Document:

Form of Warrant

 Exhibit 4.1 
 WARRANT 
 NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 
 COMMON STOCK PURCHASE WARRANT 
 To
Purchase [            ] Shares of Common Stock of 
 SCOLR PHARMA, INC.

 THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value received,
                     (the “Holder”), is entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after April 17, 2006 (the “Initial Exercise Date”) and on or prior to the close of business on April 17, 2011 (the “Termination Date”) but
not thereafter, to subscribe for and purchase from SCOLR Pharma, Inc., a Delaware corporation (the “Company”), up to [            ] shares (the “Warrant
Shares”) of Common Stock, of the Company (the “Common Stock”). The purchase price of one share of Common Stock (the “Exercise Price”) under this Warrant shall be $7.50. The Exercise
Price and the number of Warrant Shares for which the Warrant is exercisable shall be subject to adjustment as provided herein. This Warrant is being issued pursuant to that certain Placement Agency Agreement by and among the Company, Taglich
Brothers, Inc. and Roth Capital Partners, LLC (the “Placement Agency Agreement”). 
 1. Title to Warrant.
Prior to the Termination Date and subject to compliance with applicable laws and Section 7 of this Warrant, this Warrant and all rights hereunder are transferable, in whole or in part, at the office or agency of the Company by the Holder in
person or by duly authorized attorney, upon surrender of this Warrant together with the Assignment Form annexed hereto properly endorsed. The transferee shall sign an investment letter in form and substance reasonably satisfactory to the Company.

 2. Authorization of Shares. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with such issue). 
 3. Exercise of Warrant. Except as
provided in Section 4 hereof, exercise of the purchase rights represented by this Warrant may be made at any time or times on or after the Initial Exercise Date and on or before the Termination Date by the surrender of this Warrant and the
Notice of 

  

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Exercise Form annexed hereto duly executed, at the office of the Company (or such other office or agency of the Company as it may designate by notice in
writing to the registered Holder at the address of such Holder appearing on the books of the Company) and upon payment of the Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank, the
Holder shall be entitled to receive a certificate for the number of Warrant Shares so purchased. Certificates for shares purchased hereunder shall be delivered to the Holder within five (5) Trading Days after the date on which this Warrant
shall have been exercised. This Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the Holder or any other person so designated to be named therein shall be deemed to have
become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 5 prior to the
issuance of such shares, have been paid. If this Warrant shall have been exercised in part, the Company shall, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant. 
 4. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which Holder would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price. 
 5. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer
tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form
attached hereto duly executed by the Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. 
 6. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof. 
 7. Transfer, Division and Combination. 
 (a) Subject to compliance with any applicable securities laws and the conditions set forth in Sections 1 and 7(e) hereof, this Warrant and
all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the
Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name
of the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly
be cancelled. A Warrant, if properly assigned, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued. 
 (b) This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new
Warrants are to be issued, signed by the Holder or its agent or 

  

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attorney. Subject to compliance with Section 7(a), as to any transfer which may be involved in such division or combination, the Company shall execute
and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. 
 (c) The Company shall prepare, issue and deliver at its own expense (other than transfer taxes) the new Warrant or Warrants under this Section 7. 
 (d) The Company agrees to maintain, at its aforesaid office, books for the registration and the registration of transfer of the Warrants.

 (e) If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this
Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that such
transfer may be made without registration under the Securities Act and under applicable state securities or blue sky laws, (ii) that the holder or transferee execute and deliver to the Company an investment letter in form and substance
acceptable to the Company and (iii) that the transferee be an “accredited investor” as defined in Rule 501(a) promulgated under the Securities Act. 
 8. No Rights as Shareholder until Exercise. This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof. Upon the surrender of this
Warrant and the payment of the aggregate Exercise Price, the Warrant Shares so purchased shall be and be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the later of the date of such surrender or
payment. 
 9. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it
(which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate. 
 10. Saturdays, Sundays, Holidays, etc. If
the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day
not a Saturday, Sunday or legal holiday. 
 11. Adjustments of Exercise Price and Number of Warrant Shares. The number and kind of
securities purchasable upon the exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time upon the happening of any of the following. In case the Company shall (i) pay a dividend in shares of Common Stock
or make a distribution in shares of Common Stock to holders of its outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue any shares of its capital stock in a reclassification of the Common Stock, then the number of Warrant Shares purchasable upon exercise of this Warrant immediately prior thereto shall be
adjusted so that the Holder shall be entitled to receive the kind and number of Warrant Shares or other securities of the Company which it would have owned or have been entitled to receive had such Warrant been exercised in advance thereof. Upon
each such 

  

