Document:

Exhibit 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT AND WAIVER

THIS SECOND AMENDMENT TO CREDIT AGREEMENT AND WAIVER, dated as of September 19, 2013 (this "Amendment"), is among MEADOWBROOK INSURANCE GROUP, INC., a Michigan corporation (the “Borrower”), the LENDERS party hereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and BANK OF AMERICA, N.A. and KEYBANK NATIONAL ASSOCIATION, as Syndication Agents.

RECITAL

The Borrower, the Lenders, the Administrative Agent and the Syndication Agents are parties to a Credit Agreement dated as of August 29, 2012 (as amended or otherwise modified from time to time, the "Credit Agreement").  The Borrower desires to amend the Credit Agreement as set forth herein and the Lenders are willing to do so in accordance with the terms hereof.

TERMS

In consideration of the premises and of the mutual agreements herein contained, the parties agree as follows:

ARTICLE 1.

WAIVER.

1.1               The Borrower has notified the Administrative Agent and the Lenders that Events of Default have occurred under the Credit Agreement due to the breach, at all times from and after June 30, 2013 until the date hereof, of the minimum permitted Consolidated Net Worth under Section 6.09(a) of the Credit Agreement and of the maximum permitted Consolidated Leverage Ratio under Section 6.09(c) of the Credit Agreement (such Events of Default due to such breaches from and after June 30, 2013 until the effectiveness hereof (but not at any other time) are collectively referred to as the "Existing Defaults").  The Existing Defaults have been temporarily waived until September 20, 2013 pursuant to a waiver letter dated August 23, 2013, and the Borrower and the Guarantors have requested that the Lenders and the Administrative Agent waive such Existing Defaults thereafter.

1.2               Pursuant to such request, and subject to (a) the accuracy of the representations of the Borrower and Guarantors hereunder and the compliance by the Borrower and the Guarantors with the agreements herein, and (b) the satisfaction of the conditions to the effectiveness of this Agreement specified in Article 4 hereof, the Lenders hereby waive the Existing Defaults. The Borrower and the Guarantors acknowledge and agree that the waiver contained herein is a limited, specific and one-time waiver as described above.  Such waiver shall not modify or waive any other Event of Default or Default or any other term, covenant or agreement contained in any of the Loan Documents, and shall not be deemed to have prejudiced any present or future right or rights which the Administrative Agent or the Lenders now have or may have under the Credit Agreement or the other Loan Documents with respect to any present or future Event of Default other than the Existing Defaults, and, in addition, shall not entitle the Borrower or the Guarantors (or any of them) to a waiver, amendment, modification or other change to, of or in respect of any provision of any of the Loan Documents in the future in similar or dissimilar circumstances.

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ARTICLE 2.

AMENDMENTS.

Upon the satisfaction of the conditions set forth in Article 3 hereof, the Credit Agreement shall be amended as follows:

2.1               The following definitions are added to Section 1.01 of the Credit Agreement in appropriate alphabetical order:

“Second Amendment” means the Second Amendment to this Agreement.

“Second Amendment Effective Date” means the date the Second Amendment is effective.

2.2               The following definitions in Section 1.01 of the Credit Agreement are restated as follows:

"Applicable Rate" means, for any day, with respect to any Eurodollar Loan or ABR Loan or with respect to the commitment fees or fees on Letters of Credit payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption "Eurodollar Spread", "ABR Spread", "Commitment Fee Rate" or "Letter of Credit Fee", as the case may be, based upon the Consolidated Leverage Ratio as of the most recent determination date:

	
Level

	
Consolidated Leverage  Ratio

	
Eurodollar Spread and Letter of Credit Fee

	
ABR Spread

	
Commitment Fee Rate

	
I

	
≤  0.15:1.0

	
1.75%

	
0.75%

	
0.25%

	
II

	
>  0.15:1.0 and  ≤  0.25:1.0

	
2.00%

	
1.00%

	
0.30%

	
III

	
>  0.25:1.0

	
2.50%

	
1.50%

	
0.375%

The Applicable Rate shall be determined in accordance with the foregoing table based on the Consolidated Leverage Ratio as determined in the then most recent quarterly financial statements for the first three Fiscal Quarters of each Fiscal Year and the audited year-end financial statements for the last Fiscal Quarter of each Fiscal Year.  Adjustments, if any, to the Applicable Rate shall be effective the fifth Business Day after the date that the Administrative Agent is scheduled to receive the applicable financials under Section 5.01(a) or (b) and certificate under Section 5.01(c).  If the Borrower fails to deliver the financials to the Administrative Agent at the time required hereunder, then the Applicable Rate shall be set at Level III until such financials are so delivered.  The Applicable Rate shall be set at Level III as of the Second Amendment Effective Date.

Notwithstanding the foregoing, in the event that any financial statement or compliance certificate delivered pursuant to Sections 5.01(a), (b) and (c) is shown to be inaccurate, and such inaccuracy, if corrected, would have led to the application of (i) a higher Applicable Rate for any period (an “Applicable Period”) than the Applicable Rate applied for such Applicable Period, then (a) the Borrower shall immediately deliver to the Administrative Agent a corrected compliance certificate for such Applicable Period, (y) the Applicable Rate for such Applicable Period shall be determined as if the Consolidated Leverage Ratio in the corrected compliance certificate were applicable for such Applicable Period, and (z) the Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent the accrued additional interest and fees owing as a result of such increased Applicable Rate for such Applicable Period, or (ii) a lower Applicable Rate for the Applicable Period than the Applicable Rate applied for such Applicable Period, then (x) the Borrower shall immediately deliver to the Administrative Agent a corrected compliance certificate for such Applicable Period and (y) the Applicable Rate shall be adjusted in accordance with such corrected compliance certificate on the date that the Administrative Agent receives such corrected compliance certificate notwithstanding that such date is not otherwise a date on which the Applicable Rate is to be calculated, and such adjusted Applicable Rate shall remain in effect until otherwise required to be modified hereunder.  Nothing in this paragraph shall limit the rights of the Administrative Agent and Lenders with respect to their rights under this Agreement.  The Borrower’s obligations under this paragraph shall survive the termination of the Commitments and the repayment of all Obligations.

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"Consolidated Net Worth" means, as of any date of determination, for the Borrower and its Subsidiaries on a consolidated basis, Shareholders' Equity of the Borrower and its Subsidiaries on that date, but excluding unrealized gains and losses, net of taxes.

"Revolving Commitment" means, with respect to each Lender, the commitment of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder, as such commitment may be reduced or increased from time to time pursuant to Section 2.04, 2.09 or 9.04 or pursuant to this definition.  The initial amount of each Lender's Revolving Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption or Lender Addition and Acknowledgement Agreement pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable.  The aggregate amount of the Lenders' Revolving Commitments as of the Second Amendment Effective Date is $30,000,000, and the aggregate amount of the Lenders' Revolving Commitments shall automatically reduce (with each Lender’s Revolving Commitment reducing by its Applicable Percentage thereof) after the Second Amendment Effective Date to the following amounts as of the following dates: (i) $29,250,000 as of September 30, 2014, (ii) $28,500,000 as of December 31, 2014, (iii) $27,000,000 as of March 31, 2015, (iv) $25,500,000 as of June 30, 2015, (v) $24,000,000 as of September 30, 2015, (vi) $22,500,000 as of December 31, 2015, and (vii) $21,000,000 as of March 31, 2016.  Any optional reductions to the Revolving Commitments will reduce each of the levels in the foregoing clauses (i) through (vii).

