EX-10.1






EXECUTION COPY

 




$15,000,000




EpiCept Corporation

 

Common Stock

 

Equity Distribution Agreement

 




February 5, 2010

 




Maxim Group LLC


405 Lexington Avenue


New York, New York 10174

 


Ladies and Gentlemen:

 


EpiCept Corporation, a Delaware corporation (the “Company”), proposes to issue and sell
through Maxim Group LLC (the “Agent”), as sales agent, shares of Common Stock, $0.0001 par value
per share (the “Common Stock”), of the Company having an aggregate offering price of up to
$15,000,000 (the “Shares”) on terms set forth herein.  The Shares consist entirely of authorized
but unissued shares of Common Stock to be issued and sold by the Company.

 


The Company hereby confirms its agreement with the Agent with respect to the sale of the
Shares.

 



1.      Representations and Warranties of the Company.




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



(i)       A registration statement on Form S-3 (File No. 333-160571) (the “registration
statement”) was initially declared effective by the Commission on July 23, 2009, and is currently
effective, under the Securities Act of 1933, as amended, and the rules and regulations thereunder
(the “Rules and Regulations”) (collectively called the “Securities Act”); the Company has complied
to the Commission’s satisfaction with all requests of the Commission for additional or supplemental
information; no stop order of the Securities and Exchange Commission (the “Commission”) preventing
or suspending the use of any Base Prospectus (as defined below), the Prospectus Supplement (as
defined below), the Prospectus (as defined below) or any Permitted Free Writing Prospectus (as
defined below), or the effectiveness of the Registration Statement, has been issued, and no
proceedings for such purpose have been instituted or, to the Company’s knowledge after due inquiry,
are contemplated by the Commission.  Except where the context otherwise requires, “Registration
Statement,” as used herein, means the registration statement, as amended at the time of such
registration statement’s effectiveness for purposes of Section 11 of the Securities Act, as such
section applies to the Agent, including (1) all documents filed as a part thereof or incorporated
or deemed to be incorporated by reference therein, (2) any information contained or incorporated by
reference in a prospectus filed with the Commission pursuant to Rule 424(b) under the Securities
Act, to the extent such information is deemed, pursuant to Rule 430B or Rule 430C under the
Securities Act, to be part of the registration statement at the Effective Time, and (3) any
registration statement filed to register the offer and sale of Shares pursuant to Rule 462(b) under
the Securities Act (the “462(b) Registration Statement”).  Except where the context otherwise
requires, “Base Prospectus,” as used herein, means the prospectus filed as part of the Registration
Statement, together with any amendments or supplements thereto as of the date of this Agreement.
 Except where the context otherwise requires, “Prospectus Supplement,” as used herein, means the
most recent prospectus supplement relating to the Shares, filed by the Company with the Commission
pursuant to Rule 424(b) under the Securities Act and in accordance with the terms of this
Agreement.  Except where the context otherwise requires, “Prospectus,” as used herein, means the
Prospectus Supplement together with the Base Prospectus attached to or used with the Prospectus
Supplement.  “Permitted Free Writing Prospectus,” as used herein, means the documents, if any,
listed on Schedule A attached hereto and, after the date hereof, any “issuer free writing
prospectus” as defined in Rule 433 of the Securities Act, that is expressly agreed to by the
Company and the Agent in writing to be a Permitted Free Writing Prospectus. Any reference herein to
the registration statement, the Registration Statement, the Base Prospectus, the Prospectus
Supplement, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to and
include the documents, if any, incorporated by reference, or deemed to be incorporated by
reference, therein pursuant to Item 12 of Form S-3 (the “Incorporated Documents”), including,
unless the context otherwise requires, the documents, if any, filed as exhibits to such
Incorporated Documents.  For purposes of this Agreement, all references to the Registration
Statement, the Rule 462(b) Registration Statement, the Base Prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”).  All
references in this Agreement to financial statements and schedules and other information which is
“described,” “contained,” “included” or “stated” in the Registration Statement, the Base
Prospectus, the Prospectus or any Permitted Free Writing Prospectus (or other references of like
import) shall be deemed to mean and include all such financial statements and schedules and other
information which is incorporated by reference in or otherwise deemed by the Rules and Regulations
to be a part of or included in the Registration Statement, the Base Prospectus, the Prospectus or
Permitted Free Writing Prospectus as the case may be.  Any reference herein to the terms “amend,”
“amendment” or “supplement” with respect to the Registration Statement, any Base Prospectus, the
Prospectus, the Prospectus Supplement or any Permitted Free Writing Prospectus shall be deemed to
refer to and include the filing of any document under the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (collectively, the “Exchange Act”) on or after
the initial effective date of the Registration Statement, or the date of such Base Prospectus, the
Prospectus, the Prospectus Supplement or such Permitted Free Writing Prospectus, if any, as the
case may be, and deemed to be incorporated therein by reference.  “Time of Sale” means each time a
Share is purchased pursuant to this Agreement.



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



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



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



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



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



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



(v)      The consolidated financial statements of the Company and the



Subsidiaries, together with the related notes, set forth or incorporated by reference in the
Registration Statement and the Prospectus comply in all material respects with the requirements of
the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and
fairly present the financial condition of the Company and the Subsidiaries, as a whole, as of the
dates indicated and the results of operations and changes in cash flows for the periods therein
specified in conformity with generally accepted accounting principles consistently applied
throughout the periods involved; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein.  No other financial
statements or schedules are required to be included in the Registration Statement and the
Prospectus.  To the Company’s knowledge, Deloitte & Touche LLP, which has expressed its opinion
with respect to the financial statements and schedules filed as a part of the Registration
Statement and included in the Registration Statement and the Prospectus, is a registered public
accounting firm within the meaning of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”),
and in the performance of its work for the Company has not been in violation of the auditor
independence requirements of the Sarbanes-Oxley Act.



(vi)      The Company and each of its Subsidiaries has been duly organized and is validly
existing as a corporation in good standing under the laws of its jurisdiction of incorporation. The
Company and each of the Subsidiaries has full corporate power and authority to own its respective
properties and conduct its business as currently being carried on and as described in the
Registration Statement and the Prospectus, and is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction in which it owns or leases real property or in
which the conduct of its business makes such qualification necessary and in which the failure to so
qualify would have a material adverse effect upon the business, prospects, management, properties,
operations, condition (financial or otherwise) or results of operations of the Company and the
Subsidiaries, taken as a whole (“Material Adverse Effect”).



