry
practice for regular-way trading) (each, a “Settlement Date”) following the
respective Point of Sale (as defined below). The amount of proceeds to be
delivered to the Company on a Settlement Date against receipt of the Placement
Shares sold (the “Net Proceeds”) will be equal to the aggregate sales price
received by MLV at which such Placement Shares were sold, after deduction for
(i) MLV’s commission for such sales payable by the Company pursuant to Section 2
hereof, (ii) any other amounts due and payable by the Company to MLV hereunder
pursuant to Section 7(g) (Expenses) hereof, and (iii) any transaction fees
imposed by any governmental or self-regulatory organization in respect of such
sales.

(b)               Delivery of Placement Shares. On or before each Settlement
Date, the Company will, or will cause its transfer agent to, electronically
transfer the Placement Shares being sold by crediting MLV’s or its designee’s
account at The Depository Trust Company through its Deposit and Withdrawal at
Custodian System ("DWAC") or by such other means of delivery as may be mutually
agreed upon by the parties hereto which in all cases shall be freely tradeable,
transferable, registered shares in good deliverable form. On each Settlement
Date, MLV will deliver the related Net Proceeds in same day funds to an account
designated by the Company on, or prior to, the Settlement Date. MLV will be
responsible for obtaining DWAC instructions or instructions for delivery by
other means with regard to the transfer of Placement Shares being sold. The
Company agrees that if the Company, or its transfer agent (if applicable),
defaults in its obligation to deliver Placement Shares on a Settlement Date, the
Company agrees that in addition to and in no way limiting the rights and
obligations set forth in Section 10(a) (Indemnification and Contribution)
hereto, it will (i) hold MLV harmless against any loss, claim, damage, or
expense (including reasonable legal fees and expenses), as incurred, arising out
of or in connection with such default by the Company and (ii) pay to MLV any
commission to which it would otherwise have been entitled absent such default.

4

 

 

 

6.                  Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, MLV that as of the date of this
Agreement and as of each Representation Date (as defined in Section 7(m) below)
on which a certificate is required to be delivered pursuant to Section 7(m) of
this Agreement, as the case may be, except as may be disclosed in the
Incorporated Documents:

(a)                Registration Statement and Prospectus. The Company and,
assuming no act or omission on the part of MLV that would make such statement
untrue, the transactions contemplated by this Agreement meet the requirements
for and comply with the conditions for the use of Form S-3 under the Securities
Act. The Registration Statement has been filed with the Commission and has been
declared effective under the Securities Act. The Registration Statement or
Prospectus has named MLV as an underwriter, acting as principal and/or agent,
that the Company might engage in the section entitled “Plan of Distribution.”
The Company has not received, and has no notice of, any order of the Commission
preventing or suspending the use of the Registration Statement, or threatening
or instituting proceedings for that purpose. The Registration Statement and the
offer and sale of Shares as contemplated hereby meet the requirements of
Rule 415 under the Act and comply in all material respects with said Rule. Any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement have been so described or filed. Copies
of the Registration Statement, the Prospectus, and any such amendments or
supplements and all documents incorporated by reference therein that were filed
with the Commission on or prior to the date the first Placement Notice is given
hereunder, or are available through EDGAR, to MLV and their counsel. The Company
has not distributed and, prior to the later to occur of each Settlement Date and
completion of the distribution of the Placement Shares, will not distribute any
offering material in connection with the offering or sale of the Placement
Shares other than the Registration Statement and the Prospectus and any Issuer
Free Writing Prospectus (as defined below) to which MLV has consented. The
Common Stock is currently listed on the Exchange under the trading symbol
“PPHM”. Except as disclosed in the Registration Statement, including the
Incorporated Documents, the Company has not, in the 12 months preceding the date
the first Placement Notice is given hereunder, received notice from the Exchange
to the effect that the Company is not in compliance with the listing or
maintenance requirements. Except as disclosed in the Registration Statement or
Prospectus, the Company has no reason to believe that it will not in the
foreseeable future continue to be in compliance with all such listing and
maintenance requirements.

5

 

 

 

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

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

(d)               Financial Information. The consolidated financial statements
and the related notes thereto included or incorporated by reference in the
Registration Statement and the Prospectus comply with the applicable
requirements of the Act and the Exchange Act, as applicable, and present fairly,
the financial position of the Company as of the dates indicated and the results
of its operations and the changes in its consolidated 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 covered thereby (except (i) as may be otherwise indicated
in such financial statements or the notes thereto or (ii) in the case of
unaudited interim financial statements, to the extent that they may not include
footnotes or may be condensed or summary statements), and the other financial
information included or incorporated by reference in the Registration Statement
and the Prospectus has been derived from the accounting records of the Company
and presents fairly the information shown thereby. Any pro forma financial
statements or data included or incorporated by reference in the Registration
Statement and the Prospectus comply with the requirements of Regulation S-X of
the Securities Act, including, without limitation, Article 11 thereof, and the
assumptions used in the preparation of such pro forma financial statements and
data are reasonable, the pro forma adjustments used therein are appropriate to
give effect to the circumstances referred to therein and the pro forma
adjustments have been properly applied to the historical amounts in the
compilation of those statements and data. No other financial statements or
schedules of the Company or any other entity are required by the Act to be
included in the Registration Statement or the Prospectus. All disclosures
contained in the Registration Statement and the Prospectus regarding “non-GAAP
financial measures” (as such term is defined by Item 10 of Regulation S-K under
the Act) comply with Regulation G of the Exchange Act and Item 10 of Regulation
S-K under the Act, to the extent applicable. The Company does not have any
material liabilities or obligations, direct or contingent (including any
off-balance sheet obligations and any “variable interest entities” within the
meaning of Financial Accounting Standards Board Interpretation No. 46), not
disclosed in the Registration Statement and the Prospectus.

