pirs_exhibit-101






                                                                                                                                                   OPEN MARKET SALE AGREEMENTSM                                                                     August 9, 2019    JEFFERIES LLC    520 Madison Avenue   New York, New York 10022    Ladies and Gentlemen:                                                                             Pieris Pharmaceuticals, Inc., a Nevada corporation (the “Company”), proposes, subject to   the terms and conditions stated herein, to issue and sell from time to time through Jefferies LLC,   as sales agent and/or principal (the “Agent”), shares of the Company’s common stock, par value   $0.001 per share (the “Common Shares”), having an aggregate offering price of up to  $50,000,000 on the terms set forth in this agreement (this “Agreement”).    Section 1.  DEFINITIONS          (a)   Certain Definitions.  For purposes of this Agreement, capitalized terms used herein   and not otherwise defined shall have the following respective meanings:          “Affiliate” of a Person means another Person that directly or indirectly, through one or   more intermediaries, controls, is controlled by, or is under common control with, such first-   mentioned Person. The term “control” (including the terms “controlling,” “controlled by” and   “under common control with”) means the possession, direct or indirect, of the power to direct or   cause the direction of the management and policies of a Person, whether through the ownership of   voting securities, by contract or otherwise.          “Agency Period” means the period commencing on the date of this Agreement and   expiring on the earliest to occur of (x) the date on which the Agent shall have placed the Maximum   Program Amount pursuant to this Agreement and (y) the date this Agreement is terminated   pursuant to Section 7.          “Commission” means the U.S. Securities and Exchange Commission.         “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules  and regulations of the Commission thereunder.         “Floor Price” means the minimum price set by the Company in the Issuance Notice below  which the Agent shall not sell Shares during the applicable period set forth in the Issuance Notice,   which may be adjusted by the Company at any time during the period set forth in the Issuance   Notice by delivering written notice of such change to the Agent and which in no event shall be less                                                       SM “Open Market Sale Agreement” is a service mark of Jefferies LLC         





 






 than $1.00 without the prior written consent of the Agent, which may be withheld in the Agent’s   sole discretion.          “Issuance Amount” means the aggregate Sales Price of the Shares to be sold by the Agent  pursuant to any Issuance Notice.          “Issuance Notice” means a written notice delivered to the Agent by the Company in   accordance with this Agreement in the form attached hereto as Exhibit A that is executed by its   Chief Executive Officer, President or Chief Financial Officer.          “Issuance Notice Date” means any Trading Day during the Agency Period that an Issuance   Notice is delivered pursuant to Section 3(b)(i).           “Issuance Price” means the Sales Price less the Selling Commission.          “Maximum Program Amount” means Common Shares with an aggregate Sales Price of  the lesser of (a) the number or dollar amount of Common Shares registered under the effective   Registration Statement (defined below) pursuant to which the offering is being made, (b) the   number of authorized but unissued Common Shares (less Common Shares issuable upon exercise,  conversion or exchange of any outstanding securities of the Company or otherwise reserved from  the Company’s authorized capital stock), (c) the number or dollar amount of Common Shares  permitted to be sold under Form S-3 (including General Instruction I.B.6 thereof, if applicable), or  (d) the number or dollar amount of Common Shares for which the Company has filed a Prospectus  (defined below).         “Person” means an individual or a corporation, partnership, limited liability company,  trust, incorporated or unincorporated association, joint venture, joint stock company, governmental  authority or other entity of any kind.         “Principal Market” means the Nasdaq Capital Market or such other national securities  exchange on which the Common Shares, including any Shares, are then listed.         “Sales Price” means the actual sale execution price of each Share placed by the Agent  pursuant to this Agreement.         “Securities Act” means the Securities Act of 1933, as amended, and the rules and  regulations of the Commission thereunder.         “Selling Commission” means three percent (3.0%) of the gross proceeds of Shares sold  pursuant to this Agreement, or as otherwise agreed between the Company and the Agent with  respect to any Shares sold pursuant to this Agreement.          “Settlement Date” means the second business day following each Trading Day during the  period set forth in the Issuance Notice on which Shares are sold pursuant to this Agreement, when  the Company shall deliver to the Agent the amount of Shares sold on such Trading Day and the  Agent shall deliver to the Company the Issuance Price received on such sales.                                           2     





 






       “Shares” shall mean the Company’s Common Shares issued or issuable pursuant to this   Agreement.          “Trading Day” means any day on which the Principal Market is open for trading.    Section 2.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY          The Company represents and warrants to, and agrees with, the Agent that as of (1) the date  of this Agreement, (2) each Issuance Notice Date, (3) each Settlement Date, (4) each Triggering  Event Date with respect to which the Company is required to deliver a certificate pursuant to  Section 4(o) and (5) as of each Time of Sale (each of the times referenced above is referred to herein  as a “Representation Date”), except as may be disclosed in the Prospectus (including any  documents incorporated by reference therein and any supplements thereto) on or before a  Representation Date:            (a)   Registration Statement.  The Company has prepared and filed with the Commission   a shelf registration statement on Form S-3 (File No. 333-226725) that contains a base prospectus  (the “Base Prospectus”).  Such registration statement registers the issuance and sale by the  Company of the Shares under the Securities Act.  The Company may file one or more additional  registration statements from time to time that will contain a base prospectus and related prospectus  or prospectus supplement, if applicable, with respect to the Shares. Except where the context  otherwise requires, such registration statement(s), including any information deemed to be a part  thereof pursuant to Rule 430B under the Securities Act, including all financial statements, exhibits  and schedules thereto and all documents incorporated or deemed to be incorporated therein by  reference pursuant to Item 12 of Form S-3 under the Securities Act as from time to time amended  or supplemented, is herein referred to as the “Registration Statement,” and the prospectus   constituting a part of such registration statement(s) specifically relating to the  Shares, together   with any prospectus supplement filed with the Commission pursuant to Rule 424(b) under the   Securities Act relating to a particular issuance of the Shares, including all documents incorporated   or deemed to be incorporated therein by reference pursuant to Item 12 of Form S-3 under the   Securities Act, in each case, as from time to time amended or supplemented, is referred to herein   as the “Prospectus,” except that if any revised prospectus is provided to the Agent by the Company  for use in connection with the offering of the Shares that is not required to be filed by the Company  pursuant to Rule 424(b) under the Securities Act, the term “Prospectus” shall refer to such revised   prospectus from and after the time it is first provided to the Agent for such use.  The Registration   Statement at the time it originally became effective is herein called the “Original Registration   Statement.”  As used in this Agreement, the terms “amendment” or “supplement” when applied   to the Registration Statement or the Prospectus shall be deemed to include the filing by the   Company with the Commission of any document under the Exchange Act after the date hereof that   is or is deemed to be incorporated therein by reference. All references in this Agreement to the   Registration Statement, the Prospectus or any amendments or supplements thereto, or any Free   Writing Prospectus (as defined herein), shall be deemed to include any copy filed with the   Commission pursuant to EDGAR (as defined herein).          All references in this Agreement to financial statements and schedules and other information  which is “contained,” “included,” “stated” in or “part of” the Registration Statement or the  Prospectus (and all other references of like import) shall be deemed to mean and include all such                                          3     





 






financial statements and schedules and other information which is or is deemed to be incorporated  by reference in or otherwise deemed under the Securities Act to be a part of or included in the  Registration Statement or the Prospectus, as the case may be, as of any specified date; and all  references in this Agreement to amendments or supplements to the Registration Statement or the  Prospectus shall be deemed to mean and include, without limitation, the filing of any document  under the Exchange Act which is or is deemed to be incorporated by reference in or otherwise  deemed under the Securities Act to be a part of or included in the Registration Statement or the  Prospectus, as the case may be, as of any specified date.          At the time the Original Registration Statement was declared effective and at the time the  Company’s most recent annual report on Form 10-K was filed with the Commission, if later, the  Company met the then-applicable requirements for use of Form S-3 under the Securities Act.   During the Agency Period, each time the Company files an annual report on Form 10-K the  Company will meet the then-applicable requirements for use of Form S-3 under the Securities Act.           (b)   Compliance with Registration Requirements.  The Original Registration Statement   and any Rule 462(b) Registration Statement have been declared effective by the Commission   under the Securities Act.  The Company has complied, to the Commission’s satisfaction, with all   requests of the Commission for additional or supplemental information, if any.  No stop order   suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration   Statement is in effect and no proceedings for such purpose have been instituted or are pending or,   to the best knowledge of the Company, are contemplated or threatened by the Commission.           The Prospectus when filed complied or will comply in all material respects with the   Securities Act and, if filed with the Commission through its Electronic Data Gathering, Analysis   and Retrieval system (“EDGAR”) (except as may be permitted by Regulation S-T under the   Securities Act), was identical to the copy thereof delivered to the Agent for use in connection with   the issuance and sale of the Shares.  Each of the Registration Statement, any Rule 462(b)   Registration Statement and any post-effective amendment thereto, at the time it became or   becomes effective and at each Representation Date, complied and will comply in all material   respects with the Securities Act and did not and will not contain any untrue statement of a material   fact or omit to state a material fact required to be stated therein or necessary to make the statements   therein not misleading.  As of the date of this Agreement, the Prospectus and any Free Writing   Prospectus (as defined below) considered together (collectively, the “Time of Sale Information”)   did not contain any untrue statement of a material fact or omit to state a material fact necessary to   make the statements therein, in the light of the circumstances under which they were made, not   misleading.  The Prospectus, as amended or supplemented, as of its date and at each Representation   Date, did not and will not contain any untrue statement of a material fact or omit to state a material   fact necessary in order to make the statements therein, in the light of the circumstances under   which they were made, not misleading.  The representations and warranties set forth in the three   immediately preceding sentences do not apply to statements in or omissions from the Registration   Statement, any Rule 462(b) Registration Statement, or any post-effective amendment thereto, or   the Prospectus, or any amendments or supplements thereto, made in reliance upon and in   conformity with information relating to the Agent furnished to the Company in writing by the   Agent expressly for use therein, it being understood and agreed that the only such information   furnished by the Agent to the Company consists of the information described in Section 6  below.    There are no contracts or other documents required to be described in the Prospectus or to be filed                                          4     





 






 as exhibits to the Registration Statement which have not been described or filed as required. The   Registration Statement and the offer and sale of the Shares as contemplated hereby meet the   requirements of Rule 415 under the Securities Act and comply in all material respects with said   rule.            (c)   Ineligible Issuer Status. The Company is not an “ineligible issuer” in connection   with the offering of the Shares pursuant to Rules 164, 405 and 433 under the Securities Act.  Any   Free Writing Prospectus that the Company is required to file pursuant to Rule 433(d) under the   Securities Act, if applicable, has been, or will be, filed with the Commission in accordance with   the requirements of the Securities Act.  If applicable, each Free Writing Prospectus that the   Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that   was prepared by or on behalf of or used or referred to by the Company complies or will comply in   all material respects with the requirements of Rule 433 under the Securities Act including timely   filing with the Commission or retention where required and legending, and each such Free Writing   Prospectus, as of its issue date and at all subsequent times through the completion of the issuance   and sale of the Shares did not, does not and will not include any information that conflicted,   conflicts with or will conflict with the information contained in the Registration Statement or the   Prospectus, including any document incorporated by reference therein.  Except for the Free   Writing Prospectuses, if any, and electronic road shows, if any, furnished to the Agent before first   use, the Company has not prepared, used or referred to, and will not, without the Agent’s prior   consent, which consent shall not be unreasonably withheld or delayed, prepare, use or refer to, any   Free Writing Prospectus.          (d)   Incorporated Documents. The documents incorporated or deemed to be   incorporated by reference in the Registration Statement and the Prospectus, at the time they were   filed with the Commission, complied in all material respects with the requirements of the Exchange   Act, as applicable, and, when read together with the other information in the Prospectus, do not   contain an untrue statement of a material fact or omit to state a material fact required to be stated   therein or necessary to make the statements therein, in light of the circumstances under which they   were made, not misleading.           (e)   Exchange Act Compliance.  The documents incorporated or deemed to be   incorporated by reference in the Prospectus, at the time they were or hereafter are filed with the   Commission, and any Free Writing Prospectus or amendment or supplement thereto complied and   will comply in all material respects with the requirements of the Exchange Act, and, when read   together with the other information in the Prospectus, at the time the Registration Statement and   any amendments thereto become effective and at each Representation Date, as the case may be,   will not contain an untrue statement of a material fact or omit to state a material fact required to   be stated therein or necessary to make the fact required to be stated therein or necessary to make   the statements therein, in the light of the circumstances under which they were made, not  misleading.          (f)   Statistical and Market-Related Data.  All statistical, demographic and   market-related data included in the Registration Statement or the Prospectus are based on or   derived from sources that the Company believes, after reasonable inquiry or investigation, to be   reliable and accurate.  To the extent required, the Company has obtained the written consent for   the use of such data from such sources.                                          5     