(vii)      Except as disclosed in the Prospectus, subsequent to the dates as of which
information is given in the Prospectus, the Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions, or declared or paid
any dividends or made any distribution of any kind with respect to its capital stock; and there has
not been any change in the capital stock, or issuance of options, warrants, convertible securities
or other rights to purchase the capital stock (other than due to the issuance, redemption or
forfeiture of any shares of capital stock, or options, warrants, convertible securities or other
rights to purchase capital stock, under any stock option or incentive, stock purchase or similar
employee benefit plans described in the Prospectus, including upon the exercise of outstanding
options, or pursuant to the terms of outstanding warrants, or in satisfaction of outstanding debt
of the Company as described in the Prospectus (collectively, “Additional Issuances”)), or any
material change in the short-term or long-term debt, of the Company, or any Material Adverse Effect
or any development that would reasonably be expected to result in a Material Adverse Effect.



(viii)     Except as set forth in the Prospectus, there is not pending or, to the knowledge of
the Company, threatened or contemplated, any action, suit or proceeding to which the Company or any
of its Subsidiaries is a party or of which any property or assets of the Company or any of its
Subsidiaries is the subject before or by any court or governmental agency, authority or body, or
any arbitrator, which, individually or in the aggregate, might result in any Material Adverse
Effect.



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



(x)       This Agreement has been duly authorized, executed and delivered by the Company, and
constitutes a valid, legal and binding obligation of the Company, enforceable in accordance with
its terms, except as rights to indemnity hereunder may be limited by federal or state securities
laws and except as such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to general principles of
equity.  The execution, delivery and performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any agreement or instrument to which the
Company is a party or by which it is bound or to which any of its property is subject, the
Company’s charter or by-laws, or any order, rule, regulation or decree of any court or governmental
agency or body having jurisdiction over the Company or any of its properties; no consent, approval,
authorization or order of, or filing with, any court or governmental agency or body is required for
the execution, delivery and performance of this Agreement or for the consummation of the
transactions contemplated hereby and thereby, including the issuance or sale of the Shares by the
Company, except such as may be required under the Securities Act or state securities or blue sky
laws; and the Company has and will have full power and authority to enter into this Agreement and
to authorize, issue and sell the Shares as contemplated hereby and thereby.



(xi)     All of the issued and outstanding shares of capital stock of the Company, including
the outstanding shares of Common Stock, are duly authorized and validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to subscribe for or
purchase securities that have not been waived in writing, and the holders thereof are not subject
to personal liability by reason of being such holders; all of the issued and outstanding shares of
capital stock of each of the Subsidiaries, are duly authorized and validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state securities laws, are owned
by the Company directly or indirectly through one or more



Subsidiaries, were not issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities that have not been waived in writing, and the
holders thereof are not subject to personal liability by reason of being such holders; the Shares
which may be sold under this Agreement by the Company have been duly authorized and, when issued,
delivered and paid for in accordance with the terms of this Agreement will have been validly issued
and will be fully paid and nonassessable, and the holders thereof will not be subject to personal
liability by reason of being such holders; and the capital stock of the Company, including the
Common Stock, conforms to the description thereof in the Registration Statement and the
Prospectus.  Except as otherwise stated in the Registration Statement and the Prospectus, there are
no preemptive rights or other rights to subscribe for or to purchase, or any restriction upon the
voting or transfer of, any shares of Common Stock pursuant to the Company’s charter, by-laws or any
agreement or other instrument to which the Company is a party or by which the Company is bound. 
Neither the filing of the Registration Statement nor the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights for or relating to the registration of any
shares of Common Stock or other securities of the Company.  Except as described in the Registration
Statement and the Prospectus and other than Additional Issuances, there are no options, warrants,
agreements, contracts or other rights in existence to purchase or acquire from the Company any
shares of the capital stock of the Company.  The Company has an authorized and outstanding
capitalization as set forth in the Registration Statement and the Prospectus as of the dates set
forth therein.



(xii)     The Company and each of its Subsidiaries holds, and is operating in compliance in
all material respects with, all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders of any governmental or self-regulatory body required for the
conduct of its business and all such franchises, grants, authorizations, licenses, permits,
easements, consents, certifications and orders are valid and in full force and effect; and neither
the Company nor any of its Subsidiaries has received notice of any revocation or modification of
any such franchise, grant, authorization, license, permit, easement, consent, certification or
order or has reason to believe that any such franchise, grant, authorization, license, permit,
easement, consent, certification or order will not be renewed in the ordinary course; and the
Company and each of its Subsidiaries is in compliance in all material respects with all applicable
federal, state, local and foreign laws, regulations, orders and decrees.



(xiii)    The Company and each of its Subsidiaries has good and marketable title to all
property (whether real or personal) described in the Registration Statement and the Prospectus as
being owned by it, in each case free and clear of all liens, claims, security interests, other
encumbrances or defects except such as are described in the Registration Statement and the
Prospectus.  The property held under lease by the Company and its Subsidiaries is held by it under
valid, subsisting and enforceable leases with only such exceptions with respect to any particular
lease as do not interfere in any material respect with the conduct of the business of the Company.



(xiv)   The Company and each of its Subsidiaries owns, possesses, or can acquire on reasonable
terms, all Intellectual Property necessary for the conduct of its respective business as now
conducted or as described in the Registration Statement and the Prospectus to be conducted, except
as such failure to own, possess, or acquire such rights would not result in a Material Adverse
Effect.  Furthermore, (A) to the knowledge of the Company, there is no infringement,
misappropriation or violation  by third parties of any such Intellectual Property, except as such
infringement, misappropriation or violation would not result in a Material Adverse Effect;
(B) there is no pending or, to the knowledge of the Company, threatened, action, suit, proceeding
or claim by others challenging the Company’s or any Subsidiary’s rights in or to any such
Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis
for any such claim; (C) the Intellectual Property owned by the Company and the Subsidiaries, and to
the knowledge of the Company, the Intellectual Property licensed to the Company and the
Subsidiaries, has not been adjudged invalid or unenforceable, in whole or in part, and there is no
pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property, and the Company is unaware of
any facts which would form a reasonable basis for any such claim; (D) there is no pending or, to
the knowledge of the Company, threatened action, suit, proceeding or claim by others that the
Company or any of its Subsidiaries infringes, misappropriates or otherwise violates any
Intellectual Property or other proprietary rights of others, the neither the Company nor any of the
Subsidiaries has received any written notice of such claim and the Company is unaware of any other
fact which would form a reasonable basis for any such claim; and (E) to the Company’s knowledge, no
employee of the Company or any of the Subsidiaries is in or has ever been in violation of any term
of any employment contract, patent disclosure agreement, invention assignment agreement,
non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive
covenant to or with a former employer where the basis of such violation relates to such employee’s
employment with the Company or any of the Subsidiaries or actions undertaken by the employee while
employed with the Company or any of the Subsidiaries, except as such violation would not result in
a Material Adverse Effect.  “Intellectual Property” shall mean all patents, patent applications,
trade and service marks, trade and service  mark registrations, trade names, copyrights, licenses,
inventions, trade secrets, domain names, technology, know-how and other intellectual property.



