Exhibit 10.1


 


EXECUTION VERSION


 


 


IGI Laboratories, Inc.


 


$125,000,000

3.75% Convertible Senior Notes due 2019


 


PURCHASE AGREEMENT


 


December 10, 2014


 


DEUTSCHE BANK SECURITIES INC.

J.P. MORGAN SECURITIES LLC


c/o Deutsche Bank Securities Inc.


60 Wall Street


New York, New York 10005


 


Ladies and Gentlemen:


 


IGI Laboratories, Inc., a Delaware corporation
(the “Company”), hereby confirms its agreement with you (the “Initial Purchasers”), as set
forth below.


 


Section
1.          The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchasers $125,000,000 aggregate principal amount of its 3.75%
Convertible Senior Notes due 2019 (the “Firm Notes”), convertible into shares of the Company’s common
stock, par value $.01 per share (“Common Stock”), and at the election of the Initial Purchasers, up to an aggregate
of $18,750,000 additional principal amount of its 3.75% Convertible Senior Notes due 2019 (the “Optional Notes”
and, together with the Firm Notes, the “Notes”). The Notes are to be issued under an indenture (the “Indenture”)
to be dated as of December 16, 2014, by and between the Company and Wilmington Trust, National Association, as Trustee (the “Trustee”).


 


The Notes will be offered and sold to the
Initial Purchasers without being registered under the Securities Act of 1933, as amended (the “Act”), in reliance on
exemptions therefrom.


 


In connection with the sale of the Notes,
the Company has prepared a preliminary offering memorandum dated December 9, 2014 (as amended or supplemented at the date thereof,
including any and all exhibits thereto and any information incorporated by reference therein, the “Preliminary Offering
Memorandum”), setting forth or including a description of the terms of the Notes, the terms of the offering of the Notes,
and a description of the Company. As used herein, “Pricing Disclosure Package” shall mean the Preliminary Offering
Memorandum, as supplemented or amended by the written communications listed on Annex A hereto in the most recent form that
has been prepared and delivered by the Company to the Initial Purchasers in connection with their solicitation of offers to purchase
Notes prior to the time when sales of the Notes were first made (the “Time of Execution”). Promptly after the
Time of Execution and in any event no later than the second business day following the Time of Execution, the Company will prepare
and deliver to each Initial Purchaser a final offering memorandum (as amended or supplemented at the date thereof, including any
and all exhibits thereto and any information incorporated by reference therein, the “Final Offering Memorandum”),
which will consist of the Preliminary Offering Memorandum with such changes therein as are required to reflect the information
contained in the amendments or supplements listed on Annex A hereto. The Company hereby confirms that it has authorized
the use of the Pricing Disclosure Package, the Final Offering Memorandum and the Recorded Road Show (defined below) in connection
with the offer and sale of the Notes by the Initial Purchasers.


 




    	 



    	 



    

 


Section
2.          Representations and Warranties. As of the Time of Execution
and at the Closing Date and any Option Closing Date, Company represents and warrants to and agrees with each of the Initial Purchasers
as follows (references in this Section 2 to the “Offering Memorandum” are to (i) the Pricing Disclosure Package
in the case of representations and warranties made as of the Time of Execution and (ii) both the Pricing Disclosure Package and
the Final Offering Memorandum in the case of representations and warranties made at the Closing Date and any Option Closing Date
(as defined in Section 3 below)):


 


(a)          The
Preliminary Offering Memorandum, on the date thereof, did not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
At the Time of Execution, the Pricing Disclosure Package does not, and on the Closing Date or Option Closing Date, as the case
may be, will not, and the Final Offering Memorandum as of its date and on such Closing Date or Option Closing Date, will not contain
any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation
or warranty as to the information contained in or omitted from the Pricing Disclosure Package and Final Offering Memorandum, in
reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Initial Purchasers
through Deutsche Bank Securities Inc. specifically for inclusion therein, it being understood and agreed that the only such information
is that described in Section 11 hereof. The Company has not distributed or referred to and will not distribute or refer to any
written communication (as defined in Rule 405 of the Act) that constitutes an offer to sell or solicitation of an offer to buy
the Notes (each such communication by the Company or its agents and representatives (other than the Pricing Disclosure Package
and Final Offering Memorandum) an “Issuer Written Communication”) other than the Pricing Disclosure Package,
the Final Offering Memorandum and the recorded electronic road show made available to investors (the “Recorded Road Show”).
Any information in an Issuer Written Communication that is not otherwise included in the Pricing Disclosure Package and the Final
Offering Memorandum does not conflict with the Pricing Disclosure Package or the Final Offering Memorandum and each Issuer Written
Communication, when taken together with the Pricing Disclosure Package, does not at the Time of Execution, and when taken together
with the Final Offering Memorandum at the Closing Date or the Option Closing Date, as the case may be, will not, contain any 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, not misleading.


 




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(b)          The
financial statements of the Company, together with the related notes, included or incorporated by reference in the Offering Memorandum
comply in all material respects with the applicable requirements of the Securities Act and fairly present the financial condition
of the Company as of the dates indicated and the results of operations and changes in cash flows for the periods therein specified
in conformity with U.S. generally accepted accounting principles consistently applied throughout the periods involved. The
interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the General
Disclosure Package and the Prospectus 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.


 


(c)          EisnerAmper
LLP is an independent public accounting firm with respect to the Company within the meaning of the Securities Act and the Rules
and Regulations and the applicable Rules and Regulations and the Public Company Accounting Oversight Board (United States) (the
“PCAOB”) as required by the Act.


 


(d)          Nothing
has come to the attention of the Company that has caused the Company to believe that the statistical and market-related data included
or incorporated by reference in the Offering Memorandum are based on or derived from sources that are not reliable and accurate
in all material respects.


 


(e)          There
is no action pending by the Company or, to the Company’s knowledge, by the NYSE MKT to delist the Common Stock from the NYSE
MKT, nor has the Company received any notification that the NYSE MKT is contemplating terminating such listing.



 


(f)          The
Company has not taken, directly or indirectly, any action that is designed to or that has constituted or that would reasonably
be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Notes.


 


(g)          The
Company is not and, after giving effect to the offering and sale of the Notes and the application of the net proceeds thereof,
will not be an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended.


 


(h)          The
Notes and the Indenture will conform in all material respects to the descriptions thereof in the Offering Memorandum.


 




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(i)          As
of the Closing Date or the Option Closing Date, as the case may be, the Company will have the authorized, issued and outstanding
capitalization set forth in the Offering Memorandum under the heading “Capitalization”; all of the outstanding shares
of capital stock or other ownership interests of the Company and each of the subsidiaries of the Company (each, a “Subsidiary”
and collectively, the “Subsidiaries”) have been, and as of the Closing Date or the Option Closing Date, as the
case may be, will be, duly authorized and validly issued, are fully paid and, with respect to shares of capital stock, nonassessable
and were not issued in violation of any preemptive or similar rights; upon receipt of stockholder approval, the shares of Common
Stock initially issuable upon conversion of the Notes will have been duly and validly authorized and reserved for issuance and,
when issued and delivered in accordance with the provisions of the Notes and the Indenture, will be duly and validly issued, fully
paid and nonassessable and will conform to the description of the Common Stock of the Company contained in the Offering Memorandum;
other than as described in the Offering Memorandum, all of the outstanding shares of capital stock of the Company and of each of
the Subsidiaries will be free and clear of all liens, encumbrances, equities and claims or restrictions on transferability (other
than those imposed by the Act and the securities or “Blue Sky” laws of certain jurisdictions) or voting. Except as
set forth in the Offering Memorandum and other than grants of equity-based awards pursuant to the Company’s equity incentive
and employee benefit plans (including employee stock purchase plans), there are no (i) options, warrants or other rights to
purchase, (ii) agreements or other obligations to issue or (iii) other rights to convert any obligation into, or exchange
any securities for, shares of capital stock of or ownership interests in the Company or any of the Subsidiaries outstanding. Except
for the Subsidiaries or as disclosed in the Offering Memorandum, the Company does not own, directly or indirectly, any shares of
capital stock or any other equity or long-term debt securities or have any equity interest in any firm, partnership, joint venture
or other entity.


 


(j)          None
of the Company, the Subsidiaries or any of their respective Affiliates (as defined in Rule 501(b) of Regulation D under the
Act) has directly, or through any agent, (i) sold, offered for sale, solicited offers to buy or otherwise negotiated in respect
of, any “security” (as defined in the Act) that is or could
be integrated with the sale of the Notes in a manner that would require the registration under the Act of the Notes or (ii) engaged
in any form of general solicitation or general advertising (as those terms are used in Regulation D under the Act) in connection
with the offering of the Notes or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Act.
Assuming the accuracy of the representations and warranties of the Initial Purchasers in Section 7 hereof, it is not necessary
in connection with the offer, sale and delivery of the Notes to the Initial Purchasers in the manner contemplated by this Agreement
to register any of the Notes under the Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended.


 


(k)          No
securities of the Company or any Subsidiary are of the same class (within the meaning of Rule 144A under the Act) as the Notes
and listed on a national securities exchange registered under Section 6 of the Exchange Act, or quoted in a U.S. automated
inter-dealer quotation system.


 


(l)          Within
the preceding six months, neither the Company nor any other person acting on behalf of the Company has offered or sold to any person
any Notes, or any securities of the same or a similar class as the Notes, other than Notes offered or sold to the Initial Purchasers
hereunder. The Company will take reasonable precautions designed to insure that any offer or sale, direct or indirect, in the United
States or to any U.S. person (as defined in Rule 902 under the Act) of any Notes or any substantially similar security issued by
the Company, within six months subsequent to the date on which the distribution of the Notes has been completed (as notified to
the Company by the Initial Purchasers), is made under restrictions and other circumstances reasonably designed not to affect the
status of the offer and sale of the Notes in the United States and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the Act.