 






       (g)   Disclosure Controls and Procedures; Deficiencies in or Changes to Internal Control   Over Financial Reporting. Except as otherwise disclosed in the Registration Statement and the   Prospectus, the Company has established and maintains disclosure controls and procedures (as  defined in Rules 13a-15 and 15d-15 under the Exchange Act), which (i) are designed to ensure   that material information relating to the Company, including its consolidated subsidiaries, is made   known to the Company’s principal executive officer and its principal financial officer by others   within those entities, particularly during the periods in which the periodic reports required under   the Exchange Act are being prepared; (ii) have been evaluated by management of the Company   for effectiveness as of the end of the Company’s most recent fiscal quarter; and (iii) are effective   in all material respects to perform the functions for which they were established.  Except as   otherwise disclosed in the Registration Statement and the Prospectus, since the end of the   Company’s most recent audited fiscal year, there have been no significant deficiencies or material   weaknesses in the Company’s internal control over financial reporting (whether or not remediated)   and no change in the Company’s internal control over financial reporting that has materially   affected, or is reasonably likely to materially affect, the Company’s internal control over financial   reporting.  The Company is not aware of any change in its internal control over financial reporting   that has occurred during its most recent fiscal quarter that has materially affected, or is reasonably   likely to materially affect, the Company’s internal control over financial reporting.          (h)   This Agreement. This Agreement has been duly authorized, executed and delivered   by the Company.          (i)   Authorization of the Shares. The Shares have been duly authorized for issuance and   sale pursuant to this Agreement and, when issued and delivered by the Company against payment   therefor pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and the   issuance and sale of the Shares is not subject to any preemptive rights, rights of first refusal or   other similar rights to subscribe for or purchase the Shares.          (j)   No Applicable Registration or Other Similar Rights.  There are no persons with   registration or other similar rights to have any equity or debt securities registered for sale under   the Registration Statement or included in the offering contemplated by this Agreement, except for   such rights as have been duly waived.          (k)   No Material Adverse Change.  Except as otherwise disclosed in the Registration   Statement and the Prospectus, subsequent to the respective dates as of which information is given   in the Registration Statement and the Prospectus: (i) there has been no material adverse change, or   any development that would reasonably be expected to result in a material adverse change, in the   condition, financial or otherwise, or in the earnings, business, properties, operations, assets,   liabilities or prospects, whether or not arising from transactions in the ordinary course of business,   of the Company and its subsidiaries, considered as one entity (any such change being referred to   herein as a “Material Adverse Change”); (ii) the Company and its subsidiaries, considered as one   entity, have not incurred any material liability or obligation, indirect, direct or contingent,   including without limitation any losses or interference with its business from fire, explosion, flood,   earthquakes, accident or other calamity, whether or not covered by insurance, or from any strike,   labor dispute or court or governmental action, order or decree, that are material, individually or in   the aggregate, to the Company and its subsidiaries, considered as one entity, and has not entered   into any transactions not in the ordinary course of business; and (iii) there has not been any material                                          6     





 






 decrease in the capital stock or any material increase in any short-term or long-term indebtedness  of the Company or its subsidiaries and there has been no dividend or distribution of any kind  declared, paid or made by the Company or, except for dividends paid to the Company or other  subsidiaries, by any of the Company’s subsidiaries on any class of capital stock, or any repurchase  or redemption by the Company or any of its subsidiaries of any class of capital stock.          (l)   Independent Accountants. Ernst & Young LLP, which has expressed its opinion   with respect to the financial statements (which term as used in this Agreement includes the related   notes thereto) filed with the Commission as a part of the Registration Statement and the Prospectus,   is (i) an independent registered public accounting firm as required by the Securities Act, the   Exchange Act, and the rules of the Public Company Accounting Oversight Board (“PCAOB”),   (ii) in compliance with the applicable requirements relating to the qualification of accountants   under Rule 2-01 of Regulation S-X under the Securities Act and (iii) a registered public accounting   firm as defined by the PCAOB whose registration has not been suspended or revoked and who has   not requested such registration to be withdrawn.          (m)   Financial Statements.  The financial statements filed with the Commission as a part   of the Registration Statement and 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, changes in stockholders’ equity and cash flows for the periods   specified.  Such financial statements have been prepared in conformity 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.  The interactive   data in eXtensible Business Reporting Language included or incorporated by reference in the   Registration Statement fairly presents the information called for in all material respects and has   been prepared in accordance with the Commission’s rules and guidelines applicable thereto.  No   other financial statements or supporting schedules are required to be included in the Registration   Statement or the Prospectus.  The financial data set forth in each of the Registration Statement and   the Prospectus under the captions “Capitalization” fairly present, in all material respects, the   information set forth therein on a basis consistent with that of the audited financial statements   contained in the Registration Statement and the Prospectus. To the Company’s knowledge, no   person who has been suspended or barred from being associated with a registered public   accounting firm, or who has failed to comply with any sanction pursuant to Rule 5300 promulgated   by the PCAOB, has participated in or otherwise aided the preparation of, or audited, the financial   statements or other financial data filed with the Commission as a part of the Registration Statement   and the Prospectus.           (n)   Company’s Accounting System.  The Company and each of its subsidiaries make   and keep accurate books and records and maintain a system of internal accounting controls   designed to provide reasonable assurance that:  (i) transactions are executed in accordance with   management’s general or specific authorization; (ii) transactions are recorded as necessary to   permit preparation of financial statements in conformity with generally accepted accounting   principles as applied in the United States and to maintain accountability for assets; (iii) access to   assets is permitted only in accordance with management’s general or specific authorization;   (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals  and appropriate action is taken with respect to any differences; and (v) the interactive data in  eXtensible Business Reporting Language included or incorporated by reference in the Registration                                          7     





 






 Statement and the Prospectus fairly presents the information called for in all material respects and   is prepared in accordance with the Commission's rules and guidelines applicable thereto.           (o)   Incorporation and Good Standing of the Company.  The Company has been duly   incorporated and is validly existing as a corporation in good standing under the laws of the State   of Nevada and has the corporate power and authority to own, lease and operate its properties and  to conduct its business as described in the Registration Statement and the Prospectus and to enter  into and perform its obligations under this Agreement.  The Company is duly qualified as a foreign  corporation to transact business and is in good standing in the Commonwealth of Massachusetts   and each other jurisdiction in which such qualification is required, whether by reason of the   ownership or leasing of property or the conduct of business except where the failure to so qualify   or be in good standing would not reasonably be expected, individually or in the aggregate, to have   a material adverse effect on the condition (financial or otherwise), earnings, business, properties ,   operations, assets, liabilities or prospects of the Company and its subsidiaries, taken as a whole(a   “Material Adverse Effect”).          (p)   Subsidiaries.  Each of the Company’s “subsidiaries” (for purposes of this   Agreement, as defined in Rule 405 under the Securities Act) has been duly incorporated or   organized, as the case may be, and is validly existing as a corporation, partnership or limited   liability company, as applicable, in good standing under the laws of the jurisdiction of its   incorporation or organization and has the power and authority (corporate or other) to own, lease   and operate its properties and to conduct its business as described in the Registration Statement   and the Prospectus.  Each of the Company’s subsidiaries is duly qualified as a foreign corporation,   partnership or limited liability company, as applicable, to transact business and is in good standing   in each jurisdiction in which such qualification is required, whether by reason of the ownership or   leasing of property or the conduct of business, except where the failure to so qualify or be in good   standing would not reasonably be expected to, individually or in the aggregate, result in a Material   Adverse Event.  All of the issued and outstanding capital stock or other equity or ownership   interests of each of the Company’s subsidiaries have been duly authorized and validly issued, are   fully paid and nonassessable and are owned by the Company, directly or through subsidiaries, free   and clear of any security interest, mortgage, pledge, lien, encumbrance or adverse claim.  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 most recently filed   Annual Report on Form 10-K.           (q)   Capitalization and Other Capital Stock Matters.  The authorized, issued and   outstanding capital stock of the Company is as set forth in the Registration Statement and the   Prospectus under the caption “Capitalization” (other than for subsequent issuances, if any,   pursuant to employee benefit plans described in the Prospectus or upon the exercise of outstanding   preferred stock, options or warrants, in each case described in the Registration Statement and the   Prospectus).  The Common Shares (including the Shares) conform in all material respects to the   description thereof contained in the Prospectus.  All of the issued and outstanding Common Shares   have been duly authorized and validly issued, are fully paid and nonassessable and have been   issued in compliance with all federal and state securities laws.  None of the outstanding Common   Shares was issued in violation of any preemptive rights, rights of first refusal or other similar rights   to subscribe for or purchase securities of the Company that have not been duly waived or satisfied.   There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal                                          8     





 






or other rights to purchase, or equity or debt securities convertible into or exchangeable or  exercisable for, any capital stock of the Company or any of its subsidiaries other than those  described in the Registration Statement and the Prospectus.  The descriptions of the Company’s  stock option, stock bonus and other stock plans or arrangements, and the options or other rights  granted thereunder, set forth in the Registration Statement and the Prospectus accurately and fairly  presents in all material respects the information required to be shown with respect to such plans,  arrangements, options and rights.         (r)   Stock Exchange Listing. The Common Shares are registered pursuant to Section  12(b) or 12(g) of the Exchange Act and are listed on the Principal Market, and the Company has  taken no action designed to, or likely to have the effect of, terminating the registration of the  Common  Shares under the Exchange Act or delisting the Common Shares from the Principal  Market, nor has the Company received any notification that the Commission or the Principal  Market is contemplating terminating such registration or listing.  To the Company’s knowledge, it  is in compliance with all applicable listing requirements of the Principal Market.         (s)   Non-Contravention of Existing Instruments; No Further Authorizations or  Approvals Required.  Neither the Company nor any of its subsidiaries is in violation of its amended  and restated articles of incorporation or its amended and restated by-laws, charter, by-laws,  partnership agreement or operating agreement or similar organizational documents, as applicable,  or is in default (or, with the giving of notice or lapse of time, would be in default) (“Default”)  under any indenture, loan, credit agreement, note, lease, license agreement, contract, franchise or  other instrument (including, without limitation, any pledge agreement, security agreement,  mortgage or other instrument or agreement evidencing, guaranteeing, securing or relating to  indebtedness) to which the Company or any of its subsidiaries is a party or by which it or any of  them may be bound, or to which any of their respective properties or assets are subject (each, an  “Existing Instrument”), except for such Defaults as would not reasonably be expected,  individually or in the aggregate, to have a Material Adverse Effect.  The Company’s execution,  delivery and performance of this Agreement, consummation of the transactions contemplated  hereby and by the Registration Statement and the Prospectus and the issuance and sale of the  Shares (including the use of proceeds from the sale of the Shares as described in the Registration  Statement and the Prospectus under the caption “Use of Proceeds”) (i) have been duly authorized  by all necessary corporate action and will not result in any violation of the provisions of the charter  or by-laws, partnership agreement or operating agreement or similar organizational documents, as  applicable, of the Company or any subsidiary (ii) will not conflict with or constitute a breach of,  or Default or a Debt Repayment Triggering Event (as defined below) under, or result in the creation  or imposition of any lien, charge or encumbrance upon any property or assets of the Company or  any of its subsidiaries pursuant to, or require the consent of any other party to, any Existing  Instrument  and (iii) will not result in any violation of any law, administrative regulation or  administrative or court decree applicable to the Company or any of its subsidiaries except for such  conflicts, breaches, Defaults, violations, Debt Repayment Triggering Event, lien, charge or  encumbrance specified in clauses (ii) and (iii) above that would not, individually or in the  aggregate, reasonably be expected to result in a Material Adverse Effect.  No consent, approval,  authorization or other order of, or registration or filing with, any court or other governmental or  regulatory authority or agency, is required for the Company’s execution, delivery and performance  of this Agreement and consummation of the transactions contemplated hereby and by the  Registration Statement and the Prospectus, except such as have been obtained or made by the                                         9    





 