(xv)       Neither the Company nor any of its Subsidiaries is (A) in violation of its charter
or by laws, or (B) in breach of or otherwise in default, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default in the performance of any material
obligation, agreement or condition contained in any bond, debenture, note, indenture, loan
agreement, mortgage, deed of trust or any other material contract, lease or other instrument to
which it is subject or by which any of them may be bound, or to which any of the material property
or assets of the Company or any of the Subsidiaries is subject (collectively, the “Material
Contracts”); or (C) 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 (B) and
(C) above, as could not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change.



(xvi)     The Company and each of the Subsidiaries has timely filed all federal, state, local
and foreign income and franchise tax returns required to be filed and are not in default in the
payment of any taxes which were payable pursuant to said returns or any assessments with respect
thereto, other than any which the Company is contesting in good faith.  There is no pending dispute
with any taxing authority relating to any of such returns, and the Company has no knowledge of any
proposed liability for any tax to be imposed upon the properties or assets of the Company or the
Subsidiaries for which there is not an adequate reserve reflected in the Company’s financial
statements included in the Registration Statement.



(xvii)   The Company has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Shares other than any the
Registration Statement and the Prospectus or other materials permitted by the Securities Act to be
distributed by the Company; provided, however, that the Company has not made and will not make any
offer relating to the Shares that would constitute a “free writing prospectus” as defined in
Rule 405 under the Securities Act, except in accordance with the provisions of
Section 3(p) of this Agreement.



(xviii)    Except as has been previously disclosed in the Incorporated Documents with respect
to the continued listing of the Common Stock on the Nasdaq Capital Market (the “Nasdaq Issue”), the
Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is included or
approved for inclusion on the Nasdaq Capital Market and the OMX Nordic Exchange and the Company has
taken no action designed to, or likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act or delisting the Common Stock from the Nasdaq Capital Market or
the OMX Nordic Exchange nor has the Company received any notification that the Commission, the
Nasdaq Capital Market or the OMX Nordic Exchange is contemplating terminating such registration or
listing. Except for the Nasdaq Issue, the Company has complied in all material respects with the
applicable requirements of the Nasdaq Capital Market and the OMX Nordic Exchange for maintenance of
inclusion of the Common Stock thereon. The Company has filed an application to include the Shares
on the Nasdaq Capital Market and will file an application to include the Shares on the OMX Nordic
Exchange, to the extent expressly permitted by the rules of the OMX Nordic Exchange and only if
such application does not require the Company to file a prospectus with the Swedish Financial
Supervisory Authority.



(xix)     The Company has no subsidiaries other than EpiCept GmbH, Maxim Pharmaceuticals Inc.
and Cytovia, Inc. (collectively, the “Subsidiaries”) The Company does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt securities of any other
corporation or have any equity interest in any other corporation, partnership, joint venture,
association, trust or other entity.



(xx)     The Company maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with management’s general or
specific authorization; (B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in accordance with management’s
general or specific authorization; and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.  Except as described in the Registration Statement and the Prospectus, since the
filing of the annual report on Form 10-K for the fiscal year ended December 31, 2008, there has
been (i) no material weakness in the Company’s internal control over financial reporting (whether
or not remediated) and (ii) no change in the Company’s internal control over financial reporting
that has materially affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.



(xxi)      Except as described in the Registration Statement and the Prospectus, the Company
and each of the Subsidiaries: (A) is and at all times has been in full compliance with all
statutes, rules, regulations, or guidances, including, without limitation, the Federal Food, Drug
and Cosmetic Act and implementing regulations at 21 C.F.R. Parts 50, 54, 56, 58 and 812, applicable
to Company and the Subsidiaries and to the ownership, testing, development, manufacture, packaging,
processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage,
import, export or disposal of any product manufactured or distributed by the Company or the
Subsidiaries (“Applicable Laws”), except as could not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect; (B) has not received any FDA Form 483, notice
of adverse finding, warning letter, untitled letter or other correspondence or notice from any
Governmental Authority alleging or asserting noncompliance with any Applicable Laws or any
licenses, certificates, approvals, clearances, authorizations, permits and supplements or
amendments thereto required by any such Applicable Laws (“Authorizations”); (C) possesses all
material Authorizations and such Authorizations are valid and in full force and effect and are not
in violation of any term of any such Authorizations; (D) has not received notice of any claim,
action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any
Governmental Authority or third party alleging that any product operation or activity is in
violation of any Applicable Laws or Authorizations and has no knowledge that any such Governmental
Authority or third party intends to assert any such claim, litigation, arbitration, action, suit,
investigation or proceeding; (E) has not received notice that any Governmental Authority has taken,
is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and the
Company has no knowledge that any such Governmental Authority is considering such action; and
(F) has filed, obtained, maintained or submitted all material reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments as required by any
Applicable Laws or Authorizations and that all such reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments were complete and correct
in all material respects on the date filed (or were corrected or supplemented by a subsequent
submission).



(xxii)    The studies, tests and preclinical and clinical trials conducted by or on behalf of
the Company and the Subsidiaries with respect to programs that are currently in development or in
discovery or are described in the Prospectus, were and, if still pending, are, in all material
respects, being conducted in accordance with applicable experimental protocols, procedures and
controls pursuant to accepted professional scientific standards and all relevant Applicable Laws
and Authorizations; the descriptions of the results of such studies, tests and trials contained in
the Registration Statement and the Prospectus are accurate and complete in all material respects
and fairly present the data derived from such studies, tests and trials; except to the extent
disclosed in the Registration Statement and the Prospectus, the Company is not aware of any
studies, tests or trials the results of which the Company believes reasonably call into question
the study, test, or trial results described or referred to in the Registration Statement and the
Prospectus when viewed in the context in which such results are described and the clinical state of
development; and neither the Company nor any of its subsidiaries have received any notices or
correspondence from any Governmental Authority requiring the termination, suspension or material
modification of any studies, tests or preclinical or clinical trials conducted by or on behalf of
the Company.



(xxiii)   Other than as contemplated by this Agreement, the Company has not incurred any
liability for any finder’s or broker’s fee or agent’s commission in connection with the execution
and delivery of this Agreement or the consummation of the transactions contemplated hereby. The
Company has not entered into any other sales agency agreements or other similar arrangements with
any agent or any other representative in respect of at-the-market offerings of the shares in
accordance with Rule 415(a)(4) of the Securities Act.



