Exhibit 10.1
COMMON STOCK PURCHASE AGREEMENT
by and between
KINGSBRIDGE CAPITAL LIMITED
and
OXiGENE INC.
dated as of February 19, 2008

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TABLE OF CONTENTS

                      ARTICLE I   DEFINITIONS     1  
 
                    ARTICLE II   PURCHASE AND SALE OF COMMON STOCK     5  
 
  Section 2.1       Purchase and Sale of Stock     5  
 
  Section 2.2       Closing     5  
 
  Section 2.3       Registration Statement and Prospectus     6  
 
  Section 2.4       Warrant     6  
 
  Section 2.5       Blackout Shares     6  
 
                    ARTICLE III   DRAW DOWN TERMS     6  
 
  Section 3.1       Draw Down Notice     6  
 
  Section 3.2       Number of Shares     6  
 
  Section 3.3       Limitation on Draw Downs     6  
 
  Section 3.4       Trading Cushion     6  
 
  Section 3.5       Settlement     6  
 
  Section 3.6       Delivery of Shares; Payment of Draw Down Amount     7  
 
  Section 3.7       Failure to Deliver Shares     7  
 
                    ARTICLE IV   REPRESENTATIONS AND WARRANTIES OF THE COMPANY  
  8  
 
  Section 4.1       Organization, Good Standing and Power     8  
 
  Section 4.2       Authorization; Enforcement     8  
 
  Section 4.3       Capitalization     9  
 
  Section 4.4       Issuance of Shares     9  
 
  Section 4.5       No Conflicts     10  
 
  Section 4.6       Commission Documents, Financial Statements     10  
 
  Section 4.7       No Material Adverse Change     11  
 
  Section 4.8       No Undisclosed Liabilities     11  
 
  Section 4.9       No Undisclosed Events or Circumstances     12  
 
  Section 4.10       Actions Pending     12  
 
  Section 4.11       Compliance with Law     12  
 
  Section 4.12       Certain Fees     12  
 
  Section 4.13       Disclosure     12  
 
  Section 4.14       Material Non-Public Information     13  
 
  Section 4.15       Exemption from Registration; Valid Issuances     13  
 
  Section 4.16       No General Solicitation or Advertising in Regard to this
Transaction     13  
 
  Section 4.17       No Integrated Offering     13  
 
  Section 4.18       Acknowledgment Regarding Investor’s Purchase of Shares    
13  
 
                    ARTICLE V   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
INVESTOR     14  
 
  Section 5.1       Organization and Standing of the Investor     14  

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  Section 5.2       Authorization and Power     14  
 
  Section 5.3       No Conflicts     14  
 
  Section 5.4       Financial Capability     15  
 
  Section 5.5       Information     15  
 
  Section 5.6       Trading Restrictions     15  
 
  Section 5.7       Statutory Underwriter Status     15  
 
  Section 5.8       Not an Affiliate     15  
 
  Section 5.9       Manner of Sale     15  
 
  Section 5.10       Prospectus Delivery     15  
 
                    ARTICLE VI   COVENANTS OF THE COMPANY     16  
 
  Section 6.1       Securities     16  
 
  Section 6.2       Reservation of Common Stock     16  
 
  Section 6.3       Registration and Listing     16  
 
  Section 6.4       Registration Statement     17  
 
  Section 6.5       Compliance with Laws     17  
 
  Section 6.6       Other Financing     17  
 
  Section 6.7       Prohibited Transactions     18  
 
  Section 6.8       Corporate Existence     18  
 
  Section 6.9       Non-Disclosure of Non-Public Information     18  
 
  Section 6.10       Notice of Certain Events Affecting Registration; Suspension
of Right to Request a Draw Down     18  
 
  Section 6.11       Amendments to the Registration Statement     19  
 
  Section 6.12       Prospectus Delivery     19  
 
                    ARTICLE VII   CONDITIONS TO THE OBLIGATION OF THE INVESTOR
TO ACCEPT A DRAW DOWN     19  
 
  Section 7.1       Accuracy of the Company’s Representations and Warranties    
20  
 
  Section 7.2       Performance by the Company     20  
 
  Section 7.3       Compliance with Law     20  
 
  Section 7.4       Effective Registration Statement     20  
 
  Section 7.5       No Knowledge     20  
 
  Section 7.6       No Suspension     20  
 
  Section 7.7       No Injunction     20  
 
  Section 7.8       No Proceedings or Litigation     20  
 
  Section 7.9       Sufficient Shares Registered for Resale     21  
 
  Section 7.10       Warrant     21  
 
  Section 7.11       Opinion of Counsel     21  
 
  Section 7.12       Accuracy of Investor’s Representation and Warranties     21
 
 
                    ARTICLE VIII   TERMINATION     21  
 
  Section 8.1       Term     21  
 
  Section 8.2       Other Termination     21  
 
  Section 8.3       Effect of Termination     22  
 
                    ARTICLE IX   INDEMNIFICATION     22  
 
  Section 9.1       Indemnification     22  

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  Section 9.2       Notification of Claims for Indemnification     23  
 
                    ARTICLE X   MISCELLANEOUS     25  
 
  Section 10.1       Fees and Expenses     25  
 
  Section 10.2       Reporting Entity for the Common Stock     25  
 
  Section 10.3       Brokerage     25  
 
  Section 10.4       Notices     26  
 
  Section 10.5       Assignment     27  
 
  Section 10.6       Amendment; No Waiver     27  
 
  Section 10.7       Entire Agreement     27  
 
  Section 10.8       Severability     27  
 
  Section 10.9       Title and Subtitles     28  
 
  Section 10.10       Counterparts     28  
 
  Section 10.11       Choice of Law     28  
 
  Section 10.12       Specific Enforcement, Consent to Jurisdiction     28  
 
  Section 10.13       Survival     29  
 
  Section 10.14       Publicity     29  
 
  Section 10.15       Further Assurances     29  

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     This COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) is entered into as
of the 19th day of February, 2008, by and between Kingsbridge Capital Limited,
an entity organized and existing under the laws of the British Virgin Islands,
whose registered address is Palm Grove House, 2nd Floor, Road Town, Tortola,
British Virgin Islands (the “Investor”) and OXiGENE, Inc. , a corporation
organized and existing under the laws of the State of Delaware (the “Company”).
     WHEREAS, the parties desire that, upon the terms and subject to the
conditions and limitations set forth herein, the Company may issue and sell to
the Investor, from time to time as provided herein, and the Investor shall
purchase from the Company, up to $40 million worth of shares of Common Stock (as
defined below); and
     WHEREAS, such investments will be made in reliance upon the provisions of
Section 4(2) (“Section 4(2)”) and Regulation D (“Regulation D”) of the United
States Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the “Securities Act”), and/or upon such other exemption
from the registration requirements of the Securities Act as may be available
with respect to any or all of the investments in Common Stock to be made
hereunder; and
     WHEREAS, the parties hereto are concurrently entering into a Registration
Rights Agreement in the form of Exhibit A hereto (the “Registration Rights
Agreement”) pursuant to which the Company shall register the Common Stock issued
and sold to the Investor under this Agreement and issuable under the Warrant (as
defined below), upon the terms and subject to the conditions set forth therein;
and
     WHEREAS, in consideration for the Investor’s execution and delivery of, and
its performance of its obligations under, this Agreement, the Company is
concurrently issuing to the Investor a Warrant in the form of Exhibit B hereto
(the “Warrant”) pursuant to which the Investor may purchase from the Company up
to 250,000 shares of Common Stock, upon the terms and subject to the conditions
set forth therein;
     NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
     As used in this Agreement, the following terms shall have the meanings set
forth below:
     “Alternative Draw Down Amount” means the product of (i) Average Trading
Volume, (ii) the Closing Price on the Trading Day preceding the issuance of the
Draw Down Notice, (iii) the number of Trading Days during the Draw Down Pricing
Period, and (iv) the Liquidity Ratio.
     “Average Trading Volume” means the average trading volume of the twenty
(20) Trading Days during the thirty (30) Trading Days prior to the issuance of
the Draw Down Notice that results from excluding the five (5) highest and five
(5) lowest Trading Days during such period.
     “Blackout Amount” shall have the meaning assigned to such term in the
Registration Rights Agreement.