 




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(m)          Each
of the Company and its Subsidiaries has been duly organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of organization. Each of the Company and its Subsidiaries has the corporate power and authority to own
its properties and conduct its business as currently being carried on and as described in Offering Memorandum, and is duly qualified
to do business as a foreign corporation or other entity in good standing in each jurisdiction in which it owns or leases real property
or in which the conduct of its business makes such qualification necessary and in which the failure to so qualify would have or
would reasonably be expected to result in a material adverse effect upon the business, prospects, properties, operations, condition
(financial or otherwise) or results of operations of the Company and its Subsidiaries, taken as a whole, or in its ability to perform
its obligations under this Agreement (“Material Adverse Effect”). Except for those of the Company’s Subsidiaries
set forth on Schedule 2 attached hereto, none of the Company’s Subsidiaries is a “significant subsidiary” (as
such term is defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act).


 


(n)          The
Company has all requisite corporate power and authority to execute, deliver and perform each of its obligations under the Notes
and, upon receipt of stockholder approval, to issue the Common Stock issuable upon conversion of the Notes. The Notes, when issued,
will be in the form contemplated by the Indenture. The Notes have been duly and validly authorized by the Company and, when executed
by the Company and authenticated by the Trustee in accordance with the provisions of the Indenture and, in the case of the Notes,
when delivered to and paid for by the Initial Purchasers in accordance with the terms of this Agreement, will constitute valid
and legally binding obligations of the Company, entitled to the benefits of the Indenture, and enforceable against the Company
in accordance with their terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and (ii) general
principles of equity and the discretion of the court before which any proceeding therefor may be brought (collectively, the “Enforceability
Exceptions”).


 


(o)          The
Company has all requisite corporate power and authority to execute, deliver and perform its obligations under the Indenture. The
Indenture has been duly and validly authorized by the Company and, when executed and delivered by the Company (assuming the due
authorization, execution and delivery by the Trustee), will constitute a valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, except that the enforcement thereof may be subject to the Enforceability Exceptions.


 


(p)          The
Company has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and
to consummate the transactions contemplated hereby. This Agreement and the consummation
by the Company of the transactions contemplated hereby have been duly and validly authorized by the Company. This Agreement has
been duly executed and delivered by the Company.


 




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(q)          The
execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated will not (A)
result in a breach or violation of any of the terms and provisions of, or constitute a default under, any law, order, rule or regulation
to which the Company or any Subsidiary is subject, or by which any property or asset of the Company or any Subsidiary is bound
or affected, except to the extent such breach, violation or default is not reasonably likely to have a Material Adverse Effect,
(B) conflict with, result in any violation or breach of, or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) (a “Default Acceleration Event”) of, any agreement, lease, credit
facility, debt, note, bond, mortgage, indenture or other instrument (the “Contracts”) or obligation or other
understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary
is bound or affected, except to the extent that such conflict, default or Default Acceleration Event would not reasonably be expected
to result in a Material Adverse Effect, or (C) result in a breach or violation of any of the terms and provisions of, or constitute
a default under, the Company’s or any of the Subsidiaries’ respective certificates of incorporation, as amended, or
by-laws, as amended.


 


(r)          None
of the Company or the Subsidiaries is (i) in violation of its certificate of incorporation or bylaws, (ii) in breach
or violation of any statute, judgment, decree, order, rule or regulation applicable to any of them or any of their respective properties
or assets, except for any such breach or violation that would not, individually or in the aggregate, have a Material Adverse Effect,
or (iii) in breach of or default under (nor has any event occurred that, with notice or passage of time or both, would constitute
a default under) or in violation of any of the terms or provisions of any indenture, mortgage, deed of trust, loan agreement, note,
lease, license, franchise agreement, permit, certificate, contract or other agreement or instrument to which any of them is a party
or to which any of them or their respective properties or assets is subject (collectively, “Contracts”), except
for any such breach, default, violation or event that would not, individually or in the aggregate, have a Material Adverse Effect.


 


(s)          No
consent, approval, authorization or order of any governmental authority is required for the issuance and sale by the Company of
the Notes to the Initial Purchasers or the consummation by the Company of the other transactions contemplated hereby, except such
as may be required under Blue Sky laws, as to which such counsel need express no opinion, and those which have previously been
obtained.


 


(t)          Each
of the Company and its Subsidiaries has (A) filed all returns (as hereinafter defined) required to be filed with taxing authorities
prior to the date hereof or has duly obtained extensions of time for the filing thereof and (B) paid all taxes (as hereinafter
defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed against the Company or such
respective Subsidiary, except, in all cases, for any such amounts that the Company or any Subsidiary is contesting in good faith
and except in any case in which the failure to so file or pay would not reasonably be expected to have a Material Adverse Effect.
No issues have been raised and are currently pending by any taxing authority in connection with any of the returns or taxes asserted
as due from the Company or its Subsidiaries, and no waivers of statutes of limitation with respect to the returns or collection
of taxes have been given by or requested from the Company or its Subsidiaries. The term “taxes” mean all federal, state,
local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license,
lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall
profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatever, together with any interest and any
penalties, additions to tax, or additional amounts with respect thereto. The term “returns” means all returns, declarations,
reports, statements, and other documents required to be filed in respect to taxes.


 




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(u)          Since
the respective dates as of which information is given (including by incorporation by reference) in the Preliminary Offering Memorandum,
Pricing Disclosure Package or Final Offering Memorandum, (a) neither the Company nor any of its Subsidiaries has incurred any material
liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of
business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its capital
stock, there has not been any change in the capital stock of the Company or any of its Subsidiaries (other than a change in the
number of outstanding shares of Common Stock due to the issuance of shares upon the exercise of outstanding options or warrants
or the issuance of restricted stock awards or restricted stock units under the Company’s existing stock awards plan, or any
new grants thereof in the ordinary course of business), (c) there has not been any material change in the Company’s long-term
or short-term debt, and (d) there has not been the occurrence of any Material Adverse Effect.


 


(v)         There
is not pending or, to the knowledge of the Company, threatened, any action, suit, proceeding, inquiry or investigation to which
the Company or any of its Subsidiaries is a party or of which any property or assets of the Company or its Subsidiaries is the
subject before or by any court or governmental agency, authority or body, or any arbitrator or mediator, which would reasonably
be expected to result in a Material Adverse Effect or adversely affect the consummation of the transactions contemplated by this
Agreement.


 


(w)          The
Company and each of its Subsidiaries holds, and is in compliance with, all franchises, grants, authorizations, licenses, permits,
approvals, clearances, registrations, easements, consents, certificates and orders (“Permits”) issued by the
appropriate federal, state, local or foreign governmental agency, authority or body (including, without limitation, those of the
Food and Drug Administration of the U.S. Department of Health and Human Services (the “FDA”) or by any foreign,
federal, state or local governmental or regulatory authority performing functions similar to those performed by the FDA) required
for the conduct of its business, and all such Permits are valid and in full force and effect, in each case except where the invalidity,
failure to hold, or comply with, any of them would not reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has received any written notice of proceedings relating to the revocation or modification of
any Permits which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would be reasonably
expected to result in a Material Adverse Effect.


 


(x)          All
activities by the Company and each of its Subsidiaries related to the development, manufacture, distribution, marketing, promoting,
labeling, offering for sale and selling of products, including without limitation, advertising, detailing, planning, promoting,
reporting, storing, handling and shipping have been conducted in material compliance with the Permits and all applicable foreign,
federal, state or local laws and regulations, except where failure to so comply would not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect.


 




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(y)          Neither
the Company nor any of its Subsidiaries has received any written notices from, nor is otherwise aware of, any proceedings from
any regulatory authority or body alleging that the ownership, manufacture, distribution or sale of any products by the Company
is in violation of any applicable foreign, federal, state or local laws and regulations, except for any such violations as would
not, individually or in the aggregate, reasonably be expected to result in Material Adverse Effect. Except as disclosed or incorporated
by reference in the Offering Memorandum, neither the Company nor any Subsidiary has received: (i) any FDA Form 483 concerning the
manufacture of products; or (ii) warning or untitled letters from the FDA concerning any products owned, manufactured, distributed
or sold by the Company or any Subsidiary in which the FDA asserted that the operations of the Company or any Subsidiary were not
in compliance with applicable foreign, federal, state or local laws and regulations in any material respect.


 


(z)          Neither
the Company nor any of its Subsidiaries has received any written notices, nor is otherwise aware of, any proceedings that any regulatory
authority or body has initiated, or threatened to initiate, any action to recall, order a market withdrawal, suspend or otherwise
restrict the manufacture, sale or distribution of any products manufactured, sold or distributed by the Company or any Subsidiary.
There are no outstanding, pending or, to the knowledge of the Company, threatened proceedings, voluntary or involuntary market
withdrawals, safety alerts or other regulatory enforcement actions related to the manufacture, sale or distribution of products
by the Company or any Subsidiary.