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adjustment of the kind and number of Warrant Shares or other securities of the Company which are purchasable hereunder, the Holder shall thereafter be
entitled to purchase the number of Warrant Shares or other securities resulting from such adjustment at an Exercise Price per Warrant Share or other security obtained by multiplying the Exercise Price in effect immediately prior to such adjustment
by the number of Warrant Shares purchasable pursuant hereto immediately prior to such adjustment and dividing by the number of Warrant Shares or other securities of the Company that are purchasable pursuant hereto immediately after such adjustment.
An adjustment made pursuant to this paragraph shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. 
 12. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets. In case the Company shall reorganize its capital, reclassify
its capital stock, consolidate or merge with or into another corporation (where the Company is not the surviving corporation or where there is a change in or distribution with respect to the Common Stock of the Company), or sell, transfer or
otherwise dispose of its property, assets or business to another corporation and, pursuant to the terms of such reorganization, reclassification, merger, consolidation or disposition of assets, shares of common stock of the successor or acquiring
corporation, or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring corporation
(“Other Property”), are to be received by or distributed to the holders of Common Stock of the Company, then the Holder shall have the right thereafter to receive upon exercise of this Warrant, the number of shares of Common
Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and Other Property receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a
Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event. In case of any such reorganization, reclassification, merger, consolidation or disposition of assets, the successor or acquiring
corporation (if other than the Company) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Warrant to be performed and observed by the Company and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed appropriate (as determined in good faith by resolution of the Board of Directors of the Company) in order to provide for adjustments of Warrant Shares for which this Warrant is
exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 12. For purposes of this Section 12, “common stock of the successor or acquiring corporation” shall include stock of
such corporation of any class which is not preferred as to dividends or assets over any other class of stock of such corporation and which is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other
securities which are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock.
The foregoing provisions of this Section 12 shall similarly apply to successive reorganizations, reclassifications, mergers, consolidations or disposition of assets. 
 13. Notice of Adjustment. Whenever the number of Warrant Shares or number or kind of securities or other property purchasable upon the exercise of this Warrant or the Exercise Price is adjusted, as herein
provided, the Company shall give notice thereof to the Holder, which notice shall state the number of Warrant Shares (and other securities or property) purchasable upon the exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief statement of the facts requiring such adjustment and setting forth the computation by which such adjustment was made. 
 14. Notice of Corporate Action. If at any time: 
 (a) the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution, or any right to subscribe for or 

  

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purchase any evidences of its indebtedness, any shares of stock of any class or any other securities or property, or to receive any other right, or

 (b) there shall be any capital reorganization of the Company, any reclassification or recapitalization of the capital stock
of the Company or any consolidation or merger of the Company with, or any sale, transfer or other disposition of all or substantially all the property, assets or business of the Company to, another corporation or, 
 (c) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; 
 then, in any one or more of such cases, the Company shall give to Holder (i) at least 10 calendar days’ prior written notice of the date on which a record date
shall be selected for such dividend, distribution or right or for determining rights to vote in respect of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, liquidation or winding up, and (ii) in the
case of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at least 10 calendar days’ prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, the date on which the holders of Common Stock shall be entitled to
any such dividend, distribution or right, and the amount and character thereof, and (ii) the date on which any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is
to take place and the time, if any such time is to be fixed, as of which the holders of Common Stock shall be entitled to exchange their Warrant Shares for securities or other property deliverable upon such disposition, dissolution, liquidation or
winding up. Each such written notice shall be sufficiently given if addressed to Holder at the last address of Holder appearing on the books of the Company and delivered in accordance with Section 16(d). 
 15. Authorized Shares. The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority
to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such
reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.

 Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant
against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value,
(b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts
to obtain all such 

  

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authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant. 
 Before taking any action which would result in an adjustment in the number of Warrant Shares for which
this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. 

16. Miscellaneous. 
 (a) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement. 
 (b) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered,
will have restrictions upon resale imposed by state and federal securities laws. 
 (c) Nonwaiver and Expenses. No
course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding all rights hereunder terminate
on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or
remedies hereunder. 
 (d) Notices. Any notice, request or other document required or permitted to be given or
delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Placement Agency Agreement; provided upon any permitted assignment of this Warrant, the assignee shall promptly provide the Company with its
contact information. 
 (e) Limitation of Liability. No provision hereof, in the absence of any affirmative action by
Holder to exercise this Warrant or purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the Company. 
 (f) Remedies. Holder, in addition
to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 
 (g) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant Shares. 
  

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 (h) Amendment. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holder. 
 (i) Headings & Severability. The headings
used in this Warrant are for the convenience for reference only and shall not, for any purpose, be deemed a part of this Warrant. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant. 
 ******************** 
  

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 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly
authorized. 
 Dated: April     , 2006 
  

			
	SCOLR Pharma, Inc.
		
	 By:
	 	  
		 	 Name:
 Title:

  

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 NOTICE OF EXERCISE 
  

	To:	SCOLR Pharma, Inc. 

 (1) The undersigned hereby elects to
purchase                      Warrant Shares of SCOLR Pharma, Inc. pursuant to the terms of the attached Warrant (only if exercised in full),
and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. 
 (2) Payment shall be in
the form of lawful money of the United States. 
 (3) Please issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below: 
 _________________________________________ 
 The Warrant Shares shall be delivered to the following: 
 _________________________________________ 
 _________________________________________ 
 _________________________________________ 
 (4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended. 
  

			
	 [PURCHASER]

		
	By:	 	  
		 	 Name:

		 	 Title:

	
	 Dated:

  

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 ASSIGNMENT FORM 
 (To assign the foregoing warrant, execute 
 this form and supply required information. 
 Do not use this form to exercise the warrant.) 
 FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to 
                                       
                                        
               whose address is 
                                       
                                        
                                        
      . 
 _______________________________________________________________ 
  

			
	 Dated:             ,
        

		
	Holder’s Signature:	 	  
	Holder’s Address:	 	  
		 	  

  

			
		
	Signature Guaranteed:	 	  

 NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the
Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of
authority to assign the foregoing Warrant. 
  

