Document:

Unassociated Document

    Exhibit
4.2

    

    Section
4.4 of the Company’s Bylaws has been amended in its entirety to read as
follows:

    

    Section 4.4. Special
Meetings. Special
meetings of the board of directors may be called by the board of directors, the
chairman of the board, the president, the secretary or any director. Notice of
special meetings of the board of directors stating the date, time and place
thereof shall be given prior to the time set for such meeting by the person or
persons authorized to call such meeting, or by the secretary at the direction of
the person or persons authorized to call such meeting. The notice may be oral or
written. Oral notice may be communicated in person or by telephone, wire or
wireless equipment, which does not transmit a facsimile of the notice. Oral
notice is effective when communicated. Written notice may be transmitted by
mail, e-mail, private carrier, or personal delivery; telegraph or teletype; or
telephone, wire, or wireless equipment which transmits a facsimile of the
notice. Written notice is effective upon dispatch if such notice is sent to the
director’s address, e-mail, telephone number, or other number appearing on the
records of the corporation. If no place for such meeting is designated in the
notice thereof, the meeting shall be held at the principal office of the
corporation. Any director may waive notice of any meeting at any time. Whenever
any notice in required to be given to any director of the corporation pursuant
to applicable law, a waiver thereof in writing signed by the director, entitled
to notion, small be deemed equivalent to the giving of notice. The attendance of
a director at a meeting shall constitute a waiver of notice of the meeting
except where a director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not lawfully convened.
Unless otherwise required by law, neither the business to be transacted at, nor
the purpose of, any regular or special meeting of the board of directors need be
specified in the notice or waiver of notice of such
meeting.Exhibit
10.1

     

    REPROS
THERAPEUTICS INC.

     

    $10,000,000
of Common Stock

    ($0.001
par value per share)

     

    Equity Distribution
Agreement

     

    February
12, 2010

     

    Ladenburg
Thalmann & Co. Inc.

    520
Madison Avenue

    9th
Floor

    New York,
NY 10022

     

    Ladies
and Gentlemen:

     

    Repros
Therapeutics Inc., a Delaware corporation (the “Company”),
confirms its agreement (this “Agreement”)
with Ladenburg Thalmann & Co. Inc. (“Ladenburg”),
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 Ladenburg, acting as agent and/or principal, shares
(the “Placement
Shares”) of the Company’s common stock, $0.001 par value per share (the
“Common
Stock”) up to an aggregate offering price of $10,000,000 (the “Maximum
Amount”).
Notwithstanding anything to the contrary contained herein, the parties hereto
agree that compliance with the limitation set forth in this Section 1 on the
number of Placement Shares issued and sold under this Agreement shall be the
sole responsibility of the Company, and Ladenburg shall have no obligation in
connection with such compliance, provided that Ladenburg strictly follows the
trading instructions provided pursuant to any Placement Notice (as defined
below). The issuance and sale of Placement Shares through Ladenburg 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”),
although nothing in this Agreement shall be construed as requiring the Company
to use the Registration Statement (as defined below) to issue Common
Stock.

     

    The
Company has filed, in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the “Securities
Act”), with the Commission a Registration Statement on Form S-3 (No.
333-163648), 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 documents that the Company has filed or will
file in accordance with the provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder (collectively,
the “Exchange
Act”). The Company has prepared a prospectus supplement to the base
prospectus included as part of such registration statement specifically relating
to the Placement Shares (the “Prospectus
Supplement”). The Company will furnish to Ladenburg, for use by
Ladenburg, copies of the prospectus included as part of such registration
statement, as supplemented by the Prospectus Supplement, relating to the
Placement Shares. Except where the context otherwise requires, such registration
statement, as amended when it became effective, including all documents filed as
part thereof or incorporated by reference therein, and including any information
contained in a Prospectus (as defined below) subsequently filed with the
Commission pursuant to Rule 424(b) under the Securities Act or deemed to be a
part of such registration statement pursuant to Rule 430B or 462(b) of the
Securities Act, as well as any comparable successor registration statement filed
by the Company for the sale of shares of its Common Stock, including the
Placement Shares, collectively are herein called the “Registration
Statement.” The base prospectus, including all documents incorporated
therein by reference, included in the Registration Statement, as it may be
supplemented by the Prospectus Supplement, in the form in which such prospectus
and/or Prospectus Supplement have most recently been filed by the Company with
the Commission pursuant to Rule 424(b) under the Securities Act, together with
the then issued Issuer Free Writing Prospectus(es) (as defined herein), is
herein called the “Prospectus.”
Any reference herein to the Registration Statement, the Prospectus or any
amendment or supplement thereto shall be deemed to refer to and include the
documents incorporated by reference therein, and any reference herein to the
terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement or the Prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission deemed to be
incorporated by reference therein (the “Incorporated
Documents”). 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
any copy filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval System or, if applicable, the Interactive Data Electronic
Applications (collectively, “EDGAR”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

    3. Sale of Placement Shares by
Ladenburg. Subject to the terms and conditions herein set forth, upon the
Company’s issuance 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, Ladenburg, for the period
specified in the Placement Notice, will use its commercially reasonable efforts
consistent with its customary trading and sales practices to sell such Placement
Shares up to the amount specified, and otherwise in accordance with the terms of
such Placement Notice. Ladenburg will provide written confirmation to the
Company (including by email correspondence) 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
Ladenburg pursuant to Section 2 with respect to such sales, and the Net
Proceeds (as defined below) payable to the Company. Ladenburg may sell Placement
Shares by any method permitted by law deemed to be an “at the market” offering
as defined in Rule 415 of the Securities Act, including without limitation sales
made directly on the NASDAQ Capital Market (the “Exchange”),
on any other existing trading market for the Common Stock or to or through a
market maker. With the prior consent of the Company, Ladenburg may also sell
Placement Shares in privately negotiated transactions. During the term of this
Agreement and notwithstanding anything to the contrary herein, Ladenburg agrees
that in no event will it or any Ladenburg Affiliate engage in any market making,
bidding, stabilization or other trading activity with regard to the Common Stock
if such activity would be prohibited under Regulation M or other
anti-manipulation rules under the Securities Act.  For the purposes
hereof, “Trading
Day” means any day on which shares of the Common Stock are purchased and
sold on the principal market on which the Common Stock is listed or
quoted.