 Company and are in full force and effect under the Securities Act and such as may be required   under applicable state securities or blue sky laws or FINRA (as defined below). As used herein, a   “Debt Repayment Triggering Event” means any event or condition which gives, or with the   giving of notice or lapse of time would give, the holder of any note, debenture or other evidence   of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase,   redemption or repayment of all or a portion of such indebtedness by the Company or any of its   subsidiaries.          (t)   No Material Actions or Proceedings.  There is no action, suit, proceeding, inquiry   or investigation brought by or before any governmental entity now pending or, to the knowledge   of the Company, threatened, against or affecting the Company or any of its subsidiaries, which   would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect   or materially and adversely affect the consummation of the transactions contemplated by this   Agreement or the performance by the Company of its obligations hereunder; and the aggregate of   all pending legal or governmental proceedings to which the Company or any such subsidiary is a   party or of which any of their respective properties or assets is the subject, including ordinary   routine litigation incidental to the business, would not reasonably be expected to have a Material   Adverse Effect. No labor dispute with the employees of the Company or any of its subsidiaries, or   with the employees of any principal supplier, manufacturer, customer or contractor of the   Company, exists or, to the knowledge of the Company, is threatened or imminent that would   reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.           (u)   Intellectual Property Rights. The Company and its subsidiaries own, or have   obtained valid and enforceable licenses for, the inventions, patent applications, patents,   trademarks, trade names, service names, copyrights, trade secrets and other intellectual property   described in the Registration Statement and the Prospectus as being owned or licensed by them or   that are necessary for the conduct of their respective businesses as currently conducted or as   currently proposed to be conducted as described in the Registration Statement and the Prospectus   (collectively, “Intellectual Property”). To the Company’s knowledge: (i) the Registration   Statement and the Prospectus accurately, in all material respects, sets forth third party ownership   and other interests (including, e.g., co-exclusive license rights) in the Intellectual Property; there   are no material third party rights in any Intellectual Property that are not identified in the   Registration Statement and the Prospectus other than customary reversion rights of third party   licensors, customary, limited licenses to the Company’s service providers and academic and other   collaborators, and customary rights with respect to prosecution, maintenance and enforcement with   respect to third party licensees; and (ii) to the Company’s knowledge, there is no infringement by   third parties of any Intellectual Property. Except as otherwise disclosed in the Registration   Statement and the Prospectus, there is no pending or, to the Company’s knowledge, threatened  action, suit, proceeding or claim by others: (A) challenging the Company’s ownership of, or rights  in or to, any Intellectual Property, and the Company is unaware of any facts which would form a  reasonable basis for any such action, suit, proceeding or claim; (B) challenging the validity,  enforceability or scope of any Intellectual Property, and the Company is unaware of any facts  which would form a reasonable basis for any such action, suit, proceeding or claim that, if asserted  on the date hereof, would reasonably be expected to succeed; or (C) asserting that the Company  or any of its subsidiaries infringes or otherwise violates, or would, through pursuing the discovery  and development programs described in the Registration Statement or the Prospectus infringe or  violate, any valid patent, trademark, trade name, service name, copyright, trade secret or other                                          10     





 






 proprietary rights of others, and the Company is unaware of any facts which would form a   reasonable basis for any such action, suit, proceeding or claim. Except as otherwise disclosed in   the Registration Statement and the Prospectus, the Company and its subsidiaries have complied in   all material respects with the terms of each agreement pursuant to which Intellectual Property has   been licensed to the Company or any subsidiary, and all such agreements are in full force and   effect. The Intellectual Property includes claims that cover various valuable aspects and features   of the discovery and development programs described in the Registration Statement and the   Prospectus as being pursued by the Company and/or its subsidiaries. All patents and patent   applications owned by, or exclusively licensed to, the Company have been duly and properly filed   and maintained (other than cases where the Company has, for strategic reasons, chosen to no longer   pursue a patent application or continue payment of a maintenance fee or annuity). To the   knowledge of the Company, the parties prosecuting such patents and patent applications have   complied with their duty of candor and disclosure to the U.S. Patent and Trademark Office, and   the Company is not aware of any violation of such duty which would preclude the grant of a patent   in connection with any such application or would reasonably be expected to form the basis of a   finding of invalidity with respect to any patents that have issued from such applications.           (v)   All Necessary Permits, etc.  Except as otherwise disclosed in the Prospectus, the   Company and each subsidiary possess such valid and current certificates, authorizations or permits   required by state, federal or foreign regulatory agencies or bodies to conduct their respective   businesses as currently conducted and as described in the Registration Statement or the Prospectus   (“Permits”), except where failure to so possess would not reasonably be expected to, individually   or in the aggregate, result in a Material Adverse Effect.  Neither the Company nor any of its   subsidiaries is in violation of, or in default under, any of the Permits or has received any notice of   proceedings relating to the revocation or modification of, or non-compliance with, any such   certificate, authorization or permit except as would not reasonably be expected, individually or in   the aggregate, to have a Material Adverse Effect.          (w)   Title to Properties.  Except as otherwise disclosed in the Prospectus, the Company   and its subsidiaries do not own any real property. The Company and its subsidiaries have good and   marketable title to all of the personal property and other assets reflected as owned in the financial   statements referred to in Section 2(m) above (or elsewhere in the Registration Statement or the   Prospectus), in each case free and clear of any security interests, mortgages, liens, encumbrances,   equities, adverse claims and other defects, except such as would not reasonably be expected,   individually or in the aggregate, to have a Material Adverse Effect. The equipment and personal   property held under lease by the Company or any of its subsidiaries are held under valid and   enforceable leases, with such exceptions as are not material and do not materially interfere with   the use made or proposed to be made of such equipment or personal property by the Company or   such subsidiary.          (x)   Tax Law Compliance. The Company and its subsidiaries have filed all necessary   federal, local, state and foreign income and franchise tax returns or have properly requested   extensions thereof, except as would reasonably be expected, individually or in the aggregate, to   have a Material Adverse Effect, 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 for any such taxes being contested in good faith and by appropriate proceedings, and except  as would reasonably be expected, individually or in the aggregate, to have a Material Adverse                                          11     





 






 Effect.  The Company has made adequate charges, accruals and reserves (excluding reserves for  deferred taxes with respect to differences between United States generally accepted accounting  principles and tax basis accounting) in the applicable financial statements referred to in Section   2(m) above in respect of all federal, local, state and foreign income and franchise taxes for all   periods as to which the tax liability of the Company or any of its subsidiaries has not been finally   determined, except as would reasonably be expected, individually or in the aggregate, to have a   Material Adverse Effect.          (y)   Company Not an “Investment Company.”  The Company is not, and will not be,   either after receipt of payment for the Shares or after the application of the proceeds therefrom as   described under “Use of Proceeds” in the Registration Statement or the Prospectus, required to   register as an “investment company” under the Investment Company Act of 1940, as amended (the   “Investment Company Act”).          (z)   Insurance.  Except as otherwise disclosed in the Prospectus, each of the Company   and its subsidiaries are insured by recognized, financially sound and reputable institutions with   policies in such amounts and with such deductibles and covering such risks as are generally   deemed adequate and customary for their businesses including, but not limited to, policies covering   real and personal property owned or leased by the Company and its subsidiaries against theft,   damage, destruction, acts of vandalism and earthquakes and policies covering the Company and   its subsidiaries for product liability claims and clinical trial liability claims.  The Company has no   reason to believe that it or any of its subsidiaries will not be able (i) to renew its existing insurance   coverage as and when such policies expire or (ii) to obtain comparable coverage from similar   institutions as may be necessary or appropriate to conduct its business as now conducted and at a   cost that would not reasonably be expected to have a Material Adverse Effect.  Neither the   Company nor any of its subsidiaries has been denied any insurance coverage which it has sought   or for which it has applied.          (aa)  No Price Stabilization or Manipulation; Compliance with Regulation M.  Neither   the Company nor any of its subsidiaries has taken, directly or indirectly, any action designed to or   that might cause or result in stabilization or manipulation of the price of the Common Shares or of  any “reference security” (as defined in Rule 100 of Regulation M under the Exchange Act  (“Regulation M”)) with respect to the Common Shares, whether to facilitate the sale or resale of  the Shares or otherwise, and has taken no action which would directly or indirectly violate  Regulation M.            (bb)  Related Party Transactions.  There are no business relationships or related-party   transactions involving the Company or any of its subsidiaries or any other person required to be   described in the Registration Statement or the Prospectus which have not been described as   required.           (cc)  FINRA Matters.  All of the information provided to the Agent or to counsel for the   Agent by the Company, its counsel, its officers and directors and the holders of any securities (debt   or equity) or options to acquire any securities of the Company in connection with the offering of   the Shares is true, complete, correct and compliant with Financial Industry Regulatory Authority,   Inc.’s (“FINRA”) rules and any letters, filings or other supplemental information provided to  FINRA  pursuant to FINRA Rules or NASD Conduct Rules is true, complete and correct. The                                          12     





 






 Company meets the requirements for use of Form S-3 under the Securities Act specified in FINRA   Rule 5110(b)(7)(C)(i).            (dd)  No Unlawful Contributions or Other Payments.  Except as otherwise disclosed in   the Prospectus, neither the Company nor any of its subsidiaries nor, to the best of the Company’s   knowledge, any employee or agent of the Company or any subsidiary, has made any contribution   or other payment to any official of, or candidate for, any federal, state or foreign office in violation   of any law or of the character required to be disclosed in the Registration Statement and the   Prospectus.          (ee)  Compliance with Environmental Laws.  Except as described in the Prospectus and   except as could not be expected, individually or in the aggregate, to result in a Material Adverse   Effect; (i) neither the Company nor any of its subsidiaries is in violation of any federal, state, local   or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any   judicial or administrative interpretation thereof, including any judicial or administrative order,   consent, decree or judgment, relating to pollution or protection of human health, the environment   (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface   strata) or wildlife, including, without limitation, laws and regulations relating to the release or   threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous   substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to the   manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of   Hazardous Materials (collectively, “Environmental Laws”), (ii) the Company and its subsidiaries   have all permits, authorizations and approvals required under any applicable Environmental Laws   and are each in compliance with their requirements, (iii) there are no pending or, to the Company’s   knowledge, threatened administrative, regulatory or judicial actions, suits, demands, demand   letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating   to any Environmental Law against the Company or any of its subsidiaries and (iv) to the   Company’s knowledge, there are no events or circumstances that would reasonably be expected   to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any  private party or governmental body or agency, against or affecting the Company or any of its  subsidiaries relating to Hazardous Materials or any Environmental Laws.          (ff)  ERISA Compliance.  To the extent applicable, except as otherwise disclosed in the   Prospectus, the Company and its subsidiaries and any “employee benefit plan” (as defined under  the Employee Retirement Income Security Act of 1974, as amended, and the regulations and  published interpretations thereunder (collectively, “ERISA”)) established or maintained by the  Company, its subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance with  ERISA, except as would not reasonably be expected, individually or in the aggregate, to have a  Material Adverse Effect.  “ERISA Affiliate” means, with respect to the Company or any of its  subsidiaries, any member of any group of organizations described in Sections 414(b), (c), (m) or  (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published  interpretations thereunder (the “Code”) of which the Company or such subsidiary is a member.   No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur  with respect to any “employee benefit plan” established or maintained by the Company, its  subsidiaries or any of their ERISA Affiliates.  No “employee benefit plan” established or  maintained by the Company, its subsidiaries or any of their ERISA Affiliates, if such “employee  benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined                                          13     





 






under ERISA).  Neither the Company, its subsidiaries nor any of their ERISA Affiliates has  incurred or reasonably expects to incur any liability under (i) Title IV of ERISA with respect to  termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975  or 4980B of the Code.  Each “employee benefit plan” established or maintained by the Company,  its subsidiaries or any of their ERISA Affiliates that is intended to be qualified under  Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or failure  to act, which would cause the loss of such qualification.          (gg)  Brokers.  Except as otherwise disclosed in the Prospectus, 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.         (hh)  No Outstanding Loans or Other Extensions of Credit.  The Company does not have  any outstanding extension of credit, in the form of a personal loan, to or for any director or  executive officer (or equivalent thereof) of the Company except for such extensions of credit as  are expressly permitted by Section 13(k) of the Exchange Act.         (ii)  Compliance with Laws.  The Company and its subsidiaries have been and are in  compliance with all applicable laws, rules and regulations, except where failure to be so in  compliance could not be expected, individually or in the aggregate, to result in a Material Adverse  Effect.         (jj)  Dividend Restrictions.  Except as disclosed in the Prospectus, no subsidiary of the  Company is prohibited or restricted, directly or indirectly, from paying dividends to the Company,  or from making any other distribution with respect to such subsidiary’s equity securities or from  repaying to the Company or any other subsidiary of the Company any amounts that may from time  to time become due under any loans or advances to such subsidiary from the Company or from  transferring any property or assets to the Company or to any other subsidiary.         (kk)  Anti-Corruption and Anti-Bribery Laws.  Neither the Company nor any of its  subsidiaries or any of their respective officers, directors nor, to the knowledge of the Company,  any agent, employee, affiliate or other person acting on behalf of the Company or any of its  subsidiaries has, in the course of its actions for, or on behalf of, the Company or any of its  subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or other  unlawful expenses relating to political activity; (ii) made or taken any act in furtherance of an offer,  promise, or authorization of any direct or indirect unlawful payment or provision of anything of  value to any domestic government official, “foreign official” (as defined in the U.S. Foreign  Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (collectively,  the “FCPA”), or official or employee of any government-owned or controlled entity or public  international organization, or political party, party official, or candidate for political office, from  corporate funds; (iii) violated or is in violation of any provision of the FCPA, the U.K. Bribery  Act 2010 or any applicable law or regulation implementing the OECD Convention on Combating  Bribery of Foreign Public Officials in International Business Transactions, or any other applicable  non-U.S. anti-bribery statute or regulation; or (iv) made, offered, authorized, requested, or taken  an act in furtherance of any unlawful bribe, rebate, payoff, influence payment, kickback or other  unlawful payment or benefit to any domestic government official, foreign official as defined in the  FCPA, or official or employee of any government-owned or controlled entity or public                                         14    