 10Placement Agency Agreement

 Exhibit 10.1 
 PLACEMENT AGENCY AGREEMENT 
 April 17, 2006 
 Roth Capital Partners, LLC 
 24 Corporate Plaza 
 Newport Beach, CA 92660 
 Taglich Brothers, Inc. 
 The Chrysler Building 
 405 Lexington Avenue, 51st Floor 
 New York, New York 10174

 Ladies and Gentlemen: 
 Introductory. SCOLR Pharma, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions herein, to issue and sell an aggregate of up to $40,000,000 in shares (the
“Shares”) of its common stock, $0.001 par value per share (the “Common Stock”), in one or more series directly to various investors (collectively, the “Investors”). 
 The Company hereby confirms its agreement with the Placement Agents as follows: 
 Section 1. Agreement to Act as Placement Agents. 
 (a) On the basis of the representations, warranties
and agreements of the Company herein contained, and subject to all the terms and conditions of this Agreement between the Company on the one hand, and Roth Capital Partners, LLC (“Roth Capital”) and Taglich Brothers, Inc. (“Taglich
Brothers”) on the other hand, Roth Capital and Taglich Brothers shall be the Company’s exclusive Placement Agents (in such capacity, the “Placement Agents”), on a best efforts basis, in connection with the issuance and sale by
the Company of the Shares in one or more proposed takedowns from shelf Registration Statement No. 333-129275, or other registration statement(s) filed or to be filed to accomplish the takedowns (collectively the “Registration
Statement”), with the terms of each offering to be subject to market conditions and negotiations between the Company, the Placement Agents and the Investors (each takedown shall be referred to collectively herein as an “Offering” and
all such takedowns shall be referred to herein as the “Offerings”). As compensation for services rendered, and provided that any of the Shares are sold to Investors in any Offering, on the Closing Date (as defined below) of each Offering,
the Company shall pay to the Placement Agents an amount equal to six percent (6%) of the gross proceeds received by the Company from the sale of the Shares. The Company will also grant to the Placement Agents warrants, in the form attached
hereto as Exhibit A (the “Placement Agent Warrants”), to purchase 1,000 shares of Common Stock for every $1,000,000 of principal amount of Shares sold in each Offering, up to a maximum of 30,000 shares in total, at an exercise
price equal to 150% of the price such shares are sold in such Offering, exercisable for five years from the date of such Offering. 
 This
Agreement shall not give rise to any commitment by the Placement Agents to purchase any of the Shares, and the Placement Agents shall have no authority to bind the Company. The Placement Agents shall act on a best efforts basis and do not guarantee
that they will be able to raise new capital in any prospective Offering. The Company acknowledges that any advice given by the Placement Agents 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 Agents’ prior written consent. The Placement Agents may retain other brokers or dealers to act as sub-agents on their behalf in connection with any Offering.

 (b) The term of The Placement Agents’ exclusive engagement will be three months; however, either
party may terminate the engagement at any time upon 10 days written notice to the other party. Upon termination, the Placement Agents will be entitled to collect all fees earned and expenses incurred through the date of termination and the amounts
described in the next sentence, if applicable. If the Placement Agents’ exclusive engagement is terminated prior to the expiration of the three month period beginning on the date hereof (the “Exclusive Term”), any person with whom
either of the Placement Agents had discussions concerning an investment in the Company and introduced to the Company purchases securities from the Company, the Company agrees to pay to the Placement Agents upon the closing of such transaction a cash
fee in the amount that would otherwise have been payable to the Placement Agents had such transaction occurred during the Exclusive Term. The Placement Agents shall provide the Company with a list of potential investors as described in this section
within five (5) business days of termination of this Agreement, and such list shall be considered final unless the Company objects in writing within two (2) business days thereafter. Nothing in this Agreement shall be construed to limit
the ability of either of the Placement Agents or their respective affiliates to pursue, investigate, analyze, invest in or engage in investment banking, financial advisory or any other business relationship with entities or persons other than the
Company. 
 Section 2. Representations, Warranties and Agreements of the Company. 
 The Company hereby represents, warrants and covenants to the Placement Agents as of the date hereof, and as of the Closing Date of each Offering, as
follows: 
 (a) Securities Law Filings. The Company meets the requirements for use of Form S-3 under the Securities Act of 1933, as
amended (the “Act”), and has filed with the Securities and Exchange Commission (the “Commission”) the Registration Statement on such Form S-3 (Registration File No. 333-129275), which became effective on November 16,
2005, for the registration under the Act of the Shares. Such registration statement meets the requirements set forth in Rule 415(a)(1)(x) under the Act and complies in all other material respects with such Rule. The Company will file with the
Commission pursuant to Rule 424(b) under the Act a supplement to the form of prospectus included in such registration statement relating to a placement of the Shares and the plan of distribution thereof and has advised the Placement Agents of all
further material information (financial and other) with respect to the Company to be set forth therein. Such registration statement, including the exhibits thereto, as amended at the date of this Agreement, 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 supplemented form of prospectus, in the form in which it will be filed
with the Commission pursuant to Rule 424(b) is hereinafter called the “Prospectus Supplement.” Any reference herein to the 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”) pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or before the date of
this Agreement, or the issue date of the Base Prospectus or Prospectus Supplement, as the case may be; and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the 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 which is “contained,” “included” or “stated”
in the Registration Statement 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 which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus Supplement, as the case may be. 
  