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5. Representations and
Warranties of the Company. The Company represents and warrants to
Ladenburg that as of each Applicable Time (as defined below):

     

    (a) Compliance with Registration
Requirements. The Registration Statement has been filed with the
Commission under the Securities Act and declared effective by the Commission
under the Securities Act. The Company has complied with all requests of the
Commission for additional or supplemental information. No stop order suspending
the effectiveness of the Registration Statement is in effect and no proceedings
for such purpose have been instituted or are pending or, to the Company’s
knowledge, are contemplated or threatened by the Commission. The Company
satisfied all applicable requirements for the use of Form S-3 under the
Securities Act when the Registration Statement was filed. The Commission has not
issued an order preventing or suspending the use of the base prospectus, any
Free Writing Prospectus (as defined below) or the Prospectus relating to the
proposed offering of the Placement Shares and no proceedings for such purpose
have been instituted or are pending or, to the Company’s knowledge, are
contemplated or threatened by the Commission. The Prospectus delivered to
Ladenburg for use in connection with the offering of Placement Shares was, at
the time of such delivery, identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T. At the respective times each part of the
Registration Statement and each amendment thereto became effective or was deemed
effective, as the case may be, the Registration Statement complied and will
comply in all material respects with the Securities Act and 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 immediately preceding sentence does not apply to statements in
or omissions from the Registration Statement or any amendments or supplements
thereto based upon and in conformity with written information furnished to the
Company by Ladenburg specifically for use therein.

     

    (b) Delivery of Offering
Materials. The Company has delivered to Ladenburg, or made available
through EDGAR, one complete copy of the Registration Statement and of each
consent of experts filed as a part thereof, and conformed copies of the
Registration Statement (without exhibits), and the Prospectus, as amended or
supplemented, in such quantities and at such places as Ladenburg has reasonably
requested.

     

    (c) Prospectus. Neither
the Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued, as of the date hereof
and at each Applicable Time, as the case may be, included or will include an
untrue statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing sentence
does not apply to statements in or omissions from the Prospectus or any
amendments or supplements thereto based upon and in conformity with written
information furnished to the Company by Ladenburg specifically for use therein.
“Applicable
Time” means the date of this Agreement, each Representation Date (as
defined herein), the date on which a Placement Notice is given, any date on
which Placement Shares are sold hereunder, or such other time as agreed to by
the Company and Ladenburg

     

    (d) Financial
Information. The financial statements of the Company, together with the
related schedules and notes thereto, set forth or included or incorporated by
reference in the Registration Statement and the Prospectus fairly present, in
all material respects, the financial condition of the Company as of and at the
dates indicated and the results of operations, changes in financial position,
stockholders’ equity and cash flows for the periods therein specified. Such
financial statements, schedules, and notes are in conformity with generally
accepted accounting principles as consistently applied in the United States
throughout the periods involved (except as otherwise stated therein). Any
selected financial data included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the information shown
therein and, to the extent based upon or derived from the financial statements,
have been compiled on a basis consistent with the financial statements presented
therein. Any pro forma financial statements of the Company, and the related
notes thereto, included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information shown therein, have
been prepared in accordance with the Commission’s rules and guidelines with
respect to pro forma financial statements and have been properly compiled on the
basis described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions and circumstances referred to therein. The Company does not
have any material liabilities or obligations, direct or contingent (including
any off-balance sheet obligations), not disclosed in the Registration Statement
and the Prospectus. No other financial statements are required to be set forth
or to be incorporated by reference in the Registration Statement or the
Prospectus under the Securities Act.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e) Incorporated
Documents. Each document incorporated or deemed to be incorporated by
reference in the Registration Statement or the Prospectus heretofore filed, at
the time it was or hereafter is filed with the Commission, conformed and will
conform when filed in all material respects with the requirements of the
Exchange Act and the rules and regulations promulgated thereunder; no such
document when it was filed (or, if an amendment with respect to any such
document was filed, when such amendment was filed), contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and no such document, when it is filed, will contain an untrue
statement of a material fact or will omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading.

     

    (f) Distribution of Materials;
Free Writing Prospectuses. The Company is not an “ineligible issuer” in
connection with the offering pursuant to Rules 164, 405 and 433 under the
Securities Act. The Company has not, directly or indirectly, distributed and
will not distribute any prospectus or other offering material in connection with
the offering and sale of the Placement Shares other than the Prospectus and
other materials, if any, permitted under the Securities Act to be distributed.
Each “issuer free writing prospectus” as defined in Rule 433 of the
Securities Act, relating to the Placement Shares (“Issuer
Free Writing Prospectus”) that (i) is required to be filed with the
Commission by the Company, (ii) is a “road show” that is a “written
communication” within the meaning of Rule 433(d)(8)(i) of the Securities
Act whether or not required to be filed with the Commission or (iii) is
exempt from filing pursuant to Rule 433(d)(5)(i) of the Securities Act, in
each case in the form filed or required to be filed with the Commission or, if
not required to be filed, in the form retained in the Company’s records pursuant
to Rule 433(g) of the Securities Act, as of its issue date and as of each
Applicable Time, did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in the
Registration Statement or the Prospectus, including any incorporated document
deemed to be a part thereof that has not been superseded or modified. The
foregoing sentence does not apply to statements in or omissions from any Issuer
Free Writing Prospectus based upon and in conformity with written information
furnished to the Company by Ladenburg specifically for use therein. The Company
has satisfied or will satisfy the conditions in Rule 433 of the Securities Act
so as not to be required to file with the Commission any electronic road
show.

     

    (g) Organization. The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the state of Delaware with the corporate power
and authority necessary to own, hold, lease and/or operate its assets and
properties and to conduct the business in which it is engaged as described in
the Registration Statement and Prospectus; and the Company is duly qualified as
a foreign entity to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure, individually or in the aggregate, to be so qualified and be in good
standing would not have a material adverse effect on (i) the consolidated
business, operations, assets, properties, financial condition, reputation,
prospects, or results of operations of the Company and any subsidiaries which
may be incorporated or formed from time to time (the “Subsidiaries”)
taken as a whole, (ii) the transactions contemplated hereby, or
(iii) the ability of the Company to perform its obligations under this
Agreement (collectively, a “Material
Adverse Effect”). The Company has full corporate power and authority
necessary to enter into and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. Except as disclosed in the
Registration Statement and the Prospectus, the Company is in compliance with the
laws, orders, rules, regulations and directives applicable to it, except for any
noncompliance that, individually, or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.