 

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     “Blackout Shares” shall have the meaning assigned to such term in the
Registration Rights Agreement.
     “Bylaws” shall have the meaning ascribed to such term in Section 4.3
hereof.
     “Certificate” shall have the meaning assigned to such term in Section 4.3
hereof.
     “Closing Date” shall have the meaning assigned to such term in Section 2.2
hereof.
     “Closing Price” as of any particular day shall mean the closing price per
share of the Company’s Common Stock as reported by Bloomberg L.P. on such day.
     “Commission” means the United States Securities and Exchange Commission.
     “Commission Documents” shall have the meaning assigned to such term in
Section 4.6 hereof.
     “Commitment Period” means the period commencing on the Effective Date and
expiring on the earliest to occur of (i) the date on which the Investor shall
have purchased Shares pursuant to this Agreement for an aggregate purchase price
equal to the Maximum Commitment Amount, (ii) the date this Agreement is
terminated pursuant to Article VIII hereof, and (iii) the date occurring
thirty-six (36) months from the Effective Date.
     “Common Stock” means the common stock of the Company, par value $0.01 per
share.
     “Condition Satisfaction Date” shall have the meaning assigned to such term
in Article VII hereof.
     “Damages” means any loss, claim, damage, liability, costs and expenses
(including, without limitation, reasonable attorneys’ fees and expenses and
costs and reasonable expenses of expert witnesses and investigation).
     “Draw Down” shall have the meaning assigned to such term in Section 3.1
hereof.
     “Draw Down Amount” means the actual dollar amount of a Draw Down paid to
the Company.
     “Draw Down Discount Price” means (i) 88% of the VWAP on any Trading Day
during a Draw Down Pricing Period when the VWAP equals or exceeds $1.25 but is
less than or equal to $2.40, (ii) 90% of the VWAP on any Trading Day during the
Draw Down Pricing Period when VWAP exceeds $2.40 but is less than or equal to
$5.50, (iii) 92% of the VWAP on any Trading Day during the Draw Down Pricing
Period when VWAP exceeds $5.50 but is less than or equal to $9.00, (iv) 94% of
the VWAP on any Trading Day during the Draw Down Pricing Period when VWAP
exceeds $9.00 but is less than or equal to $12.00, or (v) 95% of the VWAP on any
Trading Day during the Draw Down Pricing Period when VWAP exceeds $12.00.
     “Draw Down Notice” shall have the meaning assigned to such term in
Section 3.1 hereof.

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     “Draw Down Pricing Period” shall mean, with respect to each Draw Down, a
period of eight (8) consecutive Trading Days beginning on the first Trading Day
specified in a Draw Down Notice.
     “DTC” shall mean the Depository Trust Company, or any successor thereto.
     “Effective Date” means the first Trading Day immediately following the date
on which the Registration Statement is declared effective by the Commission.
     “Exchange Act” means the United States Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
     “Excluded Merger or Sale” shall have the meaning assigned to such term in
the Warrant.
     “FINRA” means the Financial Industry Regulatory Authority.
     “Knowledge” means the actual knowledge of those officers of the Company
required to file statements relating to their ownership of the Company’s
securities pursuant to Section 16 of the Exchange Act.
     “Liquidity Ratio” means fifty percent (50%).
     “Make Whole Amount” shall have the meaning specified in Section 3.7.
     “Market Capitalization” means, as of any Trading Day, the product of
(i) the closing sale price of the Company’s Common Stock as reported by
Bloomberg L.P. using the AQR function and (ii) the number of outstanding shares
of Common Stock of the Company as reported by Bloomberg L.P. using the DES
function.
     “Material Adverse Effect” means any effect that is not negated, corrected,
cured or otherwise remedied within a reasonable period of time on the business,
operations, properties or financial condition of the Company and its
consolidated subsidiaries that is material and adverse to the Company and such
subsidiaries, taken as a whole, and/or any condition, circumstance, or situation
that would prohibit or otherwise interfere with the ability of the Company to
perform any of its obligations under this Agreement, the Registration Rights
Agreement or the Warrant in any material respect; provided, however, that none
of the following shall constitute a “Material Adverse Effect”: (i) the effects
of conditions or events that are generally applicable to the capital, financial,
banking or currency markets or the biotechnology or pharmaceutical industries;
(ii) the effects of conditions or events that are reasonably expected to occur
in the Company’s ordinary course of business (such as, by way of example only,
failed clinical trials, serious adverse events involving the Company’s product
candidates, delays in product development, unfavorable regulatory
determinations, difficulties involving collaborators or intellectual property
disputes), except for purposes of Section 4.9 herein; (iii) any changes or
effects resulting from the announcement or consummation of the transactions
contemplated by this Agreement, including, without limitation, any changes or
effects associated with any particular Draw Down, and (iv) changes in the market
price of the Common Stock.

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     “Maximum Commitment Amount” means the lesser of (i) $40 million in
aggregate Draw Down Amounts or (ii) such number of shares of Common Stock (as
adjusted for stock splits, stock combinations, stock dividends and
recapitalizations that occur on or after the date of this Agreement) that the
Company may issue pursuant to this Agreement and the transactions contemplated
hereby without violating the rules and regulations of the Principal Market.
     “Maximum Draw Down Amount” means the lesser of $10 million or either
(i) 2.0% of the Company’s Market Capitalization at the time of the Draw Down, or
(ii) the lesser of (A) 3.5% of the Company’s Market Capitalization at the time
of the Draw Down, and (B) the Alternative Draw Down Amount.
     “Permitted Transaction” shall have the meaning assigned to such term in
Section 6.6 hereof.
     “Person” means any individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including any
government or political subdivision or an agency or instrumentality thereof.
     “Principal Market” means the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market, the American Stock Exchange or the New York
Stock Exchange, whichever is at the time the principal trading exchange or
market for the Common Stock.
     “Prohibited Transaction” shall have the meaning assigned to such term in
Section 6.7 hereof.
     “Prospectus” as used in this Agreement means the prospectus in the form
included in the Registration Statement, as supplemented from time to time
pursuant to Rule 424(b) of the Securities Act.
     “Registrable Securities” means (i) the Shares, (ii) the Warrant Shares, and
(iii) any securities issued or issuable with respect to any of the foregoing by
way of exchange, stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable Securities, once
issued such securities shall cease to be Registrable Securities when (w) the
Registration Statement has been declared effective by the Commission and such
Registrable Securities have been disposed of pursuant to the Registration
Statement, (x) such Registrable Securities have been sold under circumstances
under which all of the applicable conditions of Rule 144 (or any similar
provision then in force) under the Securities Act (“Rule 144”) are met, (y) such
time as such Registrable Securities have been otherwise transferred to holders
who may trade such shares without restriction under the Securities Act, and the
Company has delivered a new certificate or other evidence of ownership for such
securities not bearing a restrictive legend or (z) in the opinion of counsel to
the Company such Registrable Securities may be sold without registration and
without any time, volume or manner limitations pursuant to Rule 144(b)(1)(i) (or
any similar provision then in effect) under the Securities Act.
     “Registration Rights Agreement” shall have the meaning set forth in the
recitals of this Agreement.

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     “Registration Statement” shall have the meaning assigned to such term in
the Registration Rights Agreement.
     “Regulation D” shall have the meaning set forth in the recitals of this
Agreement. “Section 4(2)” shall have the meaning set forth in the recitals of
this Agreement.
     “Securities Act” shall have the meaning set forth in the recitals of this
Agreement.
     “Settlement Date” shall have the meaning assigned to such term in
Section 3.5 hereof.
     “Shares” means the shares of Common Stock of the Company that are and/or
may be purchased hereunder.
     “Trading Day” means any day other than a Saturday or a Sunday on which the
Principal Market is open for trading in equity securities.
     “VWAP” means the volume weighted average price (the aggregate sales price
of all trades of Common Stock during each Trading Day divided by the total
number of shares of Common Stock traded during such Trading Day) of the Common
Stock during any Trading Day as reported by Bloomberg, L.P. using the AQR
function.
     “Warrant” shall have the meaning set forth in the recitals of this
Agreement.
     “Warrant Shares” means the shares of Common Stock issuable to the Investor
upon exercise of the Warrant.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
     Section 2.1 Purchase and Sale of Stock. Upon the terms and subject to the
conditions set forth in this Agreement, the Company shall to the extent it
elects to make Draw Downs in accordance with Article III hereof, issue and sell
to the Investor and the Investor shall purchase Common Stock from the Company
for an aggregate (in Draw Down Amounts) of up to the Maximum Commitment Amount,
consisting of purchases based on Draw Downs in accordance with Article III
hereof.
     Section 2.2 Closing. In consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Company agrees to issue and sell to the Investor, and the Investor agrees to
purchase from the Company, that number of the Shares to be issued in connection
with each Draw Down. The execution and delivery of this Agreement (the
“Closing”) shall take place at the offices of Stroock & Stroock & Lavan LLP, 180
Maiden Lane, New York, NY 10038 at 5:00 p.m. local time on February 19, 2008, or
at such other time and place or on such date as the Investor and the Company may
agree upon (the “Closing Date”). Each party shall deliver at or prior to the
Closing all documents, instruments and writings required to be delivered at the
Closing by such party pursuant to this Agreement.