6

 

 

 

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

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

(g)               Subsidiaries. Other than Avid Bioservices, Inc., the Company
has no “Significant Subsidiaries” (as such term is defined in Rule 1-02 of
Regulation S-X).

(h)               No Violation or Default. The Company is not (i) in violation
of its charter or by-laws or similar organizational documents; (ii) in default,
and no event has occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party or by
which the Company is bound or to which any of the property or assets of the
Company is subject; or (iii) in violation of any law or statute or any judgment,
order, rule or regulation of any court or arbitrator or governmental or
regulatory authority, except, in the case of each of clauses (ii) and (iii)
above, for any such violation or default that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. To the
Company’s knowledge, no other party under any material contract or other
agreement to which it is a party is in default in any respect thereunder where
such default would have a Material Adverse Effect.

(i)                 No Material Adverse Change. Except as set forth in or
otherwise contemplated by the Registration Statement (exclusive of any amendment
thereof) or the Prospectus (exclusive of any supplement thereto), since the date
of the most recent financial statements of the Company included or incorporated
by reference in the Registration Statement and the Prospectus , (i) there has
not been any material change in the capital stock of the Company (except for
changes in the number of outstanding shares of Common Stock of the Company due
to issuance of the Placement Shares and the issuance of shares upon the exercise
or conversion of securities exercisable for, or convertible into, shares of
Common Stock outstanding or reserved for issuance under the Company’s stock
incentive plans on the date hereof) or long-term debt of the Company or any
dividend or distribution of any kind declared, set aside for payment, paid or
made by the Company on any class of capital stock, that has resulted in or that
would reasonably be expected to result in a Material Adverse Effect to the
Company taken as a whole; (ii)  the Company has not entered into any transaction
or agreement, not in the ordinary course of business, that is material to the
Company taken as a whole or incurred any liability or obligation, direct or
contingent, not in the ordinary course of business, that is material to the
Company taken as a whole; (iii) there has not been any material adverse change
in the business, properties, management, financial position, stockholders’
equity, or results of operations of the Company, taken as a whole; and (iv) the
Company has not sustained any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority.

7

 

 

 

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

(k)               Authorization; Enforceability. The Company has full legal
right, power and authority to enter into this Agreement and perform the
transactions contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Company and is a legal, valid and binding
agreement of the Company enforceable in accordance with its terms, except to the
extent that (i) enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
and by general equitable principles and (ii) the indemnification and
contribution provisions of Section 10 hereof may be limited by federal or state
securities laws and public policy considerations in respect thereof.

(l)                 Authorization of Placement Shares. The Placement Shares,
when issued and delivered pursuant to the terms approved by the Board of
Directors or a duly designated committee thereof, against payment therefor as
provided herein, will be duly and validly authorized and issued and fully paid
and nonassessable, free and clear of any pledge, lien, encumbrance, security
interest or other claim, including any statutory or contractual preemptive
rights, resale rights, rights of first refusal or other similar rights, and will
be registered pursuant to Section 12 of the Exchange Act. The Placement Shares,
when issued, will conform in all material respects to the description thereof
set forth in or incorporated into the Prospectus.

(m)             No Consents Required. No consent, approval, authorization,
order, registration or qualification of or with any court or arbitrator or
governmental or regulatory authority is required for the execution, delivery and
performance by the Company of this Agreement, the issuance and sale by the
Company of the Placement Shares, except for the registration of the Placement
Shares under the Act and such consents, approvals, authorizations, orders and
registrations or qualifications as may be required under applicable state
securities laws or by the by-laws and rules of the Financial Industry Regulatory
Authority (“FINRA”) or the Exchange in connection with the sale of the Placement
Shares by MLV.

8

 

 

 

(n)               No Preferential Rights. Except as set forth in or contemplated
by the Registration Statement and the Prospectus, (i) no person, as such term is
defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act
(each, a “Person”), has the right, contractual or otherwise, to cause the
Company to issue or sell to such Person any shares of Common Stock or shares of
any other capital stock or other securities of the Company, (ii) no Person has
any preemptive rights, resale rights, rights of first refusal, or any other
rights (whether pursuant to a “poison pill” provision or otherwise) to purchase
any shares of Common Stock or shares of any other capital stock or other
securities of the Company, (iii) no Person has the right to act as an
underwriter or as a financial advisor to the Company in connection with the
offer and sale of the Shares, and (iv) no Person has the right, contractual or
otherwise, to require the Company to register under the Securities Act any
shares of Common Stock or shares of any other capital stock or other securities
of the Company, or to include any such shares or other securities in the
Registration Statement or the offering contemplated thereby, whether as a result
of the filing or effectiveness of the Registration Statement or the sale of the
Placement Shares as contemplated thereby or otherwise.

