Exhibit 10.1


 





CAPRICOR
THERAPEUTICS, INC.


 


cOMMON
STOCK





 


SALES AGREEMENT







 


July 22, 2019





 


H.C. Wainwright & Co., LLC


430 Park Avenue


New York, NY 10022


 


Ladies and Gentlemen:


 


Capricor Therapeutics,
Inc. (the “Company”), confirms its agreement (this “Agreement”) with H.C. Wainwright
 & Co., LLC (“HCW”), as follows:


 


1.  Issuance
and Sale of Placement Shares. The Company agrees that, from time to time during the term of this Agreement, on the terms and
subject to the conditions set forth herein, it may issue and sell through HCW, shares (the “Placement Shares”)
of the Company’s common stock, $0.001 par value per share (the “Common Stock”); provided however,
that in no event shall the Company issue or sell through HCW such number of Placement Shares that (a) exceeds the number of
shares or dollar amount of Common Stock registered on the effective Registration Statement (as defined below) pursuant to which
the offering is being made, (b) exceeds the number of shares or dollar amount registered on the Prospectus Supplement (as defined
below), or (c) would cause the Company to exceed the share amount limitations set forth in General Instruction I.B.6 of Form S-3
(the lesser of (a), (b) or (c), the “Maximum Amount”). Notwithstanding anything to the contrary contained
herein, the parties hereto agree that compliance with the limitations set forth in this Section 1 on the number of Placement
Shares issued and sold under this Agreement shall be the sole responsibility of the Company and that HCW shall have no obligation
in connection with such compliance. The issuance and sale of Placement Shares through HCW will be effected pursuant to the Registration
Statement (as defined below), although nothing in this Agreement shall be construed as requiring the Company to use the Registration
Statement to issue any Placement Shares.


 


The Company has filed,
in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations thereunder, also as
amended (the “Securities Act”), with the Securities and Exchange Commission (the “Commission”),
a registration statement on Form S-3 (File No. 333-227955), including a base prospectus (the “Base Prospectus”),
relating to certain securities, including the Placement Shares to be issued from time to time by the Company, and which incorporates
by reference documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder, also as amended (the “Exchange Act”).
The Company has prepared a prospectus supplement to the Base Prospectus included as part of such registration statement specifically
relating to the Placement Shares (the “Prospectus Supplement”). The Company will furnish to HCW, for
use by HCW solely in connection with the Placements (as defined below) to be conducted in accordance with this Agreement, copies
of the Base Prospectus included as part of such registration statement, as supplemented by the Prospectus Supplement, relating
to the Placement Shares. Except where the context otherwise requires, such registration statement, including all documents filed
as part thereof or incorporated by reference therein, and including any information contained in a Prospectus (as defined below)
subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act or deemed to be a part of such registration
statement pursuant to Rule 430B of the Securities Act, is herein called the “Registration Statement.”
The Base Prospectus, including all documents incorporated or deemed incorporated therein by reference to the extent such information
has not been superseded or modified in accordance with Rule 412 under the Securities Act (as qualified by Rule 430B(g) of the Securities
Act), included in the Registration Statement, as it may be supplemented by the Prospectus Supplement, in the form in which such
Base Prospectus and/or Prospectus Supplement have most recently been filed by the Company with the Commission pursuant to Rule
424(b) under the Securities Act, is herein called the “Prospectus.” Any reference herein to the Registration
Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and include any documents deemed incorporated
by reference therein (pursuant to the Securities Act or the Exchange Act) (the “Incorporated Documents”),
and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to
the Registration Statement or the Prospectus shall be deemed to refer to and include the filing after the execution hereof of any
document with the Commission incorporated by reference therein.


 






     


     


    

 


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


 


2.  Placements.
Each time that the Company wishes to issue and sell Placement Shares hereunder (each, a “Placement”),
it will notify HCW by email notice (or other method mutually agreed to in writing by the parties) (a “Placement Notice”)
containing the parameters in accordance with which it desires the Placement Shares to be sold, which shall at a minimum include
the number of Placement Shares to be issued, the time period during which sales are requested to be made, any limitation on the
number of Placement Shares that may be sold in any one Trading Day (as defined in Section 3) and any minimum price below
which sales may not be made, a form of which containing such minimum sales parameters necessary is attached hereto as Schedule
1. The Placement Notice shall originate from any of the individuals from the Company set forth on Schedule 2
(with a copy to each of the other individuals from the Company listed on such schedule), and shall be addressed to each of the
individuals from HCW set forth on Schedule 2, as such Schedule 2 may be amended from time to time.
The Placement Notice shall be effective upon receipt by HCW unless and until (i) in accordance with the notice requirements set
forth in Section 4, HCW declines to accept the terms contained therein for any reason, in its sole discretion, (ii) the
entire amount of the Placement Shares included in the Placement Notice have been sold thereunder, (iii) in accordance with the
notice requirements set forth in Section 4, the Company suspends or terminates the Placement Notice, (iv) the Company issues
a subsequent Placement Notice with parameters superseding those on the earlier dated Placement Notice, or (v) this Agreement has
been terminated under the provisions of Section 11. The amount of any discount, commission or other compensation to be paid
by the Company to HCW in connection with the sale of the Placement Shares shall be calculated in accordance with the terms set
forth in Schedule 3. It is expressly acknowledged and agreed that neither the Company nor HCW will have any obligation
whatsoever with respect to a Placement or any Placement Shares unless and until the Company delivers a Placement Notice to HCW
and HCW does not decline such Placement Notice pursuant to the terms set forth above, and then only upon the terms specified therein
and herein. In the event of a conflict between the terms of this Agreement and the terms of a Placement Notice, the terms of the
Placement Notice will control.