2.3               Section 2.04 of the Credit Agreement is restated as follows: “[Intentionally Omitted].”

2.4               Section 2.11(c) of the Credit Agreement is restated as follows:

(c)  If the Borrower or any of its Subsidiaries Disposes of any property (other than any Disposition of any property permitted by clauses (i) through (iv) of Section 6.03(c)), to the extent the Net Proceeds of all such Dispositions after the Effective Date exceeds $500,000, the Borrower shall prepay the principal amount of the Term Loans  by an amount equal to 100% of such Net Proceeds immediately upon receipt thereof by such Person.

2.5               Section 2.11 of the Credit Agreement is amended by adding the following new clause (e) to the end thereof:

(e)               In addition to all other payments required hereunder, if the aggregate Revolving Credit Exposure of all Lenders exceeds the aggregate Revolving Credit Commitment of all Lenders at any time, the Borrower shall promptly prepay the Revolving Loans by an amount equal to such excess and, to the extent any such excess exists after all Revolving Loans have been paid, cash collateralize (in accordance with the procedures of Section 2.06(j)) any Letters of Credit to the extent of such excess.

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2.6               Section 3.04(b) of the Credit Agreement is restated as follows:

(b) since December 31, 2011, there has been no material adverse change in the business, assets, operations, prospects or condition financial or otherwise, of the Borrower and its Subsidiaries, taken as a whole, except as publicly disclosed in filings filed with the Securities Exchange Commission before the Second Amendment Effective Date.

2.7               Section 6.06(a) of the Credit Agreement is restated as follows:

(a) the Borrower may pay regular cash dividends on its Equity Interests consistent with its historical dividend policies and practices, provided that such regular cash dividends per fiscal quarter will not exceed the lesser of (i) $0.02 per common share or (ii) $1,250,000 in the aggregate;

2.8               Section 6.06(e) of the Credit Agreement is restated as follows: “(e) [Intentionally Omitted].”

2.9               Section 6.09(a), (b) and (c) of the Credit Agreement is restated as follows:

(a)   Consolidated Net Worth. Permit Consolidated Net Worth at any time to be less than the sum of (i) $365,697,000, (ii) an amount equal to 75% of the positive Net Income of the Borrower earned in each fiscal quarter ending on or after September 30, 2013 (with no deduction for a net loss in any such fiscal quarter), and (iii) an amount equal to 75% of the aggregate increases in Shareholders' Equity of the Borrower and its Subsidiaries after June 30, 2013 by reason of the issuance and sale of Equity Interests of the Borrower or any Subsidiary (other than issuances to the Borrower or a wholly-owned Subsidiary), including without limitation upon any conversion of debt securities of the Borrower into such Equity Interests.

(b)  Risk Based Capital Ratio. Permit the Risk Based Capital Ratio at any time of Star Insurance, Century or of any other current or future Material Insurance Subsidiary to be less than 175%.

 

(c)  Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio of the Borrower to exceed (i) 0.375:1.00 at any time prior to September 30, 2014, or (ii) 0.35:1.00 at any time on or after September 30, 2014.

2.10             Schedule 2.01 attached to the Credit Agreement is replaced with Schedule 2.01 attached hereto.

ARTICLE 3.

REPRESENTATIONS.

The Borrower represents and warrants to the Lenders and the Administrative Agent that:

3.1               The execution, delivery and performance of this Amendment are within the Borrower's powers and have been duly authorized by all necessary corporate and other action.

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3.2               This Amendment has been duly executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

3.3               The execution, delivery and performance of this Amendment by the Borrower (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation or the charter, operating agreement, by-laws or other organizational documents of the Borrower or any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.

3.4               After giving effect to the waiver and amendments herein contained, the representations and warranties of each Loan Party set forth in the Credit Agreement or in any other Loan Document are true and correct in all material respects on and as of the date hereof.

3.5               After giving effect to the waiver and amendments herein contained, no Default shall have occurred and be continuing.

ARTICLE 4.

CONDITIONS PRECEDENT.

This Amendment shall be effective as of the date hereof when each of the following conditions is satisfied:

4.1               This Amendment shall be executed by each of the Borrower and the Required Lenders.

4.2               The Consent and Agreement attached hereto shall be executed by the Guarantors.

4.3               The Administrative Agent shall have received and be satisfied with such other documents, and the Company shall have satisfied such other conditions, as the Administrative Agent may have reasonably requested.

ARTICLE 5.

MISCELLANEOUS.

5.1               References in the Credit Agreement or in any other Loan Document to the Credit Agreement shall be deemed to be references to the Credit Agreement as amended hereby and as further amended from time to time.  Except as expressly amended hereby, the Borrower agrees that the Loan Documents are ratified and confirmed and shall remain in full force and effect and that it has no set off, counterclaim, defense or other claim or dispute with respect to any of the foregoing.  The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

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5.2               The terms used but not defined herein shall have the respective meanings ascribed thereto in the Credit Agreement.  This Amendment may be signed upon any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument, and signatures sent by telecopy or other electronic imaging shall be enforceable as originals.

5.3               This Amendment shall be construed in accordance with and governed by the laws of the State of Michigan.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written.

	
 

	
MEADOWBROOK INSURANCE GROUP, INC.

	 	
	
 

	
By:  

	
/s/ Karen M. Spaun

	
 

	
 

	
Name: Karen M. Spaun

	
 

	
 

	
Title: Sr. Vice President & Chief Financial Officer

Signature Page Meadowbrook Insurance Group Second Amendment

	
 

	
JPMORGAN CHASE BANK, individually and as Administrative Agent

	
 

	
 

	
 

	
 

	
 

	
By:  

	
/s/ Thomas A. Kiepura

	
 

	
 

	
Name:  

	
Thomas A. Kiepura

	
 

	
 

	
Title:

	
Sr Credit Executive

Signature Page Meadowbrook Insurance Group Second Amendment

	
 

	
BANK OF AMERICA, N.A., individually and as a Syndication Agent

	
 

	
 

	
 

	
 

	
 

	
By:  

	/s/ Gregory J. Bosio
	
 

	
 

	
Name:  

	
Gregory J. Bosio

	
 

	
 

	
Title:

	
Vice President

Signature Page Meadowbrook Insurance Group Second Amendment

	
 

	
KEYBANK NATIONAL ASSOCIATION, individually and as a Syndication Agent

	
 

	
 

	
 

	
 

	
 

	
By:  

	/s/ James Cribbet
	
 

	
 

	
Name:  

	
James Cribbet

	
 

	
 

	
Title:

	
SVP

Signature Page Meadowbrook Insurance Group Second Amendment

	
 

	
THE PRIVATEBANK AND TRUST COMPANY

	
 

	
 

	
 

	
 

	
 

	
By:  

	  
	
 

	
 

	
Name:  

	
  

	
 

	
 

	
Title:

	
  

Signature Page Meadowbrook Insurance Group Second Amendment

	
 

	
RBS CITIZENS, N.A.

	
 

	
 

	
 

	
By:  

	
/s/ Gavin Taylor

	
 

	
 

	
Name:  

	
Gavin Taylor

	
 

	
 

	
Title:

	
SVP

 

Signature Page Meadowbrook Insurance Group Second Amendment

CONSENT AND AGREEMENT

As of the date and year first above written, each of the undersigned hereby:  (a) fully consents to the terms and provisions of the above Amendment and the consummation of the transactions contemplated thereby; (b) agrees that the Guaranty to which it is a party and each other Loan Document to which it is a party are hereby ratified and confirmed and shall remain in full force and effect, acknowledges and agrees that it has no setoff, counterclaim, defense or other claim or dispute with respect the Guaranty to which it is a party and each other Loan Document to which it is a party; and (c) represents and warrants to the Administrative Agent and the Lenders that the execution, delivery and performance of this Consent and Agreement are within its corporate or limited liability company powers, as applicable, have been duly authorized by all necessary corporate or limited liability company action, as applicable, and are not in contravention of any applicable law or regulation or of any terms of its organizational documents or of any material agreement or undertaking to which it is a party or by which it is bound, except where such contravention would not reasonably be expected to result in a Material Adverse Effect and this Consent and Agreement is the legal, valid and binding obligations of it, enforceable against it in accordance with the terms hereof and thereof, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. Terms used but not defined herein shall have the respective meanings ascribed thereto in the Credit Agreement.