(xxiv)   The Company and each of the Subsidiaries carries, or is covered by, insurance in such
amounts and covering such risks as is adequate for the conduct of its respective business and the
value of its properties and as is customary for companies engaged in similar businesses in similar
industries; all policies of insurance and any fidelity or surety bonds insuring the Company or the
Subsidiaries or their respective businesses, assets, employees, officers and directors are in full
force and effect; the Company and each of the Subsidiaries is in compliance with the terms of such
policies and instruments in all material respects; there are no claims by the Company or any of the
Subsidiaries under any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; neither the Company nor any of the
Subsidiaries has been refused any insurance coverage sought or applied for; and the Company has no
reason to believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect.



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



(xxvi) The Incorporated Documents, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and were filed on a timely basis with the
Commission and none of such documents contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; any further Incorporated Documents, when
filed with the Commission, will conform in all material respects to the requirements of the
Exchange Act, and will not contain 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 under
which they were made, not misleading.



(xxvii) The Company is in compliance in all material respects with all applicable provisions
of the Sarbanes-Oxley Act and the rules and regulations of the Commission thereunder.



(xxviii) The Company has established and maintains disclosure controls and procedures (as
defined in Rules 13a-14 and 15d-14 under the Exchange Act) and such controls and procedures are
effective in reasonably ensuring that material information relating to the Company is made known to
the principal executive officer and the principal financial officer.  The Company has utilized such
controls and procedures in preparing and evaluating the disclosures in the Registration Statement
and the Prospectus.



(xxix) Neither the Company, the Subsidiaries, nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any Subsidiary, is aware of or
has taken any action directly or indirectly, that would result in a violation by such persons of
the FCPA (as defined below), including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any “Foreign official” (as such term is defined
in the FCPA) or any foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA, and the Company has conducted its business in
compliance with the FCPA and has instituted and maintains policies and procedures designed to
ensure, and which are reasonably expected to continue to ensure, continued compliance therewith. 
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder.



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



(xxxi) Neither the Company, the Subsidiaries, nor, to the knowledge of the Company, any
director, officer or employee of the Company or any of the Subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the
Treasury.



(xxxii) To the Company’s knowledge, no transaction has occurred between or among the Company,
on the one hand, and any of the Company’s officers, directors or 5% stockholders or any affiliate
or affiliates of any such officer, director or 5% stockholders that is required to be described
that is not so described in the Registration Statement and the Prospectus.  The Company has not,
directly or indirectly, extended or maintained credit, or arranged for the extension of credit, or
renewed an extension of credit, in the form of a personal loan to or for any of its directors or
executive officers in violation of applicable laws, including Section 402 of the Sarbanes-Oxley
Act.



(xxxiii) The Company and each of the Subsidiaries (A) is in compliance in all material
respects 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”); (B) has received and is in compliance in all material respects with all permits, licenses
or other approvals required of it under applicable Environmental Laws to conduct its business; and
(C) 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 any such case for any such failure to comply, or failure to receive
required permits, licenses or approvals, or liability as would not, individually or in the
aggregate, result in a Material Adverse Effect.



(xxxiv) The Company and each of the Subsidiaries (A) is in compliance, in all material
respects, with any and all applicable foreign, federal, state and local laws, rules, regulations,
treaties, statutes and codes promulgated by any and all governmental authorities (including
pursuant to the Occupational Health and Safety Act) relating to the protection of human health and
safety in the workplace (“Occupational Laws”); (B) has received all material permits, licenses or
other approvals required of it under applicable Occupational Laws to conduct its business as
currently conducted; and (C) is in compliance, in all material respects, with all terms and
conditions of such permit, license or approval.  No action, proceeding, revocation proceeding,
writ, injunction or claim is pending or, to the Company’s knowledge, threatened against the Company
or any of the Subsidiaries relating to Occupational Laws, and the Company does not have knowledge
of any facts, circumstances or developments relating to its operations or cost accounting practices
that could reasonably be expected to form the basis for or give rise to such actions, suits,
investigations or proceedings.



(xxxv) Each 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 the Subsidiaries or any of their respective affiliates for
employees or former employees of the Company, the Subsidiaries and their respective affiliates has
been maintained in compliance with its terms and the requirements of any applicable statutes,
orders, rules and regulations, including but not limited to, ERISA and the 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 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.



(xxxvi) No material labor problem or dispute with the employees of the Company exists or, to
the knowledge of the Company, is threatened or imminent.



(xxxvii) The Company has not taken, directly or indirectly, any action designed to or that
would constitute or that would reasonably be expected to cause or result in, under the Exchange Act
or otherwise, stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.



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



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



2. Purchase, Sale and Delivery of Shares.



(a) At the Market Sales.  On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the Company agrees to
issue and sell through the Agent as sales agent, and the Agent agrees to use its commercially
reasonable efforts to sell for and on behalf of the Company, the Shares on the following terms and
conditions; provided, however, that any obligation of the Agent to use such commercially reasonable
efforts shall be subject to the continuing accuracy of the representations and warranties of the
Company herein, to the performance by the Company of its obligations hereunder and to the
continuing satisfaction of the additional conditions specified in Section 4 of this
Agreement.



(i)   The Shares are to be sold by the Agent on a daily basis or otherwise as shall be agreed
to by the Company and the Agent on any day that the Company has instructed the Agent to make such
sales and which is a trading day for the Nasdaq Capital Market (other than a day on which the
Nasdaq Capital Market is scheduled to close prior to its regular weekday closing time) or the OMX
Nordic Exchange (each, a “Trading Day”). On any Trading Day, any representative of the Company
whose name is set forth on Schedule B hereto may instruct the Agent by telephone (confirmed
promptly by telecopy or email to the appropriate individual listed on Schedule D hereto,
using a form substantially similar to that set forth on Schedule C hereto, which
confirmation shall be promptly acknowledged by the Agent) as to the maximum number of shares to be
sold by the Agent on such day and in any event not in excess of the amount available for issuance
under the Prospectus and the currently effective Registration Statement, the time period during
which sales are requested to be made and the minimum price per Share, if any, at which such Shares
may be sold. Subject to the terms and conditions hereof and unless the sale of the Shares
described therein has been declined, suspended, or otherwise terminated in accordance with the
terms of this Agreement, the Agent shall use its commercially reasonable efforts to sell all of the
Shares so designated by the Company. The gross sales price of the Shares sold under this
Section 2(a) shall be equal to the sum of (a) the market price for shares of the Company’s
Common Stock sold by the Agent under this Section 2(a) on the Nasdaq Capital Market at the
time of such sale and (b) the product obtained by multiplying (x) the aggregate market price (in
Swedish Kronor) for all shares of the Company’s Common Stock sold by the Agent under this
Section 2(a) on the OMX Nordic Exchange for any one Trading Day and (y) the Swedish
Kronor/U.S. Dollar exchange rate as determined by Pershing LLC for such day.