 


3.  Sale
of Placement Shares by HCW.


 


(a)  Subject to
the terms and conditions herein set forth, upon the Company’s delivery of a Placement Notice, and unless the sale of the
Placement Shares described therein has been declined, suspended, or otherwise terminated in accordance with the terms of this Agreement,
HCW, for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal
trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the NASDAQ Capital Market
(“Exchange”) to sell such Placement Shares up to the amount specified, and otherwise in accordance with
the terms of such Placement Notice. HCW will provide written confirmation to the Company (including by email correspondence to
each of the individuals of the Company set forth on Schedule 2, if receipt of such correspondence is actually acknowledged
by any of the individuals to whom the notice is sent, other than via auto-reply) no later than the opening of the Trading Day (as
defined below) immediately following the Trading Day on which it has made sales of Placement Shares hereunder setting forth the
number of Placement Shares sold on such day, the compensation payable by the Company to HCW pursuant to Section 2 with respect
to such sales and the Net Proceeds (as defined below) payable to the Company. HCW may sell Placement Shares by any method permitted
by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act, including without limitation
sales made through Exchange, on any other existing trading market for the Common Stock or to or through a market maker. If expressly
authorized by the Company in a Placement Notice, HCW may also sell Placement Shares in negotiated transactions. Notwithstanding
the provisions of Section 6(kk), HCW shall not purchase Placement Shares for its own account as principal unless expressly
authorized to do so by the Company in a Placement Notice. The Company acknowledges and agrees that (i) there can be no assurance
that HCW will be successful in selling Placement Shares, and (ii) HCW will incur no liability or obligation to the Company or any
other person or entity if it does not sell Placement Shares for any reason other than a failure by HCW to use its commercially
reasonable efforts consistent with its normal trading and sales practices to sell such Placement Shares as required under this
Section 3. For the purposes hereof, “Trading Day” means any day on which the Company’s Common
Stock is purchased and sold on the principal market on which the Common Stock is listed or quoted.


 


(b) Limitations
on Offering Size. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares if, after
giving effect to the sale of such Placement Shares, the aggregate number of Placement Shares sold pursuant to this Agreement would
exceed the lesser of (A) together with all sales of Placement Shares under this Agreement, the Maximum Amount, and (B) the amount
authorized from time to time to be issued and sold under this Agreement by the Company’s board of directors, a duly authorized
committee thereof or a duly authorized executive committee, and notified to HCW in writing. Under no circumstances shall the Company
cause or request the offer or sale of any Placement Shares pursuant to this Agreement, and HCW will not effectuate a sale, at a
price lower than the minimum price authorized from time to time by the Company’s board of directors, a duly authorized committee
thereof or a duly authorized executive committee, and notified to HCW in writing. Further, under no circumstances shall the Company
cause or permit the aggregate offering amount of Placement Shares sold pursuant to this Agreement to exceed the Maximum Amount.


 






    - 2 -


     


    

 


4.  Suspension
of Sales.


 


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


 


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


 


5.  Settlement.


 


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


 


(b) Delivery
of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically
transfer the Placement Shares being sold by crediting HCW’s or its designee’s account (provided HCW shall have given
the Company written notice of such designee at least one Trading Day prior to the Settlement Date) at The Depository Trust Company
through its Deposit and Withdrawal at Custodian System (“DWAC”) or by such other means of delivery as
may be mutually agreed upon by the parties hereto which in all cases shall be freely tradable, transferable, registered shares
in good deliverable form. On each Settlement Date, HCW will deliver the related Net Proceeds in same day funds to an account designated
by the Company on, or prior to, the Settlement Date. The Company agrees that if the Company, or its transfer agent (if applicable),
defaults in its obligation to deliver duly authorized Placement Shares on a Settlement Date, in addition to and in no way limiting
the rights and obligations set forth in Section 9(a) (Indemnification and Contribution) hereto, it will (i) hold HCW
harmless against any loss, claim, damage, or reasonable, documented expense (including reasonable and documented legal fees and
expenses), as incurred, arising out of or in connection with such default by the Company and (ii) pay to HCW any commission, discount,
or other compensation to which it would otherwise have been entitled absent such default.


 


6.  Representations
and Warranties of the Company. The Company represents and warrants to, and agrees with, HCW that, as of the effective date
of the Registration Statement, each Representation Date (as defined in Section 7(m)), each date on which a Placement Notice is
given, and any date on which Placement Shares are sold hereunder:


 


(a) Compliance
with Registration Requirements. The Registration Statement has been declared effective by the Commission under the Securities
Act. The Company has complied with all requests of the Commission for additional or supplemental information related to the Registration
Statement or the Prospectus. No stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the best knowledge of the
Company, threatened by the Commission.


 


(b)  No
Misstatement or Omission. The Prospectus when filed complied and, as amended or supplemented, if applicable, will comply in
all material respects with the Securities Act. Each of the Registration Statement, any Rule 462(b) Registration Statement,
the Prospectus and any post-effective amendments or supplements thereto, at the time it became effective or its date, as applicable,
and as of each of the Settlement Dates, if any, complied in all material respects with the Securities Act and, as of each Settlement
Date, if any, did not and will not contain any untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading. The Prospectus, as amended or supplemented, as of
its date, each date on which a Placement Notice is given, and as of each of the Settlement Dates, if any, will not contain any
untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The representations and warranties set forth in the two
immediately preceding sentences do not apply to statements in or omissions from the Registration Statement, any Rule 462(b)
Registration Statement, or any post-effective amendment thereto, or the Prospectus, or any amendments or supplements thereto, made
in reliance upon and in conformity with information relating to HCW furnished to the Company in writing by HCW expressly for use
therein. There are no material contracts or other documents required to be described in the Prospectus or to be filed as exhibits
to the Registration Statement which have not been described or filed as required.


 






    - 3 -


     


    

 


(c) Not
an Ineligible Issuer. The Company currently is not an “ineligible issuer,” as defined in Rule 405 of the rules
and regulation of the Commission. The Company agrees to notify HCW promptly upon the Company becoming an “ineligible issuer.”


 


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


 


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


 


(f) S-3 Eligibility.
(i) At the time of filing the Registration Statement and (ii) at the time of the most recent amendment thereto for the purposes
of complying with Section 10(a)(3) of the Securities Act (whether such amendment was by post-effective amendment, incorporated
report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), the Company met the then applicable requirements
for use of Form S-3 under the Securities Act, including compliance with General Instruction I.B.6 of Form S-3, up to the Maximum
Amount. As of the close of trading on the Exchange on July 15, 2019, a Trading Day within 60 days prior to the date of
this Agreement, the aggregate market value of the outstanding voting and non-voting common equity (as defined in Rule 405)
of the Company held by persons other than affiliates of the Company (pursuant to Rule 144 of the Securities Act, those that directly,
or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the Company) 
(the “Non-Affiliate Shares”), was approximately $16.5 million (calculated by multiplying (x) the price
at which the common equity of the Company was last sold on the Exchange on July 15, 2019, a Trading Day within 60 days prior to
the date of this Agreement times (y) the number of Non-Affiliate Shares). The Company is not a shell company (as defined in Rule
405) and has not been a shell company for at least 12 calendar months previously.