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

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

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

9

 

 

 

(r)                 Licenses and Permits. Except as set forth in the
Registration Statement or the Prospectus, the Company possesses or has obtained,
and at each Settlement Date will possess and will have obtained, all licenses,
certificates, consents, orders, approvals, permits and other authorizations
issued by, and have made all declarations and filings with, the appropriate
federal, state, local or foreign governmental or regulatory authorities that are
necessary for the ownership or lease of its properties or the conduct of its
business as described in the Registration Statement and the Prospectus (the
“Permits”), except where the failure to possess, obtain or make the same would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except as disclosed in the Registration Statement or the
Prospectus, the Company has not received written notice of any proceeding
relating to revocation or modification of any such Permit and does not have any
reason to believe that such Permit will not be renewed in the ordinary course,
except where the failure to obtain any such renewal would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.

(s)                Market Capitalization. As of the close of trading on the
Exchange on the Trading Day immediately prior to the date of this Agreement and
the Trading Day immediately prior to the date of each Placement Notice (i) the
aggregate market value of the outstanding voting and non-voting common equity
(as defined in Securities Act Rule 405) of the Company held by persons other
than affiliates of the Company (pursuant to Securities Act Rule 144, those that
directly, or indirectly through one or more intermediaries, control, or are
controlled by, or are under common control with, the Company)  (the
“Non-Affiliate Shares”), was equal to or greater than $75 million  (calculated
by multiplying (x) the price at which the common equity of the Company was last
sold on the Exchange on the Trading Day immediately prior to the date of this
Agreement times (y) the number of Non-Affiliate Shares); or (ii) the aggregate
market value of securities sold by or on behalf of the Company as set forth on
Schedule 4 during the previous 12 calendar months, including the Placement
Shares, is no more than one-third the aggregate market value of the
Non-Affiliate Shares.

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

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

10

 

 

 

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

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

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

(y)               Title to Real and Personal Property. Except as set forth in
the Registration Statement or the Prospectus, the Company has good and valid
title in fee simple to all items of real property and good and valid title to
all personal property described in the Registration Statement or Prospectus as
being owned by it that are material to the business of the Company, in each case
free and clear of all liens, encumbrances and claims, except those that (i) do
not materially interfere with the use made and proposed to be made of such
property by the Company or (ii) would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect. Any real property
described in the Registration Statement or Prospectus as being leased by the
Company is held by it under valid, existing and enforceable leases, except those
that (A) do not materially interfere with the use made or proposed to be made of
such property by the Company or (B) would not be reasonably expected,
individually or in the aggregate, to have a Material Adverse Effect.

(z)                Intellectual Property. Except as set forth in the
Registration Statement or the Prospectus, the Company owns or possesses adequate
enforceable rights to all patents, patent applications, trademarks (both
registered and unregistered), service marks, trade names, trademark
registrations, service mark registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) (collectively, the
“Intellectual Property”), necessary for the conduct of its business as conducted
as of the date hereof, except to the extent that the failure to own or possess
adequate rights to such Intellectual Property would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; and to the
Company's knowledge there are no interference proceedings against any of the
Company’s patents or patent applications; to the Company's knowledge, the
Company has not been notified that the Company's activities allegedly infringe
any patent held by any third party; there are no pending, or to the Company’s
knowledge, threatened judicial proceedings or interference proceedings
challenging the Company’s rights in or to or the validity of the scope of any of
the Company’s patents, patent applications or proprietary information; to the
Company's knowledge no other entity or individual has any right or claim in any
of the Company’s patents, patent applications or any patent to be issued
therefrom by virtue of any contract, license or other agreement entered into
between such entity or individual and the Company or by any non-contractual
obligation, other than by written licenses granted by the Company.

11

 

 

 

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

(bb)           Disclosure Controls. The Company maintains systems of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the Company
and designed such disclosure controls and procedures to ensure that material
information relating to the Company is made known to the certifying officers by
others within those entities, particularly during the period in which the
Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the
case may be, is being prepared. The Company’s certifying officers have evaluated
the effectiveness of the Company’s controls and procedures as of a date within
90 days prior to the filing date of them most recently filed Form 10-K (such
date, the “Evaluation Date”). The Company presented in its most recently filed
Form 10-K the conclusions of the certifying officers about the effectiveness of
the disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no significant
changes in the Company’s internal controls (as such term is defined in Item
307(b) of Regulation S-K under the Act) or, to the Company’s knowledge, in other
factors that could significantly affect the Company’s internal controls.

12

 

 

 

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

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

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

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

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

(hh)           Off-Balance Sheet Arrangements. There are no transactions,
arrangements and other relationships between and/or among the Company, and/or,
to the knowledge of the Company, any of its affiliates and any unconsolidated
entity, including, but not limited to, any structural finance, special purpose
or limited purpose entity (each, an “Off Balance Sheet Transaction”) that could
reasonably be expected to affect materially the Company’s liquidity or the
availability of or requirements for its capital resources, including those Off
Balance Sheet Transactions described in the Commission’s Statement about
Management’s Discussion and Analysis of Financial Conditions and Results of
Operations (Release Nos. 33-8056; 34-45321; FR-61), required to be described in
the Prospectus which have not been described as required.