 


(aa)         The
Company and each of its Subsidiaries has complied in all material respects with, and is not in material violation of any applicable
Health Care Laws, and, to the knowledge of the Company, has not engaged in activities which are, as applicable, cause for false
claims liability, civil penalties, or mandatory or permissive exclusion from Medicare, Medicaid, or any state health care program
or other federal health care program. For purposes of this Agreement, “Health Care Laws” means: (i) the Federal
Food, Drug, and Cosmetic Act and the regulations promulgated thereunder; (ii) all applicable federal, state, and local fraud and
abuse laws, including, without limitation, the U.S. Anti-Kickback Statute (42 U.S.C. Section 1320a-7b(b)), the U.S. Physician Payments
Sunshine Act (42 U.S.C. § 1320a-7h), the U.S. Civil False Claims Act (31 U.S.C. Section 3729 et seq.), the criminal False
Claims Law (42 U.S.C. § 1320a-7b(a)), all criminal laws relating to health care fraud and abuse, including but not limited
to 18 U.S.C. Sections 286 and 287, and the health care fraud criminal provisions under the U.S. Health Insurance Portability and
Accountability Act of 1996 (“HIPAA”) (42 U.S.C. Section 1320d et seq.), the exclusion laws (42 U.S.C. §
1320a-7), the civil monetary penalties law (42 U.S.C. § 1320a-7a), HIPAA, as amended by the Health Information Technology
for Economic and Clinical Health Act (42 U.S.C. Section 17921 et seq.), and the regulations promulgated pursuant to such statutes;
(iii) Medicare (Title XVIII of the Social Security Act); (iv) Medicaid (Title XIX of the Social Security Act); (v) all federal
or state Laws regarding the collection, reporting and processing of any applicable rebate, chargeback or adjustment under the Medicaid
Drug Rebate Program (42 U.S.C. § 1396r-8) and any state supplemental rebate program, Medicare average sales price reporting
(42 U.S.C. § 1395w-3a), the Public Health Service Act (42 U.S.C. § 256b), the VA Federal Supply Schedule (38 U.S.C. §
8126) or under any state pharmaceutical assistance program or U.S. Department of Veterans Affairs agreement, and any successor
government programs. Neither the Company nor any Subsidiary has received written notice of any claim, action, suit, proceeding,
hearing, enforcement, investigation, arbitration or other action from any court or arbitrator or governmental or regulatory authority
or third party alleging that any product operation or activity is in material violation of any Health Care Law, and, to the Company’s
knowledge, no such claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action is threatened.
Neither the Company nor any Subsidiary is a party to or has any ongoing reporting obligations pursuant to any corporate integrity
agreements, deferred prosecution agreements, monitoring agreements, consent decrees, settlement orders, plans of correction or
similar agreements with or imposed by any federal, state, or local governmental agency, authority or body. Additionally, neither
the Company, its Subsidiaries nor any of its respective employees, officers or directors has been excluded, suspended or debarred
from participation in any U.S. federal health care program or human clinical research or, to the knowledge of the Company, is subject
to a governmental inquiry, investigation, proceeding, or other similar action that could reasonably be expected to result in debarment,
suspension, or exclusion.


 




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(bb)         The
Company and its Subsidiaries have good title to all property (whether real or personal) described in the Offering Memorandum as
being owned by them that is material to the business of the Company, in each case free and clear of all liens, claims, security
interests, other encumbrances or defects, except those that would not reasonably be expected to result in a Material Adverse Effect.
The property held under lease by the Company and its Subsidiaries is held by them under valid, subsisting and enforceable leases
with only such exceptions with respect to any particular lease as do not interfere in any material respect with the conduct of
the business of the Company and its Subsidiaries.


 


(cc)         The
Company and each of its Subsidiaries owns or possesses or has valid right to use all patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets
and similar rights (“Intellectual Property”) necessary for the conduct of the business of the Company and its
Subsidiaries as currently carried on and as described in the Offering Memorandum. To the knowledge of the Company, no action or
use by the Company or any of its Subsidiaries will involve or give rise to any infringement of, or license or similar fees for,
any Intellectual Property of others, except where such action, use, license or fee would not reasonably be expected to result in
a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has received any notice alleging any such infringement
or fee.


 


(dd)         The
studies and tests conducted by or on behalf of the Company or its Subsidiaries that are described or referred to in the Offering
Memorandum were and, if still pending, are being conducted in accordance with all statutes, laws, rules and regulations, as applicable
(including, without limitation, those administered by the FDA or by any foreign, federal, state or local governmental or regulatory
authority performing functions similar to those performed by the FDA). The descriptions of the results of such studies and tests
that are described or referred to in the Offering Memorandum are accurate and complete in all material respects and fairly present
the published data derived from such studies and tests, and each of the Company and its Subsidiaries has no knowledge of other
studies or tests the results of which are materially inconsistent with or otherwise call into question the results described or
referred to in the Offering Memorandum. Neither the Company nor its Subsidiaries has received any written notices or other correspondence
from the FDA or any other foreign, federal, state or local governmental or regulatory authority performing functions similar to
those performed by the FDA with respect to any ongoing studies or tests requiring the termination or suspension of such studies
or tests. For the avoidance of doubt, the Company makes no representation or warranty that the results of any studies or tests
conducted by or on behalf of the Company will be sufficient to obtain governmental approval from the FDA or any foreign, state
or local governmental body exercising comparable authority.


 




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(ee)         The
Company has established and administers a compliance program applicable to the Company and its Subsidiaries, to assist the Company,
its Subsidiaries and their directors, officers and employees of the Company and its Subsidiaries in complying with applicable regulatory
requirements (including, without limitation, those administered by the FDA and any other foreign, federal, state or local governmental
or regulatory authority performing functions similar to those performed by the FDA).


 


(ff)         Except
as would not be reasonably expected to result in a Material Adverse Effect, neither the Company nor any of its Subsidiaries has
failed to file with the FDA or any other applicable regulatory authority any filing, declaration, listing, registration, report
or submission that is required to be so filed. All such filings were complete and correct in all material respects when made (or
were corrected or supplemented by a subsequent submission) and no material deficiencies have been asserted by any applicable regulatory
authority with respect to any such filings, declarations, listings, registrations, reports or submissions.


 


(gg)         None
of the Company, the Subsidiaries or any of their respective directors or officers nor, to the knowledge of the Company, any agent,
employee, Affiliate,  or other
person acting on behalf of the Company or any of the Subsidiaries,
is currently subject to or the target of any sanctions administered by the U.S. Government, including, without limitation, the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”), the U.S. Department of Commerce,
the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury or any similar
sanctions imposed by any other body, governmental or other, to which the Company or any of its Subsidiaries is subject (collectively,
“Sanctions”), nor located, organized or resident in a country or
territory that is the subject of Sanctions (including, without limitation, Cuba, Iran, North Korea, Sudan and Syria); (iii)
neither the Company nor the Subsidiaries have knowingly engaged in during the past five years, are not now knowingly
engaged in, and will not engage in, any dealings or transactions with any person that at the time of the dealing or transaction
is or was the subject or the target of Sanctions or with any Sanctioned Country; and the Company will not directly or indirectly
use the proceeds of the offering of the Securities hereunder, or lend or contribute or otherwise make available to any Subsidiary,
joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person, or in
any country or territory, that, at the time of such funding or facilitating, is the subject of Sanctions or (ii) in any other
manner that will result in a violation by any person (including any person participating in the transaction, whether as an initial
purchaser, advisor, investor or otherwise) of Sanctions.


 


(hh)         The
Company and each of its Subsidiaries carries, or is covered by, insurance in such amounts and covering such risks as, in the Company’s
reasonable judgment, is adequate for the conduct of its business and the value of its properties and as is customary for similarly
sized companies engaged in similar businesses in similar industries. Neither the Company nor any Subsidiary has been refused any
coverage under insurance policies sought or applied for and the Company has no reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect.


 




    	-10-



    	 



    

 


(ii)         No
labor dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company, is imminent,
that would reasonably be expected to result in a Material Adverse Effect.


 


(jj)         Other
than pursuant to this Agreement, the Company has not incurred and will not incur any liability for any finder’s or broker’s
fee or agent’s commission in connection with the execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.


 


(kk)         Neither
the Company nor any of its Subsidiaries is in violation of any statute, any rule, regulation, decision or order of any governmental
agency or body or any domestic or foreign court relating to the use, disposal or release of hazardous chemicals, toxic substances
or radioactive and biological materials or relating to the protection or restoration of the environment or human exposure to hazardous
chemicals, toxic substances or radioactive and biological materials (collectively, “Environmental Laws”) except
for any such violation which would not reasonably be expected to have a Material Adverse Effect. To the knowledge of the Company,
neither the Company nor any of its Subsidiaries (i) owns or operates any real property contaminated with any substance which would
impose any liability or other obligation on the Company or any Subsidiary under applicable Environmental Laws, (ii) is liable for
any off-site disposal or contamination pursuant to any Environmental Laws, or (iii) is subject to any claim relating to any Environmental
Laws, which, in the case of clauses (i) through (iii), would individually or in the aggregate be expected to have a Material Adverse
Effect; and the Company is not aware of any pending investigation which might lead to such a claim.


 


(ll)         The
Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange
Act) that complies with the requirements of the Exchange Act and has been designed by the Company’s principal executive
officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted
accounting principles. The interactive data in eXtensible Business
Reporting Language incorporated by reference in the Offering Memorandum fairly presents the information called for in all material
respects and is prepared in accordance with the Commission's rules and guidelines applicable thereto.
The Company’s internal control over financial reporting is effective and the Company is not aware of any material
weaknesses in its internal control over financial reporting.


 


(mm)         Since
the date of the latest audited financial statements included or incorporated by reference in the Offering Memorandum, there has
been no change in the Company’s internal control over financial reporting that has materially affected, or would reasonably
be expected to materially affect, the Company’s internal control over financial reporting.