 


(g) Authorization
of the Placement Shares. The Placement Shares, when issued and delivered, will be duly authorized for issuance and sale pursuant
to this Agreement and, when issued and delivered by the Company against payment therefor pursuant to this Agreement, will be validly
issued, fully paid and nonassessable.


 


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


 






    - 4 -


     


    

 


(i) No
Material Adverse Change. Except as otherwise disclosed in the Prospectus, subsequent to the respective dates as of which information
is given in the Prospectus: (i) there has been no material adverse change, or any development that could reasonably be expected
to result in a material adverse change, in the condition, financial or otherwise, or in the earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of business, of the Company and its subsidiaries, considered as
one entity (any such change is called a “Material Adverse Change”); (ii) the Company and its subsidiaries,
considered as one entity, have not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary
course of business nor entered into any material transaction or agreement not in the ordinary course of business: and (iii) there
has been no dividend or distribution of any kind declared, paid or made by the Company or, except for regular quarterly dividends
publicly announced by the Company or dividends paid to the Company or other subsidiaries, by any of its subsidiaries on any class
of capital stock or repurchase or redemption by the Company or any of its subsidiaries of any class of capital stock.


 


(j) Independent
Accountants. Rose, Snyder & Jacobs LLP, who has expressed its opinion with respect to the financial statements (which term
as used in this Agreement includes the related notes thereto) and supporting schedules filed with the Commission or incorporated
by reference as a part of the Registration Statement and included in the Prospectus, is an independent registered public accounting
firm as required by the Securities Act and the Exchange Act.


 


(k) Preparation
of the Financial Statements. The financial statements filed with the Commission as a part of or incorporated by reference in
the Registration Statement and included in the Prospectus present fairly, in all material respects, the consolidated financial
position of the Company and its subsidiaries as of and at the dates indicated and the results of their operations and cash flows
for the periods specified. The supporting schedules included in or incorporated in the Registration Statement present fairly the
information required to be stated therein. Such financial statements and supporting schedules have been prepared in accordance
with generally accepted accounting principles as applied in the United States applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes thereto. No other financial statements or supporting schedules
are required to be included in or incorporated in the Registration Statement.


 


(l) XBRL.
The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement
fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s
rules and guidelines applicable thereto.


 


(m) Incorporation
and Good Standing of the Company and its Subsidiaries. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under this
Agreement. Each subsidiary of the Company has been duly organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its organization and has the requisite power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus. Each of the Company and its subsidiaries is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business, except for such jurisdictions where the failure to
so qualify or to be in good standing would not, individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change. Except as described in the Prospectus, all of the issued and outstanding equity interests of the subsidiaries have
been duly authorized and validly issued, are fully paid and nonassessable and are owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance or adverse claim. The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in Exhibit 21.1 to the Company’s Annual
Report on Form 10-K for the most recently ended fiscal year and other than (i) those subsidiaries not required to be
listed on Exhibit 21.1 by Item 601 of Regulation S-K under the Exchange Act and (ii) those subsidiaries formed since
the last day of the most recently ended fiscal year.


 






    - 5 -


     


    

 


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


 


(o) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals Required. Neither the Company nor any of its subsidiaries is
in violation of its charter or by-laws or is in default (or, with the giving of notice or lapse of time, would be in default) (“Default”)
under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other instrument to which the Company
or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of
the Company or any of its subsidiaries is subject (each, an “Existing Instrument”), except for such Defaults
as would not, individually or in the aggregate, result in a Material Adverse Change. The Company’s execution, delivery and
performance of this Agreement and consummation of the transactions contemplated hereby and by the Prospectus (i) have been
duly authorized by all necessary corporate action and will not result in any violation of the provisions of the charter or by-laws
of the Company or any subsidiary, (ii) will not conflict with or constitute a breach of, or Default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries
pursuant to, or require the consent of any other party to, any Existing Instrument, except for such conflicts, breaches, Defaults,
liens, charges or encumbrances as would not, individually or in the aggregate, result in a Material Adverse Change and (iii) will
not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company or
any subsidiary. No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental
or regulatory authority or agency, is required for the Company’s execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby and by the Prospectus, except such as have been obtained or made by the Company
and are in full force and effect under the Securities Act, or that may be required under applicable state securities or blue sky
laws and from the Financial Industry Regulatory Authority (“FINRA”) or Exchange.


 


(p) No
Material Actions or Proceedings. Except as disclosed in the Prospectus, there are no legal or governmental actions, suits or
proceedings pending or, to the best of the Company’s knowledge, threatened (i) against or affecting the Company or any
of its subsidiaries, (ii) which has as the subject thereof any officer or director of, or property owned or leased by, the
Company or any of its subsidiaries or (iii) relating to environmental or discrimination matters, where in any such case (A) there
is a reasonable possibility that such action, suit or proceeding might be determined adversely to the Company or such subsidiary
and (B) any such action, suit or proceeding, if so determined adversely, would result in a Material Adverse Change or adversely
affect the consummation of the transactions contemplated by this Agreement. No material labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the Company’s knowledge, is threatened or imminent.


 


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


 


(r) Tax
Law Compliance. Subject to any permitted extensions, the Company and its consolidated subsidiaries have filed all necessary
federal, state and foreign income, property and franchise tax returns (or have properly requested extensions thereof) and have
paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied
against any of them except as may be being contested in good faith and by appropriate proceedings. The Company has made adequate
charges, accruals and reserves in the applicable financial statements referred to in Section 6(k) above in respect
of all federal, state and foreign income, property and franchise taxes for all periods as to which the tax liability of the Company
or any of its consolidated subsidiaries has not been finally determined.


 


(s) Company
Not an “Investment Company”. The Company has been advised of the rules and requirements under the Investment Company
Act of 1940, as amended (the “Investment Company Act”). The Company is not, and after receipt of payment
for the Placement Shares will not be, an “investment company” within the meaning of Investment Company Act.


 






    - 6 -


     


    

 


(t) Insurance.
Except as otherwise described in the Prospectus, each of the Company and its subsidiaries are insured by insurers of recognized
financial responsibility with policies in such amounts and with such deductibles and covering such risks as are generally deemed
prudent and customary for their respective businesses as currently conducted and described in the Prospectus. The Company has no
reason to believe that it or any subsidiary will not be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result in a Material Adverse Change.