	
 

	
CREST FINANCIAL CORPORATION

	
 

	
 

	
 

	
 

	
By:

	
/s/ Karen M. Spaun

	
 

	
Name:  

	
Karen M. Spaun

	
 

	
Title:

	
Sr. Vice President & Chief Financial Officer

	
 

	
 

	
 

	
 

	
MEADOWBROOK INC.

	
 

	
 

	
 

	
 

	
By:

	
/s/ Karen M. Spaun

	
 

	
Name:

	
Karen M. Spaun

	
 

	
Title:

	
Sr. Vice President & Chief Financial Officer

	
 

	
 

	
 

	
 

	
PROCENTURY CORPORATION

	
 

	
 

	
 

	
 

	
By:

	
/s/ Karen M. Spaun

	
 

	
Name:

	
Karen M. Spaun

	
 

	
Title:

	
Sr. Vice President & Chief Financial Officer

Signature Page Meadowbrook Insurance Group Second Amendment

Schedule 2.01 – Commitments

	
Lender

	
Title

	
Revolving Commitment as of the Second Amendment Effective Date

	
Term Loan Amount Outstanding as of the Second Amendment Effective Date

	
JPMorgan Chase Bank, N.A.

 

	
Administrative Agent

	
$7,500,000.00

	
$6,375,000.00

	
Bank of America, N.A.

 

	
Syndication Agent

	
$6,923,076.92

	
$5,884,615.39

	
KeyBank National Association

 

	
Syndication Agent

	
$6,923,076.92

	
$5,884,615.39

	
The PrivateBank and Trust Company

 

	
 

	
$5,192,307.69

	
$4,413,461.54

	
RBS Citizens, N.A.

 

	
 

	
$3,461,538.47

	
$2,942,307.68

	
Total:

	
 

	
$30,000,000.00

	
$25,500,000.00Exhibit 10.1

 

 

 

PLACEMENT AGENCY AGREEMENT

 

September 19, 2013

 

Ladenburg Thalmann & Co. Inc.

520 Madison Avenue

New York, NY 10022

 

Ladies and Gentlemen:

 

Introduction.
Subject to the terms and conditions herein (this “Agreement”), Response Genetics, Inc., a Delaware corporation
(the “Company”), hereby agrees to sell an aggregate of $1,912,250.25 of registered securities (the “Securities”)
of the Company in a one-time shelf take down transaction pursuant to the Company’s Registration Statement filed on Form S-3
(File No. 333-171266) with the Securities and Exchange Commission (the “SEC”) on December 17, 2010, as amended
on January 4, 2011 (the “Registration Statement”), and the related prospectus contained in the Registration
Statement, as supplemented by the final prospectus supplement relating to the sale of the Securities to be filed with the SEC pursuant
to Rule 424 under the Securities Act of 1933, as amended (as so supplemented, the “Prospectus”), including,
but not limited to, shares (the “Shares”) of the Company’s common stock, par value $0.01 per share (the
"Common Stock”), directly to various investors (each, an “Investor” and, collectively, the
“Investors”) through Ladenburg Thalmann & Co. Inc., as placement agent (“Ladenburg” or
the “Placement Agent”). The Placement Agent may retain other brokers or dealers to act as sub-agents or selected-dealers
on their behalf in connection with the Offering (as defined below). The Company may also retain other brokers or dealers to act
on its behalf in connection with the Offering.

 

The Company hereby
confirms its agreement with the Placement Agent as follows:

 

Section 1.Agreement
to Act as Placement Agent.

 

On the basis
of the representations, warranties and agreements of the Company herein contained, and subject to all of the terms and conditions
of this Agreement, Ladenburg shall serve as the Placement Agent in connection with a one-time offering and sale by the Company
of the Securities pursuant to the Registration Statement and Prospectus, with the terms of such offering (the “Offering”)
to be subject to market conditions and negotiations between the Company and the prospective Investors. The Placement Agent will
act on a reasonable best efforts basis and the Company agrees and acknowledges that there is no guarantee of the successful placement
of the Securities, or any portion thereof, in the prospective Offering. Under no circumstances will the Placement Agent or any
of its “Affiliates” (as defined below) be obligated to underwrite or purchase any of the Shares for their own accounts
or otherwise provide any financing. The Placement Agent shall act solely as the Company’s agent and not as principal. The
Placement Agent shall have no authority to bind the Company with respect to any prospective offer to purchase Shares and the Company
shall have the sole right to accept offers to purchase Shares and may reject any such offer, in whole or in part. Subject to the
terms and conditions hereof, payment of the purchase price for, and delivery of, the Securities shall be made at Closing. As compensation
for services rendered, on the Closing Date, the Company shall pay to the Placement Agent the fees and expenses set forth below: 

 

 

    	 

    	 

    

 

(i)A cash fee payable to Ladenburg equal to five percent (5.0%) of the total gross cash consideration received
by the Company in the Offering, payable by wire transfer at the closing of the Offering (the “Closing” and the
date on which the Closing occurs, the “Closing Date”).

 

(ii)Subject
to compliance with Financial Industry Regulatory Authority (“FINRA”) Rule 5110(f)(2)(D), the Company also agrees
to reimburse Ladenburg’s expenses up to a maximum amount of $30,000 (provided, however, that such expense cap in no way limits
or impairs the indemnification and contribution provisions of this Agreement).

 

(b)The
term of the Placement Agent’s engagement will be until completion of the Offering expected to occur on or about September
25, 2013; provided, however, that a party hereto may terminate the engagement with respect to itself at any time
upon 10 days’ written notice to the other parties. Notwithstanding
anything to the contrary contained herein, the provisions concerning confidentiality, indemnification and contribution contained
herein and the Company’s obligations contained in the indemnification provisions will survive any expiration or termination
of this Agreement, and the Company’s obligation to pay fees actually earned and payable and to reimburse expenses actually
incurred and reimbursable pursuant to Section 1 hereof and which are permitted to be reimbursed under FINRA Rule 5110(f)(2)(D),
will survive any expiration or termination of this Agreement. Nothing in this Agreement shall be construed to limit the ability
of the Placement Agent or its Affiliates to pursue, investigate, analyze, invest in, or engage in investment banking, financial
advisory or any other business relationship with Persons (as defined below) other than the Company. As used herein (i) “Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind and (ii) “Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under Rule 405 under the Securities Act of 1933, as amended (the
“Securities Act”). 