 






 international organization, or political party, party official, or candidate for political office; and  the Company and its subsidiaries and, to the knowledge of the Company, the Company’s affiliates  have conducted their respective businesses in compliance with the FCPA and any other applicable  anti-corruption laws and have instituted and maintain policies and procedures designed to ensure,  and which are reasonably expected to continue to ensure, continued compliance therewith.           (ll)  Money Laundering Laws.  The operations of the Company and its subsidiaries are,   and have been conducted at all times, in compliance with applicable financial recordkeeping and   reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as   amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations   thereunder and any related or similar applicable rules, regulations or guidelines, issued,   administered or enforced by any governmental agency (collectively, the “Money Laundering   Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority   or body or any arbitrator involving the Company or any of its subsidiaries with respect to the   Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.          (mm)  Clinical Data and Regulatory Compliance.  The preclinical studies and clinical   trials, and other studies (collectively, “studies”) that are described in, or the results of which are   referred to in, the Registration Statement or the Prospectus were and, if still pending, are being  conducted in all material respects in accordance with the protocols, procedures and controls  designed and approved for such studies and with standard medical and scientific research  procedures; each description of the results of such studies is accurate and complete in all material  respects and fairly presents the data derived from such studies, and the Company and its  subsidiaries have no knowledge of any other studies the results of which are materially inconsistent  with, or otherwise call into question, the results described or referred to in the Registration  Statement or the Prospectus; where required, the Company and its subsidiaries have made all such  filings and obtained all such approvals as may be required by the Food and Drug Administration  of the U.S. Department of Health and Human Services or any committee thereof or from any other  U.S. or foreign government or drug or biologic regulatory agency, or health care facility  Institutional Review Board (collectively, the “Regulatory Agencies”); neither the Company nor  any of its subsidiaries has received any notice of, or correspondence from, any Regulatory Agency  requiring the termination, suspension or modification of any clinical trial that is described or  referred to in the Registration Statement or  the Prospectus; and the Company and its subsidiaries  have each operated and currently are in compliance in all material respects with all applicable  rules, regulations and policies of the Regulatory Agencies.          (nn)  Sanctions.  Neither the Company nor any of its subsidiaries or any of their   respective officers, directors, or affiliates, nor, to the knowledge of the Company, any agent,   employee or other person acting on behalf of the Company or any of its subsidiaries is currently   the subject  or the target of any sanctions administered by the Office of Foreign Assets Control of   the U.S. Department of the Treasury (“OFAC”), the United Nations Security Council, the  European Union, Her Majesty’s Treasury of the United Kingdom, or other relevant sanctions  authority (collectively, “Sanctions”), nor located, organized or resident in a country or territory  that is the subject or the target of Sanctions (including, without limitation, Cuba, Iran, North Korea,  Syria and the Crimea Region of the Ukraine); and the Company will not directly or indirectly use  any of the proceeds from the sale of the Shares by the Company in the offering contemplated by  this Agreement, or lend, contribute or otherwise make available any such proceeds to any                                          15     





 






 subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities   of or business with any person or country or territory that, at the time of such financing, is  subject  to, or the target of, any Sanctions or in any other manner that will result in a violation by any  person (including any person participating in the offering contemplated by this Agreement,  whether as underwriter, advisor, investor or otherwise) of Sanctions. For the past five years, the  Company and its subsidiaries have not knowingly engaged in, are not now knowingly engaged in,  and will not engage in any dealings or transactions with any person or country or territory that at  the time of the dealing or transaction is or was the subject or the target of Sanctions.          (oo)  Sarbanes-Oxley.  The Company is in compliance, in all material respects, with all   applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated   thereunder.          (pp)  Duties, Transfer Taxes, Etc.  No stamp or other issuance or transfer taxes or duties   and no capital gains, income, withholding or other taxes are payable by the Agent in the United   States or any political subdivision or taxing authority thereof or therein in connection with the   execution, delivery or performance of this Agreement by the Company or the sale and delivery by   the Company of the Shares.          (qq)  Cybersecurity. The Company and its subsidiaries’ information technology assets   and equipment, computers, systems, networks, hardware, software, websites, applications, and   databases (collectively, “IT Systems”) are adequate for, and operate and perform in all material   respects as required in connection with the operation of the business of the Company and its   subsidiaries as currently conducted, and to the knowledge of the Company free and clear of all   material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. The   Company and its subsidiaries have implemented and maintained commercially reasonable   physical, technical and administrative controls, policies, procedures, and safeguards to maintain   and protect their material confidential information and the integrity, continuous operation,   redundancy and security of all IT Systems and data, including “Personal Data,” used in connection   with their businesses.  “Personal Data” means (i) a natural person’s name, street address,   telephone number, e-mail address, photograph, social security number or tax identification   number, driver’s license number, passport number, credit card number, bank information, or   customer or account number; (ii) any information which would qualify as “personally identifying   information” under the Federal Trade Commission Act, as amended; (iii) “personal data” as   defined by GDPR; (iv) any information which would qualify as “protected health information”   under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health   Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”); and (v) any   other piece of information that allows the identification of such natural person, or his or her family,   or permits the collection or analysis of any data related to an identified person’s health or sexual   orientation. There have been no breaches, violations, outages or unauthorized uses of or accesses   to same, except for those that have been remedied without material cost or liability or the duty to   notify any other person, nor any incidents under internal review or investigations relating to the   same. The Company and its subsidiaries are presently in material compliance with all applicable   laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or   governmental or regulatory authority, and contractual obligations relating to the privacy and   security of IT Systems and Personal Data and to the protection of such IT Systems and Personal   Data from unauthorized use, access, misappropriation or modification.                                          16     





 






       (rr)  Compliance with Data Privacy Laws. The Company and its subsidiaries are, and at   all prior times were, in material compliance with all applicable state and federal data privacy and   security laws and regulations, including without limitation HIPAA, and the Company and its   subsidiaries have taken commercially reasonable actions to prepare to comply with, and since May  25, 2018, have been and currently are in material compliance with, the European Union General   Data Protection Regulation (“GDPR”) (EU 2016/679) (collectively, the “Privacy Laws”). The   Company and its subsidiaries have in place, comply with, and take appropriate steps reasonably   designed to support compliance in all material respects with their policies and procedures relating   to data privacy and security and the collection, storage, use, disclosure, handling, and analysis of   Personal Data (the “Policies”). The Company and its subsidiaries have at all times made all   disclosures to users or customers required by applicable laws, and none of such disclosures made   or contained in any Policy have, to the knowledge of the Company, been materially inaccurate or   in violation of any applicable law in any material respect. The Company further certifies that   neither it nor any subsidiary: (i) has received notice of any actual or potential liability under or   relating to, or actual or potential violation of, any of the Privacy Laws, and has no knowledge of   any event or condition that would reasonably be expected to result in any such notice; (ii) is   currently conducting or paying for, in whole or in part, any investigation, remediation, or other   corrective action pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement   that imposes any obligation or liability under any Privacy Law.            (ss)  Other Underwriting Agreements. The Company is not a party to any agreement   with an agent or underwriter for any other “at the market” or continuous equity transaction.            (tt)  Regulatory Permits and Compliance.  The Company holds, and is operating in   material compliance with, such Permits of the FDA and any other Regulatory Agency that may be   required for the conduct of its business as currently conducted (collectively, the “FDA Permits”),   and all such FDA Permits are in full force and effect. The Company has fulfilled and performed   all of its material obligations with respect to the FDA Permits, and no event has occurred which   allows, or after notice or lapse of time would allow, revocation or termination thereof or results in   any other material impairment of the rights of the holder of any FDA Permit. The Company has   operated and currently is in compliance with applicable statutes and implementing regulations   administered or enforced by the FDA or other Regulatory Agency, including the Federal Food,   Drug, and Cosmetic Act (21 U.S.C. § 301 et seq.) and applicable regulations promulgated   thereunder, except where the failure to so comply would not result in a Material Adverse Effect.   The Company has not received notice of any pending or threatened claim, suit, proceeding,   hearing, enforcement, audit, investigation, arbitration or other action from the FDA or comparable   foreign Regulatory Agency alleging that any operation or activity of the Company is in violation   of any applicable law, rule or regulation.            Any certificate signed by any officer or representative of the Company or any of its   subsidiaries and delivered to the Agent or counsel for the Agent in connection with an issuance of   Shares shall be deemed a representation and warranty by the Company to the Agent as to the   matters covered thereby on the date of such certificate.          The Company acknowledges that the Agent and, for purposes of the opinions to be   delivered pursuant to Section 4(o) hereof, counsel to the Company and counsel to the Agent, will                                           17     





 






 rely upon the accuracy and truthfulness of the foregoing representations, including any officers   certificate representation, and hereby consents to such reliance.    Section 3.  ISSUANCE AND SALE OF COMMON SHARES          (a)   Sale of Securities.  On the basis of the representations, warranties and agreements   herein contained, but subject to the terms and conditions herein set forth, the Company and the   Agent agree that the Company may from time to time seek to sell Shares through the Agent, acting   as sales agent, or directly to the Agent, acting as principal, as follows, with an aggregate Sales   Price of up to the Maximum Program Amount, based on and in accordance with Issuance Notices   as the Company may deliver, during the Agency Period.            (b)   Mechanics of Issuances.           (i)  Issuance Notice.  Upon the terms and subject to the conditions set forth herein, on any   Trading Day during the Agency Period on which the conditions set forth in Section 5(a) and   Section 5(b) shall have been satisfied, the Company may exercise its right to request an issuance   of Shares by delivering to the Agent an Issuance Notice; provided, however, that (A) in no event  may the Company deliver an Issuance Notice to the extent that the sum of (x) the aggregate Sales  Price of the requested Issuance Amount, plus (y) the aggregate Sales Price of all Shares issued  under all previous Issuance Notices effected pursuant to this Agreement, would exceed the  Maximum Program Amount; and (B) prior to delivery of any Issuance Notice, the period set forth  for any previous Issuance Notice shall have expired or been terminated. An Issuance Notice shall  be considered delivered on the Trading Day that it is received by e-mail to the persons set forth in  Schedule A hereto and confirmed by the Company by telephone (including a voicemail message  to the persons so identified), with the understanding that, with adequate prior written notice, the  Agent may modify the list of such persons from time to time.           (ii)  Agent Efforts.  Upon the terms and subject to the conditions set forth in this   Agreement, upon the receipt of an Issuance Notice, the Agent will use its commercially reasonable   efforts consistent with its normal sales and trading practices to place the Shares with respect to   which the Agent has agreed to act as sales agent, subject to, and in accordance with the information   specified in, the Issuance Notice, unless the sale of the Shares described therein has been   suspended, cancelled or otherwise terminated in accordance with the terms of this Agreement.  For   the avoidance of doubt, the parties to this Agreement may modify an Issuance Notice at any time   provided they both agree in writing to any such modification.            (iii) Method of Offer and Sale.  The Shares may be offered and sold (A) in privately   negotiated transactions with the consent of the Company or (B) by any other method permitted by   law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities   Act, including block transactions, sales made directly on the Principal Market or sales made into   any other existing trading market of the Common Shares.  Nothing in this Agreement shall be   deemed to require either party to agree to the method of offer and sale specified in the preceding   sentence, and the method of placement of any Shares by the Agent shall be at the Agent’s   discretion.                                           18     





 