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



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



(iv)    The Agent hereby covenants and agrees not to make any sales of the Shares on behalf of
the Company, pursuant to this Section 2(a), other than by means of ordinary brokers’
transactions deemed to be “at the market” offerings as defined in Rule 415 of the Securities Act
including without limitation sales made directly on the Nasdaq Capital Market, on the OMX Nordic
Exchange, on any other existing trading market for the Common Stock or to or through a market
maker.



(v)    The compensation to the Agent for sales of the Shares, as an agent of the Company,
shall be (i) 4% of the gross sales price of the first $10,000,000 of Shares sold pursuant to this
Section 2(a) and (ii) thereafter, 3% of the gross sales price of the remaining $5,000,000
of Shares sold pursuant to this Section 2(a). The remaining proceeds, after further
deduction for any transaction fees imposed by any governmental or self-regulatory organization in
respect of such sales, shall constitute the net proceeds to the Company for such Shares (the “Net
Proceeds”). The Agent shall notify the Company as promptly as practicable if any deduction
referenced in the preceding sentence will be required.



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



(vii)     All Shares sold pursuant to this Section 2(a) will be delivered by the
Company to Agent for the accounts of the Agent on the third full business day following the date on
which such Shares are sold, or at such other time and date as Agent and the Company determine
pursuant to Rule 15c6-1(a) under the Exchange Act, each such time and date of delivery being herein
referred to as a “Settlement Date.”  On each Settlement Date, the Shares sold through the Agent for
settlement on such date shall be issued and delivered by the Company to the Agent against payment
of the Net Proceeds from the sale of such Shares. Settlement for all such Shares shall be effected
by free delivery of the Shares by the Company or its transfer agent (i) to the Agent or its
designee’s account (provided the Agent shall have given the Company written notice of such designee
prior to the Settlement Date) at The Depository Trust



Company (“DTC”) or (ii) by such other means of delivery as may be mutually agreed upon by the
parties hereto, which in all cases shall be freely tradable, transferable, registered shares in
good deliverable form, in return for payment in same day funds delivered to an account designated
by the Company. If the Company or its transfer agent (if applicable) shall default on its
obligation to deliver the Shares on any Settlement Date, the Company shall (A) indemnify and hold
the Agent harmless against any loss, claim or damage arising from or as a result of such default by
the Company and (B) pay the Agent any commission to which it would otherwise be entitled absent
such default against payment of the Net Proceeds therefor by wire transfer of same day funds
payable to the order of the Company at 9:00 a.m. New York City time. If the Agent breaches this
Agreement by failing to deliver the Net Proceeds on any Settlement Date for the shares delivered by
the Company, the Agent will pay the Company interest based on the effective overnight federal funds
rate until such proceeds, together with such interest, have been fully paid.



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



(c) Notwithstanding any other provisions of this Agreement, the Company agrees that no sale of
Shares shall take place, and the Company shall not request the sale of any Shares, and the Agent
shall not be obligated to sell, during any period in which the Company is, or could be deemed to
be, in possession of material non-public information; provided that, notwithstanding the provisions
of this paragraph (c), the Company agrees that no sales of Shares shall take place during the
twenty (20) calendar days prior to an Earnings Release (as defined below).



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



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



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



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



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





 







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



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



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



(f) The Company will make generally available to its security holders as soon as practicable
an earnings statement (which need not be audited) covering a 12-month period that shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations. If
the Company makes any public announcement or release disclosing its results of operations or
financial condition for a completed quarterly or annual fiscal period (each, an “Earnings Release”)
and the Company has not yet filed a Quarterly Report on Form 10-Q or an Annual Report on Form 10-K
with respect to such information, as applicable, then, prior to any sale of Shares, the Company
shall be obligated to (x) file a prospectus supplement with the Commission under the applicable
paragraph of Rule 424(b), which prospectus supplement shall include the applicable financial
information, (y) file a Current Report on Form 8-K, which Form 8-K shall include the applicable
financial information or (z) furnish a Current Report on Form 8-K pursuant to Item 2.02 thereof,
which current report shall specifically state that the applicable financial information shall be
deemed “filed” under the Exchange Act.



(g)    The Company, whether or not the transactions contemplated hereunder are consummated or
this Agreement is terminated, will pay or cause to be paid (i) all expenses (including stock or
transfer taxes and stamp or similar duties allocated to the respective transferees) incurred in
connection with the registration, issue, sale and delivery of the Shares, (ii) all reasonable
expenses and fees (including, without limitation, fees and expenses of the Company’s accountants
and counsel) in connection with the preparation, printing, filing, delivery, and shipping of the
Registration Statement (including the financial statements therein and all amendments, schedules,
and exhibits thereto), the Base Prospectus, each Prospectus, any Permitted Free Writing Prospectus,
and any amendment thereof or supplement thereto, and the producing, word-processing, printing,
delivery, and shipping of this Agreement and other closing documents, including Blue Sky Memoranda
(covering the states and other applicable jurisdictions) and including the cost to furnish copies
of each thereof to the Agent, (iii) all filing fees, (iv) the reasonable fees and disbursements of
the Agent’s counsel incurred in connection with the qualification of the Shares for offering and
sale by the Agent or by dealers under the securities or blue sky laws of the states and other
jurisdictions which Agent shall designate, (v) the fees and expenses of any transfer agent or
registrar, (vi) the filing fees and reasonable fees and disbursements of Agent’s counsel incident
to any required review and approval by the Financial Industry Regulatory Authority, Inc. of the
terms of the sale of the Shares, (vii) listing fees, if any, (viii) the cost and expenses of the
Company relating to investor presentations or any “roadshow” undertaken in connection with
marketing of the Shares, and (ix) all other costs and expenses incident to the performance of its
obligations hereunder that are not otherwise specifically provided for herein.  In addition, upon
execution of this Agreement, the Company shall reimburse the Agent for its reasonable out of pocket
expenses, including the reasonable fees and disbursements of the Agent’s counsel actually incurred,
in an amount (inclusive of any amounts owed pursuant to (iv) and (vi) above) not to exceed
$100,000.



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



(i)    The Company will not offer for sale, sell, contract to sell, pledge, grant any option
for the sale of, enter into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective economic disposition due
to cash settlement or otherwise) by the Company or any affiliate, or otherwise issue or dispose of,
directly or indirectly (or publicly disclose the intention to make any such offer, sale, pledge,
grant, issuance or other disposition), of any Common Stock or any securities convertible into or
exchangeable for, or any options or rights to purchase or acquire, Common Stock, or permit the
registration under the Securities Act of any Common Stock, such securities, options or rights,
except for (i) the registration of the Shares and the sales through the Agent pursuant to this
Agreement, (ii) the registration of shares issued or issuable with respect to any Additional
Issuances, (iii) sales of shares through any dividend reinvestment and stock purchase plan of the
Company and (iv) any Additional Issuances, without, in each case, (A) giving the Agent at least
three business days’ prior written notice specifying the nature of the proposed sale and the date
of such proposed sale and (B) the Agent suspending activity under this Agreement for such period of
time as requested by the Company.