 




    	-11-



    	 



    

 


(nn)         The
Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply
with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information
relating to the Company and its Subsidiaries is made known to the Company’s principal executive officer and principal financial
officer by others within those entities; and such disclosure controls and procedures are effective.


 


(oo)         The
operations of the Company and its Subsidiaries are being conducted in material compliance with applicable employment laws and the
rules and regulations thereunder issued, administered or enforced by any governmental agency (collectively, the “Employee
Benefit 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 Employee Benefit Laws is pending or, to the
knowledge of the Company, threatened.


 


(pp)         None
of the Company or the Subsidiaries currently has any liability for any prohibited transaction or funding deficiency or any complete
or partial withdrawal liability with respect to any pension, profit sharing or other plan that is subject to the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), to which the Company or any of the Subsidiaries makes or
ever has made a contribution and in which any employee of the Company or of any Subsidiary is or has ever been a participant. With
respect to such plans, the Company and each Subsidiary is in compliance in all material respects with all applicable provisions
of ERISA.


 


(qq)         None
of the Company, any of the Subsidiaries or their respective directors or officers, nor to the knowledge of the Company, any agent,
employee, Affiliate or other person associated with or acting on behalf of the Company or any of the Subsidiaries: (i) has used
any funds for any unlawful contribution, gift, property, entertainment or other unlawful expense relating to political activity;
(ii) has made, taken or will take any action in furtherance of
any direct or indirect unlawful payment, promise to pay, or authorization
or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any
foreign or domestic government official or employee (including any
officer or employee of a government or government-owned or controlled entity or of a public international organization, or any
person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate
for political office) to improperly influence official action or secure an improper advantage for the Company or its subsidiaries;
(iii) has made, offered, or taken an act in furtherance of
any bribe, unlawful rebate, payoff, influence payment, property,
gift, kickback or other unlawful payment; or (iv) is aware of or has taken any action, directly or indirectly, that
would result in a violation of any provision of the Bribery Act 2010 of the United Kingdom, or the OECD Convention on Bribery
of Foreign Public Officials in International Business Transactions (“OECD Convention”), the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder (collectively, the “FCPA”), including,
without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of
an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization
of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA),
including any officer or employee of a government or government-owned or controlled entity or of a public international organization,
or any person acting in an official capacity for or on behalf of any of the foregoing, in contravention of the FCPA or
any applicable anti-bribery and anticorruption laws or regulations to which the Company, any of its Subsidiaries, any director,
officer, agent, employee, Affiliate or other person associated with or acting on behalf of the Company or any of its Subsidiaries
is subject. The Company, the Subsidiaries and their Affiliates have each conducted their businesses in compliance with the FCPA
and any applicable anti-bribery and anti-corruption laws or regulations and have instituted and maintain and enforce and
will continue to maintain and enforce policies and procedures designed to promote and ensure, and which are reasonably
expected to continue to ensure, continued compliance with all applicable
anti-bribery and anti-corruption laws.


 




    	-12-



    	 



    

 


(rr)         The
operations of the Company and the Subsidiaries are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements, including without limitation those of Title 18 U.S. Code Section 1956 and 1957, the
Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), the Currency and Foreign Transactions Reporting
Act of 1970, as amended, the applicable money laundering statutes of all jurisdictions, the rules and regulations thereunder issued,
administered or enforced by any governmental agency having jurisdiction over the Company or any of the Subsidiaries, and any international
anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task
Force on Money Laundering, of which the United States is a member and with which designation the United States representative to
the group or organization continues to concur, all as amended, and any Executive order, directive, or regulation pursuant to the
authority of any of the foregoing, or any orders or licenses issued thereunder (collectively, the “Anti-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 the Subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge
of the Company, threatened.


 


(ss)         Immediately
after the consummation of the transactions contemplated by this Agreement, the fair value and present fair saleable value of the
assets of each of the Company and the Subsidiaries (each on a consolidated basis) will exceed the sum of its stated liabilities
and identified contingent liabilities; none of the Company or the Subsidiaries (each on a consolidated basis) is, nor will any
of the Company or the Subsidiaries (each on a consolidated basis) be, after giving effect to the execution, delivery and performance
of this Agreement, and the consummation of the transactions contemplated hereby, (a) left with unreasonably small capital
with which to carry on its business as it is proposed to be conducted, (b) unable to pay its debts (contingent or otherwise)
as they mature or (c) otherwise insolvent.


 


(tt)         Solely
to the extent that the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated by the Commission and
the NYSE MKT thereunder (collectively, the “Sarbanes-Oxley Act”) have been applicable to the Company, there
is and has been no failure on the part of the Company to comply in all material respects with any provision of the Sarbanes-Oxley
Act. The Company has taken all necessary actions to ensure that it is in compliance with all provisions of the Sarbanes-Oxley Act
that are in effect and with which the Company is required to comply (including Section 402 related to loans) and is actively taking
steps to ensure that it will be in compliance with other provisions of the Sarbanes-Oxley Act not currently in effect or which
will become applicable to the Company. As of the date hereof, there are no outstanding personal loans made, directly or indirectly,
by the Company to any director or executive officer of the Company.


 




    	-13-



    	 



    

 


(uu)         As
of the respective dates of the Preliminary Offering Memorandum, Pricing Disclosure Package and Final Offering Memorandum, the Company
is a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.


 


Any certificate signed by any officer of
the Company or any Subsidiary and delivered to any Initial Purchaser or to counsel for the Initial Purchasers shall be deemed a
joint and several representation and warranty by the Company and each of the Subsidiaries to each Initial Purchaser as to the matters
covered thereby.


 


Section
3.          Purchase, Sale and Delivery of the Notes. On the basis of
the representations, warranties, agreements and covenants herein contained and subject to the terms and conditions herein set forth,
(a) the Company agrees to issue and sell to the Initial Purchasers, and the Initial Purchasers, acting severally and not jointly,
agree to purchase the Firm Notes in the respective amounts set forth on Schedule 1 hereto from the Company at 97.00%
of their principal amount and (b) in the event and to the extent that the Initial Purchasers shall exercise the election to purchase
Optional Notes as provided below, the Company agrees to issue and sell to the Initial Purchasers, at the same purchase price set
forth in clause (a) of this Section 3, and each of the Initial Purchasers, acting severally and not jointly, agrees to purchase
from the Company that portion of the aggregate principal amount of the Optional Notes as to which such election shall have been
exercised (to be adjusted by the Initial Purchasers so as to eliminate fractions of $1,000), in each case as set forth opposite
the name of such Initial Purchaser set forth on Schedule 1 hereto.


 


The Company hereby grants to the Initial
Purchasers the right to purchase at their election up to $18,750,000 in aggregate principal amount of the Optional Notes, at the
purchase price set forth in clause (a) of the first paragraph of this Section 3. Any such election to purchase Optional Notes may
be exercised only by written notice from the Initial Purchasers to the Company, given within a period of 30 calendar days after
the date of this Agreement setting forth the aggregate principal amount of Optional Notes to be purchased and the date on which
such Optional Notes are to be delivered, as determined by the Initial Purchasers but in no event earlier than the Closing Date
or, unless the Initial Purchasers and the Company otherwise agree in writing, earlier than two or later than 10 business days after
the date of such notice (the “Option Closing Date”).


 


The
Notes to be purchased by the Initial Purchasers hereunder will be represented by one or more definitive global Notes in book-entry
form which will be deposited by or on behalf of the Company with The Depository Trust Company (“DTC”) or its
designated custodian. The Company will deliver the Notes to the Initial Purchasers for the account of each Initial Purchaser, against
payment by or on behalf of the Initial Purchasers of the purchase price therefor by wire transfer (same day funds) to such account
or accounts as the Company shall specify prior to the Closing Date or the Option Closing Date, as the case may be, or by such means
as the parties hereto shall agree prior to the such date, by causing DTC to credit the Notes to the account of Deutsche Bank Securities
Inc. at DTC. Such delivery of and payment for the Notes shall be made at the offices of Latham & Watkins LLP, 885 Third Avenue,
New York, New York 10022 at 10:00 A.M., New York time, on December 16, 2014, or at such other place, time or date as the Initial
Purchasers, on the one hand, and the Company, on the other hand, may agree upon, such time and date of delivery against payment
being herein referred to as the “Closing Date.” The Company will cause the certificates representing the Notes
to be made available for checking and packaging by the Initial Purchasers at the offices of Deutsche Bank Securities Inc. in New
York, New York, or at such other place as Deutsche Bank Securities Inc. may designate, at least 24 hours prior to the Closing Date
or the Option Closing Date, as the case may be.


 




    	-14-



    	 



    

 


Section
4.          Covenants of the Company. The Company covenants and agrees
with each of the Initial Purchasers as follows:


 


(a)          Until
the later of (i) the completion of the distribution of the Notes by the Initial Purchasers, (ii) the Closing Date or
(iii) any Option Closing Date, the Company will not amend or supplement the Pricing Disclosure Package and the Final Offering Memorandum
(or any document incorporated by reference therein) or otherwise distribute or refer to any Issuer Written Communication or other
written communication (as defined under Rule 405 of the Act) that constitutes an offer to sell or a solicitation of an offer to
buy the Notes (other than the Pricing Disclosure Package, the Recorded Road Show and the Final Offering Memorandum) or file any
report with the Commission under the Exchange Act unless the Initial Purchasers shall previously have been advised and furnished
a copy for a reasonable period of time prior to the proposed amendment, supplement or report and as to which the Initial Purchasers
shall have given their consent. The Company will promptly, upon the reasonable request of the Initial Purchasers or counsel for
the Initial Purchasers, make any amendments or supplements to the Pricing Disclosure Package and the Final Offering Memorandum
that may be necessary or advisable in connection with the resale of the Notes by the Initial Purchasers.