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     Section 2.3 Registration Statement and Prospectus. The Company shall
prepare and file with the Commission the Registration Statement (including the
Prospectus) in accordance with the provisions of the Securities Act and the
Registration Rights Agreement.
     Section 2.4 Warrant. On the Closing Date, the Company shall issue and
deliver the Warrant to the Investor.
     Section 2.5 Blackout Shares. The Company shall deliver any Blackout Amount
or issue and deliver any Blackout Shares to the Investor in accordance with
Section 1.1(e) of the Registration Rights Agreement.
ARTICLE III
DRAW DOWN TERMS
     Subject to the satisfaction of the conditions hereinafter set forth in this
Agreement, the parties agree as follows:
     Section 3.1 Draw Down Notice. During the Commitment Period, the Company
may, in its sole discretion, issue a Draw Down Notice (as hereinafter defined)
which shall specify the dollar amount of Shares the Company elects to sell to
the Investor (each such election, a “Draw Down”) up to a Draw Down Amount equal
to the Maximum Draw Down Amount, which Draw Down the Investor shall be obligated
to accept. The Company shall inform the Investor in writing by sending a duly
completed Draw Down Notice in the form of Exhibit C hereto by e-mail to the
addresses set forth in Section 10.4, with a copy to the Investor’s counsel, as
to such Draw Down Amount before commencement of trading on the first Trading Day
of the related Draw Down Pricing Period (the “Draw Down Notice”). In addition to
the Draw Down Amount, each Draw Down Notice shall designate the first Trading
Day of the Draw Down Pricing Period. In no event shall any Draw Down Amount
exceed the Maximum Draw Down Amount. Each Draw Down Notice shall be accompanied
by a certificate, signed by the Chief Executive Officer or Chief Financial
Officer, dated as of the date of such Draw Down Notice, in the form of Exhibit D
hereof.
     Section 3.2 Number of Shares. Subject to Section 3.6(b), the number of
Shares to be issued in connection with each Draw Down shall be equal to the sum
of the number of shares issuable on each Trading Day of the Draw Down Pricing
Period. The number of shares issuable on a Trading Day during a Draw Down
Pricing Period shall be equal to the quotient of one eighth (1/8th) of the Draw
Down Amount divided by the Draw Down Discount Price for such Trading Day.
     Section 3.3 Limitation on Draw Downs. Only one Draw Down shall be permitted
for each Draw Down Pricing Period.
     Section 3.4 Trading Cushion. Unless the parties agree in writing otherwise,
there shall be a minimum of three (3) Trading Days between the expiration of any
Draw Down Pricing Period and the beginning of the next succeeding Draw Down
Pricing Period.
     Section 3.5 Settlement. The number of Shares purchased by the Investor in
any Draw Down shall be determined and settled on two separate dates. Shares
purchased by the Investor

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during the first four Trading Days of any Draw Down Pricing Period shall be
determined and settled no later than the sixth Trading Day of such Draw Down
Pricing Period. Shares purchased by the Investor during the second four Trading
Days of any Draw Down Pricing Period shall be determined and settled no later
than the second Trading Day after the last Trading Day of such Draw Down Pricing
Period. Each date on which settlement of the purchase and sale of Shares occurs
hereunder being referred to as a “Settlement Date.” The Investor shall provide
the Company with delivery instructions for the Shares to be issued at each
Settlement Date at least two Trading Days in advance of such Settlement Date.
The number of Shares actually issued shall be rounded down to the nearest whole
number of Shares.
     Section 3.6 Delivery of Shares; Payment of Draw Down Amount.
          (a) On each Settlement Date, the Company shall deliver the Shares
purchased by the Investor to the Investor or its designees exclusively via
book-entry through the DTC to an account designated by the Investor, and upon
receipt of the Shares, the Investor shall cause payment thereof to be made to
the Company’s designated account by wire transfer of immediately available
funds, if the Shares are received by the Investor no later than 1:00 p.m.
(Eastern Time), or next day available funds, if the Shares are received
thereafter.
          (b) For each Trading Day during a Draw Down Pricing Period where the
VWAP is less than the greater of (i) 85% of the Closing Price of the Company’s
Common Stock on the Trading Day immediately preceding the commencement of such
Draw Down Pricing Period, or (ii) $1.25, such Trading Day shall not be used in
calculating the number of Shares to be issued in connection with such Draw Down,
and the Draw Down Amount in respect of such Draw Down Pricing Period shall be
reduced by one eighth (1/8th) of the initial Draw Down Amount specified in the
Draw Down Notice. If trading in the Company’s Common Stock is suspended for any
reason for more than three (3) consecutive or non-consecutive hours during any
Trading Day during a Draw Down Pricing Period, such Trading Day shall not be
used in calculating the number of Shares to be issued in connection with such
Draw Down, and the Draw Down Amount in respect of such Draw Down Pricing Period
shall be reduced by one eighth (1/8th) of the initial Draw Down Amount specified
in the Draw Down Notice.
     Section 3.7 Failure to Deliver Shares. If on any Settlement Date, the
Company fails to cause the delivery of the Shares purchased by the Investor, and
such failure is not cured within two (2) Trading Days following such Settlement
Date, the Company shall pay to the Investor on demand in cash by wire transfer
of immediately available funds to an account designated by the Investor the
“Make Whole Amount;” provided, however, that in the event that the Company is
prevented from delivering Shares in respect of any such Settlement Date in a
timely manner by any fact or circumstance that is not reasonably within the
control of, or directly attributable to, the Company, or is otherwise reasonably
within the control of, or directly attributable to, the Investor, then such two
(2) Trading Day period shall be automatically extended until such time as such
fact or circumstance is cured. As used herein, the Make Whole Amount shall be an
amount equal to the sum of (i) the Draw Down Amount actually paid by the
Investor in respect of such Shares plus (ii) an amount equal to the actual loss
suffered by the Investor in respect of sales to subsequent purchasers, pursuant
to transactions entered into before the Settlement Date, of the Shares that were
required to be delivered by the Company, which shall be based upon documentation
reasonably satisfactory to the Company demonstrating the difference (if greater

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than zero) between (A) the price per share paid by the Investor to purchase such
number of shares of Common Stock necessary for the Investor to meet its share
delivery obligations to such subsequent purchasers minus (B) the average Draw
Down Discount Price during the applicable Draw Down Pricing Period. In the event
that the Make Whole Amount is not paid within two (2) Trading Days following a
demand therefor from the Investor, the Make Whole Amount shall accrue interest
compounded daily at a rate equal to ten percent (10%) per annum up to and
including the date on which the Make Whole Amount is actually paid. For the
purposes of this Section 3.7 facts or circumstances that are reasonably within
the control of the Company include such facts and circumstances attributable to
acts or omissions of the Company, its officers, directors, employees, agents and
representatives, including, without limitation, any transfer agent(s),
accountant(s) and/or attorney(s) engaged by the Company in connection with the
Company’s performance of its obligations hereunder. Notwithstanding anything to
the contrary set forth in this Agreement, in the event that the Company pays the
Make Whole Amount (plus interest, if applicable) in respect of any Settlement
Date in accordance with this Section 3.7, such payment shall be the Investor’s
sole remedy in respect of the Company’s failure to deliver Shares in respect of
such Settlement Date, and the Company shall not be obligated to deliver such
Shares.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
     The Company hereby makes the following representations and warranties to
the Investor:
     Section 4.1 Organization, Good Standing and Power. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite power and authority to own, lease
and operate its properties and assets and to carry on its business as now being
conducted. Except as set forth in the Commission Documents (as defined below),
the Company does not own more than fifty percent (50%) of the outstanding
capital stock of or control any other business entity, other than any
wholly-owned subsidiary that is not “significant” within the meaning of
Regulation S-X promulgated by the Commission. The Company is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary, other than those in which the failure to be so
qualified or be in good standing would not have a Material Adverse Effect.
     Section 4.2 Authorization; Enforcement. (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Registration Rights Agreement and the Warrant and to issue
the Shares, the Warrant, the Warrant Shares and any Blackout Shares (except to
the extent that the number of Blackout Shares required to be issued exceeds the
number of authorized shares of Common Stock under the Certificate); (ii) the
execution and delivery of this Agreement and the Registration Rights Agreement,
and the execution, issuance and delivery of the Warrant, by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly and validly authorized by all necessary corporate action and no further
consent or authorization of the Company or its Board of Directors or
stockholders is required (other than as contemplated by Section 6.5); and
(iii) each of this Agreement and the Registration Rights Agreement has been duly
executed and delivered, and the Warrant has been duly executed, issued and
delivered, by