 

Section 2.Representations,
Warranties and Covenants of the Company. The Company hereby represents, warrants and covenants to the Placement Agent as of
the date hereof, and as of each Closing Date, as follows:

 

(a)Securities
Law Filings. The Company has filed with the Securities and Exchange Commission (the “Commission”) the Registration
Statement under the Securities Act, which was filed on December 17, 2010 and declared effective on January 6, 2011, for the registration
of the Securities. At the time of such filing, the Company met the requirements of Form S-3 under the Securities Act. Following
the determination of pricing among the Company and the prospective Investors introduced to the Company by the Placement Agent,
the Company will file with the Commission pursuant to Rule 424(b) under the Securities Act, and the rules and regulations (the
“Rules and Regulations”) of the Commission promulgated thereunder, a prospectus supplement relating to the terms
of the Offering and of the Securities and the plan of distribution thereof and will advise the Placement Agent of all further information
(financial and other) with respect to the Company required to be set forth therein. Such registration statement, at any given time,
including the exhibits thereto filed at such time, as amended at such time, is hereinafter called the “Registration Statement”;
such prospectus in the form in which it appears in the Registration Statement is hereinafter called the “Base Prospectus”;
and the amended or supplemented form of prospectus, in the form in which it will be filed with the Commission pursuant to Rule
424(b) (including the Base Prospectus as so amended or supplemented) is hereinafter called the “Prospectus Supplement.”
The Registration Statement at the time it originally became effective is hereinafter called the “Original Registration
Statement.” Any reference in this Agreement to the Registration Statement, the Original Registration Statement, the Base
Prospectus or the Prospectus Supplement shall be deemed to refer to and include the documents incorporated by reference therein
(the “Incorporated Documents”), if any, which were filed under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), at any given time, as the case may be; and any reference in this Agreement to the terms
“amend,” “amendment” or “supplement” with respect to the Registration Statement, the Original
Registration Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include the filing of
any document under the Exchange Act after the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus
Supplement, as the case may be, deemed to be incorporated therein by reference. All references in this Agreement to financial statements
and schedules and other information that is “contained,” “included,” “described,” “referenced,”
“set forth” or “stated” in the Registration Statement, the Base Prospectus or the Prospectus Supplement
(and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other
information that is or is deemed to be incorporated by reference in the Registration Statement, the Base Prospectus or the Prospectus
Supplement, as the case may be. The Company has not received any written notice that the Commission has issued or intends to issue
a stop order suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or the Prospectus Supplement
or intends to commence a proceeding for any such purpose.

 

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(b)Assurances.
The Original Registration Statement, as amended, (and any further documents to be filed with the Commission) contains all exhibits
and schedules as required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto, at
the time it became effective, complied in all material respects with the Securities Act and the Exchange Act and the applicable
Rules and Regulations and did not and, as amended or supplemented, if applicable, will not, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
The Base Prospectus and the Prospectus Supplement, each as of its respective date, comply or will comply in all material respects
with the Securities Act and the Exchange Act and the applicable Rules and Regulations. Each of the Base Prospectus and the Prospectus
Supplement, as amended or supplemented, did not and will not contain as of the date thereof any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The Incorporated Documents, if any, when they were filed with the Commission, conformed in all
material respects to the requirements of the Exchange Act and the applicable Rules and Regulations, and none of such documents,
when they were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein (with respect to Incorporated Documents incorporated by reference in the Base Prospectus
or Prospectus Supplement), in light of the circumstances under which they were made not misleading; and any further documents so
filed and incorporated by reference in the Base Prospectus or Prospectus Supplement, when such documents are filed with the Commission,
will conform in all material respects to the requirements of the Exchange Act and the applicable Rules and Regulations, as applicable,
and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading. No post-effective amendment to the Registration
Statement reflecting any facts or events arising after the date thereof which represent, individually or in the aggregate, a fundamental
change in the information set forth therein is required to be filed with the Commission. There are no documents required to be
filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant
to the Securities Act or (y) will not be filed within the requisite time period. There are no contracts or other documents required
to be described in the Base Prospectus, or Prospectus Supplement, or to be filed as exhibits or schedules to the Registration Statement,
that have not been described or filed as required. The Company is eligible to use free writing prospectuses in connection with
the Offering pursuant to Rules 164 and 433 under the Securities Act. Any free writing prospectus that the Company is required to
file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements
of the Securities Act and the applicable rules and regulations of the Commission thereunder. Each free writing prospectus that
the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or on behalf
of or used by the Company complies or will comply in all material respects with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder. The Company will not, without the prior consent of the Placement
Agent, prepare, use or refer to, any free writing prospectus.

 

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(c)Offering
Materials. The Company has delivered, or will as promptly as practicable deliver, to the Placement Agent complete conformed
copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof, and
conformed copies of the Registration Statement (without exhibits), the Base Prospectus, and the Prospectus Supplement, as amended
or supplemented, in such quantities and at such places as the Placement Agent reasonably requests. Neither the Company nor any
of its directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material
in connection with the offering and sale of the Securities other than the Base Prospectus, the Prospectus Supplement, the Registration
Statement, copies of the documents incorporated by reference therein and any other materials permitted by the Securities Act.

 

(d)Subsidiaries.
All of the direct and indirect subsidiaries of the Company (the “Subsidiaries”) are set forth in the Incorporated
Documents. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free
and clear of any liens, charges, security interests, encumbrances, rights of first refusal, preemptive rights or other restrictions
(collectively, “Liens”), and all of the issued and outstanding shares of capital stock of each Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
If the Company has no Subsidiaries, all other references to the Subsidiaries in this Agreement shall be disregarded.

 

(e)Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of this Agreement or any other agreement entered into between the Company and the Investors, (ii) a material
adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and
the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material
respect on a timely basis its obligations under this Agreement or the transactions contemplated under the Prospectus Supplement
(any of (i), (ii) or (iii), a “Material Adverse Effect”) and no action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened
(“Proceeding”), has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to
revoke, limit or curtail such power and authority or qualification.

 

    	4

    	 

    

 

(f)Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and the Prospectus Supplement and otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of each of this Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby
and under the Prospectus Supplement have been duly authorized by all necessary action on the part of the Company and no further
action is required by the Company, the Company’s Board of Directors (the “Board of Directors”) or the
Company’s stockholders in connection therewith other than in connection with the Required Approvals (as defined below). This
Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid
and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by
applicable law.

 

(g)No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the transactions contemplated pursuant
to the Prospectus Supplement, the issuance and sale of the Securities and the consummation by it of the transactions contemplated
hereby and thereby to which it is a party do not and will not (i) conflict with or violate any provision of the Company’s
or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result
in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights
of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company
or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii)
subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal
and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected;
except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material
Adverse Effect.

 

(h)Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of this Agreement and the transactions contemplated
pursuant to the Prospectus Supplement, other than those which have already been obtained or made other than: (i) the filing with
the Commission of the Prospectus Supplement, (ii) application(s) to the Nasdaq Capital Market (the “Trading Market”)
for the listing of the Shares for trading thereon in the time and manner required thereby and (iii) such filings as are required
to be made under applicable state securities laws (collectively, the “Required Approvals”).

 

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(i)Issuance
of the Securities; Registration. The Securities are duly authorized and, when issued and paid for in accordance with the Prospectus
Supplement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company.
The Company has duly authorized capital stock that amounts to the maximum number of shares of Common Stock issuable pursuant to
the Prospectus Supplement.

 

(j)Capitalization.
The capitalization of the Company is as set forth in the Incorporated Documents. The Company has not issued any capital stock since
its Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, other than (i) pursuant
to a prospectus supplement to the Registration Statement filed with the Commission on August 23, 2013, (ii) pursuant to the exercise
of employee stock options under the Company’s stock option plans, (iii) the issuance of shares of Common Stock to employees
pursuant to the Company’s employee stock purchase plans and (iv) pursuant to the conversion and/or exercise of securities
of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time any Common Stock, including, without
limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock (“Common Stock Equivalents”)
outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this
Agreement and the transactions contemplated pursuant to the Prospectus Supplement. Except as a result of the purchase and sale
of the Securities, there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements
by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.
The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any
Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are validly
issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.
No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale
of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s
stockholders.

 

(k)SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with
the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on
a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any 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, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

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(l)Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has
been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property
to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v)
the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock
option plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except
for the issuance of the Securities contemplated by the Prospectus Supplement or disclosed in the Prospectus Supplement, no event,
liability, fact, circumstance, occurrence or development has occurred or exists with respect to the Company or its Subsidiaries
or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed
by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly
disclosed at least one Trading Day prior to the date that this representation is made.

 

(m)Litigation.
Except as disclosed in the Incorporated Documents, there is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county,
local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity
or enforceability of any of this Agreement and the transactions contemplated pursuant to the Prospectus Supplement or the Securities
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim
of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been,
and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company
or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities
Act.