     

    (h) Subsidiaries. The
Company has no “significant subsidiaries” (as such term is defined in Rule 1-02
of Regulation S-X promulgated under the Securities Act). Except as disclosed in
the Registration Statement and the Prospectus, the Company does not own,
directly or indirectly, any shares of stock or any other equity interests or
long-term debt securities of any corporation, firm, partnership, joint venture,
association or other entity.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i) No Violation or
Default. Except as disclosed in the Registration Statement and the
Prospectus, neither the Company nor any of its Subsidiaries is (i) in
violation of any provision of its charter or bylaws or similar organizational
documents, (ii) in default in any respect, and no event has occurred which,
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 of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which it is a party or by which it is bound or to which any of its property or
assets is subject, (iii) in violation in any respect of any statute, law,
rule, regulation, ordinance, judgment, order or decree of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company, its Subsidiaries or any of its properties,
as applicable (including, without limitation, those administered by the Food and
Drug Administration of the U.S. Department of Health and Human Services (the
“FDA”) or by any foreign, federal,
state or local governmental or regulatory authority performing functions similar
to those performed by the FDA), or (iv) in violation of any rule or
regulation of any self-regulating organization or other non-governmental
regulatory authority (including, without limitation, the rules and regulations
of the Exchange) except, with respect to clauses (ii), (iii), and (iv), any
violations or defaults which, singularly or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect. The execution, delivery and
performance of this Agreement, the issuance and sale of the Placement Shares and
the consummation of the transactions contemplated hereby will not conflict with,
or result in any breach of or constitute a default under (nor constitute any
event which with notice, lapse of time or both would result in any breach of, or
constitute a default under), (i) any provision of the charter, bylaws or
organizational documents, as the case may be, of the Company or any of its
Subsidiaries, (ii) any provision of any contract, license, repurchase
agreement, management agreement, indenture, mortgage, deed of trust, bank loan
or credit agreement, note, lease or other evidence of indebtedness, or any
lease, contract 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,
or any of their respective assets or properties may be bound or affected, except
for any breach or default that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect, (iii) any
federal, state, local or foreign law, regulation or rule or any decree, judgment
or order applicable to the Company or any of its Subsidiaries, or (iv) any
rule or regulation of any self-regulating organization or other non-governmental
regulatory authority (including, without limitation, the rules and regulations
of the Exchange), except for any breach or default that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect.

     

    (j) Capitalization. The
Company has an authorized, issued and outstanding capitalization as set forth in
the Registration Statement and the Prospectus (except for subsequent issuances,
if any, pursuant to this Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or pursuant to the exercise
of convertible securities or options referred to in the Prospectus). All of the
issued and outstanding shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable, have been
issued in compliance with all federal and state securities laws and were not
issued in violation of any preemptive right, resale right, right of first
refusal or similar right. 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. This Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company enforceable in accordance with its 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 and
contribution provisions of Section 9 hereof may be limited by federal or
state securities laws and public policy considerations in respect
thereof.

     

    (l) Capital Stock and Placement
Shares in Proper Form. The capital stock of the Company, including the
Placement Shares, conforms in all material respects to the description thereof
contained in the Registration Statement and the Prospectus. The holders of the
Placement Shares will not be subject to personal liability under the Delaware
General Corporation Law by reason of being such holders.

     

    (m) Authorization of Placement
Shares. The Placement Shares, or class of shares which the Placement
Shares are part of, when issued and delivered pursuant to the terms approved by
the Board of Directors or a duly designated committee thereof, against payment
therefor as provided herein, will be duly and validly authorized and issued and
fully paid and non-assessable, 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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (n) Consents and Permits.
(1) Except as disclosed in the Registration Statement and the Prospectus,
the Company and its Subsidiaries have made all filings, applications and
submissions required by, and possesses all approvals, licenses, certificates,
certifications, clearances, consents, exemptions, marks, notifications, orders,
permits and other authorizations issued by, the appropriate federal, state or
foreign regulatory authorities (including, without limitation, the FDA, and any
other foreign, federal, state or local government or regulatory authorities
performing functions similar to those performed by the FDA) necessary for the
ownership or lease of their respective properties or to conduct its businesses
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; and neither
the Company nor any of its Subsidiaries has received any written notice of
proceedings relating to the 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 has any reason to believe that any such
license, certificate, permit or authorization will not be renewed in the
ordinary course. (2) No approval, authorization, consent or order of or
filing with any national, state or local governmental or regulatory commission,
board, body, authority or agency is required in connection with the issuance and
sale of the Placement Shares or the consummation by the Company of the
transactions contemplated hereby (including, without limitation, the Exchange,
or approval of the stockholders of the Company (including as may be required
pursuant to Rule 5635 of the NASDAQ Marketplace Rules)), other than
(i) registration of the Placement Shares under the Securities Act,
(ii) any necessary qualification under the securities or blue sky laws of
the various jurisdictions in which the Placement Shares are being offered by
Ladenburg, (iii) filing of any reports under the Exchange Act, or
(iv) such approvals as may be required by the Conduct Rules of the
Financial Industry Regulatory Authority, Inc. (“FINRA”).

     

    (o) No Preferential
Rights. Except as set forth in the Registration Statement and the
Prospectus, (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 shares of 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, or any other rights (whether
pursuant to a “poison pill” provision or otherwise) to purchase any shares of
Common Stock or shares of any other capital stock or other securities of the
Company, (iii) except as disclosed to Ladenburg or its agents in connection
with the transactions contemplated hereby, 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 Placement Shares and (iv), except for certain Persons
previously disclosed to Ladenburg who have received, or are contemplated to
receive, shares of Common Stock pursuant to a settlement agreement with the
Company, no Person has the right, contractual or otherwise, to require the
Company to register under the Securities Act any shares of 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.

     

    (p) Independent Public
Accountant. PricewaterhouseCoopers LLP, whose report on the financial
statements of the Company is filed with the Commission as part of the
Registration Statement and the Prospectus, is and, during the periods covered by
their report, was (i) an independent public accounting firm within the
meaning of the Securities Act, (ii) a registered public accounting firm (as
defined in Section 2(a)(12) of the Sarbanes-Oxley Act) and (iii) not
in violation of the auditor independence requirements of the Sarbanes-Oxley
Act.

     

    (q) Enforceability of
Agreements. Except as disclosed in the Registration Statement and the
Prospectus, 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 and except for any other
potentially unenforceable term that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.

     

    (r) No Litigation. Except
as disclosed in the Registration Statement and the Prospectus, there are no
actions, suits, claims, investigations, inquiries or proceedings pending or, to
the Company’s knowledge, threatened, to which either the Company or, to the
Company’s knowledge, its Subsidiaries, nor any of their respective officers or
directors, is a party or of which any of their respective properties or other
assets is subject at law or in equity, or before or by any federal, state, local
or foreign governmental or regulatory commission, board, body, authority or
agency, or before any self-regulating organization or other non-governmental
regulatory authority (including, without limitation, the Exchange), which if
resolved adversely to the Company or any Subsidiary would, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (s) Regulatory
Filings. Except as disclosed in the Registration Statement and the
Prospectus, neither the Company nor any of its Subsidiaries has failed to file
with the applicable regulatory authorities (including, without limitation, the
FDA or any foreign, federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA) any required filing,
declaration, listing, registration, report or submission, except for such
failures that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect; except as disclosed in the
Registration Statement and the Prospectus, all such filings, declarations,
listings, registrations, reports or submissions were in compliance with
applicable laws when filed and no deficiencies have been asserted by any
applicable regulatory authority with respect to any such filings, declarations,
listings, registrations, reports or submissions, except for any deficiencies
that, individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect.