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 (b) No Stop Order. No stop order suspending the effectiveness of the Registration Statement or the
use of the Base Prospectus or the Prospectus Supplement has been issued, and no proceeding for any such purpose is pending, has been initiated or, to the Company’s knowledge, is threatened by the Commission. 
 (c) Compliance with Applicable Regulations. The Registration Statement (and any further documents to be filed with the Commission) contains all
exhibits and schedules as required by the 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 Act and the Exchange Act and the applicable rules
and regulations of the Commission thereunder 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. Each of the Base Prospectus and the Prospectus Supplement, as of its respective date, complied in all material respects with the Act and the Exchange Act and the applicable rules and regulations of the
Commission thereunder. Each of the Base Prospectus and the Prospectus Supplement, as amended or supplemented, did not and will not contain as of the effective 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, 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 of the Commission thereunder, 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 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 of the Commission thereunder, 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 not misleading. Notwithstanding the foregoing, the Company makes no representations or warranties as to the information contained in or omitted from the Prospectus Supplement or any amendment thereof or supplement
thereto in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Placement Agents specifically for use in the Registration Statement or the Prospectus Supplement. No post-effective amendment to
the Registration Statement reflecting any facts or events arising after the effective 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. 
 (d) Reports and Documents, etc. 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 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 Prospectus
Supplement, or to be filed as exhibits or schedules to the Registration Statement, which have not been described or filed as required. 
 (e)
Offering Materials Furnished to the Placement Agents. The Company has delivered, or will as promptly as practicable deliver, to the Placement Agents complete conformed copies of the Registration Statement and of each consent and certificate
of experts filed as a part thereof, and conformed copies of the Registration Statement (without exhibits) and the Base Prospectus and the Prospectus Supplement, as amended or supplemented, in such quantities and at such places as the Placement
Agents reasonably request. 
 (f) Distribution of Offering Material. The Company has not distributed and will not distribute, prior to
the completion of the distribution of the Shares, any offering material in connection with the offering and sale of the Shares other than the Base Prospectus and the Prospectus Supplement or 

  

 3 

 
the Registration Statement and copies of the documents incorporated by reference therein. For the avoidance of doubt, any other material prepared and
distributed solely by the Placement Agents is not deemed to be distributed by the Company for purposes of this paragraph (f). 
 (g) The
Placement Agency Agreement. This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company, enforceable against the Company in accordance with its terms, except as rights to
indemnification and contribution hereunder may be limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles. 
 (h) Authorization of the Shares. The Shares have been duly authorized for
issuance and sale, and when issued and delivered by the Company against payment therefor pursuant to this Agreement, will be validly issued, fully paid and nonassessable. The shares of Common Stock exercisable upon exercise of the Placement Agent
Warrants have been reserved for issuance and, upon exercise of the Placement Agent Warrants, will be validly issued, fully paid and nonassessable. 
 (i) No Material Adverse Change. Subsequent to the respective dates as of which information is given in the Base Prospectus and in any Prospectus Supplement: (i) there has been no material adverse change or effect, or any
development that could reasonably be expected to result in a material adverse change or effect, in the condition, financial or otherwise, or in the earnings, business, operations or prospects, whether or not arising from transactions in the ordinary
course of business, of the Company taken as a whole (any such change or effect, where the context so requires, is called a “Material Adverse Change” or a “Material Adverse Effect”); (ii) the Company has not incurred any
material liability or obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the ordinary course of business; and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of capital stock or repurchase or redemption by the Company of any class of capital stock. 
 (j) Independent Accountants. Grant Thornton LLP, who have expressed their opinion with respect to the annual financial statements (which term as used in this Agreement includes the related notes and schedules
thereto) and supporting schedules filed with the Commission as a part of the Registration Statement and incorporated by reference in the Prospectus Supplement, are independent public or certified public accountants as required by the Act and the
Exchange Act. 
 (k) Preparation of the Financial Statements. The financial statements filed with the Commission as a part of the
Registration Statement or included or incorporated by reference in the Base Prospectus or Prospectus Supplement present fairly the financial position of the Company as of and at the dates indicated and the results of its operations and cash flows
for the periods specified therein. With respect to such financial statements, the supporting exhibits and schedules included in the Registration Statement, if any, present fairly the information required to be stated therein subject to the normal
year-end adjustments which are not expected to be material in amount. The assumptions used in preparing the pro form financial statements provide a reasonable basis for presenting the significant effects attributable to the transactions or events
described therein, the related pro forma adjustments comply with Regulation G and give appropriate effect to the assumptions and the pro forma columns and reconciliations therein reflect the proper application of adjustments to the corresponding
historical financial statements. Such financial statements and supporting schedules, if any, have been prepared in conformity with generally accepted accounting principles as applied in the United States (“GAAP”), as applicable, applied on
a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto and comply in all material respects with the Act, the Exchange Act and the applicable rules and regulations of the Commission
thereunder. No other financial statements or 

  

 4 

 
supporting schedules or exhibits are required by the Act or the rules and regulations of the Commission thereunder to be included in the Registration
Statement or the Prospectus Supplement. 
 (l) Incorporation and Good Standing. The Company has been duly organized and is validly
existing and is a corporation in good standing under the laws of its jurisdiction of incorporation with full corporate power and authority to own its properties and other assets and conduct its business as described in the Prospectus Supplement, and
is duly qualified or licensed to do business as a foreign corporation and, as applicable, is in good standing under the laws of each jurisdiction which requires such qualification or license, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect. 
 (m) Capitalization and Other Capital Stock Matters. The authorized, issued and
outstanding capital stock of the Company is as set forth in the Registration Statement and in each Prospectus Supplement (other than for issuances after the dates thereof, if any, pursuant to employee benefit plans described in any Prospectus
Supplement or upon exercise of outstanding options or warrants described in any Prospectus Supplement). The Shares conform in all material respects to the description thereof contained in the Base Prospectus and the Prospectus Supplement. As of
April 7, 2006, there were 35,258,967 shares of Common Stock outstanding. Since April 7, 2006, the Company has not issued any securities other than Common Stock of the Company pursuant to the exercise of previously outstanding options in
connection with the Company’s employee stock purchase and option plans (the “Plans”) and options granted pursuant to the Plans in the ordinary course of business consistent with past practice, in each case as disclosed in the Base
Prospectus and each Prospectus Supplement. All the issued and outstanding shares of the capital stock of the Company has been duly authorized and validly issued, are fully paid and nonassessable and have been issued in compliance, in all material
respects, with federal and state securities laws, as applicable. None of the outstanding shares of capital stock of the Company were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or
purchase securities. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital
stock of the Company other than those described in the Base Prospectus and each Prospectus Supplement. Except as set forth in the Base Prospectus or in any Prospectus Supplement, the Company does not have any subsidiaries or own directly or
indirectly any of the capital stock or other equity or long-term debt securities or have any equity interest in any other person. 
 (n)
Stock Exchange Listing. The Common Stock (including the Shares) is registered under the Exchange Act and is listed on the American Stock Exchange, and the Company has taken no action designed to, or likely to have the effect of terminating
the registration of the Common Stock under the Exchange Act or delisting or suspending from trading the Common Stock from the American Stock Exchange, nor has the Company received any information suggesting that the Commission or the National
Association of Securities Dealers, Inc. (“NASD”) is contemplating terminating or suspending such registration or listing. 
 (o)
No Transfer Taxes or Other Fees. There are no transfer taxes or other similar fees or charges under United States law or the laws of any state or any political subdivision thereof, required to be paid in connection with the execution and
delivery of this Agreement or the issuance and sale by the Company of the Shares. 
 (p) No Price Stabilization or Manipulation. The
Company has not taken and will not take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the
Shares. 
  