13

 

 

 

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

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

(kk)           Forward Looking Statements. No forward-looking statement (within
the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) (a “Forward Looking Statement”) contained in the Registration Statement and
the Prospectus has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith. The Forward Looking Statements
incorporated by reference in the Registration Statement and the Prospectus from
the Company’s Annual Report on Form 10-K for the fiscal year most recently ended
(i) are within the coverage of the safe harbor for forward looking statements
set forth in Section 27A of the Act, Rule 175(b) under the Act or Rule 3b-6
under the Exchange Act, as applicable, (ii) were made by the Company with a
reasonable basis and in good faith and reflect the Company’s good faith
commercially reasonable best estimate of the matters described therein, and
(iii) have been prepared in accordance with Item 10 of Regulation S-K under the
Act.

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

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

14

 

      

(nn)           No Improper Practices. (i) Neither the Company, nor to the
Company’s knowledge, any of its respective executive officers has, in the past
five years, made any unlawful contributions to any candidate for any political
office (or failed fully to disclose any contribution in violation of law) or
made any contribution or other payment to any official of, or candidate for, any
federal, state, municipal, or foreign office or other person charged with
similar public or quasi-public duty in violation of any law or of the character
required to be disclosed in the Prospectus; (ii) no relationship, direct or
indirect, exists between or among the Company or, to the Company’s knowledge any
affiliate, on the one hand, and the directors, officers and stockholders of the
Company, on the other hand, that is required by the Securities Act to be
described in the Registration Statement and the Prospectus that is not so
described; (iii) no relationship, direct or indirect, exists between or among
the Company or any affiliate, on the one hand, and the directors, officers,
stockholders or directors of the Company, on the other hand, that is required by
the rules of FINRA to be described in the Registration Statement and the
Prospectus that is not so described; and (iv) except as described in the
Prospectus, there are no material outstanding loans or advances or material
guarantees of indebtedness by the Company to or for the benefit of any of its
officers or directors or any of the members of the families of any of them.

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

(pp)           No Misstatement or Omission. The Incorporated Documents and each
Issuer Free Writing Prospectus as of the applicable Point of Sale, did not or
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representation or
warranty with respect to any statement contained in any Issuer Free Writing
Prospectus in reliance upon and in conformity with information concerning MLV
and furnished by MLV to the Company expressly for use in the Issuer Free Writing
Prospectus.

(qq)              Conformity of Issuer Free Writing Prospectus. Each Issuer Free
Writing Prospectus conformed or will conform in all material respects to the
requirements of the Act on the date of first use, and the Company has complied
or will comply with any filing requirements applicable to such Issuer Free
Writing Prospectus pursuant to the Act. Each Issuer Free Writing Prospectus, as
of its issue date and at all subsequent times through the completion of the
public offer and sale of the Shares, did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement or the Prospectus, including any
document incorporated by reference therein that has not been superseded or
modified. The Company has not made any offer relating to the Shares that would
constitute an Issuer Free Writing Prospectus without the prior written consent
of MLV. The Company has retained in accordance with the Act all Issuer Free
Writing Prospectuses that were not required to be filed pursuant to the Act.

15

 

 

 

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

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

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

(a)                Registration Statement Amendments. After the date of this
Agreement and during any period in which a Prospectus relating to any Placement
Shares is required to be delivered by MLV under the Securities Act (including in
circumstances where such requirement may be satisfied pursuant to Rule 172 under
the Securities Act), (i) the Company will notify MLV promptly of the time when
any subsequent amendment to the Registration Statement, other than documents
incorporated by reference, has been filed with the Commission and/or has become
effective or any subsequent supplement to the Prospectus has been filed and of
any request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus or for additional information, (ii) the
Company will prepare and file with the Commission, promptly upon MLV’s request,
any amendments or supplements to the Registration Statement or Prospectus that,
in MLV’s reasonable opinion, may be necessary or advisable in connection with
the distribution of the Placement Shares by MLV (provided, however, that the
failure of MLV to make such request shall not relieve the Company of any
obligation or liability hereunder, or affect MLV’s right to rely on the
representations and warranties made by the Company in this Agreement and
provided, further, that the only remedy MLV shall have with respect to the
failure to make such filing shall be to cease making sales under this Agreement
until such amendment or supplement is filed); (iii) the Company will not file
any amendment or supplement to the Registration Statement or Prospectus relating
to the Placement Shares or a security convertible into the Placement Shares
unless a copy thereof has been submitted to MLV within a reasonable period of
time before the filing and MLV has not reasonably objected thereto (provided,
however, that the failure of MLV to make such objection shall not relieve the
Company of any obligation or liability hereunder, or affect MLV’s right to rely
on the representations and warranties made by the Company in this Agreement and
provided, further, that the only remedy MLV shall have with respect to the
failure by the Company to obtain such consent shall be to cease making sales
under this Agreement) and the Company will furnish to MLV at the time of filing
thereof a copy of any document that upon filing is deemed to be incorporated by
reference into the Registration Statement or Prospectus, except for those
documents available via EDGAR; and (iv) the Company will cause each amendment or
supplement to the Prospectus to be filed with the Commission as required
pursuant to the applicable paragraph of Rule 424(b) of the Securities Act or, in
the case of any document to be incorporated therein by reference, to be filed
with the Commission as required pursuant to the Exchange Act, within the time
period prescribed (the determination to file or not file any amendment or
supplement with the Commission under this Section 7(a), based on the Company’s
reasonable opinion or reasonable objections, shall be made exclusively by the
Company).