 


(b)          The
Company will cooperate with the Initial Purchasers in arranging for the qualification of the Notes for offering and sale under
the securities or “Blue Sky” laws of which jurisdictions as the Initial Purchasers may designate and will continue
such qualifications in effect for as long as may be necessary to complete the resale of the Notes; provided, however,
that in connection therewith, the Company shall not be required to qualify as a foreign corporation or to execute a general consent
to service of process in any jurisdiction or subject itself to taxation in excess of a nominal dollar amount in any such jurisdiction
where it is not then so subject.


 


(c)          If,
at any time prior to the completion of the sale by the Initial Purchasers of the Notes, any event occurs or information becomes
known as a result of which the Pricing Disclosure Package and the Final Offering Memorandum as then amended or supplemented would
include 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, or if for any other reason it is necessary at any time
to amend or supplement the Pricing Disclosure Package and the Final Offering Memorandum to comply with applicable law, the Company
will promptly notify the Initial Purchasers thereof and will prepare, at the expense of the Company, an amendment or supplement
to the Pricing Disclosure Package and the Final Offering Memorandum that corrects such statement or omission or effects such compliance
and (2) if at any time prior to the Closing Date or the Option Closing Date, as the case may be, (i) any event shall occur or condition
shall exist as a result of which any of the Pricing Disclosure Package and the Final Offering Memorandum as then amended or supplemented
would include any 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, not misleading or any Issuer Written Communication would
conflict with the Pricing Disclosure Package and Final Offering Memorandum as then amended or supplemented.


 




    	-15-



    	 



    

 


(d)          The
Company will advise the Initial Purchasers promptly, and confirm such advice in writing, (i) of the issuance by any governmental
or regulatory authority of any order preventing or suspending the use of any of the Pricing Disclosure Package, any Issuer Written
Communication or the Final Offering Memorandum or the initiation or threatening of any proceeding for that purpose; (ii) of the
occurrence or development of any event at any time prior to the completion of the initial offering of the Securities as a result
of which any of the Pricing Disclosure Package, any Issuer Written Communication or the Final Offering Memorandum as then amended
or supplemented would include 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 existing when such Pricing Disclosure Package, Issuer Written Communication
or the Final Offering Memorandum is delivered to a purchaser, not misleading; and (iii) of the receipt by the Company of any notice
with respect to any suspension of the qualification of the Notes for offer and sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose; and the Company will use its reasonable best efforts to prevent the issuance of any such order
preventing or suspending the use of any of the Pricing Disclosure Package, any Issuer Written Communication or the Final Offering
Memorandum or suspending any such qualification of the Securities and, if any such order is issued, will obtain as soon as possible
the withdrawal thereof.


 


(e)          The
Company will, without charge, provide to the Initial Purchasers and to counsel for the Initial Purchasers as many copies of the
Pricing Disclosure Package, any Issuer Written Communication and the Final Offering Memorandum or any amendment or supplement thereto
as the Initial Purchasers may reasonably request.


 


(f)          The
Company will apply the net proceeds from the sale of the Notes as set forth under “Use of Proceeds” in the Pricing
Disclosure Package and the Final Offering Memorandum.


 


(g)          For
so long as any of the Notes remain outstanding during any period in which the Company is not subject to and in compliance with
Section 13 or 15(d) of the Exchange Act, the Company will furnish to the Initial Purchasers copies of all reports and other
communications (financial or otherwise) furnished by the Company to the Trustee or to the holders of the Notes and, as soon as
available, copies of any reports or financial statements furnished to or filed by the Company with the Commission or any national
securities exchange on which any class of securities of the Company may be listed.


 


(h)          None
of the Company or any of its Affiliates will sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of
any “security” (as defined in the Act) that could be integrated with the sale of the Notes in a manner which would
require the registration under the Act of the Notes.


 




    	-16-



    	 



    

 


(i)          The
Company will not, and will not permit any of the Subsidiaries or their respective Affiliates or persons acting on their behalf
to, (1) engage in any form of general solicitation or general advertising (as those terms are used in Regulation D under the Act)
in connection with the offering of the Notes or (2) engage in any manner involving a public offering within the meaning of Section 4(a)(2)
of the Act.


 


(j)          For
so long as any of the Notes remain outstanding, the Company will make available at its expense, upon request, to any holder of
such Notes and any prospective purchasers thereof the information specified in Rule 144A(d)(4) under the Act, unless the Company
is then subject to Section 13 or 15(d) of the Exchange Act.


 


(k)          The
Company will use its best efforts to permit the Notes to be eligible for clearance and settlement through The Depository Trust
Company.


 


(l)          During
the period beginning on the date hereof and continuing to the date that is 45 days after the Closing Date, without the
prior written consent of the Initial Purchasers, the Company will not offer, sell, contract to sell or otherwise dispose of, except
as provided hereunder, any securities of the Company (or guaranteed by the Company) that are substantially similar to the Notes.


 


(m)         The
Company hereby agrees that, without the prior written consent of the Initial Purchasers, it will not, during the period
ending ninety (90) days after the date hereof (“Lock-Up Period”), (i) offer, pledge, issue, sell, contract to
sell, purchase, contract to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for Common Stock; or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise; or (iii) file any registration statement with the Commission relating to the
offering of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock
(other than a registration statement on Form S-8). The restrictions contained in the preceding sentence shall not apply to
(1) the shares of common stock issuable upon the conversion of the Notes to be sold hereunder, (2) the issuance of Common
Stock upon the exercise of options, warrants or other exchange rights as disclosed as outstanding in the Preliminary Offering
Memorandum, Pricing Disclosure Package and Final Offering Memorandum, (3) the issuance of employee stock options not
exercisable during the Lock-Up Period and the grant of restricted stock awards or restricted stock units pursuant to
equity incentive plans described in the Preliminary Offering Memorandum, Pricing Disclosure Package and Final Offering
Memorandum or (4) offers, issuances and sales of shares of Common
Stock or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock in connection with any
acquisition or strategic investment (including any joint venture, strategic alliance or partnership) as long as (x) the
aggregate number of shares of Common Stock issued or issuable does not exceed 15% of the number of shares of Common Stock
outstanding immediately after the issuance and sale of the Notes, and (y) each recipient of any such shares or other
securities agrees to restrictions on the resale of securities that are consistent with the lock-up letters described in
Section 6(i) hereof for the remainder of the 90-day restricted period; for the avoidance of doubt, nothing contained herein
shall prevent the Company from entering into or announcing during the Lock-Up Period any acquisition or strategic investment
with aggregate consideration in the form of equity securities in excess of 15% of the number of shares of Common Stock
outstanding immediately after the issuance and sale of the Notes, provided that such excess equity securities consideration
is not actually transferred during the Lock-Up Period. Notwithstanding the foregoing, if (x) during the period that
begins on the date that is fifteen (15) calendar days plus three (3) business days before the last day of the Lock-Up Period
and ends on the last day of the Lock-Up Period, the Company issues an earnings release or material news or a material event
relating to the Company occurs; or (y) prior to the expiration of the Lock-Up Period, the Company announces that it will
release earnings results during the sixteen (16) day period beginning on the last day of the Lock-Up Period, then the
restrictions imposed by this clause shall continue to apply until the expiration of the date that is fifteen (15) calendar
days plus three (3) business days after the date on which the issuance of the earnings release or the material news or
material event occurs.


 




    	-17-



    	 



    

 


(n)          For
a period of two years (calculated in accordance with paragraph (d) of Rule 144 under the Act) following the date any
Notes are acquired by the Company or any of its Affiliates, none of the Company or any of its Affiliates will sell any such Notes.


 


(o)          The
Company shall use commercially reasonable efforts to cause the Common Stock that is authorized to be issued by the Company as of
the date hereof to be listed on the NYSE MKT.


 


Section
5.          Expenses. The Company agrees to pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or not the transactions contemplated herein are consummated
or this Agreement is terminated pursuant to Section 10 hereof, including all costs and expenses incident to (i) the printing,
word processing or other production of documents with respect to the transactions contemplated hereby, including any costs of printing
the Pricing Disclosure Package and the Final Offering Memorandum and any amendment or supplement thereto, and any “Blue Sky”
memoranda, (ii) all arrangements relating to the delivery to the Initial Purchasers of copies of the foregoing documents,
(iii) the fees and disbursements of the counsel (including local and special counsel), the accountants and any other experts
or advisors retained by the Company, (iv) preparation (including printing), authentication, issuance and delivery to the Initial
Purchasers of the Notes, (v) the qualification of the Notes under state securities and “Blue Sky” laws, including
filing fees and fees and disbursements of counsel for the Initial Purchasers relating thereto and in connection with the preparation
of any “Blue Sky” memoranda and any supplements thereto, (vi) expenses in connection with the “roadshow”
and any other meetings with prospective investors in the Notes (except roadshow expenses incurred by the Initial Purchasers), (vii) fees
and expenses of the Trustee including fees and expenses of counsel, (viii) any stamp or transfer taxes in connection with the original
issuance, sale and initial resale of the Notes and (ix) all other costs and expenses incident to the performance by the Company
of its obligations hereunder. If the sale of the Notes provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof is not satisfied, because this Agreement is terminated pursuant to
Section 10(a)(i) or (ii) or because of any failure, refusal or inability on the part of the Company to perform all obligations
and satisfy all conditions on their part to be performed or satisfied hereunder (other than solely by reason of a default by the
Initial Purchasers of their obligations hereunder after all conditions hereunder have been satisfied in accordance herewith), the
Company agrees to promptly reimburse the Initial Purchasers upon demand for reasonable out-of-pocket expenses (including reasonable
and documented fees, disbursements and charges of Latham & Watkins LLP, counsel for the Initial Purchasers) that shall have
been incurred by the Initial Purchasers in connection with the proposed purchase and sale of the Notes.