      (iv)  Confirmation to the Company.  If acting as sales agent hereunder, the Agent will  provide written confirmation to the Company no later than the opening of the Trading Day next  following the Trading Day on which it has placed Shares hereunder setting forth the number of  shares sold on such Trading Day, the corresponding Sales Price and the Issuance Price payable to  the Company in respect thereof.           (v)   Settlement.  Each issuance of Shares will be settled on the applicable Settlement  Date for such issuance of Shares and, subject to the provisions of Section 5, on or before each  Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the  Shares being sold by crediting the Agent’s or its designee’s account at The Depository Trust  Company through its Deposit/Withdrawal At Custodian (DWAC) System, or by such other means  of delivery as may be mutually agreed upon by the parties hereto and, upon receipt of such Shares,  which in all cases shall be freely tradable, transferable, registered shares in good deliverable form,  the Agent will deliver, by wire transfer of immediately available funds, the related Issuance Price  in same day funds delivered to an account designated by the Company prior to the Settlement Date.   The Company may sell Shares to the Agent as principal at a price agreed upon at each relevant  time Shares are sold pursuant to this Agreement (each, a “Time of Sale”).           (vi)  Suspension or Termination of Sales.  Consistent with standard market settlement  practices, the Company or the Agent may, upon notice to the other party hereto in writing or by  telephone (confirmed immediately by verifiable email), suspend any sale of Shares, and the period  set forth in an Issuance Notice shall immediately terminate; provided, however, that (A) such  suspension and termination shall not affect or impair either party’s obligations with respect to any  Shares placed or sold hereunder prior to the receipt of such notice; (B) if the Company suspends  or terminates any sale of Shares after the Agent confirms such sale to the Company, the Company  shall still be obligated to comply with Section 3(b)(v) with respect to such Shares; and (C) if the  Company defaults in its obligation to deliver Shares on a Settlement Date, the Company agrees  that it will hold the Agent harmless against any loss, claim, damage or expense (including, without  limitation, penalties, interest and reasonable legal fees and expenses), as incurred, arising out of or  in connection with such default by the Company. The parties hereto acknowledge and agree that,  in performing its obligations under this Agreement, the Agent may borrow Common Shares from  stock lenders in the event that the Company has not delivered Shares to settle sales as required by  subsection (v) above, and may use the Shares to settle or close out such borrowings.  The Company  agrees that no such notice shall be effective against the Agent unless it is made to the persons  identified in writing by the Agent pursuant to Section 3(b)(i).           (vii) No Guarantee of Placement, Etc.  The Company acknowledges and agrees that (A)  there can be no assurance that the Agent will be successful in placing Shares; (B) the Agent will  incur no liability or obligation to the Company or any other Person if it does not sell Shares; and  (C) the Agent shall be under no obligation to purchase Shares on a principal basis pursuant to this  Agreement, except as otherwise specifically agreed by the Agent and the Company.         (viii) Material Non-Public Information.  Notwithstanding any other provision of this  Agreement, the Company and the Agent agree that the Company shall not deliver any Issuance  Notice to the Agent, and the Agent shall not be obligated to place any Shares, during any period  in which the Company is in possession of material non-public information.                                          19    





 






       (c)   Fees.  As compensation for services rendered, the Company shall pay to the Agent,   on the applicable Settlement Date, the Selling Commission for the applicable Issuance Amount   (including with respect to any suspended or terminated sale pursuant to Section 3(b)(vi)) by the   Agent deducting the Selling Commission from the applicable Issuance Amount.          (d)   Expenses.  The Company agrees to pay all costs, fees and expenses incurred in   connection with the performance of its obligations hereunder and in connection with the   transactions contemplated hereby, including without limitation (i) all expenses incident to the   issuance and delivery of the Shares (including all printing and engraving costs); (ii) all fees and   expenses of the registrar and transfer agent of the Shares; (iii) all necessary issue, transfer and   other stamp taxes in connection with the issuance and sale of the Shares; (iv) all fees and expenses  of the Company’s counsel, independent public or certified public accountants and other advisors;   (v) all costs and expenses incurred in connection with the preparation, printing, filing, shipping   and distribution of the Registration Statement (including financial statements, exhibits, schedules,   consents and certificates of experts), the Prospectus, any Free Writing Prospectus (as defined   below) prepared by or on behalf of, used by, or referred to by the Company, and all amendments   and supplements thereto, and this Agreement; (vi) all filing fees, attorneys’ fees and expenses  incurred by the Company or the Agent in connection with qualifying or registering (or obtaining  exemptions from the qualification or registration of) all or any part of the Shares for offer and sale  under the state securities or blue sky laws or the provincial securities laws of Canada, and, if  requested by the Agent, preparing and printing a “Blue Sky Survey” or memorandum and a  “Canadian wrapper,, and any supplements thereto, advising the Agent of such qualifications,  registrations, determinations and exemptions; (vii) the reasonable and documented fees and  disbursements of the Agent’s counsel, including the reasonable and documented fees and expenses  of counsel for the Agent in connection with, FINRA review, if any, and approval of the Agent’s  participation in the offering and distribution of the Shares; (viii) the filing fees incident to FINRA  review, if any; (ix) the costs and expenses of the Company relating to investor presentations on  any “road show” undertaken in connection with the marketing of the offering of the Shares,  including, without limitation, expenses associated with the preparation or dissemination of any  electronic road show, expenses associated with the production of road show slides and graphics,  fees and expenses of any consultants engaged in connection with the road show presentations with  the prior approval of the Company, travel and lodging expenses of the representatives, employees  and officers of the Company and of the Agent and any such consultants, and the cost of any aircraft  chartered in connection with the road show; and (x) the fees and expenses associated with listing  the Shares on the Principal Market. The fees and disbursements of Agent’s counsel pursuant to  subsections (vi) and (vii) above shall not exceed (A) $50,000 in connection with the first Issuance  Notice and (B) $15,000 in connection with each Triggering Event Date (as defined below) on  which the Company is required to provide a certificate pursuant to Section 4(o).    Section 4.  ADDITIONAL COVENANTS          The Company covenants and agrees with the Agent as follows, in addition to any other   covenants and agreements made elsewhere in this Agreement:          (a)   Exchange Act Compliance.  During the Agency Period, the Company shall (i) file,   on a timely basis, with the Commission all reports and documents required to be filed under   Section 13, 14 or 15 of the Exchange Act in the manner and within the time periods required by                                          20     





 






 the Exchange Act; and (ii) either (A) include in its quarterly reports on Form 10-Q and its annual   reports on Form 10-K, a summary detailing, for the relevant reporting period, (1) the number of   Shares sold, if any, through the Agent pursuant to this Agreement and (2) the net proceeds, if any,    received by the Company from such sales or, in the Company’s sole discretion, (B) prepare a   prospectus supplement containing, or include in such other filing permitted by the Securities Act   or Exchange Act (each an “Interim Prospectus Supplement”), such summary information and,   at least once a quarter and subject to this Section 4, file such Interim Prospectus Supplement   pursuant to Rule 424(b) under the Securities Act (and within the time periods required by Rule   424(b) and Rule 430B under the Securities Act)); provided, however, that prior notice is given to   the Agent of any such filing of an Interim Prospectus Supplement.          (b)   Securities Act Compliance.  After the date of this Agreement, the Company shall   promptly advise the Agent in writing (i) of the receipt of any comments of, or requests for   additional or supplemental information from, the Commission; (ii) of the time and date of any   filing of any post-effective amendment to the Registration Statement, any Rule 462(b) Registration   Statement or any amendment or supplement to the Prospectus, or any Free Writing Prospectus;   (iii) of the time and date that any post-effective amendment to the Registration Statement or any   Rule 462(b) Registration Statement becomes effective; and (iv) of the issuance by the Commission   of any stop order suspending the effectiveness of the Registration Statement or any post-effective   amendment thereto, any Rule 462(b) Registration Statement or any amendment or supplement to  the Prospectus or of any order preventing or suspending the use of any Free Writing Prospectus or  the Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation  the Common Shares from any securities exchange upon which they are listed for trading or  included or designated for quotation, or of the threatening or initiation of any proceedings for any  of such purposes.  If the Commission shall enter any such stop order at any time, the Company   will use its best efforts to obtain the lifting of such order as soon as practicable.  Additionally, the   Company agrees that it shall comply with the provisions of Rule 424(b) and Rule 433, as   applicable, under the Securities Act and will use its reasonable efforts to confirm that any filings   made by the Company under such Rule 424(b) or Rule 433 were filed in a timely manner with the   Commission.            (c)   Amendments and Supplements to the Prospectus and Other Securities Act Matters.    If any event shall occur or condition exist as a result of which it is necessary to amend or   supplement the Prospectus so that the Prospectus does not include an untrue statement of a material   fact or omit to state a material fact necessary in order to make the statements therein, in the light   of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if in the   opinion of the Agent or counsel for the Agent it is otherwise necessary to amend or supplement   the Prospectus to comply with applicable law, including the Securities Act, the Company agrees   (subject to Sections 4(d) and 4(f)) to promptly prepare, file with the Commission and furnish at its   own expense to the Agent, such amendments or supplements to the Prospectus so that the   statements in the Prospectus as so amended or supplemented will not include an untrue statement   of a material fact or omit to state a material fact necessary in order to make the statements therein,   in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading   or so that the Prospectus, as amended or supplemented, will comply with applicable law including   the Securities Act.  Neither the Agent’s consent to, nor delivery of, any such amendment or   supplement shall constitute a waiver of any of the Company’s obligations under Sections 4(d) and   4(f). Notwithstanding the foregoing, the Company shall not be required to file such amendment or                                          21     





 






 supplement if there is no pending Issuance Notice and the Company believes that it is in its best   interest not to file such amendment or supplement.           (d)   Agent’s Review of Proposed Amendments and Supplements.  Prior to amending or   supplementing the Registration Statement (including any registration statement filed under   Rule 462(b) under the Securities Act) or the Prospectus (excluding any amendment or supplement   through incorporation of any report filed under the Exchange Act), the Company shall furnish to   the Agent for review, a reasonable amount of time prior to the proposed time of filing or use   thereof, a copy of each such proposed amendment or supplement, insofar as such proposed   amendment or supplement relates to the transactions contemplated hereby, and the Company shall   not file or use any such proposed amendment or supplement without the Agent’s prior consent,   and the Company shall file with the Commission within the applicable period specified in Rule   424(b) under the Securities Act any prospectus required to be filed pursuant to such Rule.          (e)   Use of Free Writing Prospectus. Neither the Company nor the Agent has prepared,   used, referred to or distributed, or will prepare, use, refer to or distribute, without the other party’s   prior written consent, any “written communication” that constitutes a “free writing prospectus” as  such terms are defined in Rule 405 under the Securities Act with respect to the offering  contemplated by this Agreement (any such free writing prospectus being referred to herein as a  “Free Writing Prospectus”).          (f)   Free Writing Prospectuses.  The Company shall furnish to the Agent for review, a   reasonable amount of time prior to the proposed time of filing or use thereof, a copy of each   proposed free writing prospectus or any amendment or supplement thereto to be prepared by or on   behalf of, used by, or referred to by the Company insofar as such proposed free writing prospectus   or amendment or supplement relates to the transactions contemplated hereby, and the Company   shall not file, use or refer to any such proposed free writing prospectus or any such amendment or   supplement thereto without the Agent’s consent.  The Company shall furnish to the Agent, without   charge, as many copies of any free writing prospectus prepared by or on behalf of, or used by the   Company insofar as such proposed free writing prospectus relates to the transactions contemplated   hereby, as the Agent may reasonably request.  If at any time when a prospectus is required by the   Securities Act (including, without limitation, pursuant to Rule 173(d)) to be delivered (whether   physically or through compliance with Rule 172 under the Securities Act or any similar rule) in   connection with sales of the Shares (but in any event if at any time through and including the date   of this Agreement) there occurred or occurs an event or development as a result of which any free   writing prospectus prepared by or on behalf of, used by, or referred to by the Company conflicted   or would conflict with the information contained in the Registration Statement or included or   would include an untrue statement of a material fact or omitted or would omit to state a material   fact necessary in order to make the statements therein, in the light of the circumstances prevailing   at that subsequent time, not misleading, the Company shall promptly amend or supplement such   free writing prospectus to eliminate or correct such conflict or so that the statements in such free   writing prospectus as so amended or supplemented will not include an untrue statement of a   material fact or omit to state a material fact necessary in order to make the statements therein, in   the light of the circumstances prevailing at such subsequent time, not misleading, as the case may   be; provided, however, that prior to amending or supplementing any such free writing prospectus,   the Company shall furnish to the Agent for review, a reasonable amount of time prior to the   proposed time of filing or use thereof, a copy of such proposed amended or supplemented free                                          22     