 


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


 


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


 


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


 


(x) No
Unlawful Contributions or Other Payments. Neither the Company nor any of its subsidiaries nor, to the Company’s knowledge,
any director, officer, employee or agent of the Company or any subsidiary acting on behalf of the Company or any of its subsidiaries
has  taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices
Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), 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 and, to the knowledge
of the Company, its controlled affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.


 


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


 






    - 7 -


     


    

 


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


 


(aa) Company’s
Accounting System. The Company maintains a system of “internal control over financial reporting” (as such term
is defined in Rule 13a-15(f) of the General Rules and Regulations under the Exchange Act (the “Exchange Act Rules”))
that complies with the requirements of the Exchange Act and has been designed by its respective principal executive and principal
financial officers, or under their supervision, to provide reasonable assurances that (i) transactions are executed in accordance
with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with U.S. GAAP and to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as
described in the Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (A) no material
weakness in the Company’s internal control over financial reporting (whether or not remediated) and (B) 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.


 


(bb) Disclosure
Controls. The Company maintains disclosure controls and procedures (as such is defined in Rule 13a-15(e) of the Exchange Act
Rules) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure
that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls
and procedures designed to ensure that such information is accumulated and communicated to the Company’s management to allow
timely decisions regarding disclosures. To the extent required by the Exchange Act Rules, the Company has conducted evaluations
of the effectiveness of its disclosure controls as required by Rule 13a-15 of the Exchange Act.


 


(cc) Compliance
with Environmental Laws. Except as otherwise described in the Prospectus, and except as would not, individually or in the aggregate,
result in a Material Adverse Change (i)  to the Company’s knowledge, neither the Company nor any of its subsidiaries
is in violation of any federal, state, local or foreign law or regulation relating to pollution or protection of human health or
the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum and petroleum products (collectively,
 “Materials of Environmental Concern”), or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern (collectively, “Environmental
Laws”), which violation includes, but is not limited to, noncompliance with any permits or other governmental authorizations
required for the operation of the business of the Company or its subsidiaries under applicable Environmental Laws, or noncompliance
with the terms and conditions thereof, nor has the Company or any of its subsidiaries received any written communication, whether
from a governmental authority, citizens group, employee or otherwise, that alleges that the Company or any of its subsidiaries
is in violation of any Environmental Law; (ii) there is no claim, action or cause of action filed with a court or governmental
authority, no investigation with respect to which the Company has received written notice, and no written notice by any person
or entity alleging potential liability for investigatory costs, cleanup costs, governmental responses costs, natural resources
damages, property damages, personal injuries, attorneys’ fees or penalties arising out of, based on or resulting from the
presence, or release into the environment, of any Material of Environmental Concern at any location owned, leased or operated by
the Company or any of its subsidiaries, now or in the past (collectively, “Environmental Claims”), pending
or, to the Company’s knowledge, threatened against the Company or any of its subsidiaries or any person or entity whose liability
for any Environmental Claim the Company or any of its subsidiaries has retained or assumed either contractually or by operation
of law; and (iii) to the best of the Company’s knowledge, there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the release, emission, discharge, presence or disposal of any Material
of Environmental Concern, that reasonably could result in a violation of any Environmental Law or form the basis of a potential
Environmental Claim against the Company or any of its subsidiaries or against any person or entity whose liability for any Environmental
Claim the Company or any of its subsidiaries has retained or assumed either contractually or by operation of law.


 


(dd)  Intellectual
Property. Except for specific matters described in the Prospectus, the Company and its subsidiaries own, possess or have sufficient
rights to use all trademarks, trade names, patent rights, copyrights, domain names, licenses, approvals, trade secrets, inventions,
technology, know-how and other intellectual property and similar rights, including registrations and applications for registration
thereof (collectively, “Intellectual Property Rights”) necessary or material to the conduct of the business
now conducted or proposed in the Prospectus to be conducted by them. Except as disclosed in the Prospectus (i) to the Company’s
knowledge, there are no rights of third parties to any of the Intellectual Property Rights owned or purported to be owned by the
Company or its subsidiaries, except for those certain rights retained by the federal and state governments pursuant to the Company’s
grants and loan award; (ii) to the Company’s knowledge there is no infringement, misappropriation, breach, or default by
any third party of any of the Intellectual Property Rights of the Company or any of its subsidiaries; (iii) there is no pending
or, to the Company’s knowledge, threatened action, suit, proceeding or claim by any third party challenging the Company’s
or any of its subsidiaries’ rights in or to, or the violation of any of the terms of, any of their Intellectual Property
Rights; (iv) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by any third
party challenging the validity, enforceability or scope of any Intellectual Property Rights of the Company or any of its subsidiaries;
(v) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by any third party that
the Company or any of its subsidiaries infringes, misappropriates or otherwise violates or conflicts with any Intellectual Property
Rights of any third party; (vi) none of the Intellectual Property Rights used or held for use by the Company or any of its subsidiaries
in their businesses has been obtained or is being used or held for use by the Company or any of its subsidiaries in violation of
any contractual obligation binding on the Company or any of its subsidiaries, and (vii) the Company and its subsidiaries have taken
reasonable steps in accordance with normal industry practice to maintain the confidentiality of all Intellectual Property Rights
the value of which to the Company or any subsidiary is contingent upon maintaining the confidentiality thereof, except in each
case covered by clauses (i) – (vii) such as would not, if determined adversely to the Company or any of its subsidiaries,
individually or in the aggregate, result in a Material Adverse Change.