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the Company and constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as rights
under indemnity and contribution thereunder may be limited by federal or state
securities laws and except as such enforceability may be limited by applicable
bankruptcy, securities, insolvency, or similar laws relating to, or affecting
generally the enforcement of, creditors’ rights and remedies, or indemnification
or by other equitable principles of general application.
     Section 4.3 Capitalization. The authorized capital stock of the Company and
the shares thereof issued and outstanding as of September 30, 2007 are set forth
on a schedule (the “Disclosure Schedule”) previously delivered to the Investor.
All of the outstanding shares of the Common Stock have been duly and validly
authorized and issued, and are fully paid and non-assessable. Except as set
forth in this Agreement or as previously disclosed on the Disclosure Schedule,
as of September 30, 2007, no shares of Common Stock were entitled to preemptive
rights or registration rights and there were no outstanding options, warrants,
scrip, rights to subscribe to, call or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for or
giving any right to subscribe for, any shares of capital stock of the Company,
except for stock options issued by the Company to its employees, directors and
consultants. Except as set forth in this Agreement, the Commission Documents, or
as previously disclosed to the Investor in the Disclosure Schedule, as of
September 30, 2007, there were no contracts, commitments, understandings, or
arrangements by which the Company is or may become bound to issue additional
shares of the capital stock of the Company or options, securities or rights
convertible into or exchangeable for or giving any right to subscribe for any
shares of capital stock of the Company. Except as described in the Commission
Documents or as previously disclosed to the Investor in the Disclosure Schedule,
as of the date hereof the Company is not a party to any agreement granting
registration rights to any Person with respect to any of its equity or debt
securities. Except as set forth in the Commission Documents or as previously
disclosed to the Investor in writing, as of the date hereof the Company is not a
party to, and it has no Knowledge of, any agreement restricting the voting or
transfer of any shares of the capital stock of the Company. The offer and sale
of all capital stock, convertible securities, rights, warrants, or options of
the Company issued during the twenty-four month period immediately prior to the
Closing complied in all material respects with all applicable federal and state
securities laws, and no stockholder has a right of rescission or damages with
respect thereto that could reasonably be expected to have a Material Adverse
Effect. The Company has furnished or made available to the Investor true and
correct copies of the Company’s Restated Certificate of Incorporation, as
amended and in effect on the date hereof (the “Certificate”), and the Company’s
Amended and Restated By-Laws, as amended and in effect on the date hereof (the
“Bylaws”).
     Section 4.4 Issuance of Shares. Subject to Section 6.5, the Shares, the
Warrant and the Warrant Shares have been, and any Blackout Shares will be, duly
authorized by all necessary corporate action (except to the extent that the
number of Blackout Shares required to be issued exceeds the number of authorized
shares of Common Stock under the Certificate) and, when issued and paid for in
accordance with the terms of this Agreement, the Registration Rights Agreement
and the Warrant, and subject to, and in reliance on, the representations,
warranties and covenants made herein by the Investor, the Shares and the Warrant
Shares shall be validly issued and outstanding, fully paid and non-assessable,
and the Investor shall be entitled to all rights accorded to a holder of shares
of Common Stock.

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     Section 4.5 No Conflicts. The execution, delivery and performance of this
Agreement, the Registration Rights Agreement, the Warrant and any other document
or instrument contemplated hereby or thereby, by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
do not and shall not in any material respect: (i) result in the violation of any
provision of the Certificate or Bylaws, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give rise to any rights of termination, amendment,
acceleration or cancellation of, any material agreement, mortgage, deed of
trust, indenture, note, bond, license, lease agreement, instrument or obligation
to which the Company is a party where such default or conflict would constitute
a Material Adverse Effect, (iii) create or impose a lien, charge or encumbrance
on any property of the Company under any agreement or any commitment to which
the Company is a party or by which the Company is bound or by which any of its
respective properties or assets are bound which would constitute a Material
Adverse Effect, (iv) result in a violation of any federal, state, local or
foreign statute, rule, regulation, order, writ, judgment or decree (including
federal and state securities laws and regulations) applicable to the Company or
any of its subsidiaries or by which any property or asset of the Company or any
of its subsidiaries are bound or affected where such violation would constitute
a Material Adverse Effect, or (v) require any consent of any third-party that
has not been obtained pursuant to any material contract to which the Company is
subject or to which any of its assets, operations or management may be subject
where the failure to obtain any such consent would constitute a Material Adverse
Effect. The Company is not required under federal, state or local law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Agreement, the
Registration Rights Agreement or the Warrant, or issue and sell the Shares, the
Warrant Shares or the Blackout Shares (except to the extent that the number of
Blackout Shares required to be issued exceeds the number of authorized shares of
Common Stock under the Certificate) in accordance with the terms hereof and
thereof (other than any filings that may be required to be made by the Company
with the Commission, the FINRA/NASDAQ or state securities commissions subsequent
to the Closing, and, any registration statement (including any amendment or
supplement thereto) or any other filing or consent which may be filed pursuant
to this Agreement, the Registration Rights Agreement or the Warrant); provided
that, for purposes of the representation made in this sentence, the Company is
assuming and relying upon the accuracy of the relevant representations and
agreements of the Investor herein.
     Section 4.6 Commission Documents, Financial Statements.
          (a) The Common Stock is registered pursuant to Section 12(b) or 12(g)
of the Exchange Act, and since January 1, 2007 the Company has timely filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the Commission pursuant to the reporting requirements of the Exchange
Act, including material filed pursuant to Section 13(a) or 15(d) of the Exchange
Act (all of the foregoing, including filings incorporated by reference therein,
being referred to herein as the “Commission Documents”). Except as previously
disclosed to the Investor in writing, since January 1, 2007 the Company has
maintained all requirements for the continued listing or quotation of its Common
Stock, and such Common Stock is currently listed or quoted on the NASDAQ Global
Market. The Company has made available to the Investor true and complete copies
of the Commission Documents filed

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with the Commission since January 1, 2007 and prior to the Closing Date. The
Company has not provided to the Investor any information which, according to
applicable law, rule or regulation, should have been disclosed publicly by the
Company but which has not been so disclosed, other than with respect to the
transactions contemplated by this Agreement. As of its date, the Company’s
Annual Report on Form 10-K for the year ended December 31, 2006 complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder applicable to such
document, and, as of its date, after giving effect to the information disclosed
and incorporated by reference therein, to the Company’s Knowledge such Annual
Report on Form 10-K did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. As of their respective dates, to the Company’s
Knowledge the financial statements, together with the related notes and
schedules thereto, of the Company included in the Commission Documents filed
with the Commission since January 1, 2007 complied as to form and substance in
all material respects with all applicable accounting requirements and the
published rules and regulations of the Commission or other applicable rules and
regulations with respect thereto. Such financial statements, together with the
related notes and schedules thereto, have been prepared in accordance with
generally accepted accounting principles (“GAAP”) applied on a consistent basis
during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto or (ii) in the case of unaudited
interim statements, to the extent they may not include footnotes or may be
condensed or summary statements), and fairly present in all material respects
the financial condition of the Company and its subsidiaries as of 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 year-end audit
adjustments).
          (b) The Company has timely filed with the Commission and made
available to the Investor via EDGAR or otherwise all certifications and
statements required by (x) Rule 13a-14 or Rule 15d-14 under the Exchange Act or
(y) 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002
(“SOXA”)) with respect to all relevant Commission Documents. The Company is in
compliance in all material respects with the provisions of SOXA applicable to it
as of the date hereof. The Company maintains disclosure controls and procedures
required by Rule 13a-15 or Rule 15d-15 under the Exchange Act; such controls and
procedures are effective to ensure that all material information concerning the
Company and its subsidiaries is made known on a timely basis to the individuals
responsible for the timely and accurate preparation of the Company’s filings
with the Commission and other public disclosure documents. As used in this
Section 4.6(b), the term “file” shall be broadly construed to include any manner
in which a document or information is furnished, supplied or otherwise made
available to the Commission.
     Section 4.7 No Material Adverse Change. Except as disclosed in the
Commission Documents or a press release of the Company, since September 30, 2007
no event or series of events has or have occurred that would, individually or in
the aggregate, have a Material Adverse Effect on the Company.
     Section 4.8 No Undisclosed Liabilities. To the Company’s Knowledge, neither
the Company nor any of its subsidiaries has any liabilities, obligations, claims
or losses (whether liquidated or unliquidated, secured or unsecured, absolute,
accrued, contingent or otherwise) that

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would be required to be disclosed on a balance sheet of the Company or any
subsidiary (including the notes thereto) in conformity with GAAP and are not
disclosed in the Commission Documents, other than those incurred in the ordinary
course of the Company’s or its subsidiaries respective businesses since
September 30, 2007 or which, individually or in the aggregate, do not or would
not have a Material Adverse Effect on the Company.
     Section 4.9 No Undisclosed Events or Circumstances. To the Company’s
Knowledge, no event or circumstance has occurred or exists with respect to the
Company or its subsidiaries or their respective businesses, properties,
operations or financial condition, which, under applicable law, rule or
regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed and which, individually or in
the aggregate, would have a Material Adverse Effect on the Company.
     Section 4.10 Actions Pending. There is no action, suit, claim,
investigation or proceeding pending or, to the Knowledge of the Company,
threatened against the Company or any subsidiary which questions the validity of
this Agreement or the transactions contemplated hereby or any action taken or to
be taken pursuant hereto or thereto. Except as set forth in the Commission
Documents or in the Disclosure Schedule, there is no action, suit, claim,
investigation or proceeding pending or, to the Knowledge of the Company,
threatened, against or involving the Company, any subsidiary or any of their
respective properties or assets, or to the Knowledge of the Company involving
any officers or directors, in their capacity as officers or directors, of the
Company or any of its subsidiaries, including, without limitation, any
securities class action lawsuit or stockholder derivative lawsuit, that could be
reasonably expected to have a Material Adverse Effect on the Company. Except as
set forth in the Commission Documents or as previously disclosed to the Investor
in writing, no judgment, order, writ, injunction or decree or award has been
issued by or, to the Knowledge of the Company, requested of any court,
arbitrator or governmental agency which could be reasonably expected to result
in a Material Adverse Effect.
     Section 4.11 Compliance with Law. The business of the Company and its
subsidiaries have been and are presently being conducted in accordance with all
applicable federal, state, local and foreign governmental laws, rules,
regulations and ordinances, except as set forth in the Commission Documents or
such that would not reasonably be expected to cause a Material Adverse Effect.
Except as set forth in the Commission Documents, the Company and each of its
subsidiaries have all franchises, permits, licenses, consents and other
governmental or regulatory authorizations and approvals necessary for the
conduct of its business as now being conducted by it, except for such
franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals, the failure to possess which, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
     Section 4.12 Certain Fees. Except as expressly set forth in this Agreement,
no brokers, finders or financial advisory fees or commissions will be payable by
the Company or any of its subsidiaries in respect of the transactions
contemplated by this Agreement.
     Section 4.13 Disclosure. To the Company’s Knowledge, neither this Agreement
nor any other documents, certificates or instruments furnished to the Investor
by or on behalf of the Company or any subsidiary in connection with the
transactions contemplated by this Agreement