 




    	-18-



    	 



    

 


Section
6.          Conditions of the Initial Purchasers’ Obligations. The
obligation of the Initial Purchasers to purchase and pay for the Notes shall, in their sole discretion, be subject to the satisfaction
or waiver of the following conditions on or prior to the Closing Date or any Option Closing Date:


 


(a)          On
the Closing Date and on any Option Closing Date, the Initial Purchasers shall have received the opinion, dated as of such Closing
Date or Option Closing Date and addressed to the Initial Purchasers, of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC, counsel
for the Company, in the form of Annex B hereto.


 


(b)          On
the Closing Date or any Option Closing Date, the Initial Purchasers shall have received the opinion, in form and substance satisfactory
to the Initial Purchasers, dated as of such Closing Date or Option Closing Date, as the case may be, and addressed to the Initial
Purchasers, of Latham & Watkins LLP, counsel for the Initial Purchasers, with respect to certain legal matters relating to
this Agreement and such other related matters as the Initial Purchasers may reasonably require. In rendering such opinion, Latham
& Watkins LLP shall have received and may rely upon such certificates and other documents and information as it may reasonably
request to pass upon such matters.


 


(c)          On
the date hereof, the Initial Purchasers shall have received from EisnerAmper LLP a comfort letter dated the date hereof, in form
and substance satisfactory to counsel for the Initial Purchasers with respect to the audited and any unaudited financial information
in the Pricing Disclosure Package. On the Closing Date and any Option Closing Date, the Initial Purchasers shall have received
from the Independent Accountants a comfort letter dated the Closing Date or the Option Closing Date, as the case may be, in form
and substance satisfactory to counsel for the Initial Purchasers, which shall refer to the comfort letter dated the date hereof
and reaffirm or update as of a more recent date, the information stated in the comfort letter dated the date hereof and similarly
address the audited and any unaudited financial information in the Final Offering Memorandum.


 


(d)          The
representations and warranties of the Company contained in this Agreement shall be true and correct on and as of the Time of Execution
and on and as of the Closing Date and any Option Closing Date as if made on and as of such Closing Date or Option Closing Date;
the statements of the Company’s officers made pursuant to any certificate delivered in accordance with the provisions hereof
shall be true and correct on and as of the date made and on and as of such Closing Date or Option Closing Date; the Company shall
have performed all covenants and agreements and satisfied all conditions on their part to be performed or satisfied hereunder at
or prior to the Closing Date or Option Closing Date; and, except as described in the Pricing Disclosure Package and the Final Offering
Memorandum (exclusive of any amendment or supplement thereto after the date hereof), subsequent to the date of the most recent
financial statements in such Pricing Disclosure Package and the Final Offering Memorandum, there shall have been no event or development,
and no information shall have become known, that, individually or in the aggregate, has or would be reasonably likely to have a
Material Adverse Effect.


 




    	-19-



    	 



    

 


(e)          The
sale of the Notes hereunder shall not be enjoined (temporarily or permanently) on the Closing Date or any Option Closing Date.


 


(f)          Subsequent
to the date of the most recent financial statements in the Pricing Disclosure Package and the Final Offering Memorandum (exclusive
of any amendment or supplement thereto after the date hereof), none of the Company or any of the Subsidiaries shall have sustained
any loss or interference with respect to its business or properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any strike, labor dispute, slow down or work stoppage or from any legal or governmental proceeding,
order or decree, which loss or interference, individually or in the aggregate, has or would be reasonably likely to have a Material
Adverse Effect.


 


(g)          The
Initial Purchasers shall have received a certificate of the Company, dated the Closing Date and any Option Closing Date, as the
case may be, signed on behalf of the Company by its Chairman of the Board, President or any Senior Vice President and the Chief
Financial Officer, to the effect that:


 


(i)          the
representations and warranties of the Company contained in this Agreement are true and correct on and as of the Time of Execution
and on and as of such Closing Date or Option Closing Date, and the Company has performed all covenants and agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date or Option Closing Date;


 


(ii)         at
such Closing Date or Option Closing Date, since the date hereof or since the date of the most recent financial statements in the
Pricing Disclosure Package and the Final Offering Memorandum (exclusive of any amendment or supplement thereto after the date hereof),
no event or development has occurred, and no information has become known, that, individually or in the aggregate, has or would
be reasonably likely to have a Material Adverse Effect; and


 


(iii)        the
sale of the Notes hereunder has not been enjoined (temporarily or permanently).


 


(h)          An
application for the listing of the Common Stock that the Company is authorized to issue as of the date hereof shall have been submitted
to the NYSE MKT.


 


(i)          The
Company shall have caused each executive officer, director and shareholder of the Company set forth on Schedule 3 hereto
to execute and deliver to the Initial Purchasers, on or prior to the date of this Agreement, a letter or letters, substantially
in the form attached hereto as Annex C (the “Lock-up Agreement”).


 


(j)          The
Company shall have amended its asset-based revolving senior secured credit facility with General Electric Capital Corporation,
as agent for GE Capital Bank, in form and substance reasonably satisfactory to counsel for the Initial Purchasers.


 




    	-20-



    	 



    

 


On or before the Closing Date and any Option
Closing Date, the Initial Purchasers and counsel for the Initial Purchasers shall have received such further documents, certificates,
letters and schedules or instruments relating to the business, corporate, legal and financial affairs of the Company and the Subsidiaries
as they shall have heretofore reasonably requested from the Company.


 


All such documents, opinions, certificates,
letters, schedules or instruments delivered pursuant to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Initial Purchasers and counsel for the Initial Purchasers. The Company
shall furnish to the Initial Purchasers such conformed copies of such documents, opinions, certificates, letters, schedules and
instruments in such quantities as the Initial Purchasers shall reasonably request.


 


Section
7.          Offering of Notes; Restrictions on Transfer. Each of the Initial
Purchasers agrees with the Company (as to itself only) that (i) it has not and will not solicit offers for, or offer or sell,
the Notes by any form of general solicitation or general advertising (as those terms are used in Regulation D under the Act) in
any manner involving a public offering within the meaning of Section 4(a)(2) of the Act; and (ii) it will solicit offers
for the Notes only from, and will offer the Notes only to persons whom the Initial Purchasers reasonably believe to be qualified
institutional buyers within the meaning of Rule 144A under the Securities Act (a “QIB”) or, if any such person is buying
for one or more institutional accounts for which such person is acting as fiduciary or agent, only when such person has represented
to the Initial Purchasers that each such account is a QIB, to whom notice has been given that such sale or delivery is being made
in reliance on Rule 144A, and, in each case, in transactions under Rule 144A.


 


Section
8.          Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors, officers, employees, and Affiliates of each Initial Purchaser
and each person, if any, who controls any Initial Purchaser within the meaning of Section 15 of the Act or Section 20
of the Exchange Act against any losses, claims, damages or liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other U.S. federal or state statutory law or regulation, at common law or otherwise,
insofar as any such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon the following:


 


(i)          any
untrue statement or alleged untrue statement of any material fact contained in the Pricing Disclosure Package, any Issuer Written
Communication or Final Offering Memorandum or any amendment or supplement thereto; or


 


(ii)         the
omission or alleged omission to state, in the Pricing Disclosure Package, any Issuer Written Communication or the Final Offering
Memorandum or any amendment or supplement thereto, a material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;


 




    	-21-



    	 



    

 


and will reimburse, as incurred, the Initial Purchasers and
each such controlling person, director, officer, employee, and Affiliate for any legal or other expenses incurred by the Initial
Purchasers or such controlling person, director, officer, employee, Affiliate and agent in connection with investigating, defending
against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action; provided,
however, the Company will not be liable in any such case to the extent that any such loss, claim, damage, or liability arises
out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in the Pricing Disclosure
Package or Final Offering Memorandum or any amendment or supplement thereto in reliance upon and in conformity with written information
concerning the Initial Purchasers furnished to the Company by the Initial Purchasers through Deutsche Bank Securities Inc. specifically
for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Initial Purchaser
consists of the information described as such in Section 11 hereof. The indemnity provided for in this Section 8 will be in
addition to any liability that the Company may otherwise have to the indemnified parties. The Company shall not be liable under
this Section 8 for any settlement of any claim or action effected without its prior written consent, which shall not be unreasonably
withheld, conditioned or delayed.


 


(b)          Each
Initial Purchaser, severally and not jointly, agrees to indemnify and hold harmless the Company, its directors, its officers and
each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act against any losses, claims, damages or liabilities to which the Company or any such director, officer or controlling person
may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact
contained in the Pricing Disclosure Package or Final Offering Memorandum or any amendment or supplement thereto, or (ii) the
omission or the alleged omission to state a material fact in the Pricing Disclosure Package or Final Offering Memorandum or any
amendment or supplement thereto, or necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in conformity with written information concerning such Initial Purchaser,
furnished to the Company by the Initial Purchasers through Deutsche Bank Securities Inc. specifically for use therein, it being
understood and agreed that the only such information furnished by or on behalf of any Initial Purchaser consists of the information
described as such in Section 11 hereof; and subject to the limitation set forth immediately preceding this clause, will reimburse,
as incurred, any legal or other expenses incurred by the Company or any such director, officer or controlling person in connection
with investigating or defending against or appearing as a third party witness in connection with any such loss, claim, damage,
liability or action in respect thereof. The indemnity provided for in this Section 8 will be in addition to any liability
that the Initial Purchasers may otherwise have to the indemnified parties. The Initial Purchasers shall not be liable under this
Section 8 for any settlement of any claim or action effected without their consent, which shall not be unreasonably withheld.