 






    - 8 -


     


    

 


(ee) Compliance
with Applicable Laws. The Company and the subsidiaries: (A) except as disclosed in the Incorporated Documents, are and at all
times have been in material compliance with all statutes, rules and regulations applicable 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 under development, manufactured or distributed by the Company or the Subsidiaries (“Applicable
Laws”), (B) have not received any notice of adverse finding, warning letter, or other written correspondence or notice
from any federal, state, local or foreign governmental or regulatory authority alleging or asserting material 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”), which would, individually or in the
aggregate, result in a Material Adverse Change; (C) possess all material Authorizations and such Authorizations are valid and in
full force and effect and neither the Company nor the Subsidiaries is in material violation of any term of any such Authorizations;
(D) have not received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or
other action any federal, state, local or foreign governmental or regulatory authority or third party alleging that any Company
product, operation or activity is in material violation of any Applicable Laws or Authorizations and has no knowledge that any
federal, state, local or foreign governmental or regulatory authority or third party is considering any such claim, litigation,
arbitration, action, suit, investigation or proceeding against the Company; (E) have not received notice that any federal, state,
local or foreign governmental or regulatory authority has taken, is taking or intends to take action to limit, suspend, modify
or revoke any material Authorizations and has no knowledge that any federal, state, local or foreign governmental or regulatory
authority is considering such action; and (F) have filed, obtained, maintained or submitted all reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations except
where the failure to file such reports, documents, forms, notices, applications, records, claims, submissions and supplements or
amendments would not result in a Material Adverse Change, and that all such reports, documents, forms, notices, applications, records,
claims, submissions and supplements or amendments were materially complete and correct on the date filed (or were corrected or
supplemented by a subsequent submission).


 


(ff) Clinical
Studies. All animal and other preclinical studies and clinical trials conducted by the Company or on behalf of the Company
were, and, if still pending are, to the Company’s knowledge, being conducted in all material respects in compliance with
all Applicable Laws and in accordance with experimental protocols, procedures and controls generally used by qualified experts
in the preclinical study and clinical trials of new drugs and biologics as applied to comparable products to those being developed
by the Company; the descriptions of the results of such preclinical studies and clinical trials contained in the Registration Statement
and the Prospectus are accurate in all material respects, and, except as set forth in the Registration Statement and the Prospectus,
the Company has no knowledge of any other clinical trials or preclinical studies, the results of which reasonably call into question
the clinical trial or preclinical study 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 Company has not received any written notices or correspondence
from any domestic or foreign governmental agency requiring the termination or suspension of any preclinical studies or clinical
trials conducted by or on behalf of the Company that are described in the Registration Statement and the Prospectus or the results
of which are referred to in the Registration Statement and the Prospectus.


 


(gg) Listing.
The Company is subject to and in compliance in all material respects with the reporting requirements of Section 13 or Section 15(d)
of the Exchange Act. The Common Stock is registered pursuant to Section 12(b) or Section 12(g) of the Exchange Act and is listed
on the Exchange, and the Company has taken no action designed to, or reasonably likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act or delisting the Common Stock from the Exchange, nor has the Company received any notification
that the Commission or Exchange is contemplating terminating such registration or listing.


 


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


 


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


 


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


 






    - 9 -


     


    

 


(kk) HCW Purchases.
The Company acknowledges and agrees that HCW has informed the Company that HCW may, to the extent permitted under the Securities
Act, the Exchange Act and this Agreement, purchase and sell shares of Common Stock for its own account while this Agreement is
in effect. HCW shall be solely responsible for compliance with Regulation M in connection with any transactions described in the
preceding sentence.


 


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


 


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


 


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


 


(a) Registration
Statement Amendments. After the date of this Agreement and during any period in which a Prospectus relating to any Placement
Shares is required to be delivered by HCW under the Securities Act (including in circumstances where such requirement may be satisfied
pursuant to Rule 172 under the Securities Act), (i) the Company will notify HCW promptly of the time when any subsequent amendment
to the Registration Statement, other than the Incorporated Documents or amendments not related to any Placement Shares, has been
filed with the Commission and/or has become effective or any subsequent supplement to the Prospectus has been filed and of any
request by the Commission for any amendment or supplement to the Registration Statement or Prospectus related to any Placement
Shares or for additional information related to any Placement Shares, (ii) the Company will prepare and file with the Commission,
promptly upon HCW’s reasonable request, any amendments or supplements to the Registration Statement or Prospectus that, in
HCW’s reasonable opinion, may be necessary or advisable in connection with the distribution of the Placement Shares by HCW
(provided, however, that the failure of HCW to make such request shall not relieve the Company of any obligation or liability
hereunder, or affect HCW’s right to rely on the representations and warranties made by the Company in this Agreement and
provided, further, that the only remedy HCW shall have with respect to the failure to make such filing shall be to cease making
sales under this Agreement until such amendment or supplement is filed); (iii) the Company will not file any amendment or supplement
to the Registration Statement or Prospectus, other than documents incorporated by reference, relating to the Placement Shares or
a security convertible into the Placement Shares unless a copy thereof has been submitted to HCW within a reasonable period of
time before the filing and HCW has not reasonably objected thereto (provided, however, that (A) the failure of HCW to make
such objection shall not relieve the Company of any obligation or liability hereunder, or affect HCW’s right to rely on the
representations and warranties made by the Company in this Agreement, (B) the Company has no obligation to provide HCW any advance
copy of such filing or to provide HCW an opportunity to object to such filing if the filing does not name HCW or does not relate
to the transaction herein provided, and (C) the only remedy HCW shall have with respect to the failure by the Company to provide
HCW with such copy or the filing of such amendment or supplement despite HCW’s objection shall be to cease making sales under
this Agreement) and the Company will furnish to HCW at the time of filing thereof a copy of any document that upon filing is deemed
to be incorporated by reference into the Registration Statement or Prospectus, except for those documents available via EDGAR;
and (iv) the Company will cause each amendment or supplement to the Prospectus, other than documents incorporated by reference,
to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act.  


 


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


 


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


 


(d) Listing
of Placement Shares. During any period in which the Prospectus relating to the Placement Shares is required to be delivered
by HCW under the Securities Act with respect to a pending sale of the Placement Shares (including in circumstances where such requirement
may be satisfied pursuant to Rule 172 under the Securities Act), the Company will use its commercially reasonable efforts to cause
the Placement Shares to be listed on Exchange and to qualify the Placement Shares for sale under the securities laws of such jurisdictions
as HCW reasonably designates and to continue such qualifications in effect so long as required for the distribution of the Placement
Shares; provided, however, that the Company shall not be required in connection therewith to qualify as a foreign corporation
or dealer in securities or file a general consent to service of process in any jurisdiction.