     

    (t) Certain Market
Activities. Neither the Company nor, to the Company’s knowledge, any of
its Subsidiaries, nor, to the Company’s knowledge, 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.

     

    (u) Broker/Dealer
Relationships. Neither the Company nor any of its 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 FINRA member” or “associated person of a FINRA member” (within
the meaning of Article I of the Bylaws of the NASD).

     

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

     

    (w) Taxes. Except as
disclosed in the Registration Statement and the Prospectus, the Company and, to
the Company’s knowledge, any of its Subsidiaries has filed on a timely basis
(taking into account all applicable extensions) all necessary federal, state,
local and foreign income and franchise tax returns, if any such returns were
required to be filed, through the date hereof and have paid all taxes shown as
due thereon except for any failure to file or pay which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
No tax deficiency has been asserted against the Company or, to the Company’s
knowledge, any of its Subsidiaries, nor does the Company know of any tax
deficiency that is likely to be asserted against any such entity that, if
determined adversely to any such entity, could reasonably be expected to have a
Material Adverse Effect. All tax liabilities, if any, are adequately provided
for on the books of the Company and, to the Company’s knowledge, any of its
Subsidiaries, except for such tax liabilities that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect.

     

    (x) Intellectual
Property. Except as disclosed 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, (a) there are
no rights of third parties to any such Intellectual Property owned by the
Company and its Subsidiaries; (b) to the Company’s knowledge, there is no
infringement by third parties of any such Intellectual Property; (c) to the
Company’s knowledge, there is no pending or 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;
(d) to the Company’s knowledge, there is no pending or threatened action,
suit, proceeding or claim by others challenging the validity or scope of any
such Intellectual Property; (e) 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;
(f) 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 (g) 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 any of
clauses (a)-(g) above, for any such infringement by third parties or any
such pending or threatened suit, action, proceeding or claim as would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (y) Clinical
Studies. The clinical, pre-clinical and other studies and tests
conducted by or on behalf of or sponsored by the Company and its Subsidiaries
were and, if still pending, are being conducted in accordance in all material
respects with all statutes, laws, rules and regulations, as applicable
(including, without limitation, those administered by the FDA or by any foreign,
federal, state or local governmental or regulatory authority performing
functions similar to those performed by the FDA). Except as set forth in
the Registration Statement and Prospectus, neither the Company nor any of its
Subsidiaries has received any notices or other correspondence from the FDA or
any other foreign, federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA with respect to any
ongoing clinical or pre-clinical studies or tests requiring the termination or
suspension of such studies or tests.

     

    (z) Compliance
Program. Except as disclosed in the Registration Statement and the
Prospectus, the Company has established and administers a compliance program
applicable to the Company, to assist the Company and the directors, officers and
employees of the Company in complying with applicable regulatory guidelines
(including, without limitation, those administered by the FDA and any other
foreign, federal, state or local governmental or regulatory authority performing
functions similar to those performed by the FDA); except where such
noncompliance would not reasonably be expected to have a Material Adverse
Effect.

     

    (aa) Environmental Laws.
Except as disclosed in the Registration Statement and the Prospectus, 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,
licenses and other approvals 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, licenses, or other approvals or any such liability as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

     

    (bb) Accounting
Controls. Except as disclosed in the Registration Statement and the
Prospectus, the Company and its Subsidiaries maintain a system of internal
accounting controls as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange
Act.

     

    (cc) Disclosure
Controls. Except as disclosed in the Registration Statement and the
Prospectus, the Company has established and maintains disclosure controls and
procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange
Act.

     

    (dd) Sarbanes-Oxley
Act. Except as disclosed in the Registration Statement and the
Prospectus, the Company, its Subsidiaries and the Company’s directors and
officers are each in compliance in all material respects with all applicable
effective provisions of the Sarbanes-Oxley Act and the rules and regulations of
the Commission and the Exchange promulgated thereunder.

     

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

     

    (ff) Labor Disputes.
Except as disclosed in the Registration Statement and the Prospectus, the
Company nor any of its Subsidiaries is engaged in any unfair labor practice;
except for matters which would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, (i) there is no
(A) unfair labor practice complaint pending or, to the Company’s knowledge,
threatened against the Company or its Subsidiaries before the National Labor
Relations Board, and no grievance or arbitration proceeding arising out of or
under collective bargaining agreements is pending or, to the Company’s
knowledge, threatened, (B) strike, labor dispute, slowdown or stoppage
pending or, to the Company’s knowledge, threatened against the Company or any of
its Subsidiaries or(C) union representation dispute currently existing
concerning the employees of the Company or any of its Subsidiaries, and
(ii) to the Company’s knowledge, (A) no union organizing activities
are currently taking place concerning the employees of the Company or any of its
Subsidiaries, and (B) there has been no violation of any federal, state,
local, or foreign law relating to discrimination in the hiring, promotion or pay
of employees or any applicable wage or hour laws concerning the employees of the
Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (gg) Investment Company
Act. Except as disclosed in the Registration Statement and the
Prospectus, neither the Company nor any of its Subsidiaries, after giving effect
to the offering and sale of the Placement Shares, will be (i) required to
register as an “investment company” or an entity “controlled” by an “investment
company,” as such terms are defined in the Investment Company Act of 1940, as
amended (the “Investment
Company Act”), or (ii) a “business development company” (as defined
in Section 2(a)(48) of the Investment Company Act).

     

    (hh) Insurance. Except as
disclosed in the Registration Statement and the Prospectus, neither the Company
nor, to the Company’s knowledge, any of its Subsidiaries has sustained any loss
or interference with its respective business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, in each case that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

     

    (ii) Underwriter
Agreements. Except as disclosed in the Registration Statement and the
Prospectus, the Company is not a party to any agreement with an agent or
underwriter for any other “at-the-market” or continuous equity
transaction.

     

    (jj) ERISA. Except as
disclosed in the Registration Statement and the Prospectus, the Company and its
Subsidiaries are in compliance with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder (“ERISA”),
except for any noncompliance that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. Except as disclosed in
the Registration Statement and the Prospectus, no “reportable event” (as defined
in section 4043 of ERISA) for which the Pension Benefit Guaranty Corporation has
not waived the notice requirement has occurred in the past three years with
respect to any “pension plan” (as defined in ERISA) for which the Company and
its Subsidiaries would reasonably expect to have any liability. Except as
disclosed in the Registration Statement and the Prospectus, the Company and its
Subsidiaries have not incurred and do not reasonably expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal
from, any “pension plan” or (ii) Sections 412 or 4971 of the Code. Except
as disclosed in the Registration Statement and the Prospectus, each “pension
plan” for which the Company or its Subsidiaries would have any liability that is
intended to be qualified under Section 401(a) of the Code has received a
favorable determination or opinion letter to that effect and, to the Company’s
knowledge, no event has occurred since the date of such letter that could
reasonably be expected to result in the loss of such qualification.