 






writing prospectus and the Company shall not file, use or refer to any such amended or  supplemented free writing prospectus without the Agent’s consent, which consent shall not be  unreasonably withheld or delayed.         (g)   Filing of Agent Free Writing Prospectuses.  The Company shall not take any action  that would result in the Agent or the Company being required to file with the Commission pursuant  to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the  Agent that the Agent otherwise would not have been required to file thereunder.         (h)   Copies of Registration Statement and Prospectus.  After the date of this Agreement  through the last time that a prospectus is required by the Securities Act (including, without  limitation, pursuant to Rule 173(d)) to be delivered in connection with sales of the Shares, the  Company agrees to furnish the Agent with copies (which may be electronic copies) of the  Registration Statement and each amendment thereto, and with copies (which may be electronic  copies) of the Prospectus and each amendment or supplement thereto in the form in which it is  filed with the Commission pursuant to the Securities Act or Rule 424(b) under the Securities Act,  both in such quantities as the Agent may reasonably request from time to time; and, if the delivery  of a prospectus is required under the Securities Act or under the blue sky or securities laws of any  jurisdiction at any time on or prior to the applicable Settlement Date for any period set forth in an  Issuance Notice in connection with the offering or sale of the Shares and if at such time any event  has occurred as a result of which the Prospectus as then amended or supplemented would include  an untrue statement of a material fact or omit to state any material fact necessary in order to make  the statements therein, in the light of the circumstances under which they were made when such  Prospectus is delivered, not misleading, or, if for any other reason it is necessary during such same  period to amend or supplement the Prospectus or to file under the Exchange Act any document  incorporated by reference in the Prospectus in order to comply with the Securities Act or the  Exchange Act, to notify the Agent and to request that the Agent suspend offers to sell Shares (and,  if so notified, the Agent shall cease such offers as soon as practicable); and if the Company decides  to amend or supplement the Registration Statement or the Prospectus as then amended or  supplemented, to advise the Agent promptly by telephone (with confirmation in writing) and to  prepare and cause to be filed promptly with the Commission an amendment or supplement to the  Registration Statement or the Prospectus as then amended or supplemented that will correct such  statement or omission or effect such compliance; provided, however, that if during such same  period the Agent is required to deliver a prospectus in respect of transactions in the Shares, the  Company shall promptly prepare and file with the Commission such an amendment or supplement.         (i)   Blue Sky Compliance.  The Company shall cooperate with the Agent and counsel  for the Agent to qualify or register the Shares for sale under (or obtain exemptions from the  application of) the state securities or blue sky laws or Canadian provincial securities laws of those  jurisdictions designated by the Agent, shall comply with such laws and shall continue such  qualifications, registrations and exemptions in effect so long as required for the distribution of the  Shares.  The Company shall not be required to qualify as a foreign corporation or to take any action  that would subject it to general service of process in any such jurisdiction where it is not presently  qualified or where it would be subject to taxation as a foreign corporation.  The Company will  advise the Agent promptly of the suspension of the qualification or registration of (or any such  exemption relating to) the Shares for offering, sale or trading in any jurisdiction or any initiation  or threat of any proceeding for any such purpose, and in the event of the issuance of any order                                         23    





 






suspending such qualification, registration or exemption, the Company shall use its best efforts to  obtain the withdrawal thereof as soon as practicable.         (j)   Earnings Statement.  As soon as practicable, the Company will make generally  available to its security holders and to the Agent an earnings statement (which need not be audited)  covering a period of at least 12 months beginning with the first fiscal quarter of the Company  occurring after the date of this Agreement which shall satisfy the provisions of Section 11(a) of  the Securities Act and Rule 158 under the Securities Act.         (k)   Listing; Reservation of Shares.  (a)  The Company will use its best efforts to  maintain the listing of the Shares on the Principal Market; and (b) the Company will reserve and  keep available at all times, free of preemptive rights, Shares for the purpose of enabling the  Company to satisfy its obligations under this Agreement.         (l)   Transfer Agent.  The Company shall engage and maintain, at its expense, a registrar  and transfer agent for the Shares.           (m)   Due Diligence.   During the term of this Agreement, the Company will reasonably  cooperate with any reasonable due diligence review conducted by the Agent in connection with  the transactions contemplated hereby, including, without limitation, providing information and  making available documents and senior corporate officers, during normal business hours and at  the Company’s principal offices, as the Agent may reasonably request from time to time.         (n)   Representations and Warranties.  The Company acknowledges that each delivery  of an Issuance Notice and each delivery of Shares on a Settlement Date shall be deemed to be (i)  an affirmation to the Agent that the representations and warranties of the Company contained in  or made pursuant to this Agreement are true and correct as of the date of such Issuance Notice or  of such Settlement Date, as the case may be, as though made at and as of each such date, except  as may be disclosed in the Prospectus (including any documents incorporated by reference therein  and any supplements thereto); and (ii) an undertaking that the Company will advise the Agent if  any of such representations and warranties will not be true and correct as of the Settlement Date  for the Shares relating to such Issuance Notice, as though made at and as of each such date (except  that such representations and warranties shall be deemed to relate to the Registration Statement  and the Prospectus as amended and supplemented relating to such Shares).         (o)   Deliverables at Triggering Event Dates; Certificates. The Company agrees that on  or prior to the date of the first Issuance Notice and, during the term of this Agreement after the  date of the first Issuance Notice, upon:               (A)   the filing of the Prospectus or the amendment or supplement of any  Registration Statement or Prospectus (other than a prospectus supplement relating solely to an  offering of securities other than the Shares or a prospectus filed pursuant to Section 4(a)(ii)(B)),  by means of a post-effective amendment, sticker or supplement, but not by means of incorporation  of documents by reference into the Registration Statement or Prospectus;                 (B)   the filing with the Commission of an annual report on Form 10-K or a  quarterly report on Form 10-Q (including any Form 10-K/A or Form 10-Q/A containing amended                                         24    





 






financial information or a material amendment to the previously filed annual report on Form 10- K or quarterly report on Form 10-Q), in each case, of the Company; or                (C)   the filing with the Commission of a current report on Form 8-K of the  Company containing amended financial information (other than information “furnished” pursuant  to Item 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K  relating to reclassification of certain properties as discontinued operations in accordance with  Statement of Financial Accounting Standards No. 144) that is material to the offering of securities  of the Company in the Agent’s reasonable discretion; (any such event, a “Triggering Event  Date”), the Company shall furnish the Agent (but in the case of clause (C) above only if the Agent  reasonably determines that the information contained in such current report on Form 8-K of the  Company is material) with a certificate as of the Triggering Event Date, in the form and substance  satisfactory to the Agent and its counsel, substantially similar to the form previously provided to  the Agent and its counsel, modified, as necessary, to relate to the Registration Statement and the  Prospectus as amended or supplemented, (A) confirming that the representations and warranties  of the Company contained in this Agreement are true and correct, (B) that the Company has  performed all of its obligations hereunder to be performed on or prior to the date of such certificate  and as to the matters set forth in Section 5(a)(iii) hereof, and (C) containing any other certification  that the Agent shall reasonably request. The requirement to provide a certificate under this Section  4(o) shall be waived for any Triggering Event Date occurring at a time when no Issuance Notice  is pending or a suspension is in effect, which waiver shall continue until the earlier to occur of the  date the Company delivers instructions for the sale of Shares hereunder (which for such calendar  quarter shall be considered a Triggering Event Date) and the next occurring Triggering Event Date.  Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following a  Triggering Event Date when a suspension was in effect and did not provide the Agent with a  certificate under this Section 4(o), then before the Company delivers the instructions for the sale  of Shares or the Agent sells any Shares pursuant to such instructions, the Company shall provide  the Agent with a certificate in conformity with this Section 4(o) dated as of the date that the  instructions for the sale of Shares are issued.         (p)   Legal Opinions.  On or prior to the date of the first Issuance Notice and on or prior  to each Triggering Event Date with respect to which the Company is obligated to deliver a  certificate pursuant to Section 4(o) for which no waiver is applicable and excluding the date of this  Agreement, a negative assurances letter and the written legal opinion of Mintz, Levin, Cohn,  Ferris, Glovsky and Popeo P.C., counsel to the Company, Brownstein Hyatt Farber Schreck, LLP,  local Nevada counsel for the Company, Dentons Europe LLP, local German counsel for the  Company, Schiweck Weinzierl Koch, Patentanwälte Partnerschaft mbH, intellectual property  counsel to the Company, and Choate Hall & Stewart LLP, U.S. intellectual property counsel for  the Company, each dated the date of delivery, in form and substance reasonably satisfactory to the  Agent and its counsel, substantially similar to the form previously provided to the Agent and its  counsel, modified, as necessary, to relate to the Registration Statement and the Prospectus as then  amended or supplemented, shall be furnished to the Agent; provided, however, no more than one  of each opinion shall be required to be furnished hereunder per annual report on Form 10-K and  quarterly report on Form 10-Q filed by the Company. In lieu of such opinions for subsequent  periodic filings, in the discretion of the Agent, the Company may furnish a reliance letter from  such counsel to the Agent, permitting the Agent to rely on a previously delivered opinion letter,  modified as appropriate for any passage of time or Triggering Event Date (except that statements                                         25    





 






 in such prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as   amended or supplemented as of such Triggering Event Date).            (q)   Comfort Letter. On or prior to the date of the first Issuance Notice and on or prior   to each Triggering Event Date with respect to which the Company is obligated to deliver a   certificate pursuant to Section 4(o) for which no waiver is applicable and excluding the date of this   Agreement, the Company shall cause  Ernst & Young LLP, the independent registered public   accounting firm who has audited the financial statements included or incorporated by reference in   the Registration Statement, to furnish the Agent a comfort letter, dated the date of delivery, in form   and substance reasonably satisfactory to the Agent and its counsel, substantially similar to the form   previously provided to the Agent and its counsel; provided, however, that any such comfort letter   will only be required on the Triggering Event Date specified to the extent that it contains financial  statements filed with the Commission under the Exchange Act and incorporated or deemed to be  incorporated by reference into a Prospectus.  If requested by the Agent, the Company shall also   cause a comfort letter to be furnished to the Agent within ten (10) Trading Days of the date of   occurrence of any material transaction or event requiring the filing of a current report on Form 8-  K containing material amended financial information of the Company, including the restatement   of the Company’s financial statements. The Company shall be required to furnish no more than   one comfort letter hereunder per calendar quarter.            (r)    Secretary’s Certificate. On or prior to the date of the first Issuance Notice and on or   prior to each Triggering Event Date with respect to which the Company is obligated to deliver a   certificate pursuant to Section 4(o) for which no waiver is applicable and excluding the date of this   Agreement, the Company shall furnish the Agent a certificate executed by the Secretary of the   Company, signing in such capacity, dated the date of delivery (i) certifying that attached thereto   are true and complete copies of the resolutions duly adopted by the Board of Directors of the   Company authorizing the execution and delivery of this Agreement and the consummation of the   transactions contemplated hereby (including, without limitation, the issuance of the Shares   pursuant to this Agreement), which authorization shall be in full force and effect on and as of the   date of such certificate, (ii) certifying and attesting to the office, incumbency, due authority and   specimen signatures of each Person who executed this Agreement for or on behalf of the Company,   and (iii) containing any other certification that the Agent shall reasonably request.           (s)   Agent’s Own Account; Clients’ Account.  The Company consents to the Agent   trading, in compliance with applicable law, in the Common Shares for the Agent’s own account   and for the account of its clients at the same time as sales of the Shares occur pursuant to this   Agreement.          (t)   Investment Limitation.  The Company shall not invest, or otherwise use the   proceeds received by the Company from its sale of the Shares in such a manner as would require   the Company or any of its subsidiaries to register as an investment company under the Investment   Company Act.          (u)   Market Activities.  The Company will not take, directly or indirectly, any action   designed to or that might be reasonably expected to cause or result in stabilization or manipulation   of the price of the Shares or any other reference security, whether to facilitate the sale or resale of   the Shares or otherwise, and the Company will, and shall cause each of its affiliates to, comply                                          26     





 






 with all applicable provisions of Regulation M.  If the limitations of Rule 102 of Regulation M   (“Rule 102”) do not apply with respect to the Shares or any other reference security pursuant to   any exception set forth in Section (d) of Rule 102, then promptly upon notice from the Agent (or,   if later, at the time stated in the notice), the Company will, and shall cause each of its affiliates to,   comply with Rule 102 as though such exception were not available but the other provisions of   Rule 102 (as interpreted by the Commission) did apply. The Company shall promptly notify the   Agent if it no longer meets the requirements set forth in Section (d) of Rule 102.            (v)   Notice of Other Sale.  Without the written consent of the Agent, the Company will   not, directly or indirectly, offer to sell, sell, contract to sell, grant any option to sell or otherwise   dispose of any Common Shares or securities convertible into or exchangeable for Common Shares   (other than Shares hereunder), warrants or any rights to purchase or acquire Common Shares,   during the period beginning on the third Trading Day immediately prior to the date on which any   Issuance Notice is delivered to the Agent hereunder and ending on the third Trading Day   immediately following the Settlement Date with respect to Shares sold pursuant to such Issuance   Notice; and will not directly or indirectly enter into any other “at the market” or continuous equity   transaction offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any   Common Shares (other than the Shares offered pursuant to this Agreement) or securities   convertible into or exchangeable for Common Shares, warrants or any rights to purchase or   acquire, Common Shares prior to the termination of this Agreement; provided, however, that such   restrictions will not be required in connection with the Company’s (i) issuance or sale of Common   Shares, options to purchase Common Shares or Common Shares issuable upon the exercise of   options or other equity awards pursuant to any employee, consultant, or director share, option,   incentive or benefit plan, share purchase or ownership plan, long-term incentive plan, dividend   reinvestment plan, inducement award under Principal Market rules or other compensation plan of   the Company or its subsidiaries, as in effect on the date of this Agreement, (ii) issuance or sale of   Common Shares issuable upon exchange, conversion or redemption of preferred stock or other  securities or the exercise or vesting of warrants, options or other equity awards outstanding at the  date of this Agreement, (iii) issuance or sale of Common Shares or securities convertible into or  exchangeable for Common Shares as consideration for mergers, acquisitions, other business  combinations, joint ventures, collaborations, licensing arrangements or strategic alliances  occurring after the date of this Agreement which are not used for capital raising purposes and (iv)  modification of any outstanding options, warrants of any rights to purchase or acquire Common  Shares.     Section 5.  CONDITIONS TO DELIVERY OF ISSUANCE NOTICES AND TO   SETTLEMENT          (a)   Conditions Precedent to the Right of the Company to Deliver an Issuance Notice   and the Obligation of the Agent to Sell Shares.  The right of the Company to deliver an Issuance   Notice hereunder is subject to the satisfaction, on the date of delivery of such Issuance Notice, and   the obligation of the Agent to use its commercially reasonable efforts to place Shares during the   applicable period set forth in the Issuance Notice is subject to the satisfaction, on each Trading   Day during the applicable period set forth in the Issuance Notice, of each of the following   conditions:                                           27     