 






    - 10 -


     


    

 


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


 


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


 


(g) Expenses.
The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, in accordance
with the provisions of Section 11 hereunder, will pay all expenses incident to the performance of the Company’s obligations
under this Agreement, including (i) the preparation, filing, including any fees required by the Commission, and printing of the
Registration Statement (including financial statements and exhibits) as originally filed and of each amendment and supplement thereto
and each Free Writing Prospectus, in such number as HCW shall deem reasonably necessary, (ii) the printing and delivery to HCW
of such documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Placement Shares,
(iii) the preparation, issuance and delivery of the certificates, if any, for the Placement Shares to HCW, including any stock
or other transfer taxes and any capital duties, stamp duties or other duties or taxes payable upon the sale, issuance or delivery
of the Placement Shares to HCW, (iv) the fees and disbursements of the counsel, accountants and other advisors to the Company,
(v) the fees and disbursements of counsel to HCW in connection with entering into the transactions contemplated by this Agreement
up to $20,000, and the quarterly disbursements of counsel to HCW; (vi) any fees and expenses of the transfer agent and registrar
for the Common Stock, (vii) the filing fees incident to any review by FINRA of the terms of the sale of the Placement Shares, if
any (viii) the fees and expenses incurred in connection with the listing of the Placement Shares on the Exchange, and (ix) all
trading, execution, settlement, or wiring fees incurred by HCW in connection with the sale of the Placement Shares. Unless stated
otherwise, all such expenses under this clause (g) shall be paid by the Company promptly upon the request of HCW, subject to the
Company’s receipt of reasonably detailed documentation with respect to such fees and expenses advanced by HCW. For the avoidance
of doubt, the Company is only responsible for the expenses set forth above.


 


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


 


(i) Notice
of Other Sales. During the pendency of any Placement Notice given hereunder, and for 5 Trading Days following the termination
of any Placement Notice given hereunder, the Company shall provide HCW notice as promptly as reasonably possible before it offers
to sell, contracts to sell, sells, grants any option to sell or otherwise disposes of any shares of Common Stock (other than Placement
Shares offered pursuant to the provisions of this Agreement) or securities convertible into or exchangeable for Common Stock, warrants
or any rights to purchase or acquire Common Stock; provided, that such notice shall not be required in connection with the
(i) issuance, grant or sale of Common Stock, options to purchase shares of Common Stock or any other equity awards, or Common Stock
issuable upon the exercise of options or other equity awards pursuant to any stock option, stock bonus, employee stock purchase
or other stock plan or arrangement described in the Prospectus, (ii) the issuance, grant or sale of Common Stock, or securities
convertible into or exercisable for Common Stock, in connection with any joint venture, commercial, strategic or collaborative
relationship, or the acquisition or license by the Company of the securities, businesses, property or other assets of another person
or entity, (iii) the issuance or sale of Common Stock pursuant to any dividend reinvestment plan that the Company may adopt from
time to time provided the implementation of such is disclosed to HCW in advance or (iv) any shares of Common Stock issuable upon
the exchange, conversion or redemption of securities or the exercise or vesting of warrants, options or other rights in effect
or outstanding. Notwithstanding the foregoing provisions, nothing herein shall be construed to restrict the Company’s ability,
or require the Company to provide notice to HCW, to file a registration statement under the Securities Act, including another prospectus
supplement in connection with the Registration Statement for the issuance and sale of shares other than the Placement Shares. Furthermore,
nothing herein shall be construed to restrict the Company’s ability to engage in other offerings of its securities at the
same or different times, without any obligation to HCW other than as set forth in this Section 7(i).


 


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


 


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


 


(l) Required
Filings Relating to Placement of Placement Shares. To the extent that the filing of a prospectus supplement with the Commission
with respect to a placement of Placement Shares is required under Rule 424(b) under the Securities Act, the Company agrees that
on or before such dates as the Securities Act shall require, the Company will (i) file a prospectus supplement with the Commission
under the applicable paragraph of Rule 424(b) under the Securities Act (each and every filing under Rule 424(b), a “Filing
Date”), which prospectus supplement will set forth, to the extent required, within the relevant period, the amount
of Placement Shares sold through HCW, the Net Proceeds to the Company and the compensation payable by the Company to HCW with respect
to such Placement Shares (provided that the Company may satisfy its obligations under this Section 7(l)(i) by effecting
a filing in accordance with the Exchange Act with respect to such information), and (ii) deliver such number of copies of each
such prospectus supplement to each exchange or market on which such sales were effected as may be required by the rules or regulations
of such exchange or market.


 






    - 11 -


     


    

 


(m) Representation
Dates; Certificate. On or prior to the First Delivery Date and each time after the First Delivery Date the Company (i) amends
or supplements the Registration Statement or the Prospectus relating to the Placement Shares (other than a prospectus supplement
filed in accordance with Section 7(l) of this Agreement) by means of a post-effective amendment, sticker, or supplement
but not by means of incorporation of document(s) by reference to the Registration Statement or the Prospectus relating to the Placement
Shares; (ii) files an annual report on Form 10-K under the Exchange Act; (iii) files its quarterly reports on Form 10-Q under the
Exchange Act; or (iv) files a current report on Form 8-K under the Exchange Act containing amended audited financial information
(other than information “furnished” pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to
Item 8.01 of Form 8-K relating to the reclassification of certain properties as discontinued operations in accordance with Statement
of Financial Accounting Standards No. 144 under the Exchange Act) under the Exchange Act (each date of filing of one or more of
the documents referred to in clauses (i) through (iv) shall be a “Representation Date”); the Company
shall furnish HCW with a certificate, in the form attached hereto as Exhibit 7(m) within five (5) Trading Days of any Representation
Date if requested by HCW. The requirement to provide a certificate under this Section 7(m) shall be automatically waived
for any Representation Date occurring at a time at which no Placement Notice is pending, which waiver shall continue until the
earlier to occur of the date the Company delivers a Placement Notice hereunder (which for such calendar quarter shall be considered
a Representation Date, including for purposes of Sections 7(n) and (o) hereof) and the next occurring Representation
Date; provided, however, that such waiver shall not apply for any Representation Date on which the Company files
its annual report on Form 10-K. Notwithstanding the foregoing, if the Company subsequently decides to sell Placement Shares following
a Representation Date when the Company relied on such waiver and did not provide HCW with a certificate under this Section 7(m),
then before the Company delivers the Placement Notice or HCW sells any Placement Shares, the Company shall provide HCW with a certificate,
in the form attached hereto as Exhibit 7(m), dated the date of the Placement Notice.