 

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(n)Labor
Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. No executive officer, to the knowledge of the Company, is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the
continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with
respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages
and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

 

(o)Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any
court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation
of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.

 

(p)Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any written notice of proceedings relating to the
revocation or modification of any Material Permit.

 

(q)Title
to Assets. The Company and the Subsidiaries have good and marketable title in all personal property owned by them that is material
to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for Liens as do not materially
affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by
the Company and the Subsidiaries, and Liens for the payment of federal, state or other taxes, for which appropriate reserves have
been made in accordance with GAAP and the payment of which is neither delinquent nor subject to penalties. The Company and the
Subsidiaries do not own any real property. Except as disclosed in the SEC Reports, any real property and facilities held under
lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company
and the Subsidiaries are in compliance.

 

    	8

    	 

    

 

(r)Patents
and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property
rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC
Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”). Except for reminder notices received in the ordinary course concerning annuity payments and certain abandoned
patent applications, neither the Company nor any Subsidiary has received a written notice that any of the Intellectual Property
Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from
the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial
statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property
Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material
Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure
to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(s)Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the
Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain commercially reasonable coverage from similar insurers as may be necessary to continue its business
without a significant increase in cost.

 

(t)Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company and,
to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company
or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess
of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred
on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the
Company.

 

(u)Sarbanes-Oxley;
Internal Accounting Controls. The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act
of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission
thereunder that are effective as of the date hereof and as of each Closing Date. The Company and the
Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions
are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets
is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
Company and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company
in the reports 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. The Company’s certifying officers have evaluated the effectiveness of
the Company’s disclosure controls and procedures as of the end of the period covered by the Company’s most recently
filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its
most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of
the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have
been no changes in the Company’s internal control over financial reporting (as such term is defined in the Exchange Act)
that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial
reporting.

 

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(v)Certain
Fees. Except as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions are or will be payable
by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by this Agreement and the transactions contemplated pursuant to the Prospectus Supplement.
The Investors shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons
for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement
and the transactions contemplated pursuant to the Prospectus Supplement.

 

(w)Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will
not be, or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as
amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject
to registration under the Investment Company Act of 1940, as amended.

 

(x)Registration
Rights. Except as disclosed in the SEC Reports, no Person has any right to cause the Company to effect the registration under
the Securities Act of any securities of the Company, which right has not been waived.

 

(y)Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating
such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on
which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or
maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance requirements.

 

(z)Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to the Investors as a result of the Investors and
the Company fulfilling their obligations or exercising their rights under this Agreement and the transactions contemplated pursuant
to the Prospectus Supplement, including without limitation as a result of the Company’s issuance of the Securities and the
Investors’ ownership of the Securities.

 

    	10

    	 

    

 

(aa)Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by this Agreement and the transactions
contemplated pursuant to the Prospectus Supplement, the Company confirms that neither it nor, to its knowledge, any other Person
acting on its behalf has provided any of the Investors or their agents or counsel with any information that it believes constitutes
or might constitute material, non-public information which is not otherwise disclosed in the Prospectus Supplement. The Company
understands and confirms that the Investors will rely on the foregoing representation in effecting transactions in securities of
the Company. None of the Registration Statement, the Base Prospectus, the Prospectus Supplement or the Incorporated Documents contained,
as of their respective dates, any untrue statement of a material fact or omitted to state any material fact necessary in order
to make the statements made therein, in light of the circumstances under which they were made, not misleading.

 

(bb)No
Integrated Offering. Assuming the accuracy of the Investors’ representations and warranties set forth in a definitive
agreement for the sale of the Securities, neither the Company, nor any of its Affiliates, nor any Person acting on its or their
behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under
circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes
of any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed
or designated.

 

(cc)Solvency.
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from each Closing Date.  The SEC Reports set
forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the
Company or any Subsidiary has commitments.  For the purposes of this Agreement, “Indebtedness” means (x)
any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary
course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether
or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties
by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;
and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance
with GAAP.  Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

(dd)Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and each Subsidiary (i) has made or filed all United States federal and state income and all
foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has
paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material
taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in
any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary
know of no basis for any such claim.

 

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(ee)Foreign
Corrupt Practices. Neither the Company nor, to the knowledge of the Company, any agent or other person acting on behalf of
the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials
or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation
of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

(ff)Accountants.
The Company’s accounting firm is BDO USA, LLP. To the knowledge and belief of the Company, such accounting firm (i) is a
registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial
statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2013.

 

(gg)Regulation
M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to 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 Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases
of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any
other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s Placement
Agent in connection with the placement of the Securities.

 

(hh)Office
of Foreign Assets Control. Neither the Company nor, to the Company's knowledge, any director, officer, agent, employee or affiliate
of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department.

 

(ii)U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon an Investor’s
request.

 

(jj)Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act
of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly
or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or
more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

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

 

    	12

    	 

    

 

(ll)Certificates.
Any certificate signed by an officer of the Company and delivered to the Placement Agent or to counsel for the Placement
Agent shall be deemed to be a representation and warranty by the Company to the Placement Agent as to the matters set forth
therein.

 

(mm)Reliance.
The Company acknowledges that the Placement Agent will rely upon the accuracy and truthfulness of the foregoing representations
and warranties and hereby consents to such reliance.

 

(nn)Forward-Looking
Statements. No forward-looking statements (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in any of the Registration Statement, the Base Prospectus or the Prospectus Supplement has been made or reaffirmed
without what the Company reasonably believes is a reasonable basis, or has been disclosed other than in good faith.

 

(oo)Statistical
or Market-Related Data. Any statistical, industry-related and market-related data included or incorporated by reference in
the Registration Statement, the Base Prospectus or the Prospectus Supplement are based on or derived from sources that the Company
reasonably and in good faith believes to be reliable and accurate, and such data agree with the sources from which they are derived.

 

(pp)FINRA
Affiliations. There are no affiliations with any FINRA member firm among the Company’s officers, directors or, to the
knowledge of the Company, any five percent (5%) or greater stockholder of the Company.

 

Section 3.Delivery
and Payment. Each Closing shall occur at the offices of the Placement Agent (or at such other place as shall be agreed upon
by the Placement Agent and the Company). Subject to the terms and conditions hereof, at each Closing payment of the purchase price
for the Securities sold on such Closing Date shall be made by Federal Funds wire transfer, against delivery of such Securities,
and such Securities shall be registered in such name or names and shall be in such denominations, as the Placement Agent may request
at least one business day before the time of purchase (as defined below).

 

Deliveries of the documents
with respect to the purchase of the Securities, if any, shall be made at the offices of the Placement Agent. All actions taken
at a Closing shall be deemed to have occurred simultaneously.

 

Section 4.Covenants
and Agreements of the Company. The Company further covenants and agrees with the Placement Agent as follows:

 

(a)Registration
Statement Matters. The Company will advise the Placement Agent promptly after it receives notice thereof of the time when any
amendment to the Registration Statement has been filed or becomes effective or any supplement to any Prospectus Supplement or any
amended Prospectus Supplement has been filed and will furnish the Placement Agent with copies thereof. The Company will file promptly
all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant
to Section 13(a), 14 or 15(d) of the Exchange Act subsequent to the date of any Prospectus Supplement and for so long as the delivery
of a prospectus is required in connection with the Offering. The Company will advise the Placement Agent, promptly after it receives
notice thereof (i) of any request by the Commission to amend the Registration Statement or to amend or supplement any Prospectus
Supplement or for additional information, and (ii) of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto or any order directed at any Incorporated Document, if any,
or any amendment or supplement thereto or any order preventing or suspending the use of the Base Prospectus or any Prospectus Supplement
or any amendment or supplement thereto or any post-effective amendment to the Registration Statement, of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, of the institution or threatened institution of any proceeding
for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or a
Prospectus Supplement or for additional information. The Company shall use its best efforts to prevent the issuance of any such
stop order or prevention or suspension of such use.  If the Commission shall enter any such stop order or order or notice
of prevention or suspension at any time, the Company will use its best efforts to obtain the lifting of such order at the earliest
possible moment, or will file a new registration statement and use its best efforts to have such new registration statement declared
effective as soon as practicable.  Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b),
430A, 430B and 430C, as applicable, under the Securities Act, including with respect to the timely filing of documents thereunder,
and will use its reasonable efforts to confirm that any filings made by the Company under such Rule 424(b) are received
in a timely manner by the Commission.