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contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made herein or therein, in the light
of the circumstances under which they were made herein or therein, not
misleading.
     Section 4.14 Material Non-Public Information. Except for this Agreement and
the transactions contemplated hereby, neither the Company nor its employees have
disclosed to the Investor, any material non-public information that, according
to applicable law, rule or regulation, should have been disclosed publicly by
the Company prior to the date hereof but which has not been so disclosed.
     Section 4.15 Exemption from Registration; Valid Issuances. Subject to, and
in reliance on, the representations, warranties and covenants made herein by the
Investor, the issuance and sale of the Shares, the Warrant, the Warrant Shares
and any Blackout Shares in accordance with the terms and on the bases of the
representations and warranties set forth in this Agreement, may and shall be
properly issued pursuant to Section 4(2), Regulation D and/or any other
applicable federal and state securities laws. Neither the sales of the Shares,
the Warrant, the Warrant Shares or any Blackout Shares pursuant to, nor the
Company’s performance of its obligations under, this Agreement, the Registration
Rights Agreement, or the Warrant shall (i) result in the creation or imposition
of any liens, charges, claims or other encumbrances upon the Shares, the Warrant
Shares, any Blackout Shares or any of the assets of the Company, or (ii) except
as previously disclosed to the Investor in writing, entitle the holders of any
outstanding shares of capital stock of the Company to preemptive or other rights
to subscribe to or acquire the shares of Common Stock or other securities of the
Company.
     Section 4.16 No General Solicitation or Advertising in Regard to this
Transaction. Neither the Company nor any of its affiliates or any Person acting
on its or their behalf (i) has conducted any general solicitation (as that term
is used in Rule 502(c) of Regulation D) or general advertising with respect to
any of the Shares, the Warrant, the Warrant Shares or any Blackout Shares or
(ii) has made any offers or sales of any security or solicited any offers to buy
any security under any circumstances that would require registration of the
Shares under the Securities Act.
     Section 4.17 No Integrated Offering. 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, other than pursuant to this Agreement and employee benefit
plans, under circumstances that would require integration under the Securities
Act of shares of the Common Stock issuable hereunder with any other offers or
sales of securities of the Company.
     Section 4.18 Acknowledgment Regarding Investor’s Purchase of Shares. The
Company acknowledges and agrees that the Investor is acting solely in the
capacity of an arm’s length investor with respect to this Agreement and the
transactions contemplated hereunder. The Company further acknowledges that the
Investor is not acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to this Agreement and the transactions
contemplated hereunder and any advice given by the Investor or any of its
representatives or agents in connection with this Agreement and the transactions
contemplated hereunder is merely incidental to the Investor’s purchase of the
Shares.

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ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR
     The Investor hereby makes the following representations, warranties and
covenants to the Company:
     Section 5.1 Organization and Standing of the Investor. The Investor is a
company duly organized, validly existing and in good standing under the laws of
the British Virgin Islands.
     Section 5.2 Authorization and Power. The Investor has the requisite power
and authority to enter into and perform its obligations under this Agreement,
the Warrant and the Registration Rights Agreement and to purchase the Shares,
the Warrant and the Warrant Shares in accordance with the terms hereof and
thereof. The execution, delivery and performance of this Agreement, the Warrant
and the Registration Rights Agreement by Investor and the consummation by it of
the transactions contemplated hereby or thereby have been duly authorized by all
necessary corporate action, and no further consent or authorization of the
Investor, its Board of Directors or stockholders is required. Each of this
Agreement and the Registration Rights Agreement has been duly executed and
delivered by the Investor and constitutes a valid and binding obligation of the
Investor enforceable against the Investor in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership, or
similar laws relating to, or affecting generally the enforcement of creditor’s
rights and remedies or by other equitable principles of general application.
     Section 5.3 No Conflicts. The execution, delivery and performance of this
Agreement, the Registration Rights Agreement, the Warrant and any other document
or instrument contemplated hereby, by the Investor and the consummation of the
transactions contemplated thereby do not (i) violate any provision of the
Investor’s charter documents or bylaws, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, mortgage, deed of
trust, indenture, note, bond, license, lease agreement, instrument or obligation
to which the Investor is a party, (iii) create or impose a lien, charge or
encumbrance on any property of the Investor under any agreement or any
commitment to which the Investor is a party or by which the Investor is bound or
by which any of its respective properties or assets are bound, (iv) result in a
violation of any federal, state, local or foreign statute, rule, regulation,
order, writ, judgment or decree (including federal and state securities laws and
regulations) applicable to the Investor or by which any property or asset of the
Investor are bound or affected, or (v) require the consent of any third-party
that has not been obtained pursuant to any material contract to which Investor
is subject or to which any of its assets, operations or management may be
subject. The Investor is not required under federal, state or local law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Agreement or to
purchase the Shares or the Warrant in accordance with the terms hereof, provided
that, for purposes of the representation made in this sentence, the Investor is
assuming and relying upon the accuracy of the relevant representations and
agreements of the Company herein.

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     Section 5.4 Financial Capability. The Investor has the financial capability
to perform all of its obligations under this Agreement, including the capability
to purchase the Shares, the Warrant and the Warrant Shares in accordance with
the terms hereof. The Investor has such knowledge and experience in business and
financial matters that it is capable of evaluating the merits and risks of an
investment in Common Stock. The Investor is an “accredited investor” as defined
in Regulation D. The Investor is a “sophisticated investor” as described in
Rule 506(b)(2)(ii) of Regulation D. The Investor acknowledges that an investment
in the Common Stock and the Warrant is speculative and involves a high degree of
risk.
     Section 5.5 Information. The Investor and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Shares, the
Warrant and the Warrant Shares which have been requested by the Investor. The
Investor has reviewed or received copies of the Commission Documents. The
Investor and its advisors, if any, have been afforded the opportunity to ask
questions of the Company. The Investor has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment decision
with respect to its acquisition of the Shares, the Warrant and the Warrant
Shares. Except for this Agreement and the transactions contemplated hereby,
neither the Company nor any of its officers, directors or employees has
disclosed to the Investor any material non-public information that, according to
applicable law, rule or regulation, should have been disclosed publicly by the
Company prior to the date hereof but which has not been so disclosed. The
Investor understands that it (and not the Company) shall be responsible for its
own tax liabilities that may arise as a result of this investment or the
transactions contemplated by this Agreement.
     Section 5.6 Trading Restrictions. The Investor covenants that neither the
Investor nor any of its affiliates nor any entity managed or controlled by the
Investor will, or cause or assist any Person to, enter into or execute any
“short sale” (as such term is defined in Rule 200 of Regulation SHO, or any
successor regulation, promulgated by the Commission under the Exchange Act) of
any securities of the Company, and that the Investor and its affiliates shall
comply with all other applicable laws.
     Section 5.7 Statutory Underwriter Status. The Investor acknowledges that,
pursuant to the Commission’s current interpretations of the Securities Act, the
Investor will be disclosed as an “underwriter” within the meaning of the
Securities Act in the Registration Statement (and amendments thereto) and in any
Prospectus contained therein to the extent required by applicable law.
     Section 5.8 Not an Affiliate. The Investor is not an officer, director or
“affiliate” (as defined in Rule 405 of the Securities Act) of the Company.
     Section 5.9 Manner of Sale. At no time was Investor presented with or
solicited by or through any leaflet, public promotional meeting, television
advertisement or any other form of general solicitation or advertising.
     Section 5.10 Prospectus Delivery. The Investor agrees that unless the
Shares and Warrant Shares are eligible for resale pursuant to all the conditions
of Rule 144, it will resell the Shares and Warrant Shares only pursuant to the
Registration Statement, in a manner described