 


(n) Legal
Opinion. (i) On or prior to the First Delivery Date, the Company shall cause to be furnished to HCW a written opinion
and negative assurance letter of Sidley Austin LLP, or other counsel reasonably satisfactory to HCW (“Company Counsel”),
in form and substance reasonably satisfactory to HCW and its counsel, dated the date that such opinion and negative assurance letter
are required to be delivered and (ii) within the later of (A) five (5) Trading Days of each Representation Date with respect
to which the Company is obligated to deliver a certificate in the form attached hereto as Exhibit 7(m), and (B) the date
a Placement Notice is first delivered by the Company following a Representation Date, the Company shall cause to be furnished to
HCW a negative assurance letter of Company Counsel, in form and substance reasonably satisfactory to HCW and its counsel, dated
the date that the negative assurance letter is required to be delivered (the “Opinion Date”), modified,
as necessary, to relate to the Registration Statement and the Prospectus as then amended or supplemented; provided, however,
that in lieu of such negative assurance letters for subsequent Representation Dates, counsel may furnish HCW with a letter (a “Reliance
Letter”) to the effect that HCW may rely on a prior negative assurance letter delivered under this Section 7(n)
to the same extent as if it were dated the date of such Reliance Letter (except that statements in such prior negative assurance
letter shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented at such Representation
Date).


 


(o) Comfort
Letter. On or prior to the First Delivery Date and within five (5) Trading Days of each subsequent Representation Date with
respect to which the Company is obligated to deliver a certificate in the form attached hereto as Exhibit 7(m), other than
pursuant to Section 7(m)(iii), the Company shall cause its independent accountants to furnish HCW letters (the “Comfort
Letters”), dated the date the Comfort Letter is delivered, in form and substance satisfactory to HCW, (i) confirming
that they are an independent registered public accounting firm within the meaning of the Securities Act and the PCAOB, (ii) stating,
as of such date, the conclusions and findings of such firm with respect to the financial information and other matters ordinarily
covered by accountants’ “comfort letters” to HCW in connection with registered public offerings (the first such
letter, the “Initial Comfort Letter”) and (iii) updating the Initial Comfort Letter with any information
that would have been included in the Initial Comfort Letter had it been given on such date and modified as necessary to relate
to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letter.


 


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


 


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


 


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


 






    - 12 -


     


    

 


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


 


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


 


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


 


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


 


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


 


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


 


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


 






    - 13 -


     


    

 


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


 


(d) Material
Changes. Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the Commission, there
shall not have been any material adverse change, on a consolidated basis, in the authorized capital stock of the Company or any
Material Adverse Change or any development that could reasonably be expected to result in a Material Adverse Change.


 


(e) Company
Counsel Legal Opinion. HCW shall have received the opinion and negative assurance letters or Reliance Letters of Company Counsel
required to be delivered pursuant to Section 7(n) on or before the date on which such delivery of such opinion and negative
assurance letter is required pursuant to Section 7(n).


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


9.  Indemnification
and Contribution.


 


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


 






    - 14 -


     


    

 


(b) HCW
Indemnification. HCW agrees to indemnify and hold harmless the Company and its directors, officers, employees and agents of
the Company and each person, if any, who (i) controls the Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, or (ii) is controlled by or is under common control with the Company (each, a “Capricor Affiliate”)
from and against any and all losses, claims, liabilities, expenses and damages (including, but not limited to, any and all reasonably
investigative, legal and other expenses incurred in connection with, and any and all amounts paid in settlement (in accordance
with Section 9(a)) of, any action, suit or proceeding between any indemnified party and any third party, or otherwise, or
any claim asserted), as and when incurred, to which the Company, or any Capricor Affiliate, may become subject under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, liabilities, expenses or damages arise out of or are based, directly or indirectly, on untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement (or any amendments thereto) or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with information relating to HCW and furnished to the Company
in writing by HCW expressly for use therein.


 


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


 


(d) So long
as the indemnifying party is conducting the defense of the claim for liability in accordance with this Section 9, the indemnified
party will reasonably cooperate with the indemnifying party’s defense of such claim. The indemnified party will not consent
to the entry of any judgment or enter into any settlement with respect to the claim without the prior written consent of the indemnifying
party and an indemnifying party will not, in any event, be liable for any settlement of or entry of any judgment with respect to
any action or claim effected without the indemnifying party’s written consent. No indemnifying party shall, without the prior
written consent of each indemnified party (which consent shall not be unreasonably withheld or delayed), settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated
by this Section 9 (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability arising or that may arise out of such claim, action
or proceeding.


 






    - 15 -


     


    

 


(e) Contribution.
In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 9 is applicable in accordance with its terms but for any reason is held to be unavailable from
the Company or HCW, the Company and HCW will contribute to the total losses, claims, liabilities, expenses and damages (including
any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other than
HCW, such as persons who control the Company within the meaning of the Securities Act, officers of the Company who signed the Registration
Statement and directors of the Company, who also may be liable for contribution) to which the Company and HCW may be subject in
such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and HCW on the
other hand. Notwithstanding the foregoing, such obligation of contribution shall only apply if the parties seeking contribution
complied in all respects with the conditions relative to indemnification set forth in Sections 9(c) and (d) above.
The relative benefits received by the Company on the one hand and HCW on the other hand shall be deemed to be in the same proportion
as the total Net Proceeds from the sale of the Placement Shares (before deducting expenses) received by the Company bear to the
total compensation received by HCW (before deducting expenses) from the sale of Placement Shares on behalf of the Company. If,
but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence
but also the relative fault of the Company, on the one hand, and HCW, on the other, with respect to the statements or omission
that resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information
supplied by the Company or HCW, the intent of the parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and HCW agree that it would not be just and equitable if contributions
pursuant to this Section 9(e) were to be determined by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense, or damage, or action in respect thereof, referred to above in this Section 9(e)
shall be deemed to include, for the purpose of this Section 9(e), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action or claim to the extent consistent with Section
9(c) hereof. Notwithstanding the foregoing provisions of this Section 9(e), HCW shall not be required to contribute
any amount in excess of the commissions received by it under this Agreement and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section 9(e), any person who controls a party to this Agreement
within the meaning of the Securities Act, and any officers, directors, partners, employees or agents of HCW, will have the same
rights to contribution as that party, and each officer of the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to contribution, promptly
after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made
under this Section 9(e), will notify any such party or parties from whom contribution may be sought, but the omission to
so notify will not relieve that party or parties from whom contribution may be sought from any other obligation it or they may
have under this Section 9(e) except to the extent that the failure to so notify such other party materially damaged such
party or prejudiced the substantive rights or defenses of the party from whom contribution is sought. Except for a settlement entered
into pursuant to the last sentence of Section 9(d) hereof, no party will be liable for contribution with respect to any
action or claim settled without its written consent if such consent is required pursuant to Section 9(d) hereof.