16

 

 

 

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

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

(d)               Listing of Placement Shares. During any period in which the
Prospectus relating to the Placement Shares is required to be delivered by MLV
under the Securities Act with respect to the offer and sale of the Placement
Shares, the Company will use its reasonable best efforts to cause the Placement
Shares to be listed on the Exchange and to qualify the Placement Shares for sale
under the securities laws of such jurisdictions as MLV reasonably designates and
to continue such qualifications in effect so long as required for the
distribution of the Placement Shares; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation or
dealer in securities or file a general consent to service of process in any
jurisdiction.

17

 

 

 

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

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

(g)               Expenses. The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is terminated, in
accordance with the provisions of Section 12 hereunder, will pay all expenses
incident to the performance of its obligations hereunder, including, but not
limited to, expenses relating to (i) the preparation, printing and filing of the
Registration Statement and each amendment and supplement thereto, of each
Prospectus and of each amendment and supplement thereto, (ii) the preparation,
issuance and delivery of the Placement Shares, (iii) the qualification of the
Placement Shares under securities laws in accordance with the provisions of
Section 7(d) of this Agreement, including filing fees, (iv) the printing and
delivery to MLV of copies of the Prospectus and any amendments or supplements
thereto, and of this Agreement, (v) the fees and expenses incurred in connection
with the listing or qualification of the Placement Shares for trading on the
Exchange, (vi) filing fees and expenses, if any, of the Commission and the FINRA
Corporate Financing Department. MLV will pay all other expenses incident to the
performance of its obligations hereunder.

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

(i)                 Notice of Other Sales. The Company will use reasonable best
efforts to inform MLV on a timely basis of any transaction to sell or otherwise
dispose of any shares of Common Stock (other than the Shares offered pursuant to
the provisions of this Agreement) or securities convertible into or exchangeable
for Common Stock, warrants or any rights to purchase or acquire, Common Stock
during the period of any Placement Notice.

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

18

 

 

 

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

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

(m)             Representation Dates; Certificate. During the term of this
Agreement, each time the Company (i) files the Prospectus relating to the
Placement Shares or amends or supplements the Registration Statement or the
Prospectus relating to the Placement Shares (other than a prospectus supplement
filed in accordance with Section 7(l) of this Agreement) by means of a
post-effective amendment, sticker, or supplement but not by means of
incorporation of document(s) by reference to the Registration Statement or the
Prospectus relating to the Placement Shares; (ii) files an annual report on Form
10-K under the Exchange Act; (iii) files its quarterly reports on Form 10-Q
under the Exchange Act; (iv) files a report on Form 8-K containing amended
financial information (other than an earnings release, to “furnish” information
pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to
Item 8.01 of Form 8-K relating to the reclassifications of certain properties as
discontinued operations in accordance with Statement of Financial Accounting
Standards No. 144) under the Exchange Act or (v) files a Form 8-K under the
Exchange Act for any other purpose (other than to “furnish” information pursuant
to Items 2.02 or 7.01 of revised Form 8-K) (each date of filing of one or more
of the documents referred to in clauses (i) through (v) shall be a
“Representation Date”); the Company shall furnish MLV (but in the case of clause
(v) above only if MLV reasonably determines that the information contained in
such Form 8-K is material) with a certificate, in the form attached hereto as
Exhibit 7(m). The requirement to provide a certificate under this Section 7(m)
shall be waived for any Representation Date occurring at a time at which no
Placement Notice is pending, which waiver shall continue until the earlier to
occur of the date the Company delivers a Placement Notice hereunder (which for
such calendar quarter shall be considered a Representation Date) and the next
occurring Representation Date; provided, however, that such waiver shall not
apply for any Representation Date on which the Company files its annual report
on Form 10-K. Notwithstanding the foregoing, if the Company subsequently decides
to sell Placement Shares following a Representation Date when the Company relied
on such waiver and did not provide MLV with a certificate under this Section
7(m), then before the Company delivers the Placement Notice or MLV sells any
Placement Shares, the Company shall provide MLV with a certificate, in the form
attached hereto as Exhibit 7(m), dated the date of the Placement Notice.

19

 

 

 

(n)               Legal Opinion. No later than ten Trading Days following the
date of the initial Placement Notice given hereunder and within three Trading
Days of each Representation Date with respect to which the Company is obligated
to deliver a certificate in the form attached hereto as Exhibit 7(m) for which
no waiver is applicable, the Company shall cause to be furnished to MLV a
written opinion of K&L Gates LLP (“Company Counsel”), or other counsel
satisfactory to MLV, in form and substance satisfactory to MLV and its counsel,
dated the date of the Representation Date; provided, however, the Company shall
be required to furnish to MLV no more than one opinion hereunder per calendar
quarter; provided, further, that in lieu of such opinions for subsequent
Representation Dates, counsel may furnish MLV with a letter (a “Reliance
Letter”) to the effect that MLV may rely on a prior opinion delivered under this
Section 7(n) to the same extent as if it were dated the date of such letter
(except that statements in such prior opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended or supplemented as of the
Representation Date).