 

    	13

    	 

    

 

(b)Blue
Sky Compliance. The Company will cooperate with the Placement Agent and the Investors in endeavoring to qualify the Securities
for sale under the securities laws of such jurisdictions (United States and foreign) as the Placement Agent and the Investors may
reasonably request and will make such applications, file such documents, and furnish such information as may be reasonably required
for that purpose, provided that the Company shall not be required to qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction where it is not now so qualified or required to file such a consent, and provided further
that the Company shall not be required to produce any new disclosure document other than a Prospectus Supplement. The Company will,
from time to time, prepare and file such statements, reports and other documents as are or may be required to continue such qualifications
in effect for so long a period as the Placement Agent may reasonably request for distribution of the Securities. The Company will
advise the Placement Agent promptly of the suspension of the qualification or registration of (or any such exemption relating to)
the Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use its
reasonable best efforts to obtain the withdrawal thereof at the earliest possible moment.

 

(c)Amendments
and Supplements to a Prospectus Supplement and Other Matters. The Company will comply with the Securities Act and the Exchange
Act, and the rules and regulations of the Commission thereunder, so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement, the Incorporated Documents and any Prospectus Supplement. If during the period in which a prospectus
is required by law to be delivered in connection with the distribution of Securities contemplated by the Incorporated Documents
or any Prospectus Supplement (the “Prospectus Delivery Period”), any event shall occur as a result of which,
in the judgment of the Company or in the opinion of the Placement Agent or counsel for the Placement Agent, it becomes necessary
to amend or supplement the Incorporated Documents or any Prospectus Supplement in order to make the statements therein, in the
light of the circumstances under which they were made, as the case may be, not misleading, or if it is necessary at any time to
amend or supplement the Incorporated Documents or any Prospectus Supplement or to file under the Exchange Act any Incorporated
Document to comply with any law, the Company will promptly prepare and file with the Commission, and furnish at its own expense
to the Placement Agent and to dealers, an appropriate amendment to the Registration Statement or supplement to the Registration
Statement, the Incorporated Documents or any Prospectus Supplement that is necessary in order to make the statements in the Incorporated
Documents and any Prospectus Supplement as so amended or supplemented, in the light of the circumstances under which they were
made, as the case may be, not misleading, or so that the Registration Statement, the Incorporated Documents or any Prospectus Supplement,
as so amended or supplemented, will comply with law. Before amending the Registration Statement or supplementing the Incorporated
Documents or any Prospectus Supplement in connection with the Offering, the Company will furnish the Placement Agent with a copy
of such proposed amendment or supplement and will not file any such amendment or supplement to which the Placement Agent reasonably
objects.

 

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(d)Copies
of any Amendments and Supplements to a Prospectus Supplement. The Company will furnish the Placement Agent, without charge,
during the period beginning on the date hereof and ending on the later of the last Closing Date of the Offering, as many copies
of the Incorporated Documents and any Prospectus Supplement and any amendments and supplements thereto (including any Incorporated
Documents, if any) as the Placement Agent may reasonably request.

 

(e)Free
Writing Prospectus. The Company covenants that it will not, unless it obtains the prior written consent of the Placement Agent,
make any offer relating to the Securities that would constitute a Company Free Writing Prospectus or that would otherwise constitute
a “free writing prospectus” (as defined in Rule 405 of the Securities Act) required to be filed by the Company with
the Commission or retained by the Company under Rule 433 of the Securities Act. In the event that the Placement Agent expressly
consents in writing to any such free writing prospectus (a “Permitted Free Writing Prospectus”), the Company
covenants that it shall (i) treat each Permitted Free Writing Prospectus as a Company Free Writing Prospectus, and (ii) comply
with the requirements of Rule 164 and 433 of the Securities Act applicable to such Permitted Free Writing Prospectus, including
in respect of timely filing with the Commission, legending and record keeping.

 

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

 

(g)Earnings
Statement. As soon as practicable and in accordance with applicable requirements under the Securities Act, but in any event
not later than 18 months after the last Closing Date, the Company will make generally available to its security holders and to
the Placement Agent an earnings statement, covering a period of at least 12 consecutive months beginning after the last Closing
Date, that satisfies the provisions of Section 11(a) and Rule 158 under the Securities Act.

 

(h)Periodic
Reporting Obligations. During the Prospectus Delivery Period, the Company will duly file, on a timely basis, with the Commission
and the Trading Market all reports and documents required to be filed under the Exchange Act within the time periods and in the
manner required by the Exchange Act.

 

(i)Additional
Documents. The Company will enter into any subscription, purchase or other customary agreements as the Placement Agent
or the Investors deem necessary or appropriate to consummate the Offering, all of which will be in form and substance reasonably
acceptable to the Company, the Placement Agent and the Investors. The Company agrees that the Placement Agent may rely upon, and
each is a third party beneficiary of, the representations and warranties, and applicable covenants, set forth in any such purchase,
subscription or other agreement with Investors in the Offering.

 

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(j)No
Manipulation of Price.  The Company will not take, directly or indirectly, any action designed to cause or result
in, or that has constituted or might reasonably be expected to constitute, the stabilization or manipulation of the price of any
securities of the Company.

 

(k)Acknowledgment.
The Company acknowledges that any advice given by the Placement Agent to the Company is solely for the benefit and use of the Board
of Directors of the Company and may not be used, reproduced, disseminated, quoted or referred to, without the Placement Agent’s
prior written consent.

 

Section 5.Conditions
of the Obligations of the Placement Agent. The obligations of the Placement Agent hereunder shall be subject to the accuracy
of the representations and warranties on the part of the Company set forth in Section 2 hereof, in each case as of the date hereof
and as of each Closing Date as though then made, to the timely performance by each of the Company of its covenants and other obligations
hereunder on and as of such dates, and to each of the following additional conditions:

 

(a)[RESERVED]

 

(b)Compliance
with Registration Requirements; No Stop Order; No Objection from the FINRA. Each Prospectus Supplement (in accordance with
Rule 424(b)) and “free writing prospectus” (as defined in Rule 405 of the Securities Act), if any, shall have
been duly filed with the Commission, as appropriate; no stop order suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission;
no order preventing or suspending the use of any Prospectus Supplement shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; no order having the effect of ceasing or suspending the distribution
of the Securities or any other securities of the Company shall have been issued by any securities commission, securities regulatory
authority or stock exchange and no proceedings for that purpose shall have been instituted or shall be pending or, to the knowledge
of the Company, contemplated by any securities commission, securities regulatory authority or stock exchange; all requests for
additional information on the part of the Commission shall have been complied with; and the FINRA shall have raised no objection
to the fairness and reasonableness of the placement terms and arrangements.

 

(c)Corporate
Proceedings. All corporate proceedings and other legal matters in connection with this Agreement, the Registration Statement
and each Prospectus Supplement, and the registration, sale and delivery of the Securities, shall have been completed or resolved
in a manner reasonably satisfactory to the Placement Agent's counsel, and such counsel shall have been furnished with such papers
and information as it may reasonably have requested to enable such counsel to pass upon the matters referred to in this Section 5.