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



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



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



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



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



(o)     [Reserved]



(p)     The Company represents and agrees that, it has not made and will not make any offer
relating to the Shares that would constitute an “issuer free writing prospectus,” as defined in
Rule 433 under the Securities Act, or that would otherwise constitute a “free writing prospectus,”
as defined in Rule 405 under the Securities Act, required to be filed with the Commission other
than a Permitted Free Writing Prospectus.  The Company represents that it has treated or agrees
that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,”
as defined in Rule 433, and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely Commission filing where
required, legending and record keeping.



(q)    On the date hereof and each (A) date when a Registration Statement or Prospectus is
amended or supplemented (other than a supplement to a Prospectus filed pursuant to
Rule 424(b) under the Securities Act relating solely to the offering of securities other than the
Shares) or (B) date that an Incorporated Document (other than a Current Report on Form 8-K unless
Agent shall reasonably request) is filed with the Commission (each of the dates in (A) and (B) are
referred to herein as a “Bringdown Date”), the Company shall cause Eilenberg & Krause LLP, counsel
for the Company, to furnish to the Agent its written opinion and negative assurance letter, dated
as of the Bringdown Date, and addressed to the Agent, in form and substance stating in effect the
matters set forth on Annex A hereto, each modified as necessary to relate to the
Registration Statement and the Prospectus as amended and supplemented to the time of delivery of
such opinions. With respect to this Section 3(q), in lieu of delivering such opinions or letters
for Bringdown Dates subsequent to the date hereof, such counsel may furnish agent with a letter (a
“Reliance Letter”) to the effect that Agent may rely upon a prior opinion or letter delivered under
this Section 3(a) to the same extent as if it were dated the date of such letter (except that
statement in such prior opinion shall be deemed to relate to the Registration Statement and the
Prospectus as amended or supplemented as of such Representation Statement.



(r)      On the date hereof and each date when (A) a Registration Statement or Prospectus is
amended or supplemented to include additional or amended financial information, (B)  the Company
files an annual report on Form 10-K or a Quarterly Report on form 10-Q or (C) a document (other
than an annual report on Form 10-K or a Quarterly Report on Form 10-Q) containing additional or
amended financial information is filed with the Commission and incorporated by reference into the
Prospectus, the Company shall cause Deloitte & Touche LLP, or other independent accountants
satisfactory to the Agent, to deliver to the Agent (x) a letter, dated as of such date and
addressed to Agent, in form and substance satisfactory to Agent (the first such letter, the
“Initial Comfort Letter”), confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable requirements relating to
the qualifications of accountants under Rule 2-01 of Regulation S-X of the Commission, and stating
the conclusions and findings of said firm with respect to the financial information and other
matters and (y) a letter updating the Initial Comfort Letter with any information that would have
been included in the Initial comfort Letter had it been given on such date and as modified as
necessary to relate to the Registration Statement, the Prospectus or any issuer free writing
prospectus, as amended or supplemented to the date of such letter.



(s)        On the date hereof and each Bringdown Date, the Company shall furnish to the Agent
a certificate, dated as of such date and addressed to Agent, signed by the chief executive officer
and by the chief financial officer of the Company, to the effect that:



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



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



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



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



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



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



(u)   The Company shall disclose in its quarterly reports on Form 10-Q and in its annual
report on Form 10-K the number of the Shares sold through the Agent under this Agreement, the Net
Proceeds to the Company and the compensation paid by the Company with respect to sales of the
Shares pursuant to this Agreement during the relevant quarter (or alternatively, prepare a
prospectus supplement with such summary information and, at least once a quarter and subject to
Section 3(a) above, file such prospectus supplement pursuant to Rule 424(b) under the Securities
Act.



(v)      The Company shall ensure that there are at all times sufficient shares of Common
Shares to provide for the issuance, free of any preemptive rights, out of its authorized but
unissued Common Shares, of the maximum aggregate number of Shares authorized for issuance by the
Board pursuant to the terms of this Agreement. The Company will use its reasonable best efforts to
cause the Common Stock to be listed on the Nasdaq Capital Market and the OMX Nordic Exchange, to
the extent expressly permitted by the rules and regulations of the OMX Nordic Exchange and only if
such listing does not require the Company to file a prospectus with the Swedish Financial
Supervisory Authority, and to maintain such listing. The Company shall cooperate with Agent and
use its reasonable efforts to permit Shares to be eligible for clearance and settlement through the
facilities of DTC.



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



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



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



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



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



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



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



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



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



(e)     On each Bringdown Date, Goodwin Procter LLP, counsel for the Agent, shall not have
reasonably determined that the Base Prospectus, the Prospectus, or any Permitted Free Writing
Prospectus, as of such date, includes an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of the circumstances then
existing, not misleading.



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



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



(h)      The Financial Industry Regulatory Authority, Inc. shall have raised no objection to
the fairness and reasonableness of the underwriting terms and arrangements.



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



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



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



5.    Indemnification and Contribution.



(a)   The Company agrees to indemnify and hold harmless the Agent its affiliates, directors
and officers and each person, if any, who controls such Agent within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act from and against any losses, claims, damages
or liabilities, joint or several, to which the Agent may become subject, under the Securities Act
or otherwise (including in settlement of any litigation if such settlement is effected with the
written consent of the Company), insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, the Base Prospectus, the Prospectus, or
any amendment or supplement thereto, any Incorporated Documents, or any Permitted Free Writing
Prospectus or in any materials or information provided to investors by, or with the approval of,
the Company in connection with the offering of the Shares (the “Marketing Materials”) or arise out
of or are based upon the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, and will reimburse
the Agent for any legal or other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or action; provided,
however, that the Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration Statement, any Base
Prospectus, the Prospectus, or any amendment or supplement thereto or any Permitted Free Writing
Prospectus or in any Marketing Materials, in reliance upon and in conformity with written
information furnished to the Company by Agent specifically for use in the preparation thereof, it
being understood and agreed that the only information furnished by the Agent consists of the
information described as such in Section 5(g) hereof.



(b)       The Agent will indemnify and hold harmless the Company its affiliates, directors and
officers and each person, if any, who controls such Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any losses, claims, damages or
liabilities to which the Company may become subject, under the Securities Act or otherwise
(including in settlement of any litigation, if such settlement is effected with the written consent
of the Agent), insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Base Prospectus, the Prospectus, or any
amendment or supplement thereto or any Permitted Free Writing Prospectus or Marketing Materials, or
arise out of or are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Registration Statement, any Base Prospectus, the
Prospectus, or any amendment or supplement thereto, or any Permitted Free Writing Prospectus or
Marketing Materials in reliance upon and in conformity with written information furnished to the
Company by Agent specifically for use in the preparation thereof, it being understood and agreed
that the only information furnished by the Agent consists of the information described  as such in
Section 5(g) hereof, and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending against any such
loss, claim, damage, liability or action.