(o)               Comfort Letter. No later than twenty (20) Trading Days
following the date the Company files its annual report on Form 10-K for the year
ended April 30, 2013 and thereafter within twenty (20) Trading Days following
each subsequent date the Company files an annual report on Form 10-K under the
Exchange Act, during any period in which the Prospectus relating to the
Placement Shares is required to be delivered by MLV (including in circumstances
where such requirement may be satisfied pursuant to Rule 172 under the Act) and
with respect to which the Company is obligated to deliver a certificate in the
form attached hereto as Exhibit 7(m) for which no waiver is applicable, the
Company shall cause its independent accountants to furnish MLV letters (the
“Comfort Letters”), dated the date the Comfort Letter is delivered. The Comfort
Letter from the Company's independent accountants shall be in a form and
substance satisfactory to MLV, (i) confirming that they are an independent
public accounting firm within the meaning of the Securities Act and the PCAOB,
(ii) stating, as of such date, the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily covered by
accountants’ “comfort letters” to underwriters in connection with registered
public offerings (the first such letter, the “Initial Comfort Letter”) and
(iii) updating the Initial Comfort Letter with any information that would have
been included in the Initial Comfort Letter had it been given on such date and
modified as necessary to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such letter.

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

(q)               Investment Company Act. The Company will conduct its affairs
in such a manner so as to reasonably ensure that it will not be or become, at
any time prior to the termination of this Agreement, an “investment company,” as
such term is defined in the Investment Company Act, assuming no change in the
Commission’s current interpretation as to entities that are not considered an
investment company.

20

 

 

 

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

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

8.                  Representations and Covenants of MLV. MLV represents and
warrants that it is duly registered as a broker-dealer under FINRA, the Exchange
Act and the applicable statutes and regulations of each state in which the
Placement Shares will be offered and sold, except such states in which MLV is
exempt from registration or such registration is not otherwise required. MLV
shall continue, for the term of this Agreement, to be duly registered as a
broker-dealer under FINRA, the Exchange Act and the applicable statutes and
regulations of each state in which the Shares will be offered and sold, except
such states in which MLV is exempt from registration or such registration is not
otherwise required, during the term of this Agreement.

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

21

 

 

 

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

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

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

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

22

 

 

 

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

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

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

(h)               No Suspension. Trading in the Shares shall not have been
suspended on the Exchange.

(i)                 Other Materials. On each date on which the Company is
required to deliver a certificate pursuant to Section 7(m), the Company shall
have furnished to MLV such appropriate further information, certificates and
documents as MLV may reasonably request and as are usually and customarily
furnished pursuant to a securities offering. All such opinions, certificates,
letters and other documents will be in compliance with the provisions hereof.
The Company will furnish MLV with such conformed copies of such opinions,
certificates, letters and other documents as MLV shall reasonably request.

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

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

(l)                 No Termination Event. There shall not have occurred any
event that would permit MLV to terminate this Agreement pursuant to Section
12(a).

10.              Indemnification and Contribution.

(a)                Company Indemnification. The Company agrees to indemnify and
hold harmless MLV, the directors, officers, partners, employees and agents of
MLV and each person, if any, who (i) controls MLV within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, or (ii) is
controlled by or is under common control with MLV (a “MLV Affiliate”) from and
against any and all losses, claims, liabilities, expenses and damages
(including, but not limited to, any and all reasonable investigative, legal and
other expenses incurred in connection with, and any and all amounts paid in
settlement (in accordance with Section 10(c)) of, any action, suit or proceeding
between any of the indemnified parties and any indemnifying parties or between
any indemnified party and any third party, or otherwise, or any claim asserted),
as and when incurred, to which MLV, or any such person, may become subject under
the Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based, directly or
indirectly, on (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus or in
any Issuer Free Writing Prospectus or in any application or other document
executed by or on behalf of the Company or based on written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify the Shares under the securities laws thereof or filed with the
Commission, (ii) the omission or alleged omission to state in any such document
a material fact required to be stated in it or necessary to make the statements
in it not misleading or (iii) any breach by any of the indemnifying parties of
any of their respective representations, warranties and agreements contained in
this Agreement; provided, however, that this indemnity agreement shall not apply
to the extent that such loss, claim, liability, expense or damage arises from
the sale of the Placement Shares pursuant to this Agreement and is caused
directly or indirectly by an untrue statement or omission made in reliance on
and in conformity with information relating to MLV. This indemnity agreement
will be in addition to any liability that the Company might otherwise have.

23

 

 

(b)               MLV Indemnification. MLV agrees to indemnify and hold harmless
the Company and its directors and each officer of the Company who signed the
Registration Statement, and each person, if any, who (i) controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act or (ii) is controlled by or is under common control with the
Company (a “Company Affiliate”) against any and all loss, liability, claim,
damage and expense described in the indemnity contained in Section 10(c), as
incurred, but only with respect to (i) MLV’s breach of Section 8 and/or (ii)
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendments thereto) or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
information relating to MLV and furnished to the Company by MLV.

(c)                Procedure. Any party that proposes to assert the right to be
indemnified under this Section 10 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 10, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve the indemnifying party from (i) any liability that it might
have to any indemnified party otherwise than under this Section 10 and (ii) any
liability that it may have to any indemnified party under the foregoing
provision of this Section 10 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the indemnifying
party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
counsel reasonably satisfactory to the indemnified party, and after notice from
the indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party will
not, in any event, be liable for any settlement of any action or claim effected
without its written consent. No indemnifying party shall, without the prior
written consent of each indemnified party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 10 (whether or
not any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising or that may arise out of such claim, action or
proceeding.