 

(d)No
Material Adverse Effect. Subsequent to the execution and delivery of this Agreement and prior to each Closing Date, there shall
not have occurred any Material Adverse Effect.

 

(e)Opinion
of Counsel for the Company. The Placement Agent shall have received on each Closing Date the favorable opinion of legal counsel
to the Company, dated as of such Closing Date, including, without limitation, a negative assurance letter, addressed to the Placement
Agent in form and substance reasonably satisfactory to the Placement Agent.

 

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(f)Officers’
Certificate. The Placement Agent shall have received on each Closing Date a certificate of the Company, dated as of such Closing
Date, signed by the Chief Executive Officer and Chief Financial Officer of the Company, to the effect that, and the Placement Agent
shall be reasonably satisfied that, the signers of such certificate have reviewed the Registration Statement, the Incorporated
Documents, any Prospectus Supplement, any Permitted Free Writing Prospectus and this Agreement and to the further effect that:

 

(i)The
representations and warranties of the Company in this Agreement are true and correct, as if made on and as of such Closing Date,
and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied
at or prior to such Closing Date;

 

(ii)No
stop order suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or any Prospectus Supplement
has been issued and no proceedings for that purpose have been instituted or are pending or, to the Company’s knowledge, threatened
under the Securities Act; no order having the effect of ceasing or suspending the distribution of the Securities or any other securities
of the Company has been issued by any securities commission, securities regulatory authority or stock exchange in the United States
and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, contemplated by any
securities commission, securities regulatory authority or stock exchange in the United States;

 

(iii)When
the Registration Statement became effective, at the time of sale, and at all times subsequent thereto up to the delivery of such
certificate, the Registration Statement and the Incorporated Documents, if any, when such documents became effective or were filed
with the Commission, contained all material information required to be included therein by the Securities Act and the Exchange
Act and the applicable rules and regulations of the Commission thereunder, as the case may be, and in all material respects conformed
to the requirements of the Securities Act and the Exchange Act and the applicable rules and regulations of the Commission thereunder,
as the case may be, and the Registration Statement and the Incorporated Documents, if any, did not and do not include any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading (provided, however, that the preceding representations
and warranties contained in this paragraph (iii) shall not apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by the Placement Agent expressly for use therein) and, since the effective
date of the Registration Statement, there has occurred no event required by the Securities Act and the rules and regulations of
the Commission thereunder to be set forth in the Incorporated Documents which has not been so set forth; and

 

(iv)Subsequent
to the respective dates as of which information is given in the Registration Statement, the Incorporated Documents and any Prospectus
Supplement, there has not been any Material Adverse Effect.

 

(g)Comfort Letters.
On the date hereof, and on each Closing Date, the Placement Agent shall have received from BDO USA, LLP, independent public or
certified public accountants for the Company, a letter dated the date hereof, or such Closing Date, as the case may be, addressed
to the Placement Agent, in form and substance reasonably satisfactory to the Placement Agent, containing statements and information
of the type ordinarily included in accountant’s “comfort letters” to placement agents in a registered offering,
delivered according to Statement of Auditing Standards No. 72 (or any successor bulletin), with respect to the audited and unaudited
financial statements and certain financial information contained or incorporated by reference in the Registration Statement and
the Prospectus.

 

    	17

    	 

    

 

(h)Stock
Exchange Listing. The Common Stock shall be registered under the Exchange Act and shall be listed on the principal Trading
Market, and the Company shall not have taken any action designed to terminate, or likely to have the effect of terminating, the
registration of the Common Stock under the Exchange Act or delisting or suspending from trading the Common Stock from the principal
Trading Market, nor shall the Company have received any information suggesting that the Commission or the principal Trading Market
is contemplating terminating such registration or listing.

 

(i)Additional
Documents. On or before each Closing Date, the Placement Agent and counsel for the Placement Agent shall have received such
information and documents as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of
the Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein contained.

 

If any condition specified
in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Placement Agent
by notice to the Company at any time on or prior to a Closing Date, which termination shall be without liability on the part of
any party to any other party, except that Section 6 (Payment of Expenses), Section 7 (Indemnification and Contribution) and Section
8 (Representations and Indemnities to Survive Delivery) shall at all times be effective and shall survive such termination.

 

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Section 6.Payment
of Expenses. The Company agrees to pay all costs, fees and expenses incurred by the Company in connection with the performance
of its obligations hereunder and in connection with the transactions contemplated hereby, including, without limitation: (i) all
expenses incident to the issuance, delivery and qualification of the Securities (including all printing and engraving costs); (ii)
all fees and expenses of the registrar and transfer agent of the Common Stock; (iii) all necessary issue, transfer and other stamp
taxes in connection with the issuance and sale of the Securities; (iv) all fees and expenses of the Company’s counsel,
independent public or certified public accountants and other advisors; (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration Statement (including financial statements, exhibits,
schedules, consents and certificates of experts), the Base Prospectus and each Prospectus Supplement, and all amendments and supplements
thereto, and this Agreement; (vi) all filing fees, reasonable attorneys’ fees and expenses incurred by the Company or the
Placement Agent in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Securities for offer and sale under the state securities or blue sky laws or the securities laws of any
other country, and, if requested by the Placement Agent, preparing and printing a “Blue Sky Survey,” an “International
Blue Sky Survey” or other memorandum, and any supplements thereto, advising the Placement Agent of such qualifications,
registrations and exemptions; (vii) if applicable, the filing fees incident to the review and approval by the FINRA of the Placement
Agent’s participation in the offering and distribution of the Securities; (viii) the fees and expenses associated with including
the Securities on the Trading Market; (ix) all costs and expenses incident to the travel and accommodation of the Company’s
employees on the “roadshow,” if any; and (x) all other fees, costs and expenses referred to in Part II of the
Registration Statement.

 

Section 7.Indemnification
and Contribution. The Company agrees to indemnify the Placement Agent in accordance with the provisions of Schedule A
hereto, which is incorporated by reference herein and made a part hereof.

 

Section 8.Representations
and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements
of the Company or any person controlling the Company, of its officers, and of the Placement Agent set forth in or made pursuant
to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Placement Agent,
the Company, or any of its or their partners, officers or directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Securities to be sold in the proposed Offering and any termination of this Agreement. A successor
to the Placement Agent, or to the Company, its directors or officers or any person controlling the Company, shall be entitled to
the benefits of the indemnity, contribution and reimbursement agreements contained in this Agreement.

 

Section 9.Notices.
All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:

 

If to the Placement Agent, to the address
set forth above, Attn: General Counsel, Facsimile: (305) 572-4220.

 

With a copy to: 

 

SorinRand LLP

515 Madison Avenue

New York, New York 10022

Attention: Jeffrey S. Marcus

 

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If to the Company:

 

Response Genetics, Inc.

1640 Marengo Street, 6th Floor

Los Angeles, California 90033

Attention: Thomas A. Bologna, Chairman and Chief Executive Officer

 

With a copy to: 

 

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019

	Attention:  	Steven A. Seidman
	 	Laura L. Delanoy

 

Any party hereto may
change the address for receipt of communications by giving written notice to the others.

 

Section 10.Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of the employees, officers
and directors and controlling persons referred to in Section 7 hereof, and to their respective successors and personal representatives,
and no other person will have any right or obligation hereunder.

 

Section 11.Partial
Unenforceability. The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect
the validity or enforceability of any other section, paragraph or provision hereof. If any section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and
only such minor changes) as are necessary to make it valid and enforceable.