 




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(c)          Promptly
after receipt by an indemnified party under this Section 8 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 8, such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 8, notify the indemnifying party of the commencement thereof in
writing; but the omission to so notify the indemnifying party (i) will not relieve it from any liability under paragraph (a)
or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification obligation provided in paragraphs (a) or (b) above.
In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel (including local counsel) satisfactory to such indemnified
party; provided, however, that if (i) the use of counsel (including local counsel) chosen by the indemnifying
party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be one or more legal defenses available to it and/or other indemnified parties
that are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time
after receipt by the indemnifying party of notice of the institution of such action, or (iv) the indemnifying party has authorized
in writing the employment of counsel for the indemnified party at the expense of the indemnifying party, then, in each such case,
the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate counsel (including local counsel) to defend such
action on behalf of such indemnified party or parties. After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this Section 8 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof,
unless the indemnified party shall have employed separate counsel in accordance with the proviso to the immediately preceding sentence
(it being understood, however, that in connection with such action the indemnifying party shall not be liable for the expenses
of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar actions
in the same jurisdiction arising out of the same general allegations or circumstances, designated by the Initial Purchasers in
the case of paragraph (a) of this Section 8 or the Company in the case of paragraph (b) of this Section 8,
representing the indemnified parties under such paragraph (a) or paragraph (b), as the case may be, who are parties to
such action or actions). All fees and expenses reimbursed pursuant to this paragraph (c) shall be reimbursed as they are incurred.
After such notice from the indemnifying party to such indemnified party, the indemnifying party will not be liable for the costs
and expenses of any settlement of such action effected by such indemnified party without the prior written consent of the indemnifying
party (which consent shall not be unreasonably withheld, conditioned or delayed), unless such indemnified party waived in writing
its rights under this Section 8, in which case the indemnified party may effect such a settlement without such consent. No
indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement or compromise of any
pending or threatened proceeding in respect of which any indemnified party is or could have been a party, or indemnity could have
been sought hereunder by any indemnified party, unless such settlement (A) includes an unconditional written release of the
indemnified party, in form and substance reasonably satisfactory to the indemnified party, from all liability on claims that are
the subject matter of such proceeding and (B) does not include any statement as to an admission of fault, culpability or failure
to act by or on behalf of any indemnified party.


 




    	-23-



    	 



    

 


(d)          In
circumstances in which the indemnity agreement provided for in the preceding paragraphs of this Section 8 is unavailable to,
or insufficient to hold harmless, an indemnified party in respect of any losses, claims, damages or liabilities (or actions in
respect thereof), each indemnifying party, in order to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect (i) the relative benefits received by the indemnifying party or parties on
the one hand and the indemnified party on the other from the offering of the Notes or (ii) if the allocation provided by the
foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions
or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof).
The relative benefits received by the Company on the one hand and any Initial Purchaser on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (before deducting expenses) received by the Company bear to the total discounts
and commissions received by such Initial Purchaser. The relative fault of the parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand, or such Initial Purchaser on the other, the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or alleged statement
or omission, and any other equitable considerations appropriate in the circumstances. The Company and the Initial Purchasers agree
that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation or by any
other method of allocation that does not take into account the equitable considerations referred to in the first sentence of this
paragraph (d). Notwithstanding any other provision of this paragraph (d), no Initial Purchaser shall be obligated to
make contributions hereunder that in the aggregate exceed the total discounts, commissions and other compensation received by such
Initial Purchaser under this Agreement, less the aggregate amount of any damages that such Initial Purchaser has otherwise been
required to pay by reason of the untrue or alleged untrue statements or the omissions or alleged omissions to state a material
fact, and no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d),
each person, if any, who controls an Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Initial Purchasers, and each director, officer, employee, Affiliate
and agent and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, shall have the same rights to contribution as the Company. The Initial Purchasers’ obligations to contribute
pursuant to his paragraph (d) are several to their respective purchase obligations and not joint.


 




    	-24-



    	 



    

 


Section
9.          Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its officers and the Initial Purchasers set forth in this
Agreement or made by or on behalf of them pursuant to this Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or directors, the Initial Purchasers or any controlling
person referred to in Section 8 hereof and (ii) delivery of and payment for the Notes. The respective agreements, covenants,
indemnities and other statements set forth in Sections 5, 8, 9 and 14 hereof shall remain in full force and effect, regardless
of any termination or cancellation of this Agreement.


 


Section
10.         Termination. (a) This Agreement may be terminated in the sole discretion
of the Initial Purchasers by notice to the Company given prior to the Closing Date in the event that the Company shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on its part to be performed or satisfied hereunder
at or prior thereto or, if at or prior to the Closing Date,


 


(i)          any
of the Company or the Subsidiaries shall have sustained any loss or interference with respect to its businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not covered by insurance, or from any strike, labor dispute, slow
down or work stoppage or any legal or governmental proceeding, which loss or interference has had or has a Material Adverse Effect,
or there shall have been any event or development that, individually or in the aggregate, has or could be reasonably likely to
have a Material Adverse Effect (including without limitation a change in control of the Company or the Subsidiaries), except in
each case as described in the Pricing Disclosure Package and the Final Offering Memorandum (exclusive of any amendment or supplement
thereto);


 


(ii)          trading in securities
of the Company or in securities generally on the New York Stock Exchange, American Stock Exchange or the NASDAQ Global Market shall
have been suspended or materially limited or minimum or maximum prices shall have been established on any such exchange or market;


 


(iii)        a
banking moratorium shall have been declared by New York or United States authorities or a material disruption in commercial banking
or securities settlement or clearance services in the United States; or


 


(iv)        there
shall have been (A) an outbreak or escalation of hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial markets of the United States which, in the case of (A),
(B) or (C) above and in the sole judgment of the Initial Purchasers, makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Notes as contemplated by the Pricing Disclosure Package and the Final Offering Memorandum.


 


(b)          Termination
of this Agreement pursuant to this Section 10 shall be without liability of any party to any other party except as provided
in Section 9 hereof.


 




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Section
11.         Information Supplied by the Initial Purchasers. The statements
set forth in the third sentence of the tenth paragraph, and the eleventh and fourteenth paragraphs under the heading “Plan
of Distribution” in the Preliminary Offering Memorandum and the Final Offering Memorandum (to the extent such statements
relate to the Initial Purchasers) constitute the only information furnished by the Initial Purchasers to the Company for the purposes
of Sections 2(a) and 8 hereof.


 


Section
12.         Default by Initial Purchasers.


 


If
on the Closing Date any Initial Purchaser shall fail to purchase and pay for the portion of the Notes which such Initial Purchaser
has agreed to purchase and pay for on such date (otherwise than by reason of any default on the part of the Company), you, as Initial
Purchasers, shall use your reasonable efforts to procure within 36 hours thereafter one or more of the other Initial Purchasers,
or any others, to purchase from the Company such amounts as may be agreed upon and upon the terms set forth herein, the Notes which
the defaulting Initial Purchaser or Initial Purchasers failed to purchase. If during such 36 hours you, as such Initial Purchasers,
shall not have procured such other Initial Purchasers, or any others, to purchase the Notes agreed to be purchased by the defaulting
Initial Purchaser or Initial Purchasers, then (a) if the aggregate number of shares with respect to which such default shall occur
does not exceed 10% of the Notes to be purchased on the Closing Date, the other Initial Purchaser shall be obligated, severally,
in proportion to the respective numbers of Notes which it is obligated to purchase hereunder, to purchase the Notes which such
defaulting Initial Purchaser or Initial Purchasers failed to purchase, or (b) if the aggregate number of Notes with respect to
which such default shall occur exceeds 10% of the Notes to be purchased on the Closing Date, the Company or you as the Initial
Purchasers will have the right, by written notice given within the next 36-hour period to the parties to this Agreement, to terminate
this Agreement without liability on the part of the non-defaulting Initial Purchaser or of the Company except to the extent provided
in Sections 5 and 8 hereof. In the event of a default by any Initial Purchaser or Initial Purchasers, as set forth in this Section
12, the Closing Date, may be postponed for such period, not exceeding seven days, as you, as Initial Purchasers, may determine
in order that the required changes in the Pricing Disclosure Package or the Final Offering Memorandum or in any other documents
or arrangements may be effected. The term “Initial Purchaser” includes any person substituted for a defaulting Initial
Purchaser. Any action taken under this Section 12 shall not relieve any defaulting Initial Purchaser from liability in respect
of any default of such Initial Purchaser under this Agreement


 


Section
13.         Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchasers, shall be mailed or delivered to Deutsche Bank Securities Inc., 60 Wall Street, New York, New
York 10005, Attention: Equity Capital Markets, Second Floor (fax: (212) 797-4877), with a copy to the attention of the General
Counsel, 36th Floor (fax: (212) 797-4561), and to J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York
10179, Attention: Equity-Linked Capital Markets; if sent to the Company, shall be mailed or delivered to the Company at IGI Laboratories,
Inc., 105 Lincoln Ave., PO Box 687, Buena, NJ 08310, Attention: Jason Grenfell-Gardner (fax: (856)-697-2259) with a copy to Mintz,
Levin, Cohn, Ferris, Glovsky, and Popeo, P.C., 666 Third Avenue, New York, NY 10017, Attention: Joel I. Papernik, Esq.