24

 

 

 

(d)               Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 10 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company or MLV, the
Company and MLV will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than MLV, such as
persons who control the Company within the meaning of the Securities Act,
officers of the Company who signed the Registration Statement and directors of
the Company, who also may be liable for contribution) to which the Company and
MLV may be subject in such proportion as shall be appropriate to reflect the
relative benefits received by the Company on the one hand and MLV on the other.
The relative benefits received by the Company on the one hand and MLV on the
other hand shall be deemed to be in the same proportion as the total net
proceeds from the sale of the Placement Shares (before deducting expenses)
received by the Company bear to the total compensation received by MLV (before
deducting expenses) from the sale of Placement Shares on behalf of the Company.
If, but only if, the allocation provided by the foregoing sentence is not
permitted by applicable law, the allocation of contribution shall be made in
such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the
Company, on the one hand, and MLV, on the other, with respect to the statements
or omission that resulted in such loss, claim, liability, expense or damage, or
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or MLV, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
MLV agree that it would not be just and equitable if contributions pursuant to
this Section 10(d) were to be determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense, or damage, or action
in respect thereof, referred to above in this Section 10(d) shall be deemed to
include, for the purpose of this Section 10(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim to the extent consistent with Section
10(c) hereof. Notwithstanding the foregoing provisions of this Section 10(d),
MLV shall not be required to contribute any amount in excess of the commissions
received by it under this Agreement and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 10(d), any person who
controls a party to this Agreement within the meaning of the Securities Act, and
any officers, directors, partners, employees or agents of MLV, will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 10(d), will notify any such party or parties from whom
contribution may be sought, but the omission to so notify will not relieve that
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 10(d) except to the extent that the
failure to so notify such other party materially prejudiced the substantive
rights or defenses of the party from whom contribution is sought. Except for a
settlement entered into pursuant to the last sentence of Section 10(c) hereof,
no party will be liable for contribution with respect to any action or claim
settled without its written consent if such consent is required pursuant to
Section 10(c) hereof.

25

 

 

 

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

12.              Termination.

(a)                MLV shall have the right by giving notice as hereinafter
specified at any time to terminate this Agreement if (i) any Material Adverse
Effect, or any development that has actually occurred and that is reasonably
expected to cause a Material Adverse Effect has occurred that, in the reasonable
judgment of MLV, may materially impair the ability of MLV to sell the Placement
Shares hereunder, (ii) the Company shall have failed, refused or been unable to
perform any agreement on its part to be performed hereunder; provided, however,
in the case of any failure of the Company to deliver (or cause another person to
deliver) any certification, opinion, or letter required under Sections 7(m),
7(n), or 7(o), MLV’s right to terminate shall not arise unless such failure to
deliver (or cause to be delivered) continues for more than thirty days from the
date such delivery was required; or (iii) any other condition of MLV’s
obligations hereunder is not fulfilled, or (iv), any suspension or limitation of
trading in the Placement Shares or in securities generally on the Exchange shall
have occurred. Any such termination shall be without liability of any party to
any other party except that the provisions of Section 7(g) (Expenses), Section 9
(Indemnification), Section 11 (Survival of Representations), Section 17
(Applicable Law; Consent to Jurisdiction) and Section 18 (Waiver of Jury Trial)
hereof shall remain in full force and effect notwithstanding such termination.
If MLV elects to terminate this Agreement as provided in this Section 12(a), MLV
shall provide the required notice as specified in Section 13 (Notices).

26

 

 

 

(b)               The Company shall have the right, by giving 3days notice as
hereinafter specified to terminate this Agreement in its sole discretion at any
time after the date of this Agreement. Any such termination shall be without
liability of any party to any other party except that the provisions of Section
7(g), Section 10, Section 11, Section 17 and Section 18 hereof shall remain in
full force and effect notwithstanding such termination.

(c)                MLV shall have the right, by giving 90 days’ notice as
hereinafter specified to terminate this Agreement in its sole discretion at any
time after the date of this Agreement. Any such termination shall be without
liability of any party to any other party except that the provisions of Section
7(g), Section 10, Section 11, Section 17 and Section 18 hereof shall remain in
full force and effect notwithstanding such termination.

(d)               Unless earlier terminated pursuant to this Section 12, this
Agreement shall automatically terminate upon the issuance and sale of all of the
Placement Shares through MLV on the terms and subject to the conditions set
forth herein; provided that the provisions of Section 7(g), Section 10, Section
11, Section 17 and Section 18 hereof shall remain in full force and effect
notwithstanding such termination.

(e)                This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 12(a), (b), (c), or (d) above or otherwise by
mutual agreement of the parties; provided, however, that any such termination by
mutual agreement shall in all cases be deemed to provide that Section 7(g),
Section 10, Section 11, Section 17 and Section 18 shall remain in full force and
effect.

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

27

 

 

 

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

MLV & Co. LLC
1251 Avenue of the Americas, 41st Floor
New York, NY 10020
Attention: General Counsel
Facsimile: 212.317.1515

with a copy to:

Holme Roberts & Owen LLP
1700 Lincoln Street, Suite 4100
Denver, CO 80203
Attention: Garth B. Jensen
Facsimile: 303-866-0200

and if to the Company, shall be delivered to:

Peregrine Pharmaceuticals, Inc.
14282 Franklin Avenue

Tustin, California 92780-7017

Attention: General Counsel
Facsimile: 714-838-9433

with a copy to:

Michael A. Hedge

K&L Gates LLP

1 Park Plaza, Twelfth Floor

Irvine, California 92614

Facsimile: 949-253-0902

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

An electronic communication (“Electronic Notice”) shall be deemed written notice
for purposes of this Section 13 if sent to the electronic mail address specified
by the receiving party under separate cover. Electronic Notice shall be deemed
received at the time the party sending Electronic Notice receives verification
of receipt by the receiving party. Any party receiving Electronic Notice may
request and shall be entitled to receive the notice on paper, in a nonelectronic
form (“Nonelectronic Notice”) which shall be sent to the requesting party within
ten (10) days of receipt of the written request for Nonelectronic Notice.