 

Section 12.Governing
Law Provisions. This Agreement shall be deemed to have been made and delivered in New York City and both this Agreement and
the transactions contemplated hereby shall be governed as to validity, interpretation, construction, effect and in all other respects
by the internal laws of the State of New York, without regard to the conflict of laws principles thereof. Each of the Placement
Agent and the Company: (i) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement and/or
the transactions contemplated hereby shall be instituted exclusively in New York Supreme Court, County of New York, or in the United
States District Court for the Southern District of New York, (ii) waives any objection which it may have now or hereafter to the
venue of any such suit, action or proceeding, and (iii) irrevocably consents to the jurisdiction of the New York Supreme Court,
County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding.
Each of the Placement Agent and the Company further agrees to accept and acknowledge service of any and all process which may be
served in any such suit, action or proceeding in the New York Supreme Court, County of New York, or in the United States District
Court for the Southern District of New York and agrees that service of process upon the Company mailed by certified mail to the
Company’s address shall be deemed in every respect effective service of process upon the Company, in any such suit, action
or proceeding, and service of process upon the Placement Agent mailed by certified mail to the Placement Agent’s address
shall be deemed in every respect effective service process upon the Placement Agent, in any such suit, action or proceeding. Notwithstanding
any provision of this Agreement to the contrary, the Company agrees that neither the Placement Agent nor its affiliates, and the
officers, directors, employees, agents and representatives of the Placement Agent, their respective affiliates and each other person,
if any, controlling the Placement Agent or any of its affiliates, shall have any liability (whether direct or indirect, in contract
or tort or otherwise) to the Company for or in connection with the engagement and transaction described herein except for any such
liability for losses, claims, damages or liabilities incurred by us that are finally judicially determined to have resulted from
the bad faith, gross negligence or intentional misconduct of such individuals or entities. If either party shall commence an action
or proceeding to enforce any provision of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed
by the other party for its reasonable attorney’s fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.

 

    	20

    	 

    

 

Section 13.General
Provisions.

 

(a)This
Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject matter hereof among the parties hereto. This Agreement
may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition
is meant to benefit. Section headings herein are for the convenience of the parties only and shall not affect the construction
or interpretation of this Agreement.

 

(b)The
Company acknowledges that in connection with the offering of the Securities: (i) the Placement Agent have acted at arms length,
are not agents of, and owe no fiduciary duties to the Company or any other person, (ii) the Placement Agent owe the Company only
those duties and obligations set forth in this Agreement and (iii) the Placement Agent may have interests that differ from those
of the Company. The Company waives to the fullest extent permitted by applicable law any claims it may have against the Placement
Agent arising from an alleged breach of fiduciary duty in connection with the offering of the Securities.

 

[The remainder of this page has been
intentionally left blank.]

 

    	21

    	 

    

 

If the foregoing is
in accordance with your understanding of our agreement, please sign below whereupon this instrument, along with all counterparts
hereof, shall become a binding agreement in accordance with its terms.

 

	 	Very truly yours,
	 	 	 
	 	RESPONSE GENETICS, Inc.
	 	A Delaware corporation
	 	 	 
	 	 	 
	 	By:  	/s/ Thomas A. Bologna
	 	 	Name:  Thomas A. Bologna
	 	 	Title:    Chairman & CEO

 

 

The foregoing Placement
Agency Agreement is hereby confirmed and accepted as of the date first above written.

 

Ladenburg Thalmann
& Co. Inc.

 

 

	By:  	/s/ David Rosenberg	 
	 	Name:   David Rosenberg	 
	 	Title:     Co-CEO	 

 

    	 

    	 

    

 

SCHEDULE A – INDEMNIFICATION

 

The Company hereby
agrees to indemnify and hold the Placement Agent, its officers, directors, principals, employees, affiliates, and shareholders,
and their respective successors and assigns, harmless from and against any and all loss, claim, damage, liability, deficiencies,
actions, suits, proceedings, costs and reasonable legal expenses whatsoever (including, but not limited to, reasonable legal fees
and other expenses and reasonable disbursements incurred in connection with investigating, preparing to defend or defending any
action, suit or proceeding, including any inquiry or investigation, commenced or threatened, or any claim whatsoever, or in appearing
or preparing for appearance as witness in any proceeding, including any pretrial proceeding such as a deposition) (collectively,
“Losses”) arising out of, based upon, or in any way related or attributed to, (i) any breach of a representation,
warranty or covenant by the Company contained in this Agreement or (ii) any activities or services performed hereunder by the Placement
Agent, 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, gross negligence or bad faith of the Placement Agent in performing the services hereunder.

 

If the Placement Agent
receives written notice of the commencement of any legal action, suit or proceeding with respect to which the Company is or may
be obligated to provide indemnification pursuant to this Schedule A, the Placement Agent shall, within thirty (30) days
of the receipt of such written notice, give the Company written notice thereof (a “Claim Notice”). Failure to
give such Claim Notice within such thirty (30) day period shall not constitute a waiver by the Placement Agent of their right to
indemnity hereunder with respect to such action, suit or proceeding. Upon receipt by the Company of a Claim Notice from the Placement
Agent with respect to any claim for indemnification which is based upon a claim made by a third party (a “Third Party
Claim”), the Company may assume the defense of the Third Party Claim with counsel of its own choosing, as described below.
The Placement Agent shall cooperate in the defense of the Third Party Claim and shall furnish such records, information and testimony
and attend all such conferences, discovery proceedings, hearings, trial and appeals as may be reasonably required in connection
therewith. The Placement Agent shall have the right to employ their own counsel in any such action, which shall be at the Company's
expense if (i) the Company and the Placement Agent shall have mutually agreed in writing to the retention of such counsel, (ii)
the Company shall have failed in a timely manner to assume the defense and employ counsel or experts reasonably satisfactory to
the Placement Agent in such litigation or proceeding or (iii) the named parties to any such litigation or proceeding (including
any impleaded parties) include the Company and either or both of the Placement Agent and representation of the Company and the
Placement Agent by the same counsel or experts would, in the reasonable opinion of the Placement Agent, be inappropriate due to
actual or potential differing interests between the Company and the Placement Agent. The Company shall not satisfy or settle any
Third Party Claim for which indemnification has been sought and is available hereunder, without the prior written consent of the
Placement Agent, which consent shall not be unreasonably withheld, conditioned or delayed and which shall not be required if the
Placement Agent are granted a release in connection therewith. The indemnification provisions hereunder shall survive the termination
or expiration of this Agreement.

 

The Company further
agrees, upon demand by the Placement Agent, to promptly reimburse the Placement Agent for, or pay, any fees, expenses or disbursements
as to which the Placement Agent has been indemnified herein with such reimbursement to be made currently as any such fees, expenses
or disbursements are incurred by the Placement Agent. Notwithstanding the provisions of the aforementioned indemnification, any
such reimbursement or payment by the Company of fees, expenses, or disbursements incurred by the Placement Agent shall be repaid
by the Placement Agent in the event of any proceeding in which a final judgment (after all appeals or the expiration of time to
appeal) is entered in a court of competent jurisdiction against the Placement Agent based solely upon its gross negligence, intentional
misconduct or bad faith in the performance of its duties hereunder, and provided further, that the Company shall not be required
to make reimbursement or payment for any settlement effected without the Company’s prior written consent (which consent shall
not be unreasonably withheld or delayed).

 

    	 

    	 

    

 

If for any reason the
foregoing indemnification is unavailable or is insufficient to hold the Placement Agent harmless, the Company agrees to contribute
the amount paid or payable by the Placement Agent in such proportion as to reflect not only the relative benefits received by the
Company, on the one hand, and the Placement Agent, on the other hand, but also the relative fault of the Company and the Placement
Agent as well as any relevant equitable considerations. In no event shall the Placement Agent contribute in excess of the fees
actually received by it pursuant to the terms of this Agreement.

 

For purposes of this
Agreement, each officer, director, shareholder, and employee or affiliate of the Placement Agent and each person, if any, who
controls the Placement Agent (or any affiliate thereof) within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act shall have the same rights as the Placement Agent with respect to matters of indemnification by the Company
hereunder.

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