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under the caption “Plan of Distribution” in the Registration Statement, and in a
manner in compliance with all applicable securities laws, including, without
limitation, any applicable prospectus delivery requirements of the Securities
Act and the insider trading restrictions of the Exchange Act.
ARTICLE VI
COVENANTS OF THE COMPANY
     The Company covenants with the Investor as follows, which covenants are for
the benefit of the Investor and its permitted assignees (as defined herein):
     Section 6.1 Securities Compliance. The Company shall notify the Commission
and the Principal Market, if and as applicable, in accordance with their
respective rules and regulations, of the transactions contemplated by this
Agreement, and shall use commercially reasonable efforts to take all other
necessary action and proceedings as may be required and permitted by applicable
law, rule and regulation, for the legal and valid issuance of the Shares, the
Warrant Shares and the Blackout Shares, if any, to the Investor. Each Commission
Document to be filed with the Commission after the Closing Date and incorporated
by reference in the Registration Statement and Prospectus, when such document
becomes effective or is filed with the Commission, as the case may be, shall
comply in all material respects with the requirements of the Securities Act or
the Exchange Act, as applicable, and other federal, state and local laws, rules
and regulations applicable to it, and shall not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
     Section 6.2 Reservation of Common Stock. As of the date hereof, the Company
has available and the Company shall reserve and keep available at all times,
free of preemptive rights and other similar contractual rights of stockholders,
shares of Common Stock for the purpose of enabling the Company to satisfy any
obligation to issue the Shares in connection with all Draw Downs contemplated
hereunder and the Warrant Shares. The number of shares so reserved from time to
time, as theretofore increased or reduced as hereinafter provided, may be
reduced by the number of shares actually delivered hereunder.
     Section 6.3 Registration and Listing. During the Commitment Period, the
Company shall use commercially reasonable efforts to: (i) cause its Common Stock
to continue to be registered under Section 12(b) or 12(g) of the Exchange Act,
(ii) comply in all respects with its reporting and filing obligations under the
Exchange Act, and (iii) prevent the termination or suspension of such
registration, or the termination or suspension of its reporting and filing
obligations under the Exchange Act or Securities Act (except as expressly
permitted herein). The Company shall use commercially reasonable efforts to
maintain the listing and trading of its Common Stock and the listing of the
Shares purchased by Investor hereunder on the Principal Market (including,
without limitation, maintaining sufficient net tangible assets) and will comply
in all material respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the FINRA and the Principal Market. The
Company will not be required to carry out any action pursuant to this Agreement,
the Registration Rights Agreement or the Warrant that would adversely impact the
listing of the Company’s securities on the Principal

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Market as now in effect, and as may be changed by the Company in the future in
the Company’s discretion.
     Section 6.4 Registration Statement. Without the prior written consent of
the Investor, the Registration Statement shall be used solely in connection with
the transactions between the Company and the Investor contemplated hereby.
     Section 6.5 Compliance with Laws.
          (a) The Company shall comply, and cause each subsidiary to comply,
with all applicable laws, rules, regulations and orders, noncompliance with
which could reasonably be expected to have a Material Adverse Effect. Without
limiting the generality of the foregoing, neither the Company nor any of its
officers, directors or affiliates has taken or will take, directly or
indirectly, any action designed or intended to stabilize or manipulate the price
of any security of the Company, or which caused or resulted in, or which would
in the future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
          (b) Without the consent of its stockholders in accordance with FINRA
and The NASDAQ Stock Market LLC rules, the Company will not be obligated to
issue, and the Investor will not be obligated to purchase, any Shares or
Blackout Shares which would result in the issuance under this Agreement, the
Warrant and the Registration Rights Agreement of Shares and Blackout Shares
(collectively) representing more than the applicable percentage under the rules
of the FINRA and The NASDAQ Stock Market LLC , including, without limitation,
NASDAQ Marketplace Rule 4350(i), that would require stockholder approval of the
issuance thereof. Nothing herein shall compel the Company to seek such consent
of its stockholders.
     Section 6.6 Other Financing. Nothing in this Agreement shall be construed
to restrict the right of the Company to offer, sell and/or issue securities of
any kind whatsoever, provided such transaction is not a Prohibited Transaction
(as defined below) (any such transaction that is not a Prohibited Transaction is
referred to in this Agreement as a “Permitted Transaction”). Without limiting
the generality of the preceding sentence, the Company may, without the prior
written consent of the Investor, (i) establish stock option or award plans or
agreements (for directors, employees, consultants and/or advisors), and issue
securities thereunder, and amend such plans or agreements, including increasing
the number of shares available thereunder, (ii) issue equity securities to
finance, or otherwise in connection with, the acquisition of one or more other
companies, equipment, technologies or lines of business, (iii) issue shares of
Common Stock and/or Preferred Stock in connection with the Company’s option or
award plans, stock purchase plans, rights plans, warrants or options, (iv) issue
shares of Common Stock and/or Preferred Stock in connection with the acquisition
of products, licenses, equipment or other assets and strategic partnerships or
joint ventures; (v) issue shares of Common and/or Preferred Stock to consultants
and/or advisors as consideration for services rendered or to be rendered,
(vi) issue and sell equity or debt securities in a public offering, (vii) issue
and sell and equity or debt securities in a private placement (other than in
connection with any Prohibited Transaction), (viii) issue equity securities to
equipment lessors, equipment vendors, banks or similar lending institutions in
connection with leases or loans, or in connection with strategic commercial or
licensing transactions, (ix) issue securities in connection with any stock
split, stock dividend,

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recapitalization, reclassification or similar event by the Company, and
(x) issue shares of Common Stock to the Investor under any other agreement
entered into between the Investor and the Company.
     Section 6.7 Prohibited Transactions. Except as set forth on Schedule 6.7
hereof, during the term of this Agreement, the Company shall not enter into any
Prohibited Transaction without the prior written consent of the Investor, which
consent may be withheld at the sole discretion of the Investor. For the purposes
of this Agreement, the term “Prohibited Transaction” shall refer to the issuance
by the Company of any “future priced securities,” which shall mean the issuance
of shares of Common Stock or securities of any type whatsoever that are, or may
become, convertible or exchangeable into shares of Common Stock where the
purchase, conversion or exchange price for such Common Stock is determined using
any floating discount or other post-issuance adjustable discount to the market
price of Common Stock, including, without limitation, pursuant to any equity
line or other financing that is substantially similar to the financing provided
for under this Agreement.
     Section 6.8 Corporate Existence. The Company shall take all commercially
reasonable steps necessary to preserve and continue the corporate existence of
the Company; provided, however, that nothing in this Agreement shall be deemed
to prohibit the Company from engaging in any Excluded Merger or Sale with
another Person provided that in the event of an Excluded Merger or Sale, if the
surviving, successor or purchasing Person does not agree to assume the
obligations under the Warrant, then the Company shall deliver a notice to the
Investor at least ten (10) days before the consummation of such Excluded Merger
or Sale (provided that, to the extent that such transaction has not been
publicly disclosed, then the Investor agrees to maintain the confidentiality of
such information and to use such information only in connection with a decision
to exercise the Warrant), the Investor may exercise the Warrant at any time
before the consummation of such Excluded Merger or Sale (and such exercise may
be made contingent upon the consummation of such Excluded Merger or Sale), and
any portion of the Warrant that has not been exercised before consummation of
such Excluded Merger or Sale shall terminate and expire, and shall no longer be
outstanding.
     Section 6.9 Non-Disclosure of Non-Public Information. Except as otherwise
expressly provided in this Agreement, the Registration Rights Agreement or the
Warrant, none of the Company, its officers, directors, employees nor agents
shall disclose material non-public information to the Investor, its advisors or
representatives.
     Section 6.10 Notice of Certain Events Affecting Registration; Suspension of
Right to Request a Draw Down. The Company shall promptly notify the Investor
upon the occurrence of any of the following events in respect of the
Registration Statement or the Prospectus related to the offer, issuance and sale
of the Shares and the Warrant Shares hereunder: (i) receipt of any request for
additional information by the Commission or any other federal or state
governmental authority during the period of effectiveness of the Registration
Statement for amendments or supplements to the Registration Statement or the
Prospectus; (ii) the issuance by the Commission or any other federal or state
governmental authority of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose;
(iii) receipt of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation

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or threatening of any proceeding for such purpose; and (iv) the Company becoming
aware of the happening of any event, which makes any statement of a material
fact made in the Registration Statement or Prospectus untrue or which requires
the making of any additions to or changes to the statements then made in the
Registration Statement or Prospectus in order to state a material fact required
by the Securities Act to be stated therein or necessary in order to make the
statements then made therein, in light of the circumstances under which they
were made, not misleading, or of the necessity to amend the Registration
Statement or supplement the Prospectus to comply with the Securities Act or any
other law. If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, the Company shall use
commercially reasonable efforts to obtain the withdrawal of such order at the
earliest possible time. The Company shall not be required to disclose to the
Investor the substance or specific reasons of any of the events set forth in
clauses (i) through (ii) of the previous sentence, only that the event has
occurred. The Company shall not request a Draw Down during the continuation of
any of the foregoing events.
     Section 6.11 Amendments to the Registration Statement. After the
Registration Statement has been declared effective by the Commission, and for so
long as it remains effective, the Company shall not file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus of
which the Investor shall not previously have been advised. In addition, so long
as, in the reasonable opinion of counsel for the Investor, a Prospectus is
required to be delivered in connection with sales of the Shares by the Investor,
if the Company files any information, documents or reports that are incorporated
by reference in the Registration Statement pursuant to the Exchange Act, the
Company shall, if requested in writing by the Investor, deliver a copy of such
information, documents or reports to the Investor promptly following such
filing.
     Section 6.12 Prospectus Delivery. From time to time for such period as in
the reasonable opinion of counsel for the Investor a prospectus is required by
the Securities Act to be delivered in connection with sales by the Investor, the
Company will expeditiously deliver to the Investor, without charge, as many
copies of the Prospectus (and of any amendment or supplement thereto) as the
Investor may reasonably request. The Company consents to the use of the
Prospectus (and of any amendment or supplement thereto) in accordance with the
provisions of the Securities Act and state securities laws in connection with
the offering and sale of the Shares and the Warrant Shares and for such period
of time thereafter as the Prospectus is required by the Securities Act to be
delivered in connection with sales of the Shares and the Warrant Shares.
ARTICLE VII
CONDITIONS TO THE OBLIGATION OF THE INVESTOR
TO ACCEPT A DRAW DOWN
     The obligation of the Investor hereunder to accept a Draw Down Notice and
to acquire and pay for the Shares in accordance therewith is subject to the
satisfaction or waiver, at each Condition Satisfaction Date, of each of the
conditions set forth below. Other than those conditions set forth in
Section 7.12 which are for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion, the conditions are for the
Investor’s sole benefit and may be waived by the Investor at any time in its
sole discretion. As used in this

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Agreement, the term “Condition Satisfaction Date” shall mean, with respect to
each Draw Down, the date on which the applicable Draw Down Notice is delivered
to the Investor and each Settlement Date in respect of the applicable Draw Down
Pricing Period.
     Section 7.1 Accuracy of the Company’s Representations and Warranties. Each
of the representations and warranties of the Company shall be true and correct
in all material respects as of the date when made as though made at that time
except for representations and warranties that are expressly made as of a
particular date.
     Section 7.2 Performance by the Company. The Company shall have, in all
material respects, performed, satisfied and complied with all covenants,
agreements and conditions required by this Agreement, the Registration Rights
Agreement and the Warrant to be performed, satisfied or complied with by the
Company.
     Section 7.3 Compliance with Law. The Company shall have complied in all
respects with all applicable federal, state and local governmental laws, rules,
regulations and ordinances in connection with the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby except for any failures to so comply which could not
reasonably be expected to have a Material Adverse Effect.
     Section 7.4 Effective Registration Statement. Upon the terms and subject to
the conditions set forth in the Registration Rights Agreement, the Registration
Statement shall have previously become effective and shall remain effective and
(i) neither the Company nor the Investor shall have received notice that the
Commission has issued or intends to issue a stop order with respect to the
Registration Statement or that the Commission otherwise has suspended or
withdrawn the effectiveness of the Registration Statement, either temporarily or
permanently, or intends or has threatened to do so (unless the Commission’s
concerns have been addressed and the Investor is reasonably satisfied that the
Commission no longer is considering or intends to take such action), and (ii) no
other suspension of the use or withdrawal of the effectiveness of the
Registration Statement or the Prospectus shall exist.
     Section 7.5 No Knowledge. The Company shall have no Knowledge of any event
that could reasonably be expected to have the effect of causing the Registration
Statement with respect to the resale of the Registrable Securities by the
Investor to be suspended or otherwise ineffective (which event is reasonably
likely to occur within eight Trading Days following the Trading Day on which a
Draw Down Notice is delivered) as of the Settlement Date.
     Section 7.6 No Suspension. Trading in the Company’s Common Stock shall not
have been suspended by the Commission, the Principal Market or the FINRA and
trading in securities generally as reported on the Principal Market shall not
have been suspended or limited.
     Section 7.7 No Injunction. No statute, rule, regulation, order, decree,
writ, ruling or injunction shall have been enacted, entered, promulgated,
threatened or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.
     Section 7.8 No Proceedings or Litigation. No action, suit or proceeding
before any arbitrator or any court or governmental authority shall have been
commenced or, to the

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Knowledge of the Company threatened, and, to the Knowledge of the Company no
inquiry or investigation by any governmental authority shall have been
threatened, against the Company or any subsidiary, or any of the officers,
directors or affiliates of the Company or any subsidiary seeking to enjoin,
prevent or change the transactions contemplated by this Agreement, or seeking
damages in connection with such transactions.
     Section 7.9 Sufficient Shares Registered for Resale. The Company shall have
sufficient Shares, calculated using the closing trade price of the Common Stock
as of the Trading Day immediately preceding such Draw Down Notice, registered
under the Registration Statement to issue and sell such Shares in accordance
with such Draw Down Notice.
     Section 7.10 Warrant. The Warrant shall have been duly executed, delivered
and issued to the Investor, and the Company shall not be in default in any
material respect under any of the provisions thereof, provided that any refusal
by or failure of the Company to issue and deliver Warrant Shares in respect of
any exercise (in whole or in part) thereof shall be deemed to be material for
the purposes of this Section 7.10.
     Section 7.11 Opinion of Counsel. The Investor shall have received the form
of opinion mutually agreed to between the parties on the date of this Agreement.
     Section 7.12 Accuracy of Investor’s Representation and Warranties. The
representations and warranties of the Investor shall be true and correct in all
material respects as of the date when made as though made at that time except
for representations and warranties that are made as of a particular date.
ARTICLE VIII
TERMINATION
     Section 8.1 Term. Unless otherwise terminated in accordance with
Section 8.2 below, this Agreement shall terminate upon the earlier to occur of
(i) the expiration of the Commitment Period or (ii) the issuance of Shares
pursuant to this Agreement in an amount equal to the Maximum Commitment Amount.
     Section 8.2 Other Termination.
               (a) The Investor may terminate this Agreement upon (x) one
(1) business day’s notice if the Company enters into any Prohibited Transaction
as set forth in Section 6.7 without the Investor’s prior written consent, or
(y) one (1) business day’s notice if the Investor provides written notice of a
Material Adverse Effect to the Company, and such Material Adverse Effect
continues for a period of ten (10) Trading Days after the receipt by the Company
of such notice.
               (b) The Investor may terminate this Agreement upon one
(1) business day’s notice to the Company at any time in the event that the
Registration Statement is not initially declared effective in accordance with
the Registration Rights Agreement, provided, however, that in the event the
Registration Statement is declared effective prior to the delivery of such
notice, the Investor shall thereafter have no right to terminate this Agreement
pursuant to this Section 8.2(b).

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               (c) The Company may terminate this Agreement upon one
(1) business day’s notice; provided, however, that the Company shall not
terminate this Agreement pursuant to this Section 8.2(c) during any Draw Down
Pricing Period; provided further, that, in the event of any termination of this
Agreement by the Company hereunder, so long as the Investor owns Shares
purchased hereunder and/or Warrant Shares, unless all of such shares of Common
Stock may be resold by the Investor without registration and without any time,
volume or manner limitations pursuant to Rule 144(b)(1)(i) (or any similar
provision then in effect) under the Securities Act, the Company shall not
suspend, except as provided for in the Registration Rights Agreement and the
conditions and limitations set forth therein, or withdraw the Registration
Statement or otherwise cause the Registration Statement to become ineffective,
or voluntarily delist the Common Stock from, the Principal Market without
listing the Common Stock on another Principal Market.
               (d) Each of the parties hereto may terminate this Agreement upon
one (1) day’s notice if the other party has breached a material representation,
warranty or covenant to this Agreement and such breach is not remedied within
ten (10) Trading Days after notice of such breach is delivered to the breaching
party.
     Section 8.3 Effect of Termination. In the event of termination by the
Company or the Investor, written notice thereof shall forthwith be given to the
other party and the transactions contemplated by this Agreement shall be
terminated without further action by either party. If this Agreement is
terminated as provided in Section 8.1 or 8.2 herein, this Agreement shall become
void and of no further force and effect, except as provided in Section 10.13.
Nothing in this Section 8.3 shall be deemed to release the Company or the
Investor from any liability for any breach under this Agreement occurring prior
to such termination, or to impair the rights of the Company and the Investor to
compel specific performance by the other party of its obligations under this
Agreement arising prior to such termination.
ARTICLE IX
INDEMNIFICATION
     Section 9.1 Indemnification.
               (a) Except as otherwise provided in this Article IX, unless
disputed as set forth in Section 9.2, the Company agrees to indemnify, defend
and hold harmless the Investor and its affiliates and their respective officers,
directors, agents, employees, subsidiaries, partners, members and controlling
persons (each, an “Investor Indemnified Party”), to the fullest extent permitted
by law from and against any and all Damages directly resulting from or directly
arising out of any breach of any representation or warranty, covenant or
agreement (except as otherwise specifically provided) by the Company in this
Agreement, the Registration Rights Agreement or the Warrant; provided, however,
that the Company shall not be liable under this Article IX to an Investor
Indemnified Party to the extent that such Damages resulted or arose from the
breach by an Investor Indemnified Party of any representation, warranty,
covenant or agreement of an Investor Indemnified Party contained in this
Agreement, the Registration Rights Agreement or the Warrant or the negligence,
recklessness, willful misconduct or bad faith of an Investor Indemnified Party.
The parties intend that any Damages subject to indemnification pursuant to this
Article IX will be net of insurance proceeds (which the Investor Indemnified
Party agrees to