     

    (kk) No Improper
Practices. Except as disclosed in the Registration Statement and the
Prospectus, (i) neither the Company nor, to the Company’s knowledge, its
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, stockholders or directors of the Company
or, to the Company’s knowledge, any Subsidiary, on the other hand, that is
required by the rules of the FINRA to be described in the Registration Statement
and the Prospectus that is not so described; (iv) except as described in
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; (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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ll) Title to Property.
Except as disclosed in the Registration Statement and the Prospectus, the
Company and its Subsidiaries have good and marketable title to all property
(real and personal) described in the Registration Statement and the Prospectus
as being owned by any of them, free and clear of all material liens, claims,
security interests or other encumbrances, except to the extent such material
liens, claims, security interests or other encumbrances are disclosed in the
Registration Statement and the Prospectus; all the property described in the
Registration Statement and the Prospectus as being held under lease by the
Company or any Subsidiary is held thereby under valid, subsisting and
enforceable leases.

     

    (mm) Insurance. Except as
disclosed in the Registration Statement and the Prospectus, the Company and its
Subsidiaries maintain insurance covering their respective properties,
operations, personnel and businesses as the Company reasonably deems adequate;
such insurance insures against such losses and risks to an extent which the
Company reasonably believes is adequate and in accordance with customary
industry practice to protect the Company and its Subsidiaries and their
respective businesses; all such insurance is fully in force on the date hereof
and will be fully in force at the time of purchase; neither the Company nor its
Subsidiaries has reason to believe that it will not be able to renew any such
insurance as and when such insurance expires.

     

    (nn) Data Reliable and
Accurate. All statistical or market-related data included or incorporated
by reference in the Registration Statement and the Prospectus are based on or
derived from sources that the Company believes to be reliable and accurate, and
the Company has obtained the written consent to the use of such data from such
sources to the extent required.

     

    (oo) NASDAQ: Registration.
The Common Stock is registered pursuant to Section 12(b) or 12(g) of the
Exchange Act and is accepted for quotation on the Exchange, and the Company has
taken no action designed to terminate the registration of the Common Stock under
the Exchange Act or delisting the Common Stock from the Exchange, nor except as
disclosed in the Registration Statement and the Prospectus, has the Company
received any notification that the Commission or FINRA is contemplating
terminating such registration or listing. Except as disclosed in the
Registration Statement and the Prospectus, the Company has complied in all
material respects with the applicable requirements of the Exchange for
maintenance of inclusion of the Common Stock thereon. The Company has filed a
Notification of Listing of Additional Shares with the Exchange with respect to
the Placement Shares.

     

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

     

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

     

    6. Sale and Delivery;
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
Ladenburg’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, Ladenburg,
for the period specified in the Placement Notice, will use its commercially
reasonable efforts consistent with its normal trading and sales practices 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 Ladenburg will be successful
in selling Placement Shares, (ii) Ladenburg 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 Ladenburg to use its
commercially reasonable efforts consistent with its normal trading and sales
practices to sell such Placement Shares as required under this Agreement and
(iii) Ladenburg shall be under no obligation to purchase Placement Shares
on a principal basis pursuant to this Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     (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” and the first such settlement date, the “First
Delivery Date”). The amount of proceeds to be delivered to the Company on
a Settlement Date against receipt of the Placement Shares sold (the “Net
Proceeds”) will be equal to the aggregate sales price received by
Ladenburg at which such Placement Shares were sold, after deduction for
(i) Ladenburg’s commission, discount or other compensation for such sales
payable by the Company pursuant to Section 2
hereof, (ii) any other amounts due and payable by the Company to Ladenburg
hereunder pursuant to Section 7(g)
(Expenses) hereof and (iii) any transaction fees imposed by any
governmental or self-regulatory organization in respect of such
sales.

     

    (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 Ladenburg’s or its designee’s account at The Depository Trust
Company through its Deposit and Withdrawal at Custodian System ("DWAC")
or by such other means of delivery as may be mutually agreed upon by the parties
hereto which in all cases shall be freely tradable, transferable, registered
shares in good deliverable form. On each Settlement Date, Ladenburg 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, the Company will, in addition to
and in no way limiting the rights and obligations set forth in Section 9(a)
(Indemnification and Contribution), (i) hold Ladenburg 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
and (ii) pay to Ladenburg 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 Ladenburg may request in
writing at least one full business day before the Settlement Date. The
certificates for the Placement Shares, if any, will be made available for
examination and packaging by Ladenburg in The City of 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 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
Ladenburg in writing. Under no circumstances shall the Company cause or request
the offer or sale of any Placement Shares at a price lower than the minimum
price authorized from time to time by the Company’s board of directors, duly
authorized committee thereof or a duly authorized executive committee, and
notified to Ladenburg in writing.

     

    7. Covenants of the
Company. The Company covenants and agrees with Ladenburg
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 Ladenburg under the Securities Act with respect to a pending sale of the
Placement Shares (including in circumstances where such requirement may be
satisfied pursuant to Rule 172 under the Securities Act), the Company
will notify Ladenburg 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 any request by the Commission
for any amendment or supplement to the Registration Statement or Prospectus or
for additional information related to the Registration Statement, the Prospectus
or any Issuer Free Writing Prospectus.

     

    (b) Notice of Commission Stop
Orders. The Company will advise Ladenburg, 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 or any other order preventing or suspending the use of
the Prospectus, 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 or any examination pursuant to
Section 8(e) of the Securities Act, or if the Company becomes the subject
of a proceeding under Section 8A of the Securities Act in connection with
the offering of the Placement Shares; and the Company will promptly use its
commercially reasonable efforts to prevent the issuance of any stop or other
order or to obtain its withdrawal if such a stop or other order should be
issued.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c) Delivery of Prospectus;
Subsequent Changes. During any period in which a Prospectus relating to
the Placement Shares is required to be delivered by Ladenburg under the
Securities Act with respect to a pending sale of the Placement Shares (including
in circumstances where such requirement may be satisfied pursuant to Rule 172
under the Securities Act), the Company will 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 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 Ladenburg 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 Ladenburg under the Securities
Act with respect to a pending sale of the Placement Shares (including in
circumstances where such requirement may be satisfied pursuant to Rule 172 under
the Securities Act), the Company will use its commercially reasonable efforts to
cause the Placement Shares to be listed on the Exchange.