 






(i)   Accuracy of the Company’s Representations and Warranties; Performance by the        Company.  The Company shall have delivered the certificate required to be        delivered pursuant to Section 4(o) on or before the date on which delivery of such        certificate is required pursuant to Section 4(o). The Company shall have performed,        satisfied and complied with all covenants, agreements and conditions required by        this Agreement to be performed, satisfied or complied with by the Company at or        prior to such date, including, but not limited to, the covenants contained in Section        4(p), Section 4(q) and Section 4(r).   (ii)  No Injunction.  No statute, rule, regulation, executive order, decree, ruling or        injunction shall have been enacted, entered, promulgated or endorsed by any court        or governmental authority of competent jurisdiction or any self-regulatory       organization having authority over the matters contemplated hereby that prohibits       or directly and materially adversely affects any of the transactions contemplated by       this Agreement, and no proceeding shall have been commenced that may have the       effect of prohibiting or materially adversely affecting any of the transactions       contemplated by this Agreement.   (iii) Material Adverse Changes. Except as disclosed in the Prospectus and the Time of        Sale Information, (a) in the judgment of the Agent there shall not have occurred        any Material Adverse Change; and (b) there shall not have occurred any        downgrading, nor shall any notice have been received by the Company of any        intended or potential downgrading or of any review for a possible change that does        not indicate the direction of the possible change, in the rating accorded any        securities of the Company or any of its subsidiaries by any “nationally recognized        statistical rating organization” as such term is defined for purposes of Section        3(a)(62) of the Exchange Act.   (iv)  No Suspension of Trading in or Delisting of Common Shares; Other Events.  The        trading of the Common Shares (including without limitation the Shares) shall not        have been suspended by the Commission, the Principal Market or FINRA and the        Common Shares (including without limitation the Shares) shall have been approved        for listing or quotation on and shall not have been delisted from the Nasdaq Stock        Market, the New York Stock Exchange or any of their constituent markets.  There        shall not have occurred (and be continuing in the case of occurrences under        clauses (i) and (ii) below) any of the following:  (i) trading or quotation in any of        the Company’s securities shall have been suspended or limited by the Commission       or by the Principal Market or trading in securities generally on either the Principal       Market shall have been suspended or limited, or minimum or maximum prices shall        have been generally established on any of such stock exchanges by the Commission        or FINRA; (ii) a general banking moratorium shall have been declared by any of        federal or New York, authorities; or (iii) there shall have occurred any outbreak or       escalation of national or international hostilities or any crisis or calamity, or any       change in the United States or international financial markets, or any substantial       change or development involving a prospective substantial change in United States’       or international political, financial or economic conditions, as in the judgment of       the Agent is material and adverse and makes it impracticable to market the Shares                                   28                 





 






             in the manner and on the terms described in the Prospectus or to enforce contracts               for the sale of securities.          (b)   Documents Required to be Delivered on each Issuance Notice Date.  The Agent’s   obligation to use its commercially reasonable efforts to place Shares hereunder shall additionally   be conditioned upon the delivery to the Agent on or before the Issuance Notice Date of a certificate   in form and substance reasonably satisfactory to the Agent, executed by the Chief Executive   Officer, President or Chief Financial Officer of the Company, to the effect that all conditions to   the delivery of such Issuance Notice shall have been satisfied as at the date of such certificate as   required to be delivered pursuant to Section 4(o) (which certificate shall not be required if the   foregoing representations shall be set forth in the Issuance Notice).          (c)   No Misstatement or Material Omission. Agent shall not have advised the Company   that the Registration Statement, the Prospectus or the Time of Sale Information, or any amendment  or supplement thereto, contains an untrue statement of fact that in the Agent’s reasonable opinion  is material, or omits to state a fact that in the Agent’s reasonable opinion is material and is required  to be stated therein or is necessary to make the statements therein not misleading.          (d)   Agent Counsel Legal Opinion. Agent shall have received from Cooley   LLP, counsel for Agent, such opinion or opinions, on or before the date on which the delivery of   the Company counsel legal opinion is required pursuant to Section 4(p), with respect to such   matters as Agent may reasonably require, and the Company shall have furnished to such counsel   such documents as they reasonably request for enabling them to pass upon such matters.    Section 6.  INDEMNIFICATION AND CONTRIBUTION          (a)   Indemnification of the Agent.  The Company agrees to indemnify and hold   harmless the Agent, its officers and employees, and each person, if any, who controls the Agent   within the meaning of the Securities Act or the Exchange Act against any loss, claim, damage,   liability or expense, as incurred, to which the Agent or such officer, employee or controlling person   may become subject, under the Securities Act, the Exchange Act, other federal or state statutory   law or regulation, or the laws or regulations of foreign jurisdictions where Shares have been offered   or sold or at common law or otherwise (including in settlement of any litigation), insofar as such   loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below)   arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact   contained in the Registration Statement, or any amendment thereto, including any information  deemed to be a part thereof pursuant to Rule 430B under the Securities Act, or the omission or  alleged omission therefrom of a material fact required to be stated therein or necessary to make  the statements therein not misleading; or (ii) any untrue statement or alleged untrue statement of a  material fact contained in any Free Writing Prospectus that the Company has used, referred to or  filed, or is required to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus (or any  amendment or supplement thereto), or the omission or alleged omission therefrom of a material  fact necessary in order to make the statements therein, in the light of the circumstances under  which they were made, not misleading and to reimburse the Agent and each such officer, employee  and controlling person for any and all expenses (including the fees and disbursements of counsel  chosen by the Agent) as such expenses are reasonably incurred and documented by the Agent or  such officer, employee or controlling person in connection with investigating, defending, settling,                                          29     





 






 compromising or paying any such loss, claim, damage, liability, expense or action; provided,   however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage,   liability or expense to the extent, but only to the extent, arising out of or based upon any untrue   statement or alleged untrue statement or omission or alleged omission made in reliance upon and   in conformity with written information furnished to the Company by the Agent expressly for use   in the Registration Statement, any such Free Writing Prospectus or the Prospectus (or any   amendment or supplement thereto), it being understood and agreed that the only such information   furnished by the Agent to the Company consists of the information set forth in the first sentence   of the ninth paragraph under the caption “Plan of Distribution” in the Prospectus.  The indemnity   agreement set forth in this Section 6(a)  shall be in addition to any liabilities that the Company   may otherwise have.          (b)   Indemnification of the Company, its Directors and Officers. The Agent agrees to   indemnify and hold harmless the Company, each of its directors, each of its officers who signed   the Registration Statement and each person, if any, who controls the Company within the meaning   of the Securities Act or the Exchange Act against any loss, claim, damage, liability or expense, as   incurred, to which the Company or any such director, officer or controlling person may become   subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or   regulation, or the laws or regulations of foreign jurisdictions where Shares have been offered or   sold or at common law or otherwise (including in settlement of any litigation), that arises out of or   is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in   the Registration Statement, or any amendment thereto, including any information deemed to be a   part thereof pursuant to Rule 430B under the Securities Act, or the omission or alleged omission   therefrom of a material fact required to be stated therein or necessary to make the statements   therein not misleading; or (ii) any untrue statement or alleged untrue statement of a material fact   contained in any Free Writing Prospectus that the Company has used, referred to or filed, or is   required to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus (or any amendment   or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary   in order to make the statements therein, in the light of the circumstances under which they were   made, not misleading; but, for each of (i) and (ii) above, only to the extent arising out of or based   upon any untrue statement or alleged untrue statement or omission or alleged omission made in   reliance upon and in conformity with written information furnished to the Company by the Agent   expressly for use in the Registration Statement, any such Free Writing Prospectus or the Prospectus   (or any amendment or supplement thereto), it being understood and agreed that the only such   information furnished by the Agent to the Company consists of the information set forth in the   first sentence of the ninth paragraph under the caption “Plan of Distribution” in the Prospectus,  and to reimburse the Company and each such director, officer and controlling person for any and  all expenses (including the fees and disbursements of one counsel chosen by the Company) as such  expenses are reasonably incurred by the Company or such officer, director or controlling person  in connection with investigating, defending, settling, compromising or paying any such loss, claim,  damage, liability, expense or action. The indemnity agreement set forth in this Section 6(b) shall   be in addition to any liabilities that the Agent may otherwise have.          (c)   Notifications and Other Indemnification Procedures.  Promptly after receipt by an   indemnified party under this Section 6 of notice of the commencement of any action, such   indemnified party will, if a claim in respect thereof is to be made against an indemnifying party                                          30     





 






 under this Section 6, notify the indemnifying party in writing of the commencement thereof, but   the omission so to notify the indemnifying party will not relieve it from any liability which it may   have to any indemnified party for contribution or otherwise than under the indemnity agreement   contained in this Section 6 or to the extent it is not prejudiced as a proximate result of such failure.    In case any such action is brought against any indemnified party and such indemnified party seeks   or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled  to participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties  similarly notified, by written notice delivered to the indemnified party promptly after receiving the   aforesaid notice from such indemnified party, to assume the defense thereof with counsel   reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such   action include both the indemnified party and the indemnifying party and the indemnified party   shall have reasonably concluded that a conflict may arise between the positions of the   indemnifying party and the indemnified party in conducting the defense of any such action or that   there may be legal defenses available to it and/or other indemnified parties which are different   from or additional to those available to the indemnifying party, the indemnified party or parties   shall have the right to select separate counsel to assume such legal defenses and to otherwise   participate in the defense of such action on behalf of such indemnified party or parties.  Upon   receipt of notice from the indemnifying party to such indemnified party of such indemnifying   party’s election so to assume the defense of such action and approval by the indemnified party of   counsel, the indemnifying party will not be liable to such indemnified party under this Section 6   for any legal or other expenses subsequently incurred by such indemnified party in connection   with the defense thereof unless (i) the indemnified party shall have employed separate counsel in   accordance with the proviso to the preceding sentence (it being understood, however, that the   indemnifying party shall not be liable for the fees and expenses of more than one separate counsel   (together with local counsel), representing the indemnified parties who are parties to such action),   which counsel (together with any local counsel) for the indemnified parties shall be selected by  the indemnified party (in the case of counsel for the indemnified parties referred to in Section 6(a)   and Section 6(b) above), (ii) the indemnifying party shall not have employed counsel satisfactory   to the indemnified party to represent the indemnified party within a reasonable time after notice of   commencement of the action or (iii) the indemnifying party has authorized in writing the   employment of counsel for the indemnified party at the expense of the indemnifying party, in each   of which cases the fees and expenses of counsel shall be at the expense of the indemnifying party   and shall be paid as they are incurred.          (d)   Settlements.  The indemnifying party under this Section 6 shall not be liable for any   settlement of any proceeding effected without its written consent, but if settled with such consent   or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the   indemnified party against any loss, claim, damage, liability or expense by reason of such settlement   or judgment.  Notwithstanding the foregoing sentence, if at any time an indemnified party shall   have requested an indemnifying party to reimburse the indemnified party for fees and expenses of   counsel as contemplated by Section 6(c) hereof, the indemnifying party agrees that it shall be liable   for any settlement of any proceeding effected without its written consent if (i) such settlement is   entered into more than 30 days after receipt by such indemnifying party of the aforesaid request;   and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance   with such request prior to the date of such settlement.  No indemnifying party shall, without the   prior written consent of the indemnified party, effect any settlement, compromise or consent to the   entry of judgment in any pending or threatened action, suit or proceeding in respect of which any                                          31     