 5 

 (q) Blue Sky Matters. The Shares have been or will be qualified for sale under the securities laws
of such jurisdictions (United States and foreign) as the Placement Agents and the Investors determine, or are or will be exempt from the qualification and broker dealer requirements of such jurisdictions. 
 Any certificate signed by an officer of the Company and delivered to the Placement Agents in connection herewith or in connection with any Offering shall
be deemed to be a representation and warranty by the Company to the Placement Agents as to the matters set forth therein. 
 Section 3. Delivery and
Payment. 
 Settlement of each Offering shall occur via each Investor’s brokerage account held with either Roth Capital or Taglich
Brothers, by way of either the delivery versus payment mechanism or a cash account held with the applicable Placement Agent. On or before the Closing Date of each Offering, each Investor will make payment to credit such brokerage account in an
amount equal to the price per Share as shown on the cover page of the applicable Prospectus Supplement multiplied by the number of Shares purchased by such Investor. “Closing Date” means 10:00 a.m., California time, or at such other time
on the date of each closing of an Offering as may be agreed upon by the Company and the Placement Agents. On each Closing Date, the Company and the Placement Agents shall take all steps necessary to deliver the Shares to the brokerage account of
each Investor held with the applicable Placement Agent, and the Placement Agents shall deliver the funds received from such Investors in consideration for the Shares to the Company. The Placement Agents shall have no rights in or to any of the funds
delivered by Investors in payment for the Shares. The Shares shall be registered in such names and in such denominations as the Placement Agents or the Investors shall request by written notice to the Company. All actions taken at the closing of
each Offering shall be deemed to have occurred simultaneously. 
 Section 4. Covenants of the Company. 
 The Company further covenants to and agrees with the Placement Agents as follows: 
 (a) Registration Statement Matters. The Company agrees to advise you 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 the Prospectus Supplement or any amended Prospectus Supplement has been filed and to furnish you with copies thereof; to 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 the Prospectus Supplement and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the Shares; to advise you, promptly after it receives notices thereof (i) of any request by the Commission to amend the Registration Statement or to amend or supplement the
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 or any amendment or supplement thereto or any order preventing or suspending the use of the Base Prospectus or the 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 Shares for offering or sale in any jurisdiction, of the institution or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus Supplement or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of the Base Prospectus or Prospectus Supplement or suspending
any such qualification, promptly to use its reasonable best efforts to obtain the withdrawal of such order. 
  

 6 

 (b) Blue Sky Compliance. The Company will cooperate with the Placement Agents and the Investors in
endeavoring to qualify the Shares for sale under the securities laws of such jurisdictions (United States and foreign) as the Placement Agents 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 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 the 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 Agents may reasonably request for distribution of the Shares. 
 (c) Amendments and Supplements to the Prospectus Supplement and Other Securities Act Matters. The Company will comply with the 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 Shares as contemplated in this Agreement, the Base Prospectus and any Prospectus Supplement. If, during the period in
which a prospectus is required by law to be delivered by a Placement Agent or a dealer in connection with the distribution of Shares contemplated by the Base Prospectus or any Prospectus Supplement, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of the Placement Agents or counsel for the Placement Agents, it becomes necessary to amend or supplement the Base Prospectus or any Prospectus Supplement in order to make the statements therein,
in the light of the circumstances existing at the time the Prospectus Supplement is delivered to a purchaser, not misleading, or if it is necessary at any time to amend or supplement the Base Prospectus or any Prospectus Supplement to comply with
any law, the Company promptly will prepare and file with the Commission, and furnish at its own expense to the Placement Agents and to dealers, an appropriate amendment to the Registration Statement or supplement to the Base Prospectus or any
Prospectus Supplement so that the Prospectus Supplement as so amended or supplemented will not, in the light of the circumstances when it is so delivered, be misleading, or so that the Base Prospectus or any Prospectus Supplement will comply with
such law. Before amending the Registration Statement or supplementing the Base Prospectus in connection with each Offering, the Company will furnish you with a copy of such proposed amendment or supplement. 
 (d) Copies of any Amendments and Supplements to the Prospectus Supplement. The Company agrees to furnish the Placement Agents, without charge,
during the period beginning on the date hereof and ending on the later of the Closing Date of each Offering or such date, as in the opinion of counsel for the Placement Agents, the Prospectus Supplement are no longer required by law to be delivered
in connection with sales by a Placement Agents or dealer (the “Prospectus Delivery Period”), as many copies of the Base Prospectus and Prospectus Supplement and any amendments and supplements thereto (including any Incorporated Documents)
as the Placement Agents may reasonably request. 
 (e) Use of Proceeds. The Company shall apply the net proceeds from the sale of the
Shares sold by it in the manner described under the caption “Use of Proceeds” in each Prospectus Supplement. 
 (f) Transfer
Agent. The Company shall engage and 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 Act, but in any event not later than 18 months after the Closing Date of each Offering, the Company will make generally available to its security holders
and to the Placement Agents 