 


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


 


11.  Termination.


 


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


 






    - 16 -


     


    

 


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


 


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


 


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


 


(e) This Agreement
shall remain in full force and effect unless terminated pursuant to Sections 11(a), (b), (c) or (d)
above or otherwise by mutual agreement of the parties; provided, however, that any such termination by mutual agreement
shall in all cases be deemed to provide that Section 7(g), Section 9, Section 10, Section 16 and Section
17 shall remain in full force and effect.


 


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


 


12.  Notices.
All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of
this Agreement shall be in writing, unless otherwise specified in this Agreement, and if sent to HCW, shall be delivered to HCW
at H.C. Wainwright & Co., LLC, 430 Park Avenue, New York, NY 10022, email: atm@hcwco.com, Attention:
Head of Investment Banking with a copy to Duane Morris LLP, 1037 Raymond Boulevard, Newark, NJ 07102, attention: Dean M. Colucci,
e-mail dmcolucci@duanemorris.com; or if sent to the Company, shall be delivered to Capricor Therapeutics Inc. Inc., 8840
Wilshire Blvd, 2nd Floor, Beverly Hills, CA 90211, attention: Linda Marbán, e-mail: lmarban@capricor.com, with a copy to
Sidley Austin LLP, 1001 Page Mill Road, Building One, Palo Alto, CA 94304, attention: Rob R. Carlson, Esq. e-mail: rob.carlson@sidley.com.
Each party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice
of a new address for such purpose. Each such notice or other communication shall be deemed given (i) when delivered personally,
by email or by verifiable facsimile transmission (with an original to follow) on or before 4:30 p.m., New York City time, on a
Business Day (as defined below), or, if such day is not a Business Day on the next succeeding Business Day, (ii) on the next Business
Day after timely delivery to a nationally-recognized overnight courier, (iii) on the Business Day actually received if deposited
in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid) and (iv) if sent by e-mail, on the
Business Day on which receipt is confirmed by the individual to whom the notice is sent, other than via auto-reply. For purposes
of this Agreement, “Business Day” shall mean any day on which the Exchange and commercial banks in the
City of New York are open for business.


 


An electronic communication
(“Electronic Notice”) shall be deemed written notice for purpose of this Section 12 if sent to
the electronic mail address specified by the receiving party under separate cover. Electronic Notice shall be deemed to be received
at the time the party sending Electronic Notice receives confirmation of receipt by the receiving party, other than via auto-reply.
Any party receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a non-electronic form
(“Non-electronic Notice”) which shall be sent to the requesting party within ten (10) days of receipt
of the written request for Non-electronic Notice.


 


13.  Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and HCW and their respective successors
and the affiliates, controlling persons, officers and directors referred to in Section 9 hereof. References to any of the
parties contained in this Agreement shall be deemed to include the successors and permitted assigns of such party. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors
and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement. Neither party may assign its rights or obligations under this Agreement without the prior written consent
of the other party; provided, however, that HCW may assign its rights and obligations hereunder to an affiliate of
HCW without obtaining the Company’s consent, so long as such affiliate is a registered broker-dealer.


 






    - 17 -


     


    

 


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


 


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


 


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


 


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


 


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


 


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


 






    - 18 -


     


    

 


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


 


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


 


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


 


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


 


[Remainder of Page Intentionally Blank]


 




    - 19 -


     


    

 


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


 





	 	Very
    truly yours,
	 	 	 
	 	 	 
	 	CAPRICOR
    THERAPEUTICS, INC.
	 	 	 
	 	 	 
	 	By:	/s/
                                         AJ Bergmann




	 	Name:	AJ
                                         Bergmann




	 	Title:	CFO
	 	 	 
	 	 	 
	 	ACCEPTED
    as of the date
	 	first-above
    written:
	 	 	 
	 	 	 
	 	H.C.
    WAINWRIGHT & CO., LLC
	 	 	 
	 	 	 
	 	By:	/s/
                                         Edward D. Silvera




	 	Name:	Edward
                                         D. Silvera




	 	Title:	Chief
                                         Operating Officer











 






    - 20 -


     


    







 


SCHEDULE 1


 


form
of PLACEMENT NOTICE





 


		From:	Capricor Therapeutics, Inc.



		To:	H.C. Wainwright & Co., LLC



		Subject:	At the Market Offering—Placement Notice



		Date:	_______________, 20___



 


Gentlemen:


 


Pursuant to the terms
and subject to the conditions contained in the Sales Agreement between Capricor Therapeutics, Inc. (the “Company”),
and H.C. Wainwright & Co., LLC (“HCW”) dated July 22, 2019 (the “Agreement”), I hereby
request on behalf of the Company that HCW sell up to [ ] shares of the Company’s common stock, par value $0.001 per share,
at a minimum market price of $_______ per share. Sales should begin on the date of this Notice and shall continue until [DATE]
[all shares are sold][the aggregate sales price of the shares reaches $[ ]].


 






     


     


    

 








SCHEDULE 2


 





Notice Parties


 


The Company


 





	Linda Marbán	lmarban@capricor.com
	 	 
	Karen Krasney	kkrasney@capricor.com
	 	 
	AJ Bergmann	abergmann@capricor.com





 


HCW


 





	Michael Vasinkevich 	mv@hcwco.com
	 	 
	Craig Schwabe	cs@hcwco.com
	 	 
	Peter Fry	pfry@hcwco.com
	 	 
	Charles Worthman 	csworthman@hcwco.com
	 	 
	Norman Yun 	nyun@hcwco.com







 


With a copy to atm@hcwco.com


 







     


     


    

 


SCHEDULE 3





 


Compensation


 


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


 




     


     


    

 


Exhibit 7(m)


 





OFFICER CERTIFICATE





 


The undersigned, the duly qualified and
elected _______________________, of Capricor Therapeutics Inc. (“Company”), a Delaware corporation, does
hereby certify in such capacity and on behalf of the Company, pursuant to Section 7(m) of the Sales Agreement dated July
22, 2019 (the “Sales Agreement”) between the Company and H.C. Wainwright & Co., LLC, that to the
best of the knowledge of the undersigned:


 


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


 


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


 


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


 





	 	CAPRICOR THERAPEUTICS INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:




 


Date:  __________________