 






indemnified party is or could have been a party and indemnity was or could have been sought  hereunder by such indemnified party, unless such settlement, compromise or consent includes an  unconditional release of such indemnified party from all liability on claims that are the subject  matter of such action, suit or proceeding.         (e)   Contribution.  If the indemnification provided for in this Section 6 is for any reason  held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in respect  of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying  party shall contribute to the aggregate amount paid or payable by such indemnified party, as  incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein (i) in  such proportion as is appropriate to reflect the relative benefits received by the Company, on the  one hand, and the Agent, on the other hand, from the offering of the Shares pursuant to this  Agreement; or (ii) if the allocation provided by clause (i) above is not permitted by applicable law,  in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)  above but also the relative fault of the Company, on the one hand, and the Agent, on the other  hand, in connection with the statements or omissions which resulted in such losses, claims,  damages, liabilities or expenses, as well as any other relevant equitable considerations.  The  relative benefits received by the Company, on the one hand, and the Agent, on the other hand, in  connection with the offering of the Shares pursuant to this Agreement shall be deemed to be in the  same respective proportions as the total gross proceeds from the offering of the Shares (before  deducting expenses) received by the Company bear to the total Selling Commissions received by  the Agent.  The relative fault of the Company, on the one hand, and the Agent, on the other hand,  shall be determined by reference to, among other things, whether any such untrue or alleged untrue  statement of a material fact or omission or alleged omission to state a material fact relates to  information supplied by the Company, on the one hand, or the Agent, on the other hand, and the  parties’ relative intent, knowledge, access to information and opportunity to correct or prevent  such statement or omission.         The amount paid or payable by a party as a result of the losses, claims, damages, liabilities  and expenses referred to above shall be deemed to include, subject to the limitations set forth in  Section 6(c), any legal or other fees or expenses reasonably incurred by such party in connection  with investigating or defending any action or claim.  The provisions set forth in Section 6(c) with  respect to notice of commencement of any action shall apply if a claim for contribution is to be  made under this Section 6(e); provided, however, that no additional notice shall be required with  respect to any action for which notice has been given under Section 6(b) for purposes of  indemnification.         The Company and the Agent agree that it would not be just and equitable if contribution  pursuant to this Section 6(e) were determined by pro rata allocation or by any other method of  allocation which does not take account of the equitable considerations referred to in this Section  6(e).         Notwithstanding the provisions of this Section 6(e), the Agent shall not be required to  contribute any amount in excess of the Selling Commission received by the Agent in connection  with the offering contemplated hereby.  No person guilty of fraudulent misrepresentation (within  the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person  who was not guilty of such fraudulent misrepresentation.  For purposes of this Section 6(e), each                                         32    





 






officer and employee of the Agent and each person, if any, who controls the Agent within the  meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as  the Agent, and each director of the Company, each officer of the Company who signed the  Registration Statement, and each person, if any, who controls the Company within the meaning of  the Securities Act and the Exchange Act shall have the same rights to contribution as the Company.   Section 7.  TERMINATION & SURVIVAL         (a)   Term.  Subject to the provisions of this Section 7, the term of this Agreement shall  continue from the date of this Agreement until the end of the Agency Period, unless earlier  terminated by the parties to this Agreement pursuant to this Section 7.         (b)   Termination; Survival Following Termination.              (i)  Either party may terminate this Agreement prior to the end of the Agency Period,              by giving written notice as required by this Agreement, upon ten (10) Trading              Days’ notice to the other party; provided that, (A) if the Company terminates this              Agreement after the Agent confirms to the Company any sale of Shares, the              Company shall remain obligated to comply with Section 3(b)(v) with respect to              such Shares and (B) Section 2, Section 3(d), Section 6, Section 7 and Section 8              shall survive termination of this Agreement.  If termination shall occur prior to the              Settlement Date for any sale of Shares, such sale shall nevertheless settle in              accordance with the terms of this Agreement.            (ii) In addition to the survival provision of Section 7(b)(i), the respective indemnities,              agreements, representations, warranties and other statements of the Company, of              its officers and of the Agent set forth in or made pursuant to this Agreement will              remain in full force and effect, regardless of any investigation made by or on behalf              of the Agent or the Company or any of its or their partners, officers or directors or              any controlling person, as the case may be, and, anything herein to the contrary              notwithstanding, will survive delivery of and payment for the Shares sold hereunder              and any termination of this Agreement.   Section 8.  MISCELLANEOUS         (a)   Press Releases and Disclosure.  The Company may issue a press release describing  the material terms of the transactions contemplated hereby as soon as practicable following the  date of this Agreement, and may file with the Commission a Current Report on Form 8-K or, if  this Agreement is signed within four days of the Company’s filing of a periodic report, its  Quarterly Report on Form 10-Q, with this Agreement attached as an exhibit thereto, describing the  material terms of the transactions contemplated hereby, and the Company shall consult with the  Agent prior to making such disclosures, and the parties hereto shall use all commercially  reasonable efforts, acting in good faith, to agree upon a text for such disclosures that is reasonably  satisfactory to all parties hereto. No party hereto shall issue thereafter any press release or like  public statement (including, without limitation, any disclosure required in reports filed with the  Commission pursuant to the Exchange Act) related to this Agreement or any of the transactions  contemplated hereby without the prior written approval of the other party hereto, except as may                                         33    





 






 be necessary or appropriate in the reasonable opinion of the party seeking to make disclosure to   comply with the requirements of applicable law or stock exchange rules and except for the   disclosure required pursuant to Section 4(a) of this Agreement in the Company’s quarterly reports   on Form 10-Q or annual reports on Form 10-K. If any such press release or like public statement   is so required, the party making such disclosure shall consult with the other party prior to making   such disclosure, and the parties shall use all commercially reasonable efforts, acting in good faith,   to agree upon a text for such disclosure that is reasonably satisfactory to all parties hereto.          (b)   No Advisory or Fiduciary Relationship.  The Company acknowledges and agrees   that (i) the transactions contemplated by this Agreement, including the determination of any fees,   are arm’s-length commercial transactions between the Company and the Agent, (ii) when acting   as a principal under this Agreement, the Agent is and has been acting solely as a principal and is   not the agent or fiduciary of the Company, or its stockholders, creditors, employees or any other   party, (iii) the Agent has not assumed nor will assume an advisory or fiduciary responsibility in   favor of the Company with respect to the transactions contemplated hereby or the process leading   thereto (irrespective of whether the Agent has advised or is currently advising the Company on   other matters) and the Agent does not have any obligation to the Company with respect to the  transactions contemplated hereby except the obligations expressly set forth in this Agreement, (iv)  the Agent and its affiliates may be engaged in a broad range of transactions that involve interests  that differ from those of the Company, and (v) the Agent has not provided any legal, accounting,  regulatory or tax advice with respect to the transactions contemplated hereby and the Company  has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed  appropriate.           (c)   Research Analyst Independence.  The Company acknowledges that the Agent’s   research analysts and research departments are required to and should be independent from their   respective investment banking divisions and are subject to certain regulations and internal policies,   and as such the Agent’s research analysts may hold views and make statements or investment   recommendations and/or publish research reports with respect to the Company or the offering that   differ from the views of their respective investment banking divisions.  The Company understands   that the Agent is a full service securities firm and as such from time to time, subject to applicable   securities laws, may effect transactions for its own account or the account of its customers and   hold long or short positions in debt or equity securities of the companies that may be the subject   of the transactions contemplated by this Agreement.          (d)   Notices.  All communications hereunder shall be in writing and shall be mailed,   hand delivered or telecopied and confirmed to the parties hereto as follows:       If to the Agent:                Jefferies LLC           520 Madison Avenue            New York, NY 10022                        Attention:  General Counsel.            with a copy (which shall not constitute notice) to:                                          34     





 






                Cooley LLP            55 Hudson Yards            New York, New York 10001           Facsimile: (212) 479-6275            Attention: Daniel I. Goldberg.          If to the Company:                      Pieris Pharmaceuticals, Inc.            255 State Street, 9th Floor            Boston, Massachusetts 02109                       Attention: Ahmed Mousa, Vice President and General Counsel.            with a copy (which shall not constitute notice) to:                  Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.             One Financial Center            Boston, Massachusetts 02111                       Attention: William C. Hicks and Marc. D. Mantell         Any party hereto may change the address for receipt of communications by giving written notice   to the others in accordance with this Section 8(d).          (e)   Successors.  This Agreement will inure to the benefit of and be binding upon the   parties hereto, and to the benefit of the affiliates, agents, employees, officers and directors and   controlling persons referred to in Section 6, and in each case their respective successors, and no   other person will have any right or obligation hereunder.  The term “successors” shall not include  any purchaser of the Shares as such from the Agent merely by reason of such purchase.          (f)   Partial Unenforceability.  The invalidity or unenforceability of any Article, Section,   paragraph or provision of this Agreement shall not affect the validity or enforceability of any other   Article, Section, paragraph or provision hereof.  If any Article, Section, paragraph or provision of   this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed   to be made such minor changes (and only such minor changes) as are necessary to make it valid   and enforceable.          (g)   Governing Law Provisions.  This Agreement shall be governed by and construed   in accordance with the internal laws of the State of New York applicable to agreements made and   to be performed in such state.  Any legal suit, action or proceeding arising out of or based upon   this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be   instituted in the federal courts of the United States of America located in the Borough of Manhattan   in the City of New York or the courts of the State of New York in each case located in the Borough   of Manhattan in the City of New York (collectively, the “Specified Courts”), and each party   irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the                                          35     





 






enforcement of a judgment of any such court (a “Related Judgment”), as to which such  jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding.  Service of any  process, summons, notice or document by mail to such party’s address set forth above shall be  effective service of process for any suit, action or other proceeding brought in any such court.  The  parties irrevocably and unconditionally waive any objection to the laying of venue of any suit,  action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and  agree not to plead or claim in any such court that any such suit, action or other proceeding brought  in any such court has been brought in an inconvenient forum.           (h)   General Provisions.  This Agreement constitutes the entire agreement of the parties  to this Agreement and supersedes all prior written or oral and all contemporaneous oral  agreements, understandings and negotiations with respect to the subject matter hereof.  This  Agreement may be executed in two or more counterparts, each one of which shall be an original,  with the same effect as if the signatures thereto and hereto were upon the same instrument, and  may be delivered by facsimile transmission or by electronic delivery of a portable document format  (PDF) file.  This Agreement may not be amended or modified unless in writing by all of the parties  hereto, and no condition herein (express or implied) may be waived unless waived in writing by  each party whom the condition is meant to benefit.  The Article and Section headings herein are  for the convenience of the parties only and shall not affect the construction or interpretation of this  Agreement.                                   [Signature Page Immediately Follows]                                         36    





 






         If the foregoing is in accordance with your understanding of our agreement, kindly sign  and return to the Company the enclosed copies hereof, whereupon this instrument, along with all  counterparts hereof, shall become a binding agreement in accordance with its terms                                                                                         Very truly yours,                                                                                        PIERIS PHARMACEUTICALS, INC.                                            By:  /s/ Stephen Yoder                                                            Name: Stephen Yoder                                                 Title:   CEO                                                                                                        The foregoing Agreement is hereby confirmed and accepted by the Agent in New York,  New York as of the date first above written.      JEFFERIES LLC     By: /s/ Donald Lynaugh              Name:  Donald Lynaugh      Title:    Managing Director       





 






                                      EXHIBIT A                                  ISSUANCE NOTICE    [Date]    Jefferies LLC   520 Madison Avenue   New York, New York 10022      Attn: [__________]    Reference is made to the Open Market Sale Agreement between Pieris Pharmaceuticals, Inc. (the   “Company”) and Jefferies LLC (the “Agent”) dated as of August 9, 2019.  The Company confirms  that all conditions to the delivery of this Issuance Notice are satisfied as of the date hereof.   Date of Delivery of Issuance Notice (determined pursuant to Section 3(b)(i)):   _______________________    Issuance Amount (equal to the total Sales Price for such Shares):                                  $                                 Number of days in selling period:                         First date of selling period:                             Last date of selling period:                              Settlement Date(s) if other than standard T+2 settlement:                                                                    Floor Price Limitation (in no event less than $1.00 without the prior written consent of the Agent,   which consent may be withheld in the Agent’s sole discretion): $ ____ per share    Other Limitations:                                                                Comments:                                                                                                                      ______________________                                                                                          By:                                                                                 Name:                                                Title:                                               A-1     





 






                                       Schedule A                                                                             Notice Parties                                            The Company    Stephen Yoder   Allan Reine   Ahmed Mousa    The Agent    Donald Lynaugh     Jack Fabbri     Matthew Kim