  

 7 

 
an earnings statement, covering a period of at least 12 consecutive months beginning after the Closing Date, that satisfies the provisions of
Section 11(a) and Rule 158 under the Act. 
 (h) Periodic Reporting Obligations. During the Prospectus Delivery Period, the
Company shall duly file, on a timely basis, with the Commission and the American Stock Exchange 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 Agents or the
Investors deem reasonably necessary or appropriate to consummate each Offering, all of which will be in form and substance reasonably acceptable to the Placement Agents, the Investors and the Company. The Company agrees that the Placement Agents may
rely upon, and is a third party beneficiary of, the representation and warranties, and applicable covenants, set forth in any such purchase, subscription or other agreement with Investors in each Offering. 
 Section 5. Conditions of the Obligations of the Placement Agents. 
 The obligations of the Placement Agents hereunder shall be subject to the accuracy of the representations and warranties on the part of the Company set forth in Section 2 as of the date hereof and as of the
Closing Date of each Offering as though then made, to the timely performance by the Company of its covenants and other obligations hereunder on and as of such dates, and to each of the following additional conditions: 
 (a) Compliance with Registration Requirements; No Stop Order; No Objection from the NASD. Each Prospectus Supplement shall have been duly filed
with the Commission in accordance with Rule 424(b); 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 Shares 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 NASD shall have raised no objection to the fairness and reasonableness of the placement agency terms and arrangements. 
 (b)
Corporate Proceedings. All corporate proceedings and other legal matters in connection with this Agreement, the Registration Statement and each Prospectus Supplement, and the registration, authorization, issue, sale and delivery of the
Shares, shall have been reasonably satisfactory to the Placement Agents’ counsel, and such counsel shall have been furnished with such papers and information as they may reasonably have requested to enable them to pass upon the matters referred
to in this Section 5. 
 (c) No Material Adverse Change. Subsequent to the execution and delivery of this Agreement and prior to
each Closing Date, there shall not have occurred any Material Adverse Change or Material Adverse Effect, which, in your sole judgment, makes it impracticable or inadvisable to proceed with the public offering of the Shares on the terms and in the
manner contemplated by the applicable Prospectus Supplement. 
  

 8 

 (d) Opinion of Counsel for the Company. You shall have received on the Closing Date of each
Offering, and the Company shall cause to be delivered to you an opinion of legal counsel to the Company in customary form, dated the Closing Date, addressed to the Placement Agents. 
 (e) Accountants’ Comfort Letter. You shall have received on each Closing Date and the Company shall cause to be delivered to you, a letter
from Grant Thornton LLC (or the Company’s then current independent auditors), addressed to the Placement Agents, dated as of each Closing Date, in customary form. The letter shall not disclose any change in the condition (financial or
otherwise), earnings, operations, business or prospects of the Company from that set forth in the Registration Statement or the applicable Prospectus Supplement, which, in your sole judgment, is material and adverse and that makes it, in your sole
judgment, impracticable or inadvisable to proceed with the public offering of the Shares as contemplated by such Prospectus Supplement. 
 (f) Officers’ Certificate. You shall have received on each Closing Date a certificate of the Company, dated as of each Closing Date, signed by the Chief Executive Officer and Chief Financial Officer of the Company, to the effect
that, and you shall be satisfied that: 
 (i) The representations and warranties of the Company in this Agreement are true and
correct, as if made on and as of the 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 each Closing Date; 
 (ii) No stop order suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or the 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 Act; no order having the effect of ceasing or suspending the distribution of the Shares 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) [Reserved] 
 (iv) Subsequent to the respective dates as of which information is given in the Registration
Statement, the Base Prospectus and each Prospectus Supplement, there has not been: (a) any Material Adverse Change; (b) any transaction that is material to the Company except transactions entered into in the ordinary course of business;
(c) any obligation, direct or contingent, that is material to the Company, incurred by the Company, except obligations incurred in the ordinary course of business; (d) any material change in the capital stock (except changes thereto
resulting from the exercise of outstanding stock options or warrants) or outstanding indebtedness of the Company; (e) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company; or (f) any loss or
damage (whether or not insured) to the property of the Company which has been sustained or will have been sustained which has a Material Adverse Effect; and 
 (v) The Company has been subject to continuous disclosure requirements of the Exchange Act for a period of at least 12 calendar months
immediately preceding the filing of the Registration Statement, has timely filed all reports required of it to be filed under the Exchange Act during the past 12 calendar months and the portion of the month in which the Registration Statement was
filed, and as of the date of the Base Prospectus and each Prospectus Supplement is 

  