     

    (e) Delivery of Registration
Statement and Prospectus. The Company will furnish to Ladenburg and its
counsel (at the expense of the Company) copies of the Registration Statement,
the Prospectus (including all documents incorporated by reference therein) and
all amendments and supplements to the Registration Statement or Prospectus that
are filed with the Commission during any period in which a Prospectus relating
to the Placement Shares is required to be delivered under the Securities Act.
The copies of the Registration Statement and the Prospectus and any supplements
or amendments thereto furnished to Ladenburg will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T. Notwithstanding the
foregoing, the Company will not be required to furnish any document (other than
the Prospectus) to Ladenburg 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. “Earnings statement” and “make generally available” will have
the meanings contained in Rule 158 under the Securities Act.

     

    (g) Expenses.  The
Company, whether or not the transactions contemplated hereunder are consummated
or this Agreement is terminated, in accordance with the provisions of
Section 11 hereunder, will pay all expenses incident to the performance of
the Company’s obligations hereunder, which the parties acknowledge include
expenses relating to: (i) the preparation, printing and filing of the
Registration Statement and each amendment and supplement thereto, of each
Prospectus and of each amendment and supplement thereto, and of this Agreement,
(ii) the preparation, issuance and delivery of the Placement Shares,
(iii) the printing and delivery to Ladenburg of copies of the Prospectus
and any amendments and supplements thereto, (iv) the fees and expenses
incurred in connection with the listing or qualification of the Placement Shares
for trading on the Exchange, and (v) the filing fees and expenses, if any,
of the Commission and FINRA. The Company will pay to Ladenburg, within 30 days
of the delivery of an invoice in reasonable detail, all reasonable and customary
expenses incident to the performance of Ladenburg's obligations hereunder,
including attorney’s fees, consultant fees, travel and lodging expenses and any
other incidental fees and expenses incurred by Ladenburg, not to exceed $20,000
in the aggregate unless prior written consent by the Company is
granted.

     

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (i) Notice of Other
Sales. During either the pendency of any Placement Notice given
hereunder, or any period in which the Prospectus relating to the Placement
Shares is required to be delivered by Ladenburg, the Company shall provide
Ladenburg notice as promptly as reasonably possible before it offers to sell,
contracts to sell, sells, grants any option to sell or otherwise disposes of any
shares of Common Stock (other than Placement Shares offered pursuant to the
provisions of this Agreement) or securities convertible into or exchangeable for
Common Stock, warrants or any rights to purchase or acquire Common Stock; provided, that such notice
shall not be required in connection with the (i) issuance, grant or sale of
Common Stock, options to purchase shares of Common Stock or Common Stock
issuable upon the exercise of options or other equity awards pursuant to any
employee or director stock option or benefits plan or stock ownership plan or
issuances permitted by FINRA (ii) the issuance or sale of Common Stock
pursuant to any dividend reinvestment plan that the Company may adopt from time
to time, (iii) the issuance of Common Stock upon the exercise of any
currently outstanding warrants, options or other rights in effect or outstanding
and disclosed in filings by the Company available on EDGAR or (iv) issuance and
sale of Common Stock to certain Persons previously disclosed to Ladenburg who
are contemplated to receive such shares pursuant to a settlement agreement with
the Company.

     

    (j) Change of
Circumstances. The Company will, at any time during the pendency of a
Placement Notice, advise Ladenburg 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 Ladenburg pursuant to this
Agreement.

     

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

     

    (l) Required Filings Relating to
Placement of Placement Shares. The Company agrees that on such dates as
the Securities Act shall require, the Company will (i) file a prospectus
supplement with the Commission under the applicable paragraph of Rule 424(b)
under the Securities Act (each and every filing 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 Ladenburg, the Net Proceeds
to the Company and the compensation payable by the Company to Ladenburg 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.

     

    (m) Representation Dates;
Certificate. Three Trading Days prior to the First Delivery Date and 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) 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 Ladenburg with a certificate, in the form attached
hereto as Exhibit
7(m) within three (3) Trading Days of any Representation Date. The
requirement to provide a certificate under this Section 7(m)
shall be waived for any Representation Date occurring at a time at which no
Placement Notice is pending, which waiver shall continue until the earlier to
occur of the date the Company delivers a Placement Notice hereunder (which for
such calendar quarter shall be considered a Representation Date) and the next
occurring Representation Date; provided,
however,
that such waiver shall not apply for any Representation Date on which the
Company files its annual report on Form 10-K. Notwithstanding the foregoing, if
the Company subsequently decides to sell Placement Shares following a
Representation Date when the Company relied on such waiver and did not provide
Ladenburg with a certificate under this Section 7(m),
then before the Company delivers the Placement Notice or Ladenburg sells any
Placement Shares, the Company shall provide Ladenburg with a certificate, in the
form attached hereto as Exhibit 7(m), dated
the date of the Placement Notice.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (n) Legal Opinion. On the
date of the first Placement Notice is given hereunder, the Company shall cause
to be furnished to Ladenburg a written opinion dated as of the date of such
Placement Notice of Winstead PC (“Company
Counsel”), in form and substance satisfactory to Ladenburg and its
counsel. Within three Trading Days of each subsequent Representation Date with
respect to which the Company is obligated to deliver a certificate in the form
attached hereto as Exhibit 7(m) for which no waiver is applicable, the Company
shall cause to be furnished to Ladenburg a written opinion of Company Counsel in
a form reasonably acceptable to Ladenburg and its counsel; provided,
however,
that in lieu of such opinion, Company Counsel last furnishing such opinion to
Ladenburg may furnish to Ladenburg a letter substantially to the effect
that Ladenburg may rely on such prior opinion to the same extent as though dated
the date of such letter authorizing reliance.

     

    (o) Comfort Letter. Three
Trading Days prior to the First Delivery Date and within three Trading Days of
each Representation Date with respect to which the Company is obligated to
deliver a certificate in the form attached hereto as Exhibit 7(m) for
which no waiver is applicable, the Company shall cause its independent
accountants (and any other independent accountants whose report is included in
the Registration Statement or the Prospectus), to furnish Ladenburg letters (the
“Comfort
Letters”; the first such letter is referred to as the “Initial
Comfort Letter”) in form and substance satisfactory to Ladenburg and
Pricewaterhouse Coopers LLP (i) confirming that they are an independent
registered public accounting firm within the meaning of the Securities Act, the
Exchange 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 and (iii) updating the Initial
Comfort Letter with any information that would have been included in the Initial
Comfort Letter had it been given on such date and modified as necessary to
relate to the Registration Statement and the Prospectus, as amended and
supplemented to the date of such letter.