 




    	-26-



    	 



    

 


All such notices and communications shall
be deemed to have been duly given: when delivered by hand, if personally delivered; five business days after being deposited in
the mail, postage prepaid, if mailed; and one business day after being timely delivered to a next-day air courier.


 


In accordance with the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Initial Purchasers are required to obtain,
verify and record information that identifies their respective clients, including the Company, which information may include the
name and address of their respective clients, as well as other information that will allow the Initial Purchasers to properly identify
their respective clients.


 


Section
14.         Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, the Company and their respective successors and legal representatives, and nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any provisions herein contained; this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person
except that (i) the indemnities of the Company contained in Section 8 of this Agreement shall also be for the benefit
of the directors, officers, employees, Affiliates and agents of each Initial Purchaser and any person or persons who control the
Initial Purchasers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the indemnities
of the Initial Purchasers contained in Section 8 of this Agreement shall also be for the benefit of the directors of the Company,
its officers and any person or persons who control the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act. No purchaser of Notes from the Initial Purchasers will be deemed a successor because of such purchase.


 


Section
15.         APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT
AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.


 


Section
16.         No Advisory or Fiduciary Responsibility. The Company acknowledges
and agrees that (i) the purchase and sale of the Notes pursuant to this Agreement is an arm’s-length commercial transaction
between the Company, on the one hand, and the Initial Purchasers, on the other, (ii) in connection therewith and with the process
leading to such transaction each Initial Purchaser is acting solely as a principal and not the agent or fiduciary of the Company,
(iii) no Initial Purchaser has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering
contemplated hereby or the process leading thereto (irrespective of whether such Initial Purchaser has advised or is currently
advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this
Agreement and (iv) the Company has consulted its own legal and financial advisors to the extent it deemed appropriate. The Company
agrees that it will not claim that any Initial Purchaser has rendered advisory services of any nature or respect, or owes a fiduciary
or similar duty to the Company, in connection with such transaction or the process leading thereto.


 




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Section
17.         Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.


 




    	-28-



    	 



    

 


If the foregoing correctly sets forth our
understanding, please indicate your acceptance thereof in the space provided below for that purpose, whereupon this letter shall
constitute a binding agreement between the Company and the Initial Purchasers.


 


	 	Very truly yours,
	 	 
	 	IGI LABORATORIES, INC.
	 	 	 
	 	By:	/s/ Jenniffer Collins
	 	 	Name: Jenniffer Collins
	 	 	Title: Chief Financial Officer


 


The foregoing Agreement is hereby confirmed

and accepted as of the date first above written.


 


	DEUTSCHE BANK SECURITIES INC.	 
	 	 	 
	By:	/s/ Francis Windels	 
	 	Name: Francis Windels	 
	 	Title: Managing Director	 
	 	 	 
	By:	/s/ Faiz Khan	 
	 	Name: Faiz Khan	 
	 	Title: Director	 
	 	 	 
	J.P. MORGAN SECURITIES LLC	 
	 	 	 
	By:	/s/ Santosh Sreenivasan	 
	 	Name: Santosh Sreenivasan	 
	 	Title: Managing Director	 


 




    	-29-



    	 



    

 


SCHEDULE 1


 


	Initial Purchaser	 	Principal Amount of 
 Notes due 2019	 
	 	 	 	 
	Deutsche Bank Securities Inc.	 	$	68,750,000.00	 
	J.P. Morgan Securities LLC	 	$	56,250,000.00	 
	 	 	 	 	 
	Total	 	$	125,000,000.00	 



 




    	 



    	 



    

 


SCHEDULE 2


 


Subsidiaries


 


IGEN, Inc., a Delaware corporation


IGI Labs, Inc. a Delaware corporation


 




    	 



    	 



    

 


SCHEDULE 3


 


List of persons executing lock-up agreements


 


Jason Grenfell-Gardner


Narendra N. Borkar


Bhaskar Chaudhuri


James C. Gale


Steven H. Koehler


Jenniffer Collins


Life Sciences Opportunities Fund II, L.P.


Life Sciences Opportunities Fund (Institutional) II, L.P.


 




    	 



    	 



    

 


 


ANNEX A


 


		1.	Additional Time of Execution Information



 


Pricing Term Sheet


 




    	 



    	 



    

 


ANNEX
B


 


Form of Opinion of Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo PC


 




    	 



    	 



    

 


ANNEX
C


 


Form of Lock-up Agreement


 


Lock-Up
Agreement


 


	 	December	, 2014


 


IGI Laboratories, Inc.


 


Deutsche Bank Securities Inc.


J.P. Morgan Securities LLC


c/o Deutsche Bank Securities Inc.


60 Wall Street, 4th Floor


New York, New York 10005


 


Ladies and Gentlemen:


 


This Lock-Up Agreement is being delivered
to you in connection with the proposed Purchase Agreement (the “Purchase Agreement”) to be entered into among IGI Laboratories,
Inc., a Delaware corporation (the “Company”), and Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC, as
the initial purchasers (the “Initial Purchasers”), with respect to the proposed public offering (the “Offering”)
of convertible senior notes due 2019 (the “Notes”), convertible into shares of the Company’s common stock, par
value $.01 per share (the “Common Stock”). Capitalized terms used and not otherwise defined herein shall have the meanings
given them in the Purchase Agreement.


 


In order to induce you to enter into the
Purchase Agreement, the undersigned agrees that, for a period (the “Lock-Up Period”) beginning on the date hereof and
ending on, and including, the date that is forty-five (45) days after the date of the final prospectus supplement relating to the
Offering, the undersigned will not, without the prior written consent of the Initial Purchasers, (i) sell, offer to sell, contract
or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or
indirectly, or file (or participate in the filing of) a registration statement with the Securities and Exchange Commission (the
“Commission”) in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission promulgated thereunder (the “Exchange Act”) with respect to, any Common Stock or any other securities
of the Company that are substantially similar to Common Stock, or any securities convertible into or exchangeable or exercisable
for, or any warrants or other rights to purchase, the foregoing, (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of Common Stock or any other securities of the Company
that are substantially similar to Common Stock, or any securities convertible into or exchangeable or exercisable for, or any warrants
or other rights to purchase, the foregoing, whether any such transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise or (iii) publicly announce an intention to effect any transaction specified in clause (i) or (ii).


 




    	 



    	 



    

 


The foregoing paragraph shall not apply
to (a) bona fide gifts, provided the recipient thereof agrees in writing with the Initial Purchasers to be bound by the terms of
this Lock-Up Agreement, (b) dispositions to any trust for the direct or indirect benefit of the undersigned and/or the immediate
family of the undersigned, provided that such trust agrees in writing with the Initial Purchasers to be bound by the terms of this
Lock-Up Agreement, (c) transfers of Common Stock or securities convertible into Common Stock on death by will or intestacy; provided
that any distributee thereof agrees in writing with the Initial Purchasers to be bound by the terms of this Lock-Up Agreement,
(d) transfers of Common Stock to any affiliate of the undersigned without value, provided such affiliate agrees in writing with
the Initial Purchasers to be bound by the terms of this Lock-Up Agreement, (e) sales pursuant to a sales plan established pursuant
to Rule 10b5-1 prior to the date hereof or (f) sales or transfers of Common Stock solely in connection with the “cashless”
exercise of Company stock options outstanding on the date hereof for the purpose of exercising such stock options (provided that
any remaining Common Stock received upon such exercise will be subject to the restrictions provided for in this Lock-Up Agreement).
For purposes of this paragraph, “immediate family” shall mean the undersigned and the spouse, any lineal descendent,
father, mother, brother or sister of the undersigned.


 


Notwithstanding the foregoing, the undersigned
may not transfer any shares of Common Stock or other Company securities if the transfer triggers any filing or reporting requirement
or obligation or results in any other voluntary or mandatory public disclosure, including but not limited to Form 4 of Section
16 of the Securities Exchange Act of 1934, as amended.


 


In addition, the undersigned hereby waives
any rights the undersigned may have to require registration of Common Stock in connection with the Offering. The undersigned further
agrees that, for the Lock-Up Period, the undersigned will not, without the prior written consent of the Initial Purchasers, make
any demand for, or exercise any right with respect to, the registration of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock, or warrants or other rights to purchase Common Stock or any such securities.


 


Notwithstanding the above, if (a) during
the period that begins on the date that is fifteen (15) calendar days plus three (3) business days before the last day of the Lock-Up
Period and ends on the last day of the Lock-Up Period, the Company issues an earnings release or material news or a material event
relating to the Company occurs; or (b) prior to the expiration of the Lock-Up Period, the Company announces that it will release
earnings results during the sixteen (16) day period beginning on the last day of the Lock-Up Period, then the restrictions imposed
by this Lock-Up Agreement shall continue to apply until the expiration of the date that is fifteen (15) calendar days plus three
(3) business days after the date on which the issuance of the earnings release or the material news or material event occurs.


 




    	 



    	 



    

 


The undersigned hereby confirms that the
undersigned has not, directly or indirectly, taken, and hereby covenants that the undersigned will not, directly or indirectly,
take, any action designed, or which has constituted or will constitute or might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of shares of Common
Stock.


 


If (i) the Company
notifies you in writing that it does not intend to proceed with the Offering, or (ii) for any reason the Purchase Agreement shall
be terminated prior to the Closing Date (as defined in the Purchase Agreement), this Lock-Up Agreement shall be terminated and
the undersigned shall be released from its obligations hereunder.


 


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