 9 

 
currently in compliance with such obligations; and the Company has an aggregate market value of the public float of its outstanding Common Stock of U.S. $75
million or more. 
 (g) Stock Exchange Listing. The Common Stock (and the Shares) is registered under the Exchange Act and is or will
as of the Closing Date be listed on the American Stock Exchange, and the Company has taken no action designed to, or likely to have the effect of terminating the registration of the Shares under the Exchange Act or delisting or suspending from
trading the Shares from the American Stock Exchange, nor has the Company received any information suggesting that the Commission or the NASD is contemplated terminating such registration or listing. 
 (h) Compliance with Prospectus Delivery Requirements. The Company shall have complied with the provisions of Sections 3 and 4(c) and (d) with
respect to the furnishing of Prospectus Supplements. 
 (i) Additional Documents. On or before each Closing Date, the Placement Agents
and counsel for the Placement Agents 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 Shares 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 Agents by notice to the Company at any time on or prior to the 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 (Reimbursement of Placement Agents’ Expenses), Section 8 (Indemnification and
Contribution) and Section 10 (Representations and Indemnities to Survive Delivery) shall at all times be effective and shall survive such termination. 
 Section 6. Payment of Expenses. 
 The Company agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the transactions contemplated hereby, including without limitation: (i) all expenses incident to the issuance, delivery and qualification of the Shares (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 Shares; (iv) all fees and
expenses of the Company’s counsel, independent public or certified public accountants and other advisors; (v) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the
Registration Statement (including financial statements, exhibits, schedules, consents and certificates of experts), the 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 in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Shares for offer and sale under
the state securities or blue sky laws or the securities laws of any other country, and, if requested by the Placement Agents, preparing and printing a “Blue Sky Survey,” an “International Blue Sky Survey” or other memorandum, and
any supplements thereto, advising the Placement Agents of such qualifications, registrations and exemptions; (vii) the filing fees incident to the review and approval by the NASD of the Placement Agents’ participation in the offering and
distribution of the Shares; (viii) the fees and expenses associated with including the Shares on the American Stock Exchange; (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. 
  

 10 

 Section 7. Reimbursement of Placement Agents’ Expenses. 
 Whether or not this Agreement is terminated, and whether or not the sale to the Investors of the Shares on any Closing Date is consummated, the Company
agrees to reimburse the Placement Agents, upon demand, for all reasonable and documented out-of-pocket expenses that shall have been reasonably incurred by the Placement Agents in connection with the proposed purchase and the offering and sale of
the Shares, including but not limited to printing expenses, travel and accommodation expenses, postage, facsimile and telephone charges, and the fees and expenses of the Placement Agents’ legal counsel; provided, that such expenses shall not
exceed $30,000 in the aggregate. 
 Section 8. Indemnification and Contribution. 
 (a) Indemnification of the Placement Agents. The Company agrees to indemnify and hold harmless the Placement Agents, their respective officers and
employees, and each person, if any, who controls the Placement Agents within the meaning of the Act and the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Placement Agents or such controlling person
may become subject, under the Act, the Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the
Company, which consent shall not be unreasonably withheld), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based: (i) upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; or (ii) upon any untrue statement or alleged untrue statement of a material fact contained in the Base Prospectus or the Prospectus Supplement (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (iii) in whole or in part
upon any material inaccuracy in the representations and warranties of the Company contained herein; or (iv) in whole or in part upon any failure of the Company to perform its obligations hereunder or under applicable law; or (v) any act or
failure to act or any alleged act or failure to act by any Placement Agents in connection with, or relating in any manner to, the Shares or the offering contemplated hereby, and which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon any matter covered by clause (i), (ii), (iii) or (iv) above, provided that the Company shall not be liable under this clause (v) to the extent that a court of competent jurisdiction
shall have determined by a final judgment of a court or arbitrator of competent jurisdiction that such loss, claim, damage, liability or action resulted from any such acts or failures to act undertaken or omitted to be taken by any Placement Agent
through its willful misconduct or gross negligence; and to reimburse such Placement Agents and each such controlling person for any and all expenses (including the reasonable fees and disbursements of counsel to the Placement Agents) as promptly as
such expenses are reasonably incurred by such Placement Agents or such controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action that is subject to
these indemnification and reimbursement provisions; provided, however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only to the extent (a) arising out of or based
upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by either Placement Agent expressly for use in the Registration
Statement, the Base Prospectus or the Prospectus Supplement (or any amendment or supplement thereto), or (b) settled without the Company’s prior written consent (not to be unreasonably withheld). 
  

 11 

 (b) Indemnification of the Company, its Directors and Officers. The Placement Agents agree to
indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of the Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such director, officer or controlling person may become subject, under the Act, the Exchange Act, or other federal, state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Placement Agents, which consent shall not be unreasonably withheld), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based upon any untrue or alleged untrue statement of a material fact contained in any Prospectus Supplement (or any amendment or supplement thereto), or arises out of or is based
upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in such Prospectus Supplement (or any amendment or supplement thereto), in reliance upon and in conformity with written information furnished to the Company by the Placement Agents
expressly for use therein and to reimburse the Company, or any such director, officer or controlling person for any legal and other expense reasonably incurred by the Company, or any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. The indemnity agreement set forth in this Section 8(b) shall be in addition to any liabilities that the Placement Agents may
otherwise have. 
 (c) Information Provided by the Placement Agents. The Company and each person, if any, who controls the Company
within the meaning of the Act or the Exchange Act, hereby acknowledges that the only information that the Placement Agents will furnish to the Company expressly for use in any Prospectus Supplement (or any amendment or supplement thereto) are the
statements regarding the Placement Agents set forth under the caption “Plan of Distribution” in the Prospectus Supplement. 
 (d)
Notifications and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability, which it may have to any
indemnified party for contribution to the extent it is not prejudiced as a proximate result of such failure. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume
such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party’s election so
to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless: (i) the indemnified party shall have employed separate counsel in accordance 

  