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use commercially reasonable efforts to recover). Accordingly, the amount which
the Company is required to pay to any Investor Indemnified Party hereunder (a
“Company Indemnity Payment”) will be reduced by any insurance proceeds actually
recovered by or on behalf of any Investor Indemnified Party in reduction of the
related Damages. In addition, if an Investor Indemnified Party receives a
Company Indemnity Payment required by this Article IX in respect of any Damages
and subsequently receives any such insurance proceeds, then the Investor
Indemnified Party will pay to the Company an amount equal to the Company
Indemnity Payment received less the amount of the Company Indemnity Payment that
would have been due if the insurance proceeds had been received, realized or
recovered before the Company Indemnity Payment was made.
               (b) Except as otherwise provided in this Article IX, unless
disputed as set forth in Section 9.2, the Investor agrees to indemnify, defend
and hold harmless the Company and its affiliates and their respective officers,
directors, agents, employees, subsidiaries, partners, members and controlling
persons (each, a “Company Indemnified Party”), to the fullest extent permitted
by law from and against any and all Damages directly resulting from or directly
arising out of any breach of any representation or warranty, covenant or
agreement by the Investor in this Agreement, the Registration Rights Agreement
or the Warrant; provided, however, that the Investor shall not be liable under
this Article IX to a Company Indemnified Party to the extent that such Damages
resulted or arose from the breach by a Company Indemnified Party of any
representation, warranty, covenant or agreement of a Company Indemnified Party
contained in this Agreement, the Registration Rights Agreement or the Warrant or
negligence, recklessness, willful misconduct or bad faith of a Company
Indemnified Party. The parties intend that any Damages subject to
indemnification pursuant to this Article IX will be net of insurance proceeds
(which the Company agrees to use commercially reasonable efforts to recover).
Accordingly, the amount which the Investor is required to pay to any Company
Indemnified Party hereunder (an “Investor Indemnity Payment”) will be reduced by
any insurance proceeds theretofore actually recovered by or on behalf of any
Company Indemnified Party in reduction of the related Damages. In addition, if a
Company Indemnified Party receives an Investor Indemnity Payment required by
this Article IX in respect of any Damages and subsequently receives any such
insurance proceeds, then the Company Indemnified Party will pay to the Investor
an amount equal to the Investor Indemnity Payment received less the amount of
the Investor Indemnity Payment that would have been due if the insurance
proceeds had been received, realized or recovered before the Investor Indemnity
Payment was made.
     Section 9.2 Notification of Claims for Indemnification. Each party entitled
to indemnification under this Article IX (an “Indemnified Party”) shall,
promptly after the receipt of notice of the commencement of any claim against
such Indemnified Party in respect of which indemnity may be sought from the
party obligated to indemnify such Indemnified Party under this Article IX (the
“Indemnifying Party”), notify the Indemnifying Party in writing of the
commencement thereof. Any such notice shall describe the claim in reasonable
detail. The failure of any Indemnified Party to so notify the Indemnifying Party
of any such action shall not relieve the Indemnifying Party from any liability
which it may have to such Indemnified Party (a) other than pursuant to this
Article IX or (b) under this Article IX unless, and only to the extent that,
such failure results in the Indemnifying Party’s forfeiture of substantive
rights or defenses or the Indemnifying Party is prejudiced by such delay. The
procedures listed below shall govern the procedures for the handling of
indemnification claims.

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               (a) Any claim for indemnification for Damages that do not result
from a Third Party Claim as defined in the following paragraph, shall be
asserted by written notice given by the Indemnified Party to the Indemnifying
Party. Such Indemnifying Party shall have a period of thirty (30) days after the
receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such thirty (30) day period, such Indemnifying
Party shall be deemed to have refused to accept responsibility to make payment
as set forth in Section 9.1. If such Indemnifying Party does not respond within
such thirty (30) day period or rejects such claim in whole or in part, the
Indemnified Party shall be free to pursue such remedies as specified in this
Agreement.
               (b) If an Indemnified Party shall receive notice or otherwise
learn of the assertion by a person or entity not a party to this Agreement of
any threatened legal action or claim (collectively a “Third Party Claim”), with
respect to which an Indemnifying Party may be obligated to provide
indemnification, the Indemnified Party shall give such Indemnifying Party
written notice thereof within twenty (20) days after becoming aware of such
Third Party Claim.
               (c) An Indemnifying Party may elect to defend (and, unless the
Indemnifying Party has specified any reservations or exceptions, to seek to
settle or compromise) at such Indemnifying Party’s own expense and by such
Indemnifying Party’s own counsel, any Third Party Claim. Within thirty (30) days
after the receipt of notice from an Indemnified Party (or sooner if the nature
of such Third Party Claim so requires), the Indemnifying Party shall notify the
Indemnified Party whether the Indemnifying Party will assume responsibility for
defending such Third Party Claim, which election shall specify any reservations
or exceptions. If such Indemnifying Party does not respond within such thirty
(30) day period or rejects such claim in whole or in part, the Indemnified Party
shall be free to pursue such remedies as specified in this Agreement. In case
any such Third Party Claim shall be brought against any Indemnified Party, and
it shall notify the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to assume the defense thereof at its own
expense, with counsel satisfactory to such Indemnified Party in its reasonable
judgment; provided, however, that any Indemnified Party may, at its own expense,
retain separate counsel to participate in such defense at its own expense.
Notwithstanding the foregoing, in any Third Party Claim in which both the
Indemnifying Party, on the one hand, and an Indemnified Party, on the other
hand, are, or are reasonably likely to become, a party, such Indemnified Party
shall have the right to employ separate counsel and to control its own defense
of such claim if, in the reasonable opinion of counsel to such Indemnified
Party, either (x) one or more significant defenses are available to the
Indemnified Party that are not available to the Indemnifying Party or (y) a
conflict or potential conflict exists between the Indemnifying Party, on the one
hand, and such Indemnified Party, on the other hand, that would make such
separate representation advisable; provided, however, that in such circumstances
the Indemnifying Party (i) shall not be liable for the fees and expenses of more
than one counsel to all Indemnified Parties and (ii) shall reimburse the
Indemnified Parties for such reasonable fees and expenses of such counsel
incurred in any such Third Party Claim, as such expenses are incurred, provided
that the Indemnified Parties agree to repay such amounts if it is ultimately
determined that the Indemnifying Party was not obligated to provide
indemnification under this Article IX. The Indemnifying Party agrees that it
will not compromise or consent to the entry of any judgment in any pending or
threatened claim relating to the matters contemplated hereby (if any Indemnified
Party is a party thereto or has been actually threatened to be made a party
thereto) unless such settlement, compromise or consent

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includes an unconditional release of such Indemnified Party from all liability
arising or that may arise out of such claim. The Indemnifying Party shall not be
liable for any settlement of any claim effected against an Indemnified Party
without the Indemnifying Party’s prior written consent, which consent shall not
be unreasonably withheld, conditioned or delayed. The rights accorded to an
Indemnified Party hereunder shall be in addition to any rights that any
Indemnified Party may have at common law, by separate agreement or otherwise;
provided, however, that notwithstanding the foregoing or anything to the
contrary contained in this Agreement, nothing in this Article IX shall restrict
or limit any rights that any Indemnified Party may have to seek equitable
relief.
ARTICLE X
MISCELLANEOUS
     Section 10.1 Fees and Expenses.
               (a) Each of the Company and the Investor agrees to pay its own
expenses incident to the performance of its obligations hereunder, except that
the Company shall be solely responsible for (i) all reasonable attorneys fees
and expenses incurred by the Investor in connection with the preparation,
negotiation, execution and delivery of this Agreement, the Registration Rights
Agreement and the Warrant, and review of the Registration Statement, and in
connection with any amendments, modifications or waivers of this Agreement,
including, without limitation, all reasonable attorneys fees and expenses,
(ii) subject in all cases to Section 10.1(b) hereof, all reasonable fees and
expenses incurred in connection with the Investor’s enforcement of this
Agreement, including, without limitation, all reasonable attorneys fees and
expenses, (iii) due diligence expenses incurred by the Investor during the term
of this Agreement equal to $12,500 per calendar quarter, and (iv) all stamp or
other similar taxes and duties, if any, levied in connection with issuance of
the Shares pursuant hereto; provided, however, that in each of the above
instances the Investor shall provide customary supporting invoices or similar
documentation in reasonable detail describing such expenses (however, the
Investor shall not be obligated to provide detailed time sheets); and provided
further, that the maximum aggregate amount payable by the Company pursuant to
clause (i) above shall be $75,000 and the Investor shall bear all fees and
expenses in excess of $75,000 in connection with clause (i) above.
               (b) If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the Registration Rights Agreement or the
Warrant, the prevailing party shall be entitled to reasonable fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.