     

    (p) Market Activities.
The Company will not, and will use its commercially reasonable efforts to cause
its officers, directors and affiliates not to, (i) take, directly or
indirectly, any action designed to stabilize or manipulate the price of any
security of the Company, or which may cause or result in, or which might in the
future reasonably be expected to cause or result in, the stabilization or
manipulation of the price of any security of the Company, to facilitate the sale
or resale of any of the Placement Shares, (ii) sell, bid for, purchase or
pay anyone any compensation for soliciting purchases of the Placement Shares
during the pendency of any Placement Notice or (iii) pay or agree to pay to
any person any compensation for soliciting any order to purchase any other
securities of the Company during the pendency of any Placement Notice; provided,
however,
that upon consent of Ladenburg the Company may bid for and purchase Common Stock
in accordance with Rule 10b-18 under the Exchange Act.

     

    (q) Filings with the
Exchange. The Company will timely file with the Exchange all material
documents and notices required by the Exchange of companies that have or will
issue securities that are traded on the Exchange.

     

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

     

    (s) No Offer to Sell.
Other than a free writing prospectus (as defined in Rule 405 under the
Securities Act) approved in advance in writing by the Company and Ladenburg in
its capacity as principal or agent hereunder, neither Ladenburg nor the Company
(including its agents and representatives, other than Ladenburg in its capacity
as such) will, directly or indirectly, make, use, prepare, authorize, approve or
refer to any free writing prospectus relating to the Placement Shares to be sold
by Ladenburg as principal or agent hereunder. The Company will treat each
Ladenburg approved Issuer Free Writing Prospectus as an “issuer free writing
prospectus,” as defined in Rule 433 of the Securities Act, and will comply
with the requirements of Rule 433 of the Securities Act applicable to any
Issuer Free Writing Prospectus, including timely filing with the Commission
where required, legending and record keeping.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (t) Sarbanes-Oxley
Act.  The Company will maintain and keep accurate books and
records reflecting its 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 generally accepted accounting principles 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 generally accepted accounting principles, (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 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 Chief
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 is
made known to them, particularly during the period in which such periodic
reports are being prepared.

     

    (u) Transfer Agent. The
Company shall maintain, at its expense, a registrar and transfer agent for the
Common Stock.

     

    (v) Disclosure of Sales.
The Company will disclose in its quarterly reports on Form 10-Q and in
its annual report on Form 10-K the number of Placement Shares sold through
Ladenburg during the relevant quarter.

     

    (w) Available Shares. The
Company will ensure that there are at all times sufficient shares of Common
Stock to provide for the issuance, free of any preemptive rights, out its
authorized but unissued shares of Common Stock, of the Maximum
Amount.

     

    8. Conditions to Ladenburg’s
Obligations. The obligations of Ladenburg hereunder with respect to a
Placement Notice 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
Ladenburg of a due diligence review satisfactory to Ladenburg in its reasonable
judgment, and to the continuing satisfaction (or waiver by Ladenburg in its sole
discretion) of the following additional conditions:

     

    (a) Registration Statement
Effective. The Registration Statement shall have become effective and
shall be available for the 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; (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 document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes in the Registration Statement, related
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any materially untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and, that in the case of the Prospectus, it
will not contain any materially untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

     

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

     

    (d) Legal Opinion.
Ladenburg shall have received the opinion of Company Counsel required to be
delivered pursuant to Section 7(n) on
or before the date on which such delivery of such opinion is required pursuant
to Section 7(n).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

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

     

    (g) No Exchange Suspension or
FINRA Objection. Trading in the Common Stock shall not have been
suspended on the Exchange. FINRA shall not have objected to the fairness or
reasonableness of the terms or arrangements under this Agreement.

     

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

     

    (i) 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.

     

    (j) Approval for Listing.
The Placement Shares shall either have been (i) approved for listing on the
Exchange, subject only to notice of issuance, or (ii) 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.

     

    (k) Termination of Agreement.
If any condition specified in this Section 8 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by Ladenburg by notice to the Company. Notice of such cancellation shall be
given in writing and addressed to each of the individuals of the Company set
forth on Schedule
2.

     

    (l) No Termination Event.
There shall not have occurred any event or condition that would permit Ladenburg
to terminate this Agreement pursuant to Section 11.

     

    9. Indemnification and
Contribution.

     

    (a) Company
Indemnification. The Company agrees to indemnify and hold harmless
Ladenburg, the directors, officers, employees and agents of Ladenburg and each
person, if any, who (i) controls Ladenburg within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, or
(ii) is controlled by or is under common control with Ladenburg (a “Ladenburg
Affiliate”) from and against any and all losses, claims, liabilities,
expenses and damages (including, but not limited to, any and all reasonable
investigative, legal and other expenses incurred in connection with, and any and
all amounts paid in settlement (in accordance with Section 9(c))
(collectively, "Losses")
of, any action, suit or proceeding between any of the indemnified parties and
any indemnifying parties or between any indemnified party and any third party,
or otherwise, or any claim asserted), as and when incurred, to which Ladenburg,
or any such person, may become subject under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such Losses arise out of or are based, directly or
indirectly, on (x) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus, or any
amendments thereto (including the information deemed to be a part of the
Registration Statement at the time of effectiveness and at any subsequent time
pursuant to Rules 430A and 430B, if applicable) or the omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or (y) any act or failure to act or
any alleged act or failure to act by Ladenburg in connection with, or relating
in any manner to, the Placement Shares or the offering contemplated hereby,
unless it is finally judicially  determined in a court of competent
jurisdiction that such Losses were the primary and direct result of the
intentional misconduct or gross negligence of Ladenburg in performing the
services hereunder.  Notwithstanding anything contained herein to the
contrary, this indemnity agreement shall not apply any Losses arising from,
directly or indirectly, an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
furnished in writing to the Company by or on behalf of Ladenburg expressly for
inclusion in the Registration Statement or Prospectus. This indemnity agreement
will be in addition to any liability that the Company might otherwise
have.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     (b) Ladenburg
Indemnification. Ladenburg agrees to indemnify and hold harmless the
Company and its directors and each officer of the Company who signed the
Registration Statement, and each person, if any, who (i) controls the
Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act or (ii) is controlled by or is under
common control with the Company (a “Company
Affiliate”) against any and all Losses to which the Company, or any such
person, may become subject under the Securities Act, the Exchange Act or other
federal or state statutory law or regulation, at common law or otherwise, as and
when incurred, but only insofar as such Loss arises from or is caused directly
or indirectly by an untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information furnished in
writing to the Company by or on behalf of Ladenburg expressly for inclusion in
the Registration Statement or Prospectus.