(c)    In addition to their other obligations under Section 5(a) and
Section 5(b), the Agent and the Company each agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding arising out of or based
upon any statement or omission, or any alleged statement or omission, described in
Section 5(a) or Section 5(b), as applicable, the indemnifying party will reimburse
the indemnified party on a monthly basis for all reasonable legal fees or other expenses incurred
in connection with investigating or defending any such claim, action, investigation, inquiry or
other proceeding (other than such fees or expenses the indemnifying party contests in good faith),
notwithstanding the absence of a judicial determination as to the propriety and enforceability of
the indemnifying party’s obligation to reimburse the indemnified party for such expenses and the
possibility that such payments might later be held to have been improper by a court of competent
jurisdiction.  To the extent that any such interim reimbursement payment is so held to have been
improper, the indemnified party shall promptly return it to the party or parties that made such
payment, together with interest, compounded daily, determined on the basis of the prime rate (or
other commercial lending rate for borrowers of the highest credit standing) announced from time to
time by the Wall Street Journal  (the “Prime Rate”).  Any such interim reimbursement payments which
are not made to the indemnified party within 30 days of the date a request for reimbursement is
made, accompanied by documentation reasonably required by the indemnifying party evidencing the
incurrence of such fees and expenses, shall bear interest at the Prime Rate from the date of such
request.  This indemnity agreement shall be in addition to any liabilities which the Company or the
Agent may otherwise have.



(d)   Promptly after receipt by an indemnified party under subsection (a) or (b) above of
notice of the commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the indemnifying party
shall not relieve the indemnifying party from any liability that it may have to any indemnified
party except to the extent such indemnifying party has been materially prejudiced by such failure. 
In case any such action shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party of the indemnifying
party’s election so to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that if the indemnified party shall have reasonably concluded
that it is advisable for it to be represented by separate counsel, the indemnified party shall have
the right to employ a single separate counsel to represent it, satisfactory to the indemnifying
party, in which event the reasonable fees and expenses of such single separate counsel shall be
borne by the indemnifying party or parties and reimbursed to the indemnified party as incurred (in
accordance with the provisions of subsection (c) above).



The indemnifying party under this Section 5 shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such consent or if there
be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified
party against any loss, claim, damage, liability or expense by reason of such settlement or
judgment.  Notwithstanding the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel
as contemplated by this Section 5, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) the Indemnifying Party shall have received notice of such settlement at least 30 days prior to
such settlement being entered into, and (iii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such settlement.  No
indemnifying party shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party, unless such
settlement, compromise or consent (a) includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such action, suit or proceeding and
(b) does not include a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.



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



(f)      The obligations of the Company under this Section 5 shall be in addition to
any liability which the Company may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls the Agent within the meaning of the Securities
Act; and the obligations of the Agent under this Section 5 shall be in addition to any
liability that the Agent may otherwise have and shall extend, upon the same terms and conditions,
to each director of the Company (including any person who, with his consent, is named in the
Registration Statement as about to become a director of the Company), to each officer of the
Company who has signed the Registration Statement and to each person, if any, who controls the
Company within the meaning of the Securities Act.



(g)    The Agent confirms and the Company acknowledges that no information has been furnished
in writing to the Company by or on behalf of the Agent specifically for inclusion in the
Registration Statement, any Base Prospectus, the Prospectus or any Permitted Free Writing
Prospectus.



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



 




7.  Termination of this Agreement.



(a)   The Company shall have the right, by giving written notice as hereinafter specified, to
terminate the provisions of this Agreement relating to the solicitation of offers to purchase the
Shares in its sole discretion at any time. Any such termination shall be without liability of any
party to any other party except that (i) if the Shares have been sold through the Agent for the
Company, then Sections 3(g) and 3(z) shall remain in full force and effect,
(ii) with respect to any pending sale, through the Agent for the Company, the obligations of the
Company with respect to such pending sale of Shares, including in respect of compensation of the
Agent, shall remain in full force and effect notwithstanding such termination and (iii) the
provisions of Section 3(g), Section 5 and Section 6 of this Agreement shall
remain in full force and effect notwithstanding such termination.



(b)       The Agent shall have the right, by giving written notice as hereinafter specified,
to terminate the provisions of this Agreement relating to the solicitation of offers to purchase
the Shares in its sole discretion at any time. Any such termination shall be without liability of
any party to any other party except that (i) the provisions of the last sentence of Section
3(g), Section 5 and Section 6 of this Agreement shall remain in full force and
effect notwithstanding such termination and (ii) the provisions of Section 3(g) other than the last
sentence thereof shall remain in full force and effect only if the Agent has terminated this
Agreement as a result of the Company’s default of its obligations hereunder and its failure to cure
any default within a reasonable period of time.



(c)    This Agreement shall remain in full force and effect unless terminated pursuant to
Sections 7(a) or (b) above or otherwise by mutual agreement of the parties;
provided that any such termination by mutual agreement shall in all cases be deemed to provide that
Section 3(g), Section 5 and Section 6 shall remain in full force and
effect. This Agreement shall terminate automatically upon the issuance and sale of Shares having an
aggregate offering price equal to the amount set forth in the first paragraph of this Agreement.



(d)   Any termination of this Agreement shall be effective on the date specified in such
notice of termination; provided that such termination shall not be effective earlier than the close
of business on the date of receipt of such notice by the Agent or the Company, as the case may be.
If such termination shall occur prior to the Settlement Date for any sale of the Shares, such sale
shall settle in accordance with the provisions of Section 2(a)(vi) of this Agreement.



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



9.       Notices.  Except as otherwise provided herein, all communications under this
Agreement shall be in writing and, if to the Agent, shall be mailed, delivered or telecopied to
Maxim Group LLC, 405 Lexington Avenue, New York, New York 10174, (fax:  (212) 895-3783), Attention:
David Strupp, Managing Director, Investment Banking, with a copy to Goodwin Procter LLP, The New
York Times Building, 620 Eighth Avenue, New York, New York 10018, (fax: (212) 355-3333) Attention:
Michael D. Maline.  Notices to the Company shall be given to it at 777 Old Saw Mill River Road,
Tarrytown, New York 10591, (fax:  (914) 606-3501) Attention:  Robert Cook, Chief Financial Officer,
with a copy to Eilenberg & Krause LLP, 11 East 44th Street, 19th Floor, New York, New York 10017,
(fax: (212) 986-2399) Attention: Adam Eilenberg.  Any party to this Agreement may change such
address for notices by sending to the parties to this Agreement written notice of a new address for
such purpose.