 12 

 
with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than
one separate counsel (together with local counsel), approved by the indemnifying party), representing the indemnified parties who are parties to such action); (ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action; or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the
indemnifying party, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying party. 
 (e)
Settlements. The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent or
if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes: (i) an unconditional release of such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding; and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. 
 (f) Contribution. If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or (b) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) then each indemnifying party shall contribute to the aggregate amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect the relative benefits received by such party on the one hand and the indemnifying party on the other hand. If, however, the allocation provided by the immediately preceding sentence
is not permitted by applicable law then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of
such indemnifying party on the one hand and the indemnified party on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions or proceedings in respect thereof), as well as
any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the “control” stockholders on the one hand or the Placement Agents on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such misstatement, omission, misconduct or breach of duty. 
 The Company and the Placement Agents agree that it would not be just and
equitable if contributions pursuant to this Section 8(f) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 8(f). The
amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to above in this Section 8(f) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (f): (i) no Placement Agent shall be required to contribute any
amount in excess of the amount of the Placement Agent fees actually received by such Placement Agent pursuant to this Agreement; and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent 

  

 13 

 
misrepresentation. The Placement Agents’ obligations under this Section 8(f) to contribute are several in proportion to their respective placement
obligations and not joint. 
 (g) Timing of Any Payments of Indemnification. Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under this Section 8 shall be paid by the indemnifying party to the indemnified party as such losses, claims, damages, liabilities or expenses are incurred, but in all
cases, no later than forty-five (45) days of invoice to the indemnifying party. 
 (h) Survival. The indemnity and contribution
agreements contained in this Section 8 and the representations and warranties set forth in this Agreement shall remain operative and in full force and effect, regardless of: (i) any investigation made by or on behalf of any Placement
Agents or any person controlling such Placement Agents, the Company, its directors or officers or any persons controlling the Company; (ii) acceptance of any Shares and payment therefor hereunder; and (iii) any termination of this
Agreement. A successor to any Placement Agents, 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
Section 8. 
 (i) Acknowledgements of Parties. The parties to this Agreement hereby acknowledge that they are sophisticated
business persons who were represented by counsel during the negotiations regarding the provisions hereof including, without limitation, the provisions of this Section 8, and are fully informed regarding said provisions. They further acknowledge
that the provisions of this Section 8 fairly allocate the risks in light of the ability of the parties to investigate the Company and its business in order to assure that adequate disclosure is made in the Registration Statement and the
Prospectus Supplement as required by the Act and the Exchange Act. 
 Section 9. Placement Agent Representations and Warranties. 
 Each of the Placement Agents, severally and not jointly, hereby represents to the Company as of the date hereof, and as of the Closing Date, of each
Offering, that this Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of such Placement Agent, enforceable against it in accordance with the terms hereof, except as rights to indemnification and
contribution hereunder may be limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or
by general equitable principles. 
 Section 10. 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 Agents 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 Agents or 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 Shares sold hereunder and any termination of this Agreement. 
  

 14 

 Section 11. 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 Agents: 
 Roth Capital Partners, LLC 
 24 Corporate Plaza 
 Newport Beach, California 92660 
 Facsimile: (949) 720-5700 
 Attention: Managing Director 
 Taglich Brothers, Inc. 
 The Chrysler Building 
 405 Lexington Avenue, 51st Floor 
 New York, New York 10174

 Facsimile: (212) 661-6824 
 Attention: Managing Director 
 With a copy to 
 Summit Law Group PLLC 
 315 Fifth Avenue South 
 Suite 1000 
 Seattle, Washington 98104 
 Facsimile: (206) 676-7001 
 Attention: Michael J. Erickson 
 If to the Company: 
 SCOLR Pharma, Inc. 
 3625 132nd Avenue SE 
 Bellevue, Washington 98006 
 Facsimile: (425) 373-0181 
 Attention: Chief Executive Officer 
 With a copy to: 
 DLA Piper Rudnick Gray Cary US LLP 
 701 Fifth Avenue, Suite 7000 
 Seattle, Washington 98104 
 Facsimile: (206) 839-4801 
 Attention: W. Michael Hutchings 
 Any party hereto may change the address for receipt of communications by giving written notice to the others. 
  

 15 

 Section 12. 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 8, and to their
respective successors, and personal representatives, and no other person will have any right or obligation hereunder. 
 Section 13. 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 14. Governing Law Provisions. 
 (a) Governing Law. This agreement shall be governed by and construed in accordance with the internal laws of the state of Washington applicable to
agreements made and to be performed in such state. 
 (b) Consent to Jurisdiction. Any legal suit, action or proceeding arising out of
or based upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United States of America located in Orange County, California, or the courts of the State of
California in each case located in Orange County or Los Angeles County (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement
of a judgment of any such court (a “Related Judgment”), as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s
address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other
proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient forum.

 Section 15. General Provisions. 
 This
Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof, including,
without limitation, that certain Letter Agreement by and among the parties hereto dated as of March 8, 2006. 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. 
 [The remainder of this page has been intentionally left blank.] 
 [Signature Page
Follows] 
  

 16 

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

					
	 Very truly yours,

	
	 SCOLR PHARMA, INC.
 a Delaware corporation

		
	 By:
	 	 /s/ Daniel O. Wilds

		 	 Name:
	 	 Daniel O. Wilds

		 	 Title:
	 	 President and Chief Executive Officer

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

			
	ROTH CAPITAL PARTNERS, LLC
		
	 By:
	 	 /s/ James M. Sterns

	 Name:
	 	 James M. Sterns

	 Title:
	 	 Managing Director of Roth Capital

	
	TAGLICH BROTHERS, INC.
		
	 By:
	 	 /s/ Robert C. Schroeder

	 Name:
	 	 Robert C. Schroeder

	 Title:
	 	 Vice President of Taglich Brothers

  

 17 

 EXHIBIT A 
 FORM OF PLACEMENT AGENT WARRANTS

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