     

    (c) Procedure. Any party
that proposes to assert the right to be indemnified under this Section 9 will,
promptly after receipt of notice of commencement of any action against such
party in respect of which a claim is to be made against an indemnifying party or
parties under this Section 9,
notify each such indemnifying party of the commencement of such action,
enclosing a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve the indemnifying party from (i) any
liability that it might have to any indemnified party otherwise than under this
Section 9
and (ii) any liability that it may have to any indemnified party under the
foregoing provision of this Section 9
unless, and only to the extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party. 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. 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 the written 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 the written 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. 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 9
(whether or not any indemnified party is a party thereto), unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising or that may arise out of such
claim, action or proceeding.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d) Contribution. In
order to provide for just and equitable contribution in circumstances in which
the indemnification provided for in the foregoing paragraphs of this Section 9 is
applicable in accordance with its terms but for any reason is held to be
unavailable from the Company or Ladenburg, the Company and Ladenburg will
contribute to the total Losses (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
Ladenburg, if any), to which the Company and Ladenburg may be subject in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company, on the one hand, and Ladenburg, on the other. The relative benefits
received by the Company on the one hand and Ladenburg 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 Ladenburg 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 Ladenburg, on the other,
with respect to the statements or omission that resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering. Such relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or Ladenburg, on the other, 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 Ladenburg agree that it
would not be just and equitable if contributions pursuant to this Section 9(d)
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 in respect thereof, referred to above in this Section 9(d)
shall be deemed to include, for the purpose of this Section 9(d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim to the
extent consistent with Section 9(c)
hereof. Notwithstanding the foregoing provisions of this Section 9(d),
Ladenburg shall not be required to contribute any amount in excess of the
commissions received by it under this Agreement and no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 9(d),
any person who controls a party to this Agreement within the meaning of the
Securities Act, and any officers, directors, shareholders, partners, employees
or agents of Ladenburg, will have the same rights to contribution as that party,
and each director of the Company and each officer of the Company who signed the
Registration Statement will have the same rights to contribution as the Company,
subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 9(d),
will notify any such party or parties from whom contribution may be sought, but
the omission to so notify will not relieve that party or parties from whom
contribution may be sought from any other obligation it or they may have under
this Section 9(d)
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 9(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 9(c)
hereof.

     

    10. Representations and
Agreements to Survive Delivery. 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 Ladenburg, 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.

     

    11. Termination.

     

    (a) Termination;
General.
Ladenburg 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, which individually or in the aggregate, in the sole judgment
of Ladenburg has or could have a Material Adverse Effect 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 Ladenburg, impracticable or inadvisable to market the Placement
Shares or to enforce contracts for the sale of the Placement Shares, (3) if
trading in the Placement Shares has been suspended or limited by the Commission
or the Exchange, or if trading generally on the Exchange has been suspended or
limited, (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.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) Termination by the
Company. The
Company shall have the right to terminate this Agreement by giving 30 days
notice as specified herein to Ladenburg.

     

     (c) Termination by
Ladenburg. In
addition to the rights set forth in Section 11(a), Ladenburg shall have the
right to terminate this Agreement by giving ten days notice to the
Company.

     

    (d) Automatic
Termination.
Unless earlier terminated pursuant to this Section 11, this
Agreement shall automatically terminate upon the issuance and sale of the
Maximum Amount of Placement Shares through Ladenburg pursuant to this
Agreement.

     

    (e) Effectiveness of
Termination. 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 specified in such notice by Ladenburg 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.

     

    (f) Survival.  The
provisions of Sections 7(g), 9, 16 and 17 hereof and the obligation herein to
pay any discount, commission or other compensation accrued, but unpaid, shall
survive any expiration or termination of this Agreement.

     

    12. Notices. All notices
or other communications required or permitted to be given by any party to any
other party pursuant to the terms of this Agreement shall be in writing, unless
otherwise specified in this Agreement, and if sent to Ladenburg, shall be
delivered to Ladenburg Thalmann & Co. Inc., 520 Madison Avenue, New
York, New York 10022, fax no. (212) 308-2203, Attention: Edwin H. Gordon,
with copies to General Counsel, at the same address, or if sent to the Company,
shall be delivered to Repros Therapeutics Inc., 2408 Timberloch Place, Suite
B-7, The Woodlands, TX 77380, fax no. (281) 719-3446, Attention: Joseph S.
Podolski, with a copy to Winstead PC, 24 Waterway Avenue, Suite 500, The
Woodlands, TX 77380, Attention Jeffrey R. Harder, Esq. 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.

     

    13. Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon
the Company and Ladenburg and their respective successors and the affiliates,
controlling persons, officers and directors referred to in Section 9
hereof. References to any of the parties contained in this Agreement shall be
deemed to include the successors and permitted assigns of such party. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and permitted assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement. Neither party may
assign its rights or obligations under this Agreement without the prior written
consent of the other party.

     

    14. 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.

     

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

    17. WAIVER OF
JURY TRIAL. THE COMPANY
AND LADENBURG EACH HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY CLAIM BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

     

    18. 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.

     

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

     

    (a) the
Company is a sophisticated business enterprise that has retained Ladenburg for
the limited purposes set forth in this Agreement, and Ladenburg's and the
Company's respective rights and obligations are contractual in
nature;

     

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

     

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

     

    (d) the
Company disclaims any intention to impose fiduciary obligations on Ladenburg by
virtue of the engagement contemplated by this Agreement;

     

    (e) Ladenburg
has not provided any legal, accounting, regulatory or tax advice with respect to
the transactions contemplated by this Agreement and the Company has consulted
its own legal, accounting, regulatory and tax advisors to the extent it has
deemed appropriate;

     

    (f)
Ladenburg is a full service securities firm and as such from time to time,
subject to applicable securities laws, may effect transaction for its own
account or the account of its customers and hold long or short positions in the
Common Stock; and

     

    (g) the
Company waives, to the fullest extent permitted by law, any claims it may have
against Ladenburg, for breach of fiduciary duty or alleged breach of fiduciary
duty and agrees that Ladenburg shall have no liability (whether direct or
indirect) to the Company in respect to such fiduciary claim or to any person
asserting a fiduciary duty claim on behalf of or in right of the Company,
including shareholders, partners, employees or creditors of the
Company.

     

    [Remainder
of Page Intentionally Blank]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

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

     

    
      
        
          	
                  Very
      truly yours,

                
	 
      
	
                  REPROS
      THERAPEUTICS INC.

                
	 
      	 
      
	
                  By: 

                	
                  
                    /s/  Joseph
      S. Podolski

                  

                
	
                  Name: 

                	
                  Joseph
      S. Podolski

                
	
                  Title: 

                	
                  President
      and Chief Executive
Officer

                

        

      

    

     

    
      
        
          
            
              	
                      ACCEPTED as of the date first-above

                      written:

                    
	 
      
	
                      Ladenburg
      Thalmann & Co. Inc.

                    
	 
      	 
      
	
                      By: 

                    	
                      
                        /s/  Edwin
      Gordon

                      

                    
	
                      Name: 

                    	
                      Edwin
      Gordon

                    
	
                      Title: 

                    	
                      Managing
      Director

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