28

 

 

 

14.              Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Company and MLV and their respective
successors and the affiliates, controlling persons, officers and directors
referred to in Section 10 hereof. References to any of the parties contained in
this Agreement shall be deemed to include the successors and permitted assigns
of such party. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. Neither party may assign its rights or obligations under this
Agreement without the prior written consent of the other party; provided,
however, that MLV may assign its rights and obligations hereunder to an
affiliate of MLV without obtaining the Company’s consent.

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

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

17.              Applicable Law; Consent to Jurisdiction. This Agreement shall
be governed by, and construed in accordance with, the internal laws of the State
of Colorado without regard to the principles of conflicts of laws. Each party
hereby irrevocably submits to the non-exclusive jurisdiction of the state and
federal courts sitting in the City of Denver, for the adjudication of any
dispute hereunder or in connection with any transaction contemplated hereby, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof (certified or registered mail, return receipt requested)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law.

29

 

 

 

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

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

[Remainder of Page Intentionally Blank]

30

 

 

 

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

Very truly yours,

 

 

 

PEREGRINE PHARMACEUTICALS, INC.

 

 

By: /s/ Paul J. Lytle   Name: Paul J. Lytle   Title:   Chief Financial Officer

 

 

ACCEPTED as of the date first-above written:

MLV & CO. LLC

 

 

 

By: /s/ Dean M. Colucci Name: Dean M. Colucci Title: President

 

 

 

 

 

 

SCHEDULE 1

 

__________________________

FORM OF PLACEMENT NOTICE

__________________________

 

 

From: Peregrine Pharmaceuticals, Inc.

To: MLV & Co. LLC
Attention: Patrice McNicoll

Subject: At Market Issuance--Placement Notice

Gentlemen:

Pursuant to the terms and subject to the conditions contained in the At Market
Issuance Sales Agreement between Peregrine Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and MLV & Co. LLC, a Delaware limited liability
company (“MLV”), dated December 27, 2012, the Company hereby requests that MLV
sell up to ____________ shares of the Company’s common stock, par value $0.001
per share, at a minimum market price of $_______ per share, during the time
period beginning [month, day, time] and ending [month, day, time].

 

 

 

 

SCHEDULE 2

 

__________________________

Compensation

__________________________

 

The Company shall pay to MLV in cash, upon each sale of Placement Shares
pursuant to this Agreement, an amount equal to 2.5% of the gross proceeds from
each sale of Placement Shares.

 

 

 

SCHEDULE 3

Company

Paul Lytle plytle@peregrineinc.com Steven King sking@peregrineinc.com     MLV  
Randy Billhardt rbillhardt@mlvco.com Dean Colucci dcolucci@mlvco.com Ryan
Loforte rloforte@mlvco.com Patrice McNicoll pmcnicoll@mlvco.com

 

 

 

SCHEDULE 4

None.

 

 

EXHIBIT 7(m)

Form of Representation Date Certificate

This Officers Certificate (this “Certificate”) is executed and delivered in
connection with Section 7(m) of the At Market Issuance Sales Agreement (the
“Agreement”), dated December 27, 2012 and entered into between Peregrine
Pharmaceutical, Inc. (the “Company”) and MLV & Co. LLC (“MLV”). All capitalized
terms used but not defined herein shall have the meanings given to such terms in
the Agreement.

The undersigned, a duly appointed and authorized officer of the Company, having
made all necessary inquiries to establish the accuracy of the statements below
and having been authorized by the Company to execute this certificate, hereby
certifies as follows:

1. As of the date of this Certificate, (i) the Registration Statement does not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading and (ii) the Prospectus does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading and (iii) no event
has occurred as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein not untrue or misleading.

2. Each of the representations and warranties of the Company contained in the
Agreement were, when originally made, and are, as of the date of this
Certificate, true and correct in all material respects.

3. Each of the covenants required to be performed by the Company in the
Agreement on or prior to the date of the Agreement, this Representation Date,
and each such other date as set forth in the Agreement, has been duly, timely
and fully performed in all material respects and each condition required to be
complied with by the Company on or prior to the date of the Agreement, this
Representation Date, and each such other date as set forth in the Agreement or
in the Waivers has been duly, timely and fully complied with in all material
respects.

4. Subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change.

5. No stop order suspending the effectiveness of the Registration Statement or
of any part thereof has been issued, and no proceedings for that purpose have
been instituted or are pending or threatened by any securities or other
governmental authority (including, without limitation, the Commission).

6. No order suspending the effectiveness of the Registration Statement or the
qualification or registration of the Shares under the securities or Blue Sky
laws of any jurisdiction are in effect and no proceeding for such purpose is
pending before, or threatened, to the Company's knowledge or in writing by, any
securities or other governmental authority (including, without limitation, the
Commission).

The undersigned has executed this Officer's Certificate as of the date first
written above.

 

/s/ Paul Lytle

 

Name: Paul Lytle

 

Title: CFO