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



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



12.     Governing Law.  This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.



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



 




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



 




	 	 	 
	 

	 	Very truly yours,
	 

	 	 
	 

	 	EPICEPT CORPORATION
	 

	 	 
	 

	 	 
	 

	 	By
	 

	 	Name:
	
 
	 	Title:
	 

	 	 
	Confirmed as of the date first

	 	 
	above mentioned.

	 	 
	 

	 	 
	MAXIM GROUP LLC

	 	 
	 

	 	 
	 

	 	 
	By

	 	 
	Name:

Title:

	 	 









Schedule A




Permitted Free Writing Prospectus




None.



Schedule B




Individuals Permitted to Authorize Sales of Shares




Jack V. Talley


Robert W. Cook


Charles Darder



Schedule C




Form of E-mail or Telecopy Confirmation




Gentlemen:



Pursuant to the terms and subject to the conditions contained in the Equity Distribution Agreement
between EpiCept Corporation (the “Company”) and Maxim Group LLC. (“Maxim”) dated February 5, 2010
(the “Agreement”), I hereby confirm my telephonic request on behalf of the Company that Maxim sell
[for a period of [one] [two] [other period] days, up to [ ] shares of the Company’s Common Stock,
par value $0.0001 per share, at a minimum market price of $    per share. In
connection therewith, I hereby represent and warrant to Maxim that the Company is not in possession
of any material non-public information that would cause it to be in breach of Section 2(c) of the
Agreement.



Schedule D




Individuals to Which Notice Can Be Given




Maxim Group LLC



David J. Strupp, on behalf of the ATM Team



Via telecopy at 212-895-3783



Via email at EPCT@maximgrp.com



EpiCept Corporation



Jack V. Talley, jtalley@epicept.com



Robert W. Cook, rcook@epicept.com



Charles Darder, cdarder@epicept.com



Via facsimile: 914-606-3562



ANNEX A




FORM OF COMPANY COUNSEL OPINION





(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with full corporate
power and authority to own or lease, as the case may be, and to operate its properties and
conduct its business as currently being carried on and as described in the Registration
Statement and in the Prospectus.




(ii) Each of Maxim Pharmaceuticals Inc. and Cytovia, Inc. has been duly
incorporated and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full corporate power and authority to own or lease,
as the case may be, and to operate its properties and conduct its business as currently
being carried on and as described in the Registration Statement and in the Prospectus.




(iii) The Company is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction listed in a schedule to such counsel’s opinion.




(iv) Each Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction listed opposite such Subsidiary’s
name in a schedule to such counsel’s opinion.




(v) The authorized, issued and outstanding capital stock of the Company
conforms as to legal matters to the description thereof contained in the Registration
Statement and the Prospectus under the caption “Description of Capital Stock” as of the
date stated therein.




(vi) The Shares to be issued and sold by the Company hereunder have been duly
authorized and, when issued, delivered and paid for in accordance with the terms of the
Agreement, will have been validly issued and will be fully paid and nonassessable, and the
holders thereof will not be subject to personal liability by reason of being such holders.




(vii)  Except as otherwise stated in the Registration Statement and in the
Prospectus, there are no preemptive rights or other rights to subscribe for or to purchase,
or any restriction upon the voting or transfer of, any shares of Common Stock pursuant to
the Company’s charter, by-laws or any agreement or other instrument known to such counsel to
which the Company is a party or by which the Company is bound.




(viii) To such counsel’s knowledge, neither the filing of the Registration
Statement nor the offering or sale of the Shares as contemplated by the Agreement gives rise
to any rights for or relating to the registration of any shares of Common Stock or other
securities of the Company.




(ix) The Registration Statement has become effective under the Securities Act
and, to such counsel’s knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of such counsel, threatened by the Commission.




(x) The descriptions in the Registration Statement and in the Prospectus of
statutes, regulations, legal and governmental proceedings, contracts and other documents are
accurate and fairly present the information required to be shown.




(xi) The Company has full corporate power and authority to enter into this
Agreement, and the Agreement has been duly authorized, executed and delivered by the
Company.




(xii) The execution, delivery and performance of the Agreement and the
consummation of the transactions herein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under, any statute,
rule or regulation, any agreement or instrument known to such counsel to which the Company
is a party or by which it is bound or to which any of its property is subject, the Company’s
charter or by-laws, or any order or decree known to such counsel of any court or
Governmental Agency having jurisdiction over the Company or any of its respective
properties.




(xiii) The Company is not, and, after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as described in the
Prospectus, will not be, an “investment company” as defined in the Investment Company Act of
1940, as amended.




(xiv) No consent, approval, authorization or order of, or filing with, any
court or governmental agency or body is required for the execution, delivery and performance
of the Agreement or for the consummation of the transactions contemplated hereby, including
the issuance or sale of the Shares by the Company, except such as may be required under the
Securities Act or state securities laws or under the bylaws, rules and regulations of FINRA.




(xv) The Registration Statement and the Prospectus, and any amendment thereof
or supplement thereto, comply, and as of their respective effective or issue dates complied,
as to form in all material respects with the requirements of the Securities Act and the
Rules and Regulations; the conditions for use of Form S-3, set forth in the General
Instructions thereto, have been satisfied.




(xvi) Each document filed pursuant to the Exchange Act (other than the
financial statements and supporting schedules included therein, as to which no opinion need
to be rendered) and incorporated or deemed to be incorporated by reference in the Prospectus
complied when so filed as to form in all material respects with the Exchange Act.



In rendering such opinion, such counsel may state that its opinion is limited to matters
governed by the federal securities laws of the United States of America, the internal laws of the
State of New York and the Delaware General Corporation Law. Such counsel shall also have furnished
to the Agent, on every Bringdown Date, a written statement, addressed to the Agent and dated as of
such date, in form and substance satisfactory to the Agent, to the effect that (x) such counsel has
acted as counsel to the Company in connection with the preparation of the Registration Statement
and the Prospectus and has reviewed the Registration Statement, and (y) subject to the foregoing,
such counsel confirms that, on the basis of the information gained in the course of performing the
services referred to therein, nothing came to such counsel’s attention that caused such counsel to
believe that (i) the Registration Statement, on the effective date, , contained an untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; or (ii) the Prospectus, as of its date, and as of
the date of such opinion, contained or contains any untrue statement of a material fact or omitted
or omits to state any material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided, however, such counsel is
not passing upon and does not (a) assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the Prospectus and (b)
express any belief with respect to the financial statements and supporting schedules and other
financial and statistical data included or incorporated by reference in, or omitted from, the
Registration Statement or the Prospectus. References to the Prospectus in this paragraph shall also
include any supplements thereto at the Settlement Date.