Document:

MCY 2015 Stock Option Agreement - Exhibit 10.3

EXHIBIT 10.3

MERCURY GENERAL CORPORATION
2015 INCENTIVE AWARD PLAN

STOCK OPTION GRANT NOTICE AND
STOCK OPTION AGREEMENT
Mercury General Corporation, a California corporation (the “Company”), pursuant to its 2015 Incentive Award Plan, as amended from time to time (the “Plan”), hereby grants to the holder listed below (“Participant”), an option to purchase the number of shares of the Company’s Common Stock set forth below (the “Option”). This Option is subject to all of the terms and conditions set forth in this Stock Option Grant Notice (the "Grant Notice") and in the Stock Option Agreement attached hereto as Exhibit A (the “Agreement”) and the Plan, each of which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Agreement.
	
		
	Participant:
	      ________________________________________________

	Grant Date:
	      ________________________________________________

	Vesting Commencement Date:
	      ________________________________________________

	Exercise Price per Share:
	$      _______________________________________________

	Total Exercise Price:
	$      _______________________________________________

	Total Number of Shares Subject to the Option:
	

   ____________________________________________ shares

	Expiration Date:
	      ________________________________________________

Type of Option:       ̈   Incentive Stock Option     ̈   Non-Qualified Stock Option

		
	Vesting Schedule: 
	________________________________________________________________________

By his or her signature below, Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and this Grant Notice. Participant has reviewed the Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Agreement and the Plan. Participant has been provided with a copy or electronic access to a copy of the prospectus for the Plan.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.
Participant understands and agrees that this Option does not alter the at-will nature of his or her employment relationship with the Company and is not a promise of continued employment or service for the vesting period of the Option or any portion of it. 
The Plan, this Grant Notice and the Agreement constitute the entire agreement of the parties and supersede in their entirety all oral, implied or written promises, statements, understandings, undertakings and agreements between the Company and Participant with respect to the subject matter hereof, including without limitation, the provisions of any employment agreement or offer letter regarding equity awards to be awarded to Participant by the Company, or any other oral, implied or written promises, statements, understandings, undertakings or agreements by the Company or any of its representatives regarding equity awards to be awarded to Participant by the Company.	
								
	MERCURY GENERAL CORPORATION
	 
	PARTICIPANT

	By:
	 
	 
	By:
	 

	Print Name:
	 
	 
	Print Name:
	 

	Title:
	 
	 
	 
	 

EXHIBIT A
TO STOCK OPTION GRANT NOTICE
STOCK OPTION AGREEMENT
Pursuant to the Grant Notice to which this Agreement is attached, the Company has granted to Participant an Option under the Plan to purchase the number of shares of Common Stock indicated in the Grant Notice.
ARTICLE I
GENERAL
1.1    Defined Terms. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan or the Grant Notice.
1.2    Incorporation of Terms of Plan. The Option is subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control. 
                                                                        ARTICLE II
GRANT OF OPTION
2.1    Grant of Option. In consideration of Participant’s past and/or continued employment with or service to the Company or a Subsidiary and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”), the Company has granted to Participant the Option to purchase any part or all of an aggregate of the number of shares of Common Stock set forth in the Grant Notice, upon the terms and conditions set forth in the Plan, the Grant Notice and this Agreement. Unless designated as a Non-Qualified Stock Option in the Grant Notice, the Option shall be an Incentive Stock Option to the maximum extent permitted by law.
2.2    Exercise Price. The exercise price per share of the shares of Common Stock subject to the Option shall be as set forth in the Grant Notice, without commission or other charge; provided, however, that the price per share of the shares of Common Stock subject to the Option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the Grant Date. Notwithstanding the foregoing, if this Option is designated as an Incentive Stock Option and the Participant is a Greater Than 10% Stockholder on the Grant Date, the price per share of the shares of Common Stock subject to the Option shall not be less than 110% of the Fair Market Value of a share of Common Stock on the Grant Date.
2.3    Consideration to the Company; No Right to Continued Employment. In consideration of the grant of the Option by the Company, Participant agrees to render faithful and efficient services to the Company or any Subsidiary.  Nothing in the Plan, the Grant Notice, or this Agreement shall confer upon the Participant any right to continue in the employ or service of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and any Subsidiary, which rights are hereby expressly reserved, to discharge or terminate the services of the Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.

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                                                                ARTICLE III     
PERIOD OF EXERCISABILITY

3.1    Commencement of Exercisability.
(a)    Subject to Sections 3.2, 3.3 and 5.5, the Option shall become vested and exercisable in such amounts and at such times as are set forth in the Grant Notice.
(b)    No portion of the Option that has not become vested and exercisable on or prior to the date of Participant’s Termination of Service shall thereafter become vested and exercisable, except as may be otherwise provided in the Grant Notice or provided by the Administrator or as set forth in a written agreement between the Company and Participant.
3.2    Duration of Exercisability. The installments provided for in the vesting schedule set forth in the Grant Notice are cumulative. Each such installment that becomes vested and exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3. hereof. Once the Option becomes unexercisable, it shall be forfeited immediately.
3.3    Expiration of Option. The Option may not be exercised to any extent by anyone after the first to occur of the following events:
(a)    The expiration of ten years from the Grant Date; 
(b)    If this Option is designated as an Incentive Stock Option and Participant was a Greater Than 10% Stockholder at the time the Option was granted, the expiration of five years from the Grant Date; 
(c)    Except as the Administrator may otherwise approve, the expiration of three months following the date of Participant’s Termination of Service, unless such termination occurs by reason of Participant’s death, Disability or for Cause; 
(d)    The expiration of one year from the date of Participant’s death if Participant dies (i) prior to his or her Termination of Service or (ii) within three months after his or her Termination of Service; 
(e)    The expiration of one year from the date of Participant’s Termination of Service by reason of Participant’s Disability; or
(f)    Except as the Administrator may otherwise approve, the date of Participant’s Termination of Service for Cause. 
If the Option is an Incentive Stock Option, note that, to obtain the federal income tax advantages associated with an “incentive stock option,” the Code requires that at all times beginning on the date of grant of the Option and ending on the day three months before the date of Option’s exercise, Participant must be an Employee of the Company or any subsidiary corporation (as defined in Section 424(f) of the Code) of the Company, except in the event of Participant’s death or disability (as defined in Section 22(e)(3) of the Code). The Company has provided for extended exercisability of Participant’s Option under certain circumstances for Participant’s benefit but cannot guarantee that Participant’s Option will necessarily be treated as an “incentive stock option” if Participant continues to provide services to the Company or a 

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Subsidiary as a Consultant or Director after Participant’s employment terminates or if Participant otherwise exercises the Option more than three months after the date Participant’s employment terminates.
3.4    Tax Withholding.  Notwithstanding any other provision of this Agreement: 
(a)    The Company and its Subsidiaries have the authority to deduct or withhold, or require Participant to remit to the Company or the applicable Subsidiary, an amount sufficient to satisfy applicable federal, state, local and foreign taxes (including the Employee portion of any FICA obligation) required by Applicable Law to be withheld with respect to any taxable event arising pursuant to this Agreement.  The Company and its Subsidiaries may withhold, or allow Participant to satisfy, the tax withholding obligation in one or more of the forms specified below, subject to Section 11.2 of the Plan:
(i)    by cash or check made payable to the Company or the Subsidiary with respect to which the withholding obligation arises; 
(ii)    by the deduction of such amount from other compensation payable to Participant; 
(iii)    with respect to any withholding taxes arising in connection with the exercise of the Option, with the consent of the Administrator, by requesting that the Company withhold a net number of shares of Common Stock issuable upon the exercise of the Option having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes;
(iv)    with respect to any withholding taxes arising in connection with the exercise of the Option, with the consent of the Administrator, by tendering vested shares of Common Stock having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes; 
(v)    with respect to any withholding taxes arising in connection with the exercise of the Option, through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to shares of Common Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company or the Subsidiary with respect to which the withholding obligation arises in satisfaction of such withholding taxes; provided that payment of such proceeds is then made to the Company or the applicable Subsidiary at such time as may be required by the Administrator, but in any event not later than the settlement of such sale; or 
(vi)    in any combination of the foregoing. 
(b)    With respect to any withholding taxes arising in connection with the Option, in the event Participant fails to provide timely payment of all sums required pursuant to Section 3.4(a), the Company shall have the right and option, but not the obligation, to treat such failure as an election by Participant to satisfy all or any portion of Participant's required payment obligation pursuant to Section 3.4(a)(ii) or Section 3.4(a)(iii) above, or any combination of the foregoing as the Company may determine to be appropriate.  The Company shall not be obligated to deliver any shares of Common Stock issuable with respect to the exercise of the Option to Participant or his or her legal representative unless and until Participant or his or 

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her legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes applicable with respect to the taxable income of Participant resulting from the exercise of the Option or any other taxable event related to the Option.
(c)    In the event any tax withholding obligation arising in connection with the Option will be satisfied under Section 3.4(a)(iii) above, then the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on Participant's behalf a whole number of shares from those shares of Common Stock that are issuable upon exercise of the Option as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the tax withholding obligation and to remit the proceeds of such sale to the Company or the Subsidiary with respect to which the withholding obligation arises.  Participant's acceptance of this Option constitutes Participant's instruction and authorization to the Company and such brokerage firm to complete the transactions described in this Section 3.4(c), including the transactions described in the previous sentence, as applicable.  The Company may refuse to issue any shares of Common Stock to Participant until the foregoing tax withholding obligations are satisfied. 
(d)    Participant is ultimately liable and responsible for all taxes owed in connection with the Option, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the Option.  Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or exercise of the Option or the subsequent sale of Common Stock.  The Company and its Subsidiaries do not commit and are under no obligation to structure the Option to reduce or eliminate Participant's tax liability.
3.5    Special Tax Consequences. Participant acknowledges that, to the extent that the aggregate Fair Market Value (determined as of the time the Option is granted) of all shares of Common Stock with respect to which Incentive Stock Options, including the Option, are exercisable for the first time by Participant in any calendar year exceeds $100,000, the Option and such other options shall be Non-Qualified Stock Options to the extent necessary to comply with the limitations imposed by Section 422(d) of the Code. Participant further acknowledges that the rule set forth in the preceding sentence shall be applied by taking the Option and other “incentive stock options” into account in the order in which they were granted, as determined under Section 422(d) of the Code and the Treasury Regulations thereunder. 
                                                                 ARTICLE IV     
EXERCISE OF OPTION

4.1    Person Eligible to Exercise. Except as provided in Section 5.3, during the lifetime of the Participant, only Participant may exercise the Option or any portion thereof, unless it has been disposed of, with the consent of the Administrator, pursuant to a DRO. After the death of Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by Participant’s personal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.

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4.2    Partial Exercise. Subject to Section 5.2, any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3 hereof.
4.3    Manner of Exercise. The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company (or any third party administrator or other person or entity designated by the Company), during regular business hours of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3 hereof:
(a)    An exercise notice in a form specified by the Administrator, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator; 
(b)    The receipt by the Company of full payment for the shares of Common Stock with respect to which the Option or portion thereof is exercised, in such form of consideration permitted under Section 4.4 hereof that is acceptable to the Administrator; 
(c)    The payment of any applicable withholding tax, as provided under in accordance with Section 3.4;
(d)    Any other written representations or documents as may be required in the Administrator’s sole discretion to effect compliance with the Applicable Law; and
(e)    In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by any person or persons other than Participant, appropriate proof of the right of such person or persons to exercise the Option.
Notwithstanding any of the foregoing, the Administrator shall have the right to specify all conditions of the manner of exercise, which conditions may vary by country and which may be subject to change from time to time.
4.4    Method of Payment. Payment of the exercise price shall be by any of the following, or a combination thereof, at the election of Participant, subject to Section 11.1 of the Plan:
(a)    Cash;
(b)    Check;
(c)    Delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to shares of Common Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price; provided, that payment of such proceeds is then made to the Company at such time as may be required by the Administrator, but in any event not later than the settlement of such sale;

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(d)    With the consent of the Administrator, surrendered shares of Common Stock (including, without limitation, shares of Common Stock otherwise issuable upon the exercise of the Option) held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences and having a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or portion thereof being exercised; or
(e)    With the consent of the Administrator, property of any kind that constitutes good and valuable consideration.
4.5    Conditions to Issuance of Shares. The Company shall not be required to issue or deliver any shares of Common Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions:
(a)    The admission of such shares of Common Stock to listing on all stock exchanges on which such Common Stock is then listed; 
(b)    The completion of any registration or other qualification of such shares of Common Stock under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or other governmental regulatory body, which the Administrator, in its sole discretion, shall deem necessary or advisable; 
(c)    The obtaining of any approval or other clearance from any state or federal governmental agency that the Administrator, in its sole discretion, shall determine to be necessary or advisable; 
(d)    The lapse of such reasonable period of time following the exercise of the Option as the Administrator may from time to time establish for reasons of administrative convenience; 
(e)    The receipt by the Company of full payment for such shares of Common Stock, which may be in one or more of the forms of consideration permitted under Section 4.4; and
(f)    The receipt of full payment of any applicable withholding tax in accordance with Section 3.4 by the Company or its Subsidiary with respect to which the applicable withholding obligation arises.
4.6    Rights as Stockholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any shares of Common Stock purchasable upon the exercise of any part of the Option unless and until certificates representing such shares of Common Stock (which may be in book-entry form) shall have been issued and recorded on the records of the Company or its transfer agents or registrars and delivered to Participant (including through electronic delivery to a brokerage account).  No adjustment will be made for a dividend or other right for which the record date is prior to the date of such issuance, recordation and delivery, except as provided in Article 13 of the Plan. Except as otherwise provided herein, after such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to such shares of Stock, including, without limitation, the right to receipt of dividends and distributions on such shares.
4.7    Forfeiture and Claw-Back Provisions.  Participant hereby agrees that the Administrator may provide that the Award shall terminate and any unvested Options shall be forfeited, if Participant at any time prior to the vesting of the Option engages in any activity which is inimical, contrary or harmful to the interests of the Company, as determined by the Administrator, including, without limitation, any violation of any 

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written Company policy, or Participant’s employment is terminated for Cause.  In addition, Participant hereby acknowledges and agrees that the Award is subject to the provisions of Section 11.5 of the Plan.
                                                                  ARTICLE V     
OTHER PROVISIONS
5.1    Administration.  The Administrator shall have the power to interpret the Plan, the Grant Notice and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan, the Grant Notice and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules.  All actions taken and all interpretations and determinations made by the Administrator will be final and binding upon Participant, the Company and all other interested persons.  To the extent allowable pursuant to Applicable Law, no member of the Administrator will be personally liable for any action, determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement. 
5.2    Whole Shares.  The Option may only be exercised for whole shares of Common Stock. 
5.3    Option Generally Not Transferable.
(a)    Subject to Section 5.3(c), the Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until the shares of Common Stock underlying the Option have been issued, and all restrictions applicable to such shares of Common Stock have lapsed. Neither the Option nor any interest or right therein shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.
(b)    Unless transferred to a Permitted Transferee in accordance with Section 5.3(c), during the lifetime of Participant, only Participant may exercise the Option or any portion thereof, unless it has been disposed of pursuant to a DRO. After the death of Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by Participant’s personal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.
(c)    Notwithstanding any other provision in this Agreement, with the consent of the Administrator and to the extent the Option is designated as a Non-Qualified Stock Option, the Option may be transferred to, exercised by and paid to one or more Permitted Transferees, subject to the terms and conditions set forth in Section 11.3 of the Plan. Subject to such conditions and procedures as the Administrator may require, a Permitted Transferee may exercise the Option or any portion thereof during the Participant’s lifetime. 

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5.4    Adjustments.  Participant acknowledges that the Option, including the vesting of the Option, the number of Shares subject to the Option, and the exercise price of the Option, is subject to adjustment in the discretion of the Administrator upon the occurrence of certain events as provided in this Agreement and Article 13 of the Plan.  
5.5    Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws, including, without limitation, the provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to Applicable Law. To the extent permitted by Applicable Law, the Plan, the Grant Notice and this Agreement shall be deemed amended to the extent necessary to conform to Applicable Law.
5.6    Amendment, Suspension and Termination. To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator; provided, that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall impair any rights or obligations under this Agreement in any material way without the prior written consent of Participant.
5.7    Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Company's principal office, and any notice to be given to Participant shall be addressed to Participant (or if Participant is then deceased, to the person entitled to exercise the Option pursuant to Section 4.1) at Participant's last address reflected on the Company's records. By a notice given pursuant to this Section 5.7, either party may hereafter designate a different address for notices to be given to that party. Any notice shall be deemed duly given when sent via email (if to Participant) or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.
5.8    Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein and the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
5.9    Section 409A.  This Award is not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “Section 409A”).  However, notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if at any time the Administrator determines that this Award (or any portion thereof) may be subject to Section 409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify Participant or any other person for failure to do so) to adopt such amendments to the Plan, the Grant Notice or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate for this Award either to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.   

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5.10    Tax Representations. Participant has reviewed with Participant’s own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by the Grant Notice and this Agreement. Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Participant understands that Participant (and not the Company) shall be responsible for Participant’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. 
5.11    Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
5.12    Governing Law; Severability. The laws of the State of California shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws. Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.
5.13    Notification of Disposition. If this Option is designated as an Incentive Stock Option, Participant shall give prompt notice to the Company of any disposition or other transfer of any shares of Common Stock acquired under this Agreement if such disposition or transfer is made (a) within two years from the Grant Date with respect to such shares of Common Stock or (b) within one year after the transfer of such shares of Common Stock to the Participant. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant in such disposition or other transfer.
5.14    Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Option, the Grant Notice and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
5.15    Entire Agreement.  The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.  
5.16    Limitation on Participant's Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Option, and rights no greater than the right to receive the Common Stock as a general unsecured creditor with respect to options, as and when exercised pursuant to the terms hereof.
5.17    Counterparts.  The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which shall be deemed an original and all of which together shall constitute one instrument.

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5.18    Paperless Administration.  By accepting this Award, Participant hereby agrees to receive documentation related to the Award by electronic delivery, such as a system using an internet website or interactive voice response, maintained by the Company or a third party designated by the Company. 
5.19    Broker-Assisted Sales.  In the event of any broker-assisted sale of shares of Common Stock in connection with the payment of withholding taxes as provided in Section 3.4(a)(v) or Section 3.4(c) or the payment of the exercise price as provided in Section 4.4(c): (a) any shares of Common Stock to be sold through a broker-assisted sale will be sold on the day the tax withholding obligation or exercise of the Option, as applicable, occurs or arises, or as soon thereafter as practicable; (b) such shares of Common Stock may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (c) Participant will be responsible for all broker’s fees and other costs of sale, and Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the proceeds of such sale exceed the applicable tax withholding obligation or exercise price, the Company agrees to pay such excess in cash to Participant as soon as reasonably practicable; (e) Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding obligation or exercise price; and (f) in the event the proceeds of such sale are insufficient to satisfy the applicable tax withholding obligation, Participant agrees to pay immediately upon demand to the Company or its Subsidiary with respect to which the withholding obligation arises, an amount sufficient to satisfy any remaining portion of the Company’s or the applicable Subsidiary's withholding obligation.

A-10EX-10.1

EXHIBIT 10.1

TransEnterix, Inc.

Up to $25,000,000 of

Shares of Common Stock

(par value $0.001 per share)

Controlled Equity OfferingSM

Sales Agreement

February 20, 2015

Cantor Fitzgerald & Co.

499 Park Avenue

New York, NY 10022

Ladies and Gentlemen:

TransEnterix, Inc., a Delaware corporation (the “Company”), confirms its agreement
(this “Agreement”) with Cantor Fitzgerald & Co. (the “Agent”), as follows:

1. Issuance and Sale of Shares. The Company agrees that, from time to time during the
term of this Agreement, on the terms and subject to the conditions set forth herein, it may issue
and sell through the Agent, up to $25,000,000 of shares of common stock (the “Placement
Shares”) of the Company, par value $0.001 per share (the “Common Stock”); provided,
however, that in no event shall the Company issue or sell through the Agent such number or dollar
amount of Placement Shares that would (a) exceed the number or dollar amount of shares of Common
Stock registered on the effective Registration Statement (defined below) pursuant to which the
offering is being made or (b) exceed the number of authorized but unissued shares of Common Stock
(the “Maximum Amount”). Notwithstanding anything to the contrary contained herein, the
parties hereto agree that compliance with the limitations set forth in this Section 1 on the amount
of Placement Shares issued and sold under this Agreement shall be the sole responsibility of the
Company and that Agent shall have no obligation in connection with such compliance. The issuance
and sale of Placement Shares through Agent will be effected pursuant to the Registration Statement
(as defined below) filed by the Company and declared effective by the Securities and Exchange
Commission (the “Commission”) on December 19, 2014, although nothing in this Agreement
shall be construed as requiring the Company to use the Registration Statement to issue Common
Stock.

The Company has filed, in accordance with the provisions of the Securities Act of 1933, as
amended (the “Securities Act”) and the rules and regulations thereunder (the
“Securities Act Regulations”), with the Commission a registration statement on Form S-3
(File No. 333-199998), including a base prospectus, relating to certain securities, including the
Placement Shares to be issued from time to time by the Company, and which incorporates by reference
certain documents that the Company has filed or will file in accordance with the provisions of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and
regulations thereunder. The Company has prepared a prospectus supplement to the base prospectus
included as part of the Registration Statement, which prospectus supplement relates to the
Placement Shares to be issued from time to time by the Company (the “Prospectus
Supplement”). The Company will furnish to the Agent, for use by the Agent, copies of the base
prospectus included as part of such Registration Statement, as supplemented by the Prospectus
Supplement, relating to the Placement Shares to be issued from time to time by the Company. The
Company may file one or more additional registration statements from time to time that will contain
a base prospectus and related prospectus or prospectus supplement, if applicable (which shall be a
Prospectus Supplement), with respect to the Placement Shares. Except where the context otherwise
requires, such registration statement(s), including all documents filed as part thereof or
incorporated by reference therein, and including any information contained in a Prospectus (as
defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the Securities
Act Regulations or deemed to be a part of such registration statement pursuant to Rule 430B of the
Securities Act Regulations, is herein called the “Registration Statement.” The base
prospectus or base prospectuses, including all documents incorporated therein by reference,
included in the Registration Statement, as it may be supplemented, if necessary, by the Prospectus
Supplement, in the form in which such prospectus or prospectuses and/or Prospectus Supplement have
most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the
Securities Act Regulations, is herein called the “Prospectus.”

Any reference herein to the Registration Statement, any Prospectus Supplement or Prospectus
shall be deemed to refer to and include the documents, if any, incorporated by reference therein
(the “Incorporated Documents”), including, unless the context otherwise requires, the
documents, if any, filed as exhibits to such Incorporated Documents. Any reference herein to the
terms “amend,” “amendment” or “supplement” with respect to the Registration Statement or the
Prospectus shall be deemed to refer to and include the filing of any document under the Exchange
Act on or after the most-recent effective date of the Registration Statement, or the date of the
Prospectus, as the case may be, and incorporated therein by reference. For purposes of this
Agreement, all references to the Registration Statement, the Prospectus or to any amendment or
supplement thereto shall be deemed to include the most recent copy filed with the Commission
pursuant to its Electronic Data Gathering Analysis and Retrieval System, or if applicable, the
Interactive Data Electronic Application system when used by the Commission (collectively,
“EDGAR”).

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

3. Sale of Placement Shares by Agent. Subject to the provisions of Section
5(a), the Agent, for the period specified in the Placement Notice, will use its commercially
reasonable efforts consistent with its normal trading and sales practices and applicable state and
federal laws, rules and regulations and the rules of the NYSE MKT (the “Exchange”), to sell
the Placement Shares up to the amount specified, and otherwise in accordance with the terms of such
Placement Notice. The Agent will provide written confirmation to the Company no later than the
opening of the Trading Day (as defined below) immediately following the Trading Day on which it has
made sales of Placement Shares hereunder setting forth the number of Placement Shares sold on such
day, the compensation payable by the Company to the Agent pursuant to Section 2 with
respect to such sales, and the Net Proceeds (as defined below) payable to the Company, with an
itemization of the deductions made by the Agent (as set forth in Section 5(b)) from the
gross proceeds that it receives from such sales. Subject to the terms of the Placement Notice, the
Agent may sell Placement Shares by any method permitted by law deemed to be an “at the market”
offering as defined in Rule 415 of the Securities Act Regulations, including without limitation
sales made directly on the Exchange, on any other existing trading market for the Common Stock or
to or through a market maker. Subject to the terms of a Placement Notice, the Agent may also sell
Placement Shares by any other method permitted by law, including but not limited to in privately
negotiated transactions; provided, however, that any such transactions shall be in compliance with
the rules of the Exchange. “Trading Day” means any day on which Common Stock is traded on
the Exchange.

4. Suspension of Sales. The Company or the Agent may, upon notice to the other party
in writing (including by email correspondence to each of the individuals of the other party set
forth on Schedule 3, if receipt of such correspondence is actually acknowledged by any of the
individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed
immediately by verifiable facsimile transmission or email correspondence to each of the individuals
of the other party set forth on Schedule 3), suspend any sale of Placement Shares (a
“Suspension”); provided, however, that such suspension shall not affect or impair any
party’s obligations with respect to any Placement Shares sold hereunder prior to the receipt of
such notice. While a Suspension is in effect any obligation under Sections 7(l), 7(m), and 7(n)
with respect to the delivery of certificates, opinions, or comfort letters to the Agent, shall be
waived, provided, however, that such waiver shall not apply for the Representation Date (defined
below) occurring on the date that the Company files its annual report on Form 10-K. Each of the
parties agrees that no such notice under this Section 4 shall be effective against any other party
unless it is made to one of the individuals named on Schedule 3 hereto, as such Schedule may be
amended from time to time.

5. Sale and Delivery to the Agent; Settlement.

(a) Sale of Placement Shares. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, upon the Agent’s
acceptance of the terms of a Placement Notice, and unless the sale of the Placement Shares
described therein has been declined, suspended, or otherwise terminated in accordance with the
terms of this Agreement, the Agent, for the period specified in the Placement Notice, will use its
commercially reasonable efforts consistent with its normal trading and sales practices and
applicable law and regulations to sell such Placement Shares up to the amount specified, and
otherwise in accordance with the terms of such Placement Notice. The Company acknowledges and
agrees that (i) there can be no assurance that the Agent will be successful in selling Placement
Shares, (ii) the Agent will incur no liability or obligation to the Company or any other person or
entity if it does not sell Placement Shares for any reason other than a failure by the Agent to use
its commercially reasonable efforts consistent with its normal trading and sales practices and
applicable law and regulations to sell such Placement Shares as required under this Agreement and
(iii) the Agent shall be under no obligation to purchase Placement Shares on a principal basis
pursuant to this Agreement, except as otherwise agreed by the Agent and the Company.

(b) Settlement of Placement Shares. Unless otherwise specified in the applicable
Placement Notice, settlement for sales of Placement Shares will occur on the third (3rd)
Trading Day (or such earlier day as is industry practice for regular-way trading) following the
date on which such sales are made (each, a “Settlement Date”). The Agent shall notify the
Company of each sale of Placement Shares on the date of such sale. The amount of proceeds to be
delivered to the Company on a Settlement Date against receipt of the Placement Shares sold (the
“Net Proceeds”) will be equal to the aggregate sales price received by the Agent, after
deduction for (i) the Agent’s commission, discount or other compensation for such sales payable by
the Company pursuant to Section 2 hereof, and (ii) any transaction fees imposed by any governmental
or self-regulatory organization in respect of such sales.

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

(d) Denominations; Registration. Certificates for the Placement Shares, if any, shall
be in such denominations and registered in such names as the Agent may request in writing at least
one full Business Day (as defined below) before the Settlement Date. The certificates for the
Placement Shares, if any, will be made available by the Company for examination and packaging by
the Agent in the city of New York, New York not later than noon (New York time) on the Business Day
prior to the Settlement Date.

(e) Limitations on Offering Size. Under no circumstances shall the Company cause or
request the offer or sale of any Placement Shares if, after giving effect to the sale of such
Placement Shares, the aggregate gross sales proceeds of Placement Shares sold pursuant to this
Agreement would exceed the lesser of (A) together with all sales of Placement Shares under this
Agreement, the Maximum Amount, (B) the amount available for offer and sale under the currently
effective Registration Statement and (C) the amount authorized from time to time to be issued and
sold under this Agreement by the Company’s board of directors, a duly authorized committee thereof
or a duly authorized executive committee, and notified to the Agent in writing. Under no
circumstances shall the Company cause or request the offer or sale of any Placement Shares pursuant
to this Agreement at a price lower than the minimum price authorized from time to time by the
Company’s board of directors, a duly authorized committee thereof or a duly authorized executive
committee, and notified to the Agent in writing. Further, under no circumstances shall the Company
cause or permit the aggregate offering amount of Placement Shares sold pursuant to this Agreement
to exceed the Maximum Amount.

6. Representations and Warranties of the Company. The Company represents and warrants
to, and agrees with Agent that as of the date of this Agreement and as of each Applicable Time (as
defined below):

(a) Registration Statement and Prospectus. The Company and the transactions
contemplated by this Agreement meet the requirements for and comply with the applicable conditions
set forth in Form S 3 (including General Instruction I.A and I.B) under the Securities Act. The
Registration Statement has been filed with the Commission and has been declared effective by the
Commission under the Securities Act prior to the issuance of any Placement Notices by the Company.
The Prospectus Supplement names the Agent as the agent in the section entitled “Plan of
Distribution.” The Company has not received, and has no notice of, any order of the Commission
preventing or suspending the use of the Registration Statement, or threatening or instituting
proceedings for that purpose. The Registration Statement and the offer and sale of Placement
Shares as contemplated hereby meet the requirements of Rule 415 under the Securities Act and comply
in all material respects with said rule. Any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement have been so described or filed. Copies of the Registration
Statement, the Prospectus, and any amendments or supplements and all Incorporated Documents that
were filed with the Commission on or prior to the date of this Agreement have been delivered, or
are available through EDGAR, to the Agent and its counsel. The Company has not distributed and,
prior to the later to occur of each Settlement Date and completion of the distribution of the
Placement Shares, will not distribute any offering material in connection with the offering or sale
of the Placement Shares other than the Registration Statement and the Prospectus. The Common Stock
is registered pursuant to Section 12(b) of the Exchange Act and is currently listed on the Exchange
under the trading symbol “TRXC.” The Company has taken no action designed to, or likely to have
the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting
the Common Stock from the Exchange, nor has the Company received any notification that the
Commission or the Exchange is contemplating terminating such registration or listing or that the
Company is not in compliance with the listing or maintenance requirements of the Exchange. To the
Company’s knowledge, it is in compliance with all applicable listing requirements of the Exchange.
The Company has no reason to believe that it will not in the foreseeable future continue to be in
compliance with all such listing and maintenance requirements.

(b) No Misstatement or Omission. The Registration Statement, when it became
effective, did not, and will not, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading. The Prospectus and any amendment and supplement thereto, on the date thereof and at
each Applicable Time (defined below), did not or will not include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Incorporated Documents did not, and
any further Incorporated Documents filed after the date hereof will not, when filed with the
Commission, contain an untrue statement of a material fact or omit to state a material fact
required to be stated in such document or necessary to make the statements in such document, in
light of the circumstances under which they were made, not misleading. The foregoing shall not
apply to statements in, or omissions from, any such document made in reliance upon, and in
conformity with, information furnished to the Company by Agent specifically for use in the
preparation thereof.

(c) Conformity with Securities Act and Exchange Act. The Registration Statement, the
Prospectus or any amendment or supplement thereto, and the Incorporated Documents, when such
documents were or are filed with the Commission under the Securities Act or the Exchange Act or
became or will become effective under the Securities Act, as the case may be, conformed or will
conform in all material respects with the requirements of the Securities Act and the Exchange Act,
as applicable. There are no contracts or other documents that required under the Securities Act to
be filed as exhibits to the Registration Statement that are not so filed. At each Settlement Date,
the Registration Statement and the Prospectus, as of such date, will conform in all material
respects with the requirements of the Securities Act.

(d) Financial Information. The consolidated financial statements of the Company
included or incorporated by reference in the Registration Statement and the Prospectus, together
with the notes and schedules thereto, (i) present fairly, in all material respects, the
consolidated financial position, results of operations and cash flows of the Company and the
Subsidiaries (as defined below) as of the dates and for the periods specified, (ii) comply as to
form in all material respects with the applicable accounting requirements of the Securities Act and
Exchange Act and (iii) have been prepared in conformity with GAAP (as defined below) applied on a
consistent basis during the periods involved (except as otherwise noted therein). The financial
data with respect to the Company and the Subsidiaries (as defined below) contained or incorporated
by reference in the Registration Statement and the Prospectus, as well as any statistical data
derived from such financial data, present fairly the information shown therein at the respective
dates and for the respective periods specified and are derived from the consolidated financial
statements and books and records of the Company. There are no financial statements (historical or
pro forma) that are required to be included or incorporated by reference in the Registration
Statement, or the Prospectus that are not included or incorporated by reference as required. The
Company and the Subsidiaries (as defined below) do not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet obligations), not described in
the Registration Statement (excluding the exhibits thereto) and the Prospectus (including the
financial statements, and the notes and schedules thereto, included or incorporated therein). All
disclosures contained or incorporated by reference in the Registration Statement and the
Prospectus, regarding “non-GAAP financial measures” (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G of the Exchange Act and Item 10 of
Regulation S-K under the Securities Act, to the extent applicable.

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

(f) Organization. Each of the Company and each of its Subsidiaries (as defined below)
has been duly organized and is validly existing as a business entity and in good standing under the
laws of the jurisdiction in which it is chartered or organized. Each of the Company and each of
its Subsidiaries (as defined below) is duly licensed or qualified as a foreign corporation for
transaction of business and in good standing under the laws of each other jurisdiction in which its
ownership or lease of property or the conduct of its business requires such license or
qualification, and has all requisite power and authority necessary to own or hold its properties
and to conduct its business as described in the Registration Statement and the Prospectus, except
where the failure to be so qualified or in good standing or have such power or authority would not,
individually or in the aggregate, have, or be expected to have, a material adverse effect on the
assets, business, operations, earnings, properties, financial condition, prospects, stockholders’
equity or results of operations of the Company and the Subsidiaries (as defined below) taken as a
whole, or prevent or materially interfere with consummation of the transactions contemplated hereby
(a “Material Adverse Effect”).

(g) Subsidiaries. The subsidiaries set forth on Schedule 4 (collectively, the
“Subsidiaries”), are the Company’s only significant subsidiaries (as such term is defined
in Rule 1-02 of Regulation S-X promulgated by the Commission). Except as set forth in the
Registration Statement and in the Prospectus, the Company owns, directly or indirectly, all of the
equity interests of the Subsidiaries free and clear of any lien, charge, security interest,
encumbrance, right of first refusal or other restriction, and all the equity interests of the
Subsidiaries are validly issued and are fully paid, nonassessable and free of preemptive and
similar rights.

(h) No Violation or Default. Neither the Company nor any of its Subsidiaries is
(i) in violation of its charter or by-laws or similar organizational documents; (ii) in default,
and no event has occurred that, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound or to which any of the property or assets of the Company or any of its Subsidiaries are
subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of
any court or arbitrator or governmental or regulatory authority, except, in the case of each of
clauses (ii) and (iii) above, for any such violation or default that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. To the Company’s
knowledge, no other party under any material contract or other agreement to which it or any of its
Subsidiaries is a party is in default in any respect thereunder where such default would have a
Material Adverse Effect.

(i) No Material Adverse Change. Since the respective dates as of which information is
given in the Registration Statement and the Prospectus (including any Incorporated Documents),
there has not been (i) any Material Adverse Effect or the occurrence of any development that the
Company reasonably expects will result in a Material Adverse Effect, (ii) any transaction which is
material to the Company and the Subsidiaries taken as a whole, (iii) any obligation or liability,
direct or contingent (including any off-balance sheet obligations), incurred by the Company or any
Subsidiary, which is material to the Company and the Subsidiaries taken as a whole, (iv) any
material change in the capital stock or outstanding long-term indebtedness of the Company or any of
its Subsidiaries or (v) any dividend or distribution of any kind declared, paid or made on the
capital stock of the Company or any Subsidiary, other than in each case above in the ordinary
course of business or as otherwise disclosed in the Registration Statement or Prospectus (including
any Incorporated Document).

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

(k) Authorization; Enforceability. The Company has full legal right, power and
authority to enter into this Agreement and perform the transactions contemplated hereby, including,
without limitation, the authorization, issuance and sale of the Placement Shares as contemplated by
this Agreement. All corporate actions (including those of stockholders) necessary for the Company
to consummate the transactions contemplated in this Agreement have been taken and are in effect. No
approval of the Company (including the approval of its stockholders) is required under the rules
and regulations of any trading market for the Company to issue and deliver to the Agents the
Placement Shares. This Agreement has been duly authorized, executed and delivered by the Company
and is a legal, valid and binding obligation of the Company, enforceable in accordance with its
terms, except to the extent that enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally and by general
equitable principles.

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

(m) No Consents Required. No consent, approval, authorization, order, registration,
qualification, permit, license, exemption, filing or notice (each, a “Consent”) of, from,
with or to any court, arbitrator or governmental or regulatory authority is required for the
execution, delivery and performance by the Company of this Agreement or the issuance and sale by
the Company of the Placement Shares, except for such consents, approvals, authorizations, orders
and registrations or qualifications as may be required under applicable state securities laws or by
the by-laws and rules of the Financial Industry Regulatory Authority (“FINRA”) or the
Exchange in connection with the sale of the Placement Shares by the Agent. No event has occurred
that allows or results in, or after notice or lapse of time or both would allow or result in, the
revocation, suspension, termination or invalidation of any such Consent or any other impairment of
the rights of the holder or maker of any such Consent.

(n) No Preferential Rights. Except as set forth in the Registration Statement and the
Prospectus and for the registration rights that have been waived by or on behalf of the investors
listed on Schedule 5, (i) no person, as such term is defined in Rule 1-02 of Regulation S-X
promulgated under the Securities Act (each, a “Person”), has the right, contractual or
otherwise, to cause the Company to issue or sell to such Person any Common Stock or shares of any
other capital stock or other securities of the Company, (ii) no Person has any preemptive rights,
resale rights, rights of first refusal, rights of co-sale, or any other rights (whether pursuant to
a “poison pill” provision or otherwise) to purchase any Common Stock or shares of any other capital
stock or other securities of the Company, (iii)  no Person has the right to act as an underwriter
or as a financial advisor to the Company in connection with the offer and sale of the Common Stock,
and (iv) no Person has the right, contractual or otherwise, to require the Company to register
under the Securities Act any Common Stock or shares of any other capital stock or other securities
of the Company, or to include any such shares or other securities in the Registration Statement or
the offering contemplated thereby, whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Placement Shares as contemplated thereby or otherwise.

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

(p) Enforceability of Agreements. All agreements between the Company and third
parties expressly referenced in the Prospectus are legal, valid and binding obligations of the
Company enforceable in accordance with their respective terms, except to the extent that
(i) enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors’ rights generally and by general equitable principles and (ii) the
indemnification provisions of certain agreements may be limited by federal or state securities laws
or public policy considerations in respect thereof.

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

(r) Consents and Permits. The Company and its Subsidiaries (i) have made all filings,
applications and submissions required by, possess and are operating in compliance with, all
approvals, licenses, certificates, certifications, clearances, consents, grants, exemptions, marks,
notifications, orders, permits and other authorizations issued by, the appropriate federal, state
or foreign governmental or regulatory authorities (including, without limitation, the United States
Food and Drug Administration (the “FDA”), or any other foreign, federal, state, provincial,
court or local government or regulatory authorities including self-regulatory organizations engaged
in the regulation of clinical trials, medical devices, biologics or biohazardous substances or
materials) necessary for the ownership or lease of their respective properties or to conduct their
businesses as currently conducted as described in the Registration Statement and the Prospectus
(collectively, “Permits”), except for such Permits the failure of which to possess, obtain
or make the same would not reasonably be expected to have a Material Adverse Effect; (ii) are in
compliance with the terms and conditions of all such Permits, except where the failure to be in
compliance would not reasonably be expected to have a Material Adverse Effect; all of the Permits
are valid and in full force and effect, except where any invalidity, individually or in the
aggregate, would not be reasonably expected to have a Material Adverse Effect; (iii) have not
received any written notice of proceedings relating to the violation, limitation, revocation,
cancellation, suspension, modification or non-renewal of any such Permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect; and (iv) have no reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course.

(s) Regulatory Compliance. Except as described in the Registration Statement and the
Prospectus, and except as would not, individually or in the aggregate, have or may reasonably be
expected to have a Material Adverse Effect: (i) neither the Company nor any of its Subsidiaries
has received any written notice of adverse filing, warning letter, untitled letter or other
correspondence or notice from the FDA or other relevant regulatory authorities, or any other court
or arbitrator or federal, state, local or foreign governmental or regulatory authority, alleging or
asserting material noncompliance with the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 301 et
seq.) (the “FFDCA”), or similar state, federal or foreign law or regulation; (ii) the
Company and each Subsidiary is and has been in compliance in all material respects with applicable
health care laws, including without limitation, the FFDCA and the federal Anti-Kickback Statute (42
U.S.C. § 1320a-7b(b)), the Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a), the U.S. Civil
False Claims Act (31 U.S.C. Section 3729 et seq.), the criminal False Statements Law (42 U.S.C.
Section 1320a-7b(a), all applicable federal, state, local and all foreign civil and 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,
the statutes, regulations and directives of applicable government funded or sponsored healthcare
programs, and the regulations promulgated pursuant to such statutes, the Standards for Privacy of
Individually Identifiable Health Information (the “Privacy Rule”), the Security Standards,
and the Standards for Electronic Transactions and Code Sets promulgated under HIPAA, the Health
Information Technology for Economic and Clinical Health Act (42 U.S.C. Section 17921 et seq.), and
the regulations promulgated thereunder and any state or non-U.S. counterpart thereof or other law
or regulation the purpose of which is to protect the privacy of individuals or prescribers, the
Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education
Reconciliation Act of 2010, the regulations promulgated thereunder; the U.S. Controlled Substances
Act (21 U.S.C. Section 801 et seq.), licensure, quality, safety and accreditation requirements
under applicable federal, state, local or foreign laws or regulatory bodies; and all other local,
state, federal, national, supranational and foreign laws, relating to the regulation of the Company
and the Subsidiaries (collectively, “Health Care Laws”); (iii) the Company and each
Subsidiary possesses all licenses, certificates, approvals, clearances, authorizations, permits and
supplements or amendments thereto required by any such Health Care Laws and/or to carry on its
businesses as presently conducted or proposed to be conducted (“Authorizations”) and such
Authorizations are valid and in full force and effect and neither the Company nor any Subsidiary is
in violation of any material term of any such Authorizations; (iv) neither the Company nor any
Subsidiary received written notice of any ongoing claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from any U.S. or non-U.S. federal,
national, state, local or other governmental or regulatory authority, governmental or regulatory
agency or body, court, arbitrator or self-regulatory organization (each, a “Governmental
Authority”) or third party alleging that any product operation or activity is in violation of
any Health Care Laws or Authorizations or has any knowledge that any such Governmental Authority or
third party is considering any such claim, litigation, arbitration, action, suit, investigation or
proceeding; (v) neither the Company nor any Subsidiary has received written notice that any
Governmental Authority has taken, is taking or intends to take action to limit, suspend, modify or
revoke any Authorizations or has any knowledge that any such Governmental Authority is considering
such action; (vi) neither the Company nor any of its Subsidiaries has received any notice from any
court or arbitrator or federal, state, local or foreign governmental or regulatory authority, or
other third party, alleging or asserting material noncompliance with any Health Care Laws; (vii)
the Company and each Subsidiary has filed, obtained, maintained or submitted all reports,
documents, forms, notices, applications, records, claims, submissions and supplements or amendments
as required by any Health Care Laws or Authorizations and that all such reports, documents, forms,
notices, applications, records, claims, submissions and supplements or amendments were complete,
correct and not misleading on the date filed (or were corrected or supplemented by a subsequent
submission); and (viii) neither the Company nor any Subsidiary has, either voluntarily or
involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any
recall, market withdrawal or replacement, safety alert, post sale warning, “dear doctor” letter, or
other notice or action relating to the alleged lack of safety or efficacy of any product or any
alleged product defect or violation and, to the Company’s knowledge, no third party has initiated
or conducted any such notice or action.

(t) Intellectual Property. Except as set forth in the Registration Statement and the
Prospectus, the Company and its Subsidiaries own, possess, license or have other rights to use all
foreign and domestic patents, patent applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, Internet
domain names, know-how and other intellectual property (collectively, the “Intellectual
Property”), necessary for the conduct of their respective businesses as now conducted except to
the extent that the failure to own, possess, license or otherwise hold adequate rights to use such
Intellectual Property would not, individually or in the aggregate, have a Material Adverse Effect.
Except as disclosed in the Registration Statement and the Prospectus, (i) there are no rights of
third parties to any such Intellectual Property owned by the Company and its Subsidiaries; (ii) to
the Company’s knowledge, there is no infringement by third parties of any such Intellectual
Property; (iii) there is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others challenging the Company’s and its Subsidiaries’ rights in or to any
such Intellectual Property, and the Company is unaware of any facts which could form a reasonable
basis for any such action, suit, proceeding or claim; (iv) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope
of any such Intellectual Property; (v) there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others that the Company and its Subsidiaries
infringe or otherwise violate any patent, trademark, copyright, trade secret or other proprietary
rights of others; (vi) to the Company’s knowledge, there is no third-party U.S. patent or published
U.S. patent application which contains claims for which an Interference Proceeding (as defined in
35 U.S.C. § 135) has been commenced against any patent or patent application described in the
Prospectus as being owned by or licensed to the Company; and (vii) the Company and its Subsidiaries
have complied with the terms of each agreement pursuant to which Intellectual Property has been
licensed to the Company or such Subsidiary, and all such agreements are in full force and effect,
except, in the case of this clause (vii), for any failure to comply as would not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(u) Clinical Studies. To the Company’s knowledge, the preclinical studies and
clinical studies conducted by the Company that are described in the Prospectus were, and, if still
pending, are being, conducted in accordance with the experimental protocols, procedures and
controls pursuant to, where applicable, accepted professional and scientific standards for products
or product candidates comparable to those being developed by the Company, except for any
noncompliance that would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; the descriptions of such studies and tests, and the results thereof,
contained in the Registration Statement and the Prospectus are accurate and complete in all
material respects; the Company is not aware of any tests or studies not described in the
Registration Statement and the Prospectus, the results of which reasonably call into question the
results of the tests, studies and trials described in the Prospectus; and the Company has not
received any written notice or correspondence from the FDA or any foreign, state or local
governmental body exercising comparable authority or any institutional review board or comparable
authority requiring the termination, suspension, clinical hold or material modification of any
tests or studies. To the knowledge of the Company, there have been no material adverse episodes or
complications resulting from any tests or studies conducted by or on behalf of the Company or any
Subsidiary.

(v) Health Care Laws. 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 violation of any Health Care Laws nor, to the
Company’s knowledge, is any such claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other action threatened. The Company and the Subsidiaries have
filed, maintained or submitted all material reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments as required by any Health Care Laws, and
all such reports, documents, forms, notices, applications, records, claims, submissions and
supplements or amendments were complete and accurate on the date filed in all material respects (or
were corrected or supplemented by a subsequent submission). Neither the Company nor any Subsidiary
is a party to any corporate integrity agreements, monitoring agreements, consent decrees,
settlement orders, or similar agreements with or imposed by any governmental or regulatory
authority. Additionally, neither the Company nor any Subsidiary nor any of their respective
employees, officers or directors or, to the knowledge of the Company, agents or subcontractors 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.

(w) Market Capitalization. At the time the Registration Statement was originally
declared effective, and thereafter, at the time the Company’s then most recent Annual Report on
Form 10-K is filed with the Commission, the Company will meet the then applicable requirements for
the use of Form S-3 under the Securities Act, including but not limited to Instruction I.B.6 of
Form S-3. The aggregate market value of the outstanding voting and non-voting common equity (as
defined in Securities Act Rule 405) of the Company held by persons other than affiliates of the
Company (defined as those that directly, or indirectly through one or more intermediaries, control,
or are controlled by, or are under common control with, the Company)  (the “Non-Affiliate
Shares”), was more than $75 million  (calculated by multiplying (x) the highest price at which
the common equity of the Company was last sold on the Exchange within 60 days of the date of filing
of the Registration Statement, times (y) the number of Non-Affiliate Shares). The Company is not a
shell company (as defined in Rule 405 under the Securities Act) and has not been a shell company
for at least 12 calendar months previously and if it has been a shell company at any time
previously, has filed current Form 10 information (as defined in Instruction I.B.6 of Form S-3)
with the Commission at least 12 calendar months previously reflecting its status as an entity that
is not a shell company.

(x) No Material Defaults. Neither the Company nor any of the Subsidiaries has
defaulted on any installment on indebtedness for borrowed money or on any rental on one or more
long-term leases, which defaults, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect. The Company has not filed a report pursuant to Section 13(a) or
15(d) of the Exchange Act since the filing of its last Annual Report on Form 10-K, indicating that
it (i) has failed to pay any dividend or sinking fund installment on preferred stock or (ii) has
defaulted on any installment on indebtedness for borrowed money or on any rental on one or more
long-term leases, which defaults, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect.

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

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

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

(bb) Taxes. The Company and each of its Subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed, or have received or requested
permitted extensions thereof, and paid all taxes shown thereon through the date hereof, to the
extent that such taxes have become due and are not being contested in good faith, except where the
failure to so file or pay would not have a Material Adverse Effect. There is no pending dispute
with any taxing authority relating to any of such returns, and the Company has not received written
notice of any proposed liability for any material tax to be imposed upon the properties or assets
of the Company for which there is not an adequate reserve reflected in accordance with GAAP in the
Company’s financial statements included in the Registration Statement and the Prospectus. Except as
otherwise disclosed in or contemplated by the Registration Statement or the Prospectus, no tax
deficiency has been determined adversely to the Company or any of its Subsidiaries which has had,
or would reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect. The Company has no knowledge of any federal, state or other governmental tax deficiency,
penalty or assessment which has been or might be asserted or threatened against it which would have
a Material Adverse Effect.

(cc) Title to Real and Personal Property. The Company and its Subsidiaries have good
and marketable title in fee simple to all items of real property owned by them, good and valid
title to all personal property described in the Registration Statement or Prospectus as being owned
by them that are material to the businesses of the Company or such Subsidiary, in each case free
and clear of all liens, encumbrances and claims, except those matters that (i) do not materially
interfere with the use made of such property by the Company and any of its Subsidiaries or (ii)
would not reasonably be expected, individually or in the aggregate, to have a Material Adverse
Effect. Any real or personal property described in the Registration Statement or Prospectus as
being leased by the Company and any of its Subsidiaries is held by them under valid, existing and
enforceable leases, except those that (A) do not materially interfere with the use made of such
property by the Company or any of its Subsidiaries or (B) would not be reasonably expected,
individually or in the aggregate, to have a Material Adverse Effect. Each of the properties of the
Company and its Subsidiaries complies with all applicable codes, laws and regulations (including,
without limitation, building and zoning codes, laws and regulations and laws relating to access to
such properties), except if and to the extent disclosed in the Registration Statement or Prospectus
or except for such failures to comply that would not, individually or in the aggregate, reasonably
be expected to interfere in any material respect with the use made and proposed to be made of such
property by the Company and its Subsidiaries or otherwise have a Material Adverse Effect. None of
the Company or its subsidiaries has received from any governmental or regulatory authorities any
notice of any condemnation of, or zoning change affecting, the properties of the Company and its
Subsidiaries, and the Company knows of no such condemnation or zoning change which is threatened,
except for such that would not reasonably be expected to interfere in any material respect with the
use made and proposed to be made of such property by the Company and its Subsidiaries or otherwise
have a Material Adverse Effect, individually or in the aggregate.

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

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

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

(gg) Finder’s Fees. Neither the Company nor any of the Subsidiaries has incurred any
liability for any finder’s fees, brokerage commissions or similar payments in connection with the
transactions herein contemplated, except as may otherwise exist with respect to Agent pursuant to
this Agreement.

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

(ii) Investment Company Act. Neither the Company nor any of the Subsidiaries is or,
after giving effect to the offering and sale of the Placement Shares, will be an “investment
company” as defined in the Investment Company Act of 1940, as amended (the “Investment Company
Act”).

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

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

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

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

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

(oo) Agent Purchases. The Company acknowledges and agrees that the Agent has informed
the Company that the Agent may, to the extent permitted under the Securities Act and the Exchange
Act, purchase and sell Common Stock for its own account while this Agreement is in effect,
provided, that (i) no such purchase or sales shall take place while a Placement Notice is in effect
(except to the extent each Agent may engage in sales of Placement Shares purchased or deemed
purchased from the Company as a “riskless principal” or in a similar capacity) and (ii) the Company
shall not be deemed to have authorized or consented to any such purchases or sales by the Agent.

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

(qq) Insurance. The Company and each of its Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as the Company and each of its Subsidiaries
reasonably believe are adequate for the conduct of their properties and as is customary for
companies engaged in similar businesses in similar industries. The Company has not received
written notice from any insurer or agent of such insurer that capital improvements or other
expenditures are required or necessary to be made in order to continue such insurance, and the
Company does not have 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 at reasonable cost from
similar insurers as may be necessary to continue its business. All such insurance is outstanding
and in force on the date hereof.

(rr) Relationships. No relationship, direct or indirect, exists between or among the
Company or an affiliate, on the one hand, and the directors, officers, or to the knowledge of the
Company, stockholders, customers or suppliers of the Company, on the other hand, which is required
to be described in the Registration Statement and the Prospectus, or by the rules of FINRA, and
which is not so described. There are no outstanding loans, advances or guarantees of indebtedness
by the Company to or for the benefit of any of the executive officers or directors of the Company
in violation of applicable laws, including Section 402 of the Sarbanes-Oxley Act.

(ss) No Improper Practices. (i) Neither the Company nor, to the Company’s knowledge,
the Subsidiaries, nor to the Company’s knowledge, any of their respective executive officers has,
in the past five years, made any unlawful contributions to any candidate for any political office
(or failed fully to disclose any contribution in violation of law) or made any contribution or
other payment to any official of, or candidate for, any federal, state, municipal, or foreign
office or other person charged with similar public or quasi-public duty in violation of any law or
of the character required to be disclosed in the Prospectus; (ii) no relationship, direct or
indirect, exists between or among the Company or, to the Company’s knowledge, any Subsidiary or any
affiliate of any of them, on the one hand, and the directors, officers and stockholders of the
Company or, to the Company’s knowledge, any Subsidiary, on the other hand, that is required by the
Securities Act to be described in the Registration Statement and the Prospectus that is not so
described; (iii) no relationship, direct or indirect, exists between or among the Company or any
Subsidiary or any affiliate of them, on the one hand, and the directors, officers, or stockholders
of the Company or, to the Company’s knowledge, any Subsidiary, on the other hand, that is required
by the rules of FINRA to be described in the Registration Statement and the Prospectus that is not
so described; (iv) except as described in the Registration Statement and the Prospectus, there are
no material outstanding loans or advances or material guarantees of indebtedness by the Company or,
to the Company’s knowledge, any Subsidiary to or for the benefit of any of their respective
officers or directors or any of the members of the families of any of them; and (v) the Company has
not offered, or caused any placement agent to offer, Common Stock to any person with the intent to
influence unlawfully (A) a customer or supplier of the Company or any Subsidiary to alter the
customer’s or supplier’s level or type of business with the Company or any Subsidiary or (B) a
trade journalist or publication to write or publish favorable information about the Company or any
Subsidiary or any of their respective products or services, and, (vi) neither the Company nor any
Subsidiary nor, to the Company’s knowledge, any employee or agent of the Company or any Subsidiary
has made any payment of funds of the Company or any Subsidiary or received or retained any funds in
violation of any law, rule or regulation (including, without limitation, the Foreign Corrupt
Practices Act of 1977), which payment, receipt or retention of funds is of a character required to
be disclosed in the Registration Statement or the Prospectus.

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

(uu)  Sanctions. (i) The Company represents that, neither the Company nor any of its
Subsidiaries (collectively, the “Entity”) or any director, officer, employee, agent,
affiliate or representative of the Entity, is a government, individual, or entity (in this
paragraph (vv), “Person”) that is, or is owned or controlled by a Person that is:

(A)  the subject of any sanctions administered or enforced by the U.S.
Department of Treasury’s Office of Foreign Assets Control, the United Nations
Security Council, the European Union, Her Majesty’s Treasury, or other relevant
sanctions authority (collectively, “Sanctions”), nor

(B)  located, organized or resident in a country or territory that is the
subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran,
North Korea, Sudan and Syria).

(ii)  The Entity represents and covenants that it will not, directly or indirectly, use the
proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other Person:

(A)  to fund or facilitate any activities or business of or with any Person or
in any country or territory that, at the time of such funding or facilitation, is
the subject of Sanctions; or

(B)  in any other manner that will result in a violation of Sanctions by any
Person (including any Person participating in the offering, whether as underwriter,
advisor, investor or otherwise).

(iii)  The Entity represents and covenants that, except as detailed in the Registration
Statement and the Prospectus, for the past 5 years, it has not knowingly engaged in, is not now
knowingly engaged in, and will not engage in, any dealings or transactions with any Person, or in
any country or territory, that at the time of the dealing or transaction is or was the subject of
Sanctions.

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

(ww) Compliance with Laws. The Company has not been advised, and has no reason to
believe, that it and each of its subsidiaries are not conducting business in compliance with all
applicable laws, rules and regulations of the jurisdictions in which it is conducting business,
except where failure to be so in compliance would not result in a Material Adverse Effect. Each of
the Company and its Subsidiaries: (A) is and at all times has been in compliance with all statutes,
rules, or regulations applicable to the ownership, testing, development, manufacture, packaging,
processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage,
import, export or disposal of any product manufactured or distributed by the Company or its
Subsidiaries (“Applicable Laws”), except as could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect; (B) has not received any FDA Form
483, notice of adverse finding, warning letter, untitled letter or other correspondence or notice
from the FDA or any other governmental authority alleging or asserting noncompliance with any
Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and
supplements or amendments thereto required by any such Applicable Laws (“Authorizations”);
(C) possesses all material Authorizations and such Authorizations are valid and in full force and
effect and are not in material violation of any term of any such Authorizations; (D) has not
received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation,
arbitration or other action from any governmental authority or third party alleging that any
product operation or activity is in violation of any Applicable Laws or Authorizations and has no
knowledge that any such governmental authority or third party is considering any such claim,
litigation, arbitration, action, suit, investigation or proceeding; (E) has not received notice
that any governmental authority has taken, is taking or intends to take action to limit, suspend,
modify or revoke any Authorizations and has no knowledge that any such governmental authority is
considering such action; (F) has filed, obtained, maintained or submitted all material reports,
documents, forms, notices, applications, records, claims, submissions and supplements or amendments
as required by any Applicable Laws or Authorizations and that all such reports, documents, forms,
notices, applications, records, claims, submissions and supplements or amendments were complete and
correct on the date filed (or were corrected or supplemented by a subsequent submission); and (G)
has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be
initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, post
sale warning, “dear doctor” letter, or other notice or action relating to the alleged lack of
safety or efficacy of any product or any alleged product defect or violation and, to the Company’s
knowledge, no third party has initiated, conducted or intends to initiate any such notice or
action.

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

(xx) Merger. The Company was not, as of the date of the Agreement and Plan of Merger,
dated as of August 13, 2013, as amended (the “Merger Agreement”), by and among the Company
(formerly known as Safestitch Medical, Inc.), Tweety Acquisition Corp., a Delaware corporation and
a direct and wholly owned subsidiary of the Company, and TransEnterix Surgical, Inc. (formerly
known as TransEnterix, Inc.) (“TransEnterix Surgical”), and is not, as of the date hereof,
in default or breach, and no event has occurred that, with notice or lapse or time or both, would
constitute such default or breach, of the due performance or observance of any term, agreement,
covenant or condition contained in the Merger Agreement, in each case except to the extent that
such default or breach would not reasonably be expected to result in a Material Adverse Effect.
TransEnterix Surgical was not, as of the date of the Merger Agreement, and is not, as of the date
hereof, in default or breach, and no event has occurred that, with notice or lapse or time or both,
would constitute such default or breach, of the due performance or observance of any term,
agreement, covenant or condition contained in the Merger Agreement, in each case except to the
extent that such default or breach would not reasonably be expected to result in a Material Adverse
Effect.

The Merger, as defined in the Merger Agreement, was consummated in accordance with the terms
of the Merger Agreement and did not result in any violation of any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its subsidiaries or of any court,
regulatory body, administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or any of its or their properties, except
to the extent that such default, breach or violation would not reasonably be expected to result in
a Material Adverse Effect.

The shares of capital stock issued by the Company in the Merger (i) have been duly authorized,
were validly issued and are fully paid and nonassessable, and (ii) were issued in compliance with
all applicable state and federal laws concerning the issuance of securities.

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

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

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

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

(d) Listing of Placement Shares. During any period in which the Prospectus relating
to the Placement Shares is required to be delivered by the Agent under the Securities Act with
respect to the offer and sale of the Placement Shares, the Company will use its reasonable best
efforts to cause the Placement Shares to be listed on the Exchange.

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

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

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

(h) Notice of Other Sales. Without the prior written consent of Agent, the Company
will not, directly or indirectly, offer to sell, sell, contract to sell, grant any option to sell
or otherwise dispose of any Common Stock (other than the Placement Shares offered pursuant to this
Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights
to purchase or acquire, Common Stock during the period beginning on the fifth (5th) Trading Day
immediately prior to the date on which any Placement Notice is delivered to Agent hereunder and
ending on the fifth (5th) Trading Day immediately following the final Settlement Date with respect
to Placement Shares sold pursuant to such Placement Notice (or, if the Placement Notice has been
terminated or suspended prior to the sale of all Placement Shares covered by a Placement Notice,
the date of such suspension or termination); and will not directly or indirectly in any other
“at-the-market” or continuous equity transaction offer to sell, sell, contract to sell, grant any
option to sell or otherwise dispose of any Common Stock (other than the Placement Shares offered
pursuant to this Agreement) or securities convertible into or exchangeable for Common Stock,
warrants or any rights to purchase or acquire, Common Stock prior to the later of the termination
of this Agreement and the thirtieth (30th) day immediately following the final Settlement Date with
respect to Placement Shares sold pursuant to such Placement Notice; provided, however, that such
restrictions will not be required in connection with the Company’s issuance or sale of (i) Common
Stock, options to purchase Common Stock or Common Stock issuable upon the exercise of options,
pursuant to any employee or director stock option or benefits plan, stock ownership plan or
dividend reinvestment plan (but not Common Stock subject to a waiver to exceed plan limits in its
dividend reinvestment plan) of the Company whether now in effect or hereafter implemented,
(ii) Common Stock issuable upon conversion of securities or the exercise of warrants, options or
other rights in effect or outstanding, and disclosed in filings by the Company available on EDGAR
or otherwise in writing to the Agent and (iii) Common Stock or securities convertible into or
exchangeable for shares of Common Stock as consideration for mergers, acquisitions, other business
combinations or strategic alliances occurring after the date of this Agreement which are not issued
for capital raising purposes.

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

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

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

(l) Representation Dates; Certificate. (1) On or prior to the date of the first
Placement Notice and (2) following the delivery of the first Placement Notice, each time the
Company:

(i) files the Prospectus relating to the Placement Shares or amends or supplements (other
than a prospectus supplement relating solely to an offering of securities other than the
Placement Shares) the Registration Statement or the Prospectus relating to the Placement
Shares by means of a post-effective amendment, sticker, or supplement but not by means of
incorporation of documents by reference into the Registration Statement or the Prospectus
relating to the Placement Shares;

(ii) files an annual report on Form 10-K under the Exchange Act (including any Form 10-K/A
containing amended financial information or a material amendment to the previously filed
Form 10-K);

(iii) files its quarterly reports on Form 10-Q under the Exchange Act; or

(iv) files a current report on Form 8-K containing amended financial information (other than
information “furnished” pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure
pursuant to Item 8.01 of Form 8-K relating to the reclassification of certain properties as
discontinued operations in accordance with Statement of Financial Accounting Standards No.
144) under the Exchange Act (each date of filing of one or more of the documents referred to
in clauses (i) through (iv) shall be a “Representation Date”);

the Company shall furnish the Agent (but in the case of clause (iv) above only if the Agent
reasonably determines that the information contained in such Form 8-K is material) with a
certificate dated the Representation Date, in the form attached hereto as Exhibit 7(l). The
requirement to provide a certificate under this Section 7(l) shall be waived for any Representation
Date occurring at a time a Suspension is in effect or prior to the filing of the first Placement
Notice, which waiver shall continue until the earlier to occur of the date the Company delivers
instructions for the sale of Placement Shares hereunder (which for such calendar quarter shall be
considered a Representation Date) and the next occurring Representation Date. Notwithstanding the
foregoing, if the Company subsequently decides to sell Placement Shares following a Representation
Date when a Suspension was in effect and did not provide the Agent with a certificate under this
Section 7(l), then before the Company delivers the instructions for the sale of Placement Shares or
the Agent sells any Placement Shares pursuant to such instructions, the Company shall provide the
Agent with a certificate in conformity with this Section 7(l) dated as of the date that the
instructions for the sale of Placement Shares are issued.

(m) Legal Opinions. (1) On or prior to the date of the first Placement Notice and
(2) within five (5) Trading Days following each Representation Date with respect to which the
Company is obligated to deliver a certificate in the form attached hereto as Exhibit 7(l) for which
no waiver is applicable and excluding the date of this Agreement, the Company shall cause to be
furnished to the Agent (A) a written opinion and negative assurances letter of Ballard Spahr LLP
(“Company Counsel”), or other counsel satisfactory to the Agent, (B) a written opinion of
Kathleen Frost, Esq. (“IP Counsel”), and (C) a written opinion of Hogan Lovells
(“Regulatory Counsel”) in each case in form and substance satisfactory to Agent and its
counsel, substantially similar to the forms attached hereto as Exhibits 7(m)-1, 7(m)-2 and 7(m)-3,
respectively, modified, as necessary, to relate to the Registration Statement and the Prospectus as
then amended or supplemented; provided, however, the Company shall be required to furnish to Agent
no more than one opinion from each of Company Counsel, IP Counsel and Regulatory Counsel hereunder
per calendar quarter; provided, further, that in lieu of such opinions for subsequent periodic
filings under the Exchange Act, counsel may furnish the Agent with a letter (a “Reliance
Letter”) to the effect that the Agent may rely on a prior opinion delivered under this Section
7(m) to the same extent as if it were dated the date of such letter (except that statements in such
prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended
or supplemented as of the date of the Reliance Letter).

(n) Comfort Letter. (1) On or prior to the date of the first Placement Notice and (2)
within five (5) Trading Days of each Representation Date with respect to which the Company is
obligated to deliver a certificate in the form attached hereto as Exhibit 7(l) for which no waiver
is applicable and excluding the date of this Agreement, the Company shall cause the Accountant to
furnish the Agent letters (the “Comfort Letters”), dated the date the Comfort Letter is
delivered, which shall meet the requirements set forth in this Section 7(n); provided, that if
requested by the Agent, the Company shall cause a Comfort Letter to be furnished to the Agent
within ten (10) Trading Days of the date of occurrence of any material transaction or event,
including the restatement of the Company’s financial statements. The Comfort Letter from the
Accountant shall be in a form and substance satisfactory to the Agent, (i) confirming that they are
an independent registered public accounting firm within the meaning of the Securities Act and the
PCAOB, (ii) stating, as of such date, the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by accountants’ “comfort letters” to
underwriters in connection with registered public offerings (the first such letter, the
“Initial Comfort Letter”) and (iii) updating the Initial Comfort Letter with any
information that would have been included in the Initial Comfort Letter had it been given on such
date and modified as necessary to relate to the Registration Statement and the Prospectus, as
amended and supplemented to the date of such letter.

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

(p) Investment Company Act. The Company is not, and will conduct its affairs in such
a manner so as to reasonably ensure that neither it nor any of its Subsidiaries will be or become,
at any time prior to the termination of this Agreement, required to register as an “investment
company,” as such term is defined in the Investment Company Act.

(q) No Offer to Sell. Neither the Agent nor the Company (including its agents and
representatives, other than the Agent in its capacity as such) will make, use, prepare, authorize,
approve or refer to any written communication (as defined in Rule 405 under the Securities Act),
required to be filed with the Commission, that constitutes an offer to sell or solicitation of an
offer to buy Placement Shares hereunder.

(r) Blue Sky and Other Qualifications. The Company will use its commercially
reasonable efforts, in cooperation with the Agent, to qualify the Placement Shares for offering and
sale, or to obtain an exemption for the Placement Shares to be offered and sold, under the
applicable securities laws of such states and other jurisdictions (domestic or foreign) as the
Agent may designate and to maintain such qualifications and exemptions in effect for so long as
required for the distribution of the Placement Shares (but in no event for less than one year from
the date of this Agreement); provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Placement Shares have been so qualified or exempt, the Company will file
such statements and reports as may be required by the laws of such jurisdiction to continue such
qualification or exemption, as the case may be, in effect for so long as required for the
distribution of the Placement Shares (but in no event for less than one year from the date of this
Agreement).

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

(t) Secretary’s Certificate; Further Documentation. On or prior to the date of the
first Placement Notice, the Company shall deliver to the Agent a certificate of the Secretary of
the Company and attested to by an executive officer of the Company, dated as of such date,
certifying as to (i) the Certificate of Incorporation of the Company, (ii) the By-laws of the
Company, (iii) the resolutions of the Board of Directors of the Company, or a duly authorized
committee thereof, authorizing the execution, delivery and performance of this Agreement and the
issuance of the Placement Shares and (iv) the incumbency of the officers duly authorized to execute
this Agreement and the other documents contemplated by this Agreement. Within five (5) Trading
Days of each Representation Date, the Company shall have furnished to the Agent such further
information, certificates and documents as the Agent may reasonably request.

8. Payment of Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation and filing of the
Registration Statement, including any fees required by the Commission, and the printing or
electronic delivery of the Prospectus as originally filed and of each amendment and supplement
thereto, in such number as the Agent shall deem necessary, (ii) the printing and delivery to the
Agent of this Agreement and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Placement Shares, (iii) the preparation,
issuance and delivery of the certificates, if any, for the Placement Shares to the Agent, including
any stock or other transfer taxes and any capital duties, stamp duties or other duties or taxes
payable upon the sale, issuance or delivery of the Placement Shares to the Agent, (iv) the fees and
disbursements of the counsel, accountants and other advisors to the Company, (v) the fees and
disbursements of the counsel to the Agent, payable upon the execution of this Agreement, in an
amount not to exceed $50,000; (vi) the qualification or exemption of the Placement Shares under
state securities laws in accordance with the provisions of Section 7(r) hereof, including filing
fees, (vii) the printing and delivery to the Agent of copies of the Prospectus and any amendments
or supplements thereto in such number as the Agent shall deem necessary, (viii) the preparation,
printing and delivery to the Agent of copies of the blue sky survey, (ix) the fees and expenses of
the transfer agent and registrar for the Common Stock, (x) the filing and other fees incident to
any review by FINRA of the terms of the sale of the Placement Shares, and (x) the fees and expenses
incurred in connection with the listing of the Placement Shares on the Exchange.

9. Representations and Warranties of Agent. Agent represents and warrants that it is
duly registered as a broker-dealer under FINRA, the Exchange Act and the applicable statutes and
regulations of each state in which the Placement Shares will be offered and sold, except such
states in which Agent is exempt from registration or such registration is not otherwise required.
Agent shall continue, for the term of this Agreement, to be duly registered as a broker-dealer
under FINRA, the Exchange Act and the applicable statutes and regulations of each state in which
the Placement Shares will be offered and sold, except such states in which Agent is exempt from
registration or such registration is not otherwise required, during the term of this Agreement.
Agent will comply with all applicable law and regulations in connection with the Placement Shares,
including but not limited to Regulation M.

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

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

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

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

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

(e) Legal Opinions. The Agent shall have received the opinions of Company Counsel, IP
Counsel and Regulatory Counsel required to be delivered pursuant to Section 7(m) on or before the
date on which such delivery of such opinion is required pursuant to Section 7(m).

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

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

(h) No Suspension. Trading in the Common Stock shall not have been suspended on the
Exchange and the Common Stock shall not have been delisted from the Exchange.

(i) Other Materials. On each date on which the Company is required to deliver a
certificate pursuant to Section 7(l), the Company shall have furnished to the Agent such
appropriate further information, opinions, certificates, letters and other documents as the Agent
may reasonably request. All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof.

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

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

(l) FINRA. FINRA shall have raised no objection to the terms of this offering and the
amount of compensation allowable or payable to the Agent as described in the Prospectus.

(m) No Termination Event. There shall not have occurred any event that would permit
the Agent to terminate this Agreement pursuant to Section 13(a).

11. Indemnification and Contribution.

(a) Company Indemnification. The Company agrees to indemnify and hold harmless the
Agent, its partners, members, directors, officers, employees and agents and each person, if any,
who controls the Agent within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act as follows:

(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred,
joint or several, arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading, or arising out of any untrue statement or alleged untrue
statement of a material fact included in the Prospectus (or any amendment or supplement thereto),
or the omission or alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred,
joint or several, to the extent of the aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 11(d) below) any such settlement is
effected with the written consent of the Company, which consent shall not unreasonably be delayed
or withheld; and

against any and all expense whatsoever, as incurred (including the fees and disbursements of
counsel), reasonably incurred in investigating, preparing or defending against any litigation, or
any investigation or proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under (i) or (ii) above,
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made solely in reliance upon and in conformity with written
information furnished to the Company by the Agent expressly for use in the Registration Statement
(or any amendment thereto) or the Prospectus (or any amendment or supplement thereto).

(b) Agent Indemnification. Agent agrees to indemnify and hold harmless the Company
and its directors and each officer and director of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in Section 10(a), as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in
the Registration Statement (or any amendments thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with information furnished to the Company in
writing by the Agent expressly for use therein. The Company hereby acknowledges that the only
information that the Agent has furnished to the Company expressly for use in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) are the statements set forth
in the sixth paragraph under the caption “Plan of Distribution” in the Prospectus.

(c) Procedure. Any party that proposes to assert the right to be indemnified under
this Section 11 will, promptly after receipt of notice of commencement of any action against such
party in respect of which a claim is to be made against an indemnifying party or parties under this
Section 11, notify each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party will not relieve
the indemnifying party from (i) any liability that it might have to any indemnified party otherwise
than under this Section 11 and (ii) any liability that it may have to any indemnified party under
the foregoing provision of this Section 11 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the indemnifying party. If any such
action is brought against any indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other indemnifying party
similarly notified, to assume the defense of the action, with counsel reasonably satisfactory to
the indemnified party, and after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in writing by the
indemnifying party, (2) the indemnified party has reasonably concluded (based on advice of counsel)
that there may be legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (3) a conflict or potential
conflict exists (based on advice of counsel to the indemnified party) between the indemnified party
and the indemnifying party (in which case the indemnifying party will not have the right to direct
the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has
not in fact employed counsel to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the indemnifying party or
parties. It is understood that the indemnifying party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such fees,
disbursements and other charges will be reimbursed by the indemnifying party promptly as they are
incurred. An indemnifying party will not, in any event, be liable for any settlement of any action
or claim effected without its written consent if such consent is required by this Section 11(c).
No indemnifying party shall, without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 11 (whether or not any indemnified
party is a party thereto), unless such settlement, compromise or consent (1) includes an
unconditional release of each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (2) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified party.

(d) Settlement Without Consent if Failure to Reimburse. If an indemnified party shall
have requested an indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of
the nature contemplated by Section 11(a)(ii) effected without its written consent if (1) such
settlement is entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (2) such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and (3) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such request prior to the
date of such settlement.

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

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

13. Termination.

(a) The Agent may terminate this Agreement, by notice to the Company, as hereinafter specified
at any time (1) if there has been, since the time of execution of this Agreement or since the date
as of which information is given in the Prospectus, any change, or any development or event
involving a prospective change, in the condition, financial or otherwise, or in the business,
properties, earnings, results of operations or prospects of the Company and its Subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of business, which
individually or in the aggregate, in the sole judgment of the Agent is material and adverse and
makes it impractical or inadvisable to market the Placement Shares or to enforce contracts for the
sale of the Placement Shares, (2) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the judgment of the Agent,
impracticable or inadvisable to market the Placement Shares or to enforce contracts for the sale of
the Placement Shares, (3) if trading in the Common Stock has been suspended or limited by the
Commission or the Exchange, or if trading generally on the Exchange has been suspended or limited,
or minimum prices for trading have been fixed on the Exchange, (4) if any suspension of trading of
any securities of the Company on any exchange or in the over-the-counter market shall have occurred
and be continuing, (5) if a major disruption of securities settlements or clearance services in the
United States shall have occurred and be continuing, or (6) if a banking moratorium has been
declared by either U.S. Federal or New York authorities. Any such termination shall be without
liability of any party to any other party except that the provisions of Section 8 (Payment of
Expenses), Section 11 (Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and Time; Waiver of Jury Trial) and
Section 19 (Consent to Jurisdiction) hereof shall remain in full force and effect notwithstanding
such termination. If the Agent elects to terminate this Agreement as provided in this Section
13(a), the Agent shall provide the required notice as specified in Section 14 (Notices).

(b) The Company shall have the right, by giving ten (10) days notice as hereinafter specified
to terminate this Agreement in its sole discretion at any time after the date of this Agreement.
Any such termination shall be without liability of any party to any other party except that the
provisions of Section 8, Section 11, Section 12, Section 18 and Section 19 hereof shall remain in
full force and effect notwithstanding such termination.

(c) The Agent shall have the right, by giving ten (10) days notice as hereinafter specified to
terminate this Agreement in its sole discretion at any time after the date of this Agreement. Any
such termination shall be without liability of any party to any other party except that the
provisions of Section 8, Section 11, Section 12, Section 18 and Section 19 hereof shall remain in
full force and effect notwithstanding such termination.

(d) Unless earlier terminated pursuant to this Section 13, this Agreement shall automatically
terminate upon the issuance and sale of all of the Placement Shares through the Agent on the terms
and subject to the conditions set forth herein; provided that the provisions of Section 8, Section
11, Section 12, Section 18 and Section 19 hereof shall remain in full force and effect
notwithstanding such termination.

(e) This Agreement shall remain in full force and effect unless terminated pursuant to
Sections 13(a), (b), (c), or (d) above or otherwise by mutual agreement of the parties; provided,
however, that any such termination by mutual agreement shall in all cases be deemed to provide that
Section 8, Section 11, Section 12, Section 18 and Section 19 shall remain in full force and effect.

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

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

	 	 	 
	Cantor Fitzgerald & Co.

	499 Park Avenue

	New York, NY 10022

	Attention:

Facsimile:

	 	Capital Markets/Jeff Lumby

(212) 307-3730

with copies to:

	 	 	 
	Cantor Fitzgerald & Co.

	499 Park Avenue

New York, NY 10022

Attention:

Facsimile:

and with a copy to:

	 	

Stephen Merkel

General Counsel

(212) 307-3730

	Cooley LLP

	 	

	 	 	 
	1114 Avenue of the Americas

	New York, NY 10036-7798

	Attention:

Facsimile:

	 	Babak Yaghmaie, Esq.

(212) 479-6556

	 	 	and if to the Company, shall be delivered to:

TransEnterix, Inc.

635 Davis Drive, Suite 300

Morrisville, North Carolina 27560

Fax No. (919) 765-8459

Attention: Joseph P. Slattery

with copies to:

TransEnterix, Inc.

635 Davis Drive, Suite 300

Morrisville, North Carolina 27560

Fax No. (919) 765-8459

Attention: Joshua Weingard, Esq.

and with a copy to:

Ballard Spahr LLP

1735 Market Street

Philadelphia, Pennsylvania 19103

Fax No. (215) 864-8999

Attention: Mary J. Mullany

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

An electronic communication (“Electronic Notice”) shall be deemed written notice for
purposes of this Section 14 if sent to the electronic mail address specified by the receiving party
under separate cover. Electronic Notice shall be deemed received at the time the party sending
Electronic Notice receives verification of receipt by the receiving party. Any party receiving
Electronic Notice may request and shall be entitled to receive the notice on paper, in a
nonelectronic form (“Nonelectronic Notice”) which shall be sent to the requesting party
within ten (10) days of receipt of the written request for Nonelectronic Notice.

15. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the Company and the Agent and their respective successors and the affiliates,
controlling persons, officers and directors referred to in Section 11 hereof. References to any of
the parties contained in this Agreement shall be deemed to include the successors and permitted
assigns of such party. Nothing in this Agreement, express or implied, is intended to confer upon
any party other than the parties hereto or their respective successors and permitted assigns any
rights, remedies, obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. Neither party may assign its rights or obligations under
this Agreement without the prior written consent of the other party; provided, however, that the
Agent may assign its rights and obligations hereunder to an affiliate thereof without obtaining the
Company’s consent.

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

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

18. GOVERNING LAW AND TIME; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. THE COMPANY HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

19. CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH
OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH ANY TRANSACTION
CONTEMPLATED HEREBY, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR
PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT
SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT,
ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS
AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY
THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN
EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD
AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO
LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

20. Use of Information. The Agent may not provide any information gained in connection
with this Agreement and the transactions contemplated by this Agreement, including due diligence,
to any third party other than its legal counsel advising it on this Agreement unless expressly
approved by the Company in writing.

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

22. Effect of Headings.

The section and exhibit headings herein are for convenience only and shall not affect the
construction hereof.

23. Absence of Fiduciary Relationship.

The Company acknowledges and agrees that:

(a) the Agent is acting solely as agent in connection with the public offering of the
Placement Shares and in connection with each transaction contemplated by this Agreement and the
process leading to such transactions, and no fiduciary or advisory relationship between the Company
or any of its respective affiliates, stockholders (or other equity holders), creditors or employees
or any other party, on the one hand, and the Agent, on the other hand, has been or will be created
in respect of any of the transactions contemplated by this Agreement, irrespective of whether or
not the Agent has advised or is advising the Company on other matters, and the Agent has no
obligation to the Company with respect to the transactions contemplated by this Agreement except
the obligations expressly set forth in this Agreement;

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

(c) Neither the Agent nor its affiliates have provided any legal, accounting, regulatory or
tax advice with respect to the transactions contemplated by this Agreement and it has consulted its
own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;

(d) it is aware that the Agent and its affiliates are engaged in a broad range of transactions
which may involve interests that differ from those of the Company and the Agent and its affiliates
have no obligation to disclose such interests and transactions to the Company by virtue of any
fiduciary, advisory or agency relationship or otherwise; and

(e) it waives, to the fullest extent permitted by law, any claims it may have against the
Agent or its affiliates for breach of fiduciary duty or alleged breach of fiduciary duty in
connection with the sale of Placement Shares under this Agreement and agrees that the Agent and its
affiliates shall not have any liability (whether direct or indirect, in contract, tort or
otherwise) to it in respect of such a fiduciary duty claim or to any person asserting a fiduciary
duty claim on its behalf or in right of it or the Company, employees or creditors of Company, other
than in respect of the Agent’s obligations under this Agreement and to keep information provided by
the Company to the Agent and the Agent’s counsel confidential to the extent not otherwise
publicly-available.

24. Definitions.

As used in this Agreement, the following terms have the respective meanings set forth below:

“Applicable Time” means (i) each Representation Date and (ii) the time of each sale of
any Placement Shares pursuant to this Agreement.

“Rule 164,” “Rule 172,” “Rule 405,” “Rule 415,” “Rule
424,” “Rule 424(b),” “Rule 430B,” and “Rule 433” refer to such rules
under the Securities Act Regulations.

All references in this Agreement to financial statements and schedules and other information
that is “contained,” “included” or “stated” in the Registration Statement or the Prospectus (and
all other references of like import) shall be deemed to mean and include all such financial
statements and schedules and other information that is incorporated by reference in the
Registration Statement or the Prospectus, as the case may be.

All references in this Agreement to the Registration Statement, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to EDGAR; and all references in this Agreement to “supplements” to the
Prospectus shall include, without limitation, any supplements, “wrappers” or similar materials
prepared in connection with any offering, sale or private placement of any Placement Shares by the
Agent outside of the United States.

[Signature Page Follows]

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

Very truly yours,

	 	 	 
	TRANSENTERIX, INC.
	 
	By:
	 	/s/ Joseph P. Slattery

	 	 	 

	 	 	Name: Joseph P. Slattery

	 	 	Title: EVP and Chief Financial Officer

	 	 	ACCEPTED as of the date first-above written:

	 	 	 
	CANTOR FITZGERALD & CO.
	 
	By:
	 	/s/ Jeffrey Lumby

	 	 	 

	 	 	Name: Jeffrey Lumby

	 	 	Title: Senior Managing Director

SCHEDULE 1

FORM OF PLACEMENT NOTICE

	 	 	 
	From:

To:

	 	TransEnterix, Inc.

Cantor Fitzgerald & Co.

	 	 	 
	Attention:       

	Subject:

	 	Placement Notice

Gentlemen:

Pursuant to the terms and subject to the conditions contained in the Sales Agreement between
TransEnterix, Inc., a Delaware corporation (the “Company”), and Cantor Fitzgerald & Co.
(“Agent”), dated February 20, 2015, the Company hereby requests that the Agent sell up to
     of the Company’s Common Stock, par value $0.001 per share, at a minimum market price
of $    per share, during the time period beginning [month, day, time] and ending [month, day,
time].

SCHEDULE 2

Compensation

The Company shall pay to the Agent in cash, upon each sale of Placement Shares pursuant to
this Agreement, an amount up to 3.0% of the aggregate gross proceeds from each sale of Placement
Shares.

SCHEDULE 3

Notice Parties

The Company

Todd M. Pope

Joseph P. Slattery

The Agent

Jeff Lumby (jlumby@cantor.com)

Josh Feldman (jfeldman@cantor.com)

With copies to:

CFControlledEquityOffering@cantor.comSCHEDULE 4

Subsidiaries

Incorporated by reference to Exhibit 21 of the Company’s most recently filed Form 10-K

SCHEDULE 5

Selling Stockholders for whom Registration Rights have been waived.

	 
	AISLING CAPITAL PARTNERS III, L.P.

CHUNG CHIA COMPANY LIMITED

DONALD L. LAURIE

FROST GAMMA INVESTMENT TRUST

HSU GAMMA INVESTMENTS, L.P.

INTERNATIONAL BIOTECHNOLOGY TRUST PLC

INTERSOUTH PARTNERS VII, L.P.

JACQUELINE SIMKIN REVOCABLE TRUST

JANE H. HSIAO, Ph.D., MBA

JOSEPH LEVY REVOCABLE TRUST

KFBSF PRIVATE EQUITY FUND I, L.P.

KWANG SHUN COMPANY LIMITED

MARLIN CAPITAL INVESTMENTS, LLC

PHILLIP FROST, MD

QUAKER BIOVENTURES II, L.P.

STEPSTONE PIONEER CAPITAL BUYOUT FUND II, L.P.

STEPSTONE PIONEER CAPITAL II, L.P.

STEPSTONE-SYN INVESTMENTS, L.L.L.P.

SV LIFE SCIENCES FUND IV, L.P.

	SV LIFE SCIENCES FUND IV STRATEGIC PARTNERS, L.P.

SYNERGY LIFE SCIENCE PARTNERS L.P.

EXHIBIT 7(l)

Form of Representation Date Certificate

The undersigned, the duly qualified and elected                             , of
TransEnterix, Inc., a Delaware corporation (the “Company”), does hereby certify in such
capacity and on behalf of the Company, pursuant to Section 7(l) of the Sales Agreement,
dated February 20, 2015 (the “Sales Agreement”), between the Company and Cantor
Fitzgerald & Co., that to the best of the knowledge of the undersigned:

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

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

	 
	TRANSENTERIX, INC.

	By:

	Name:      

	Title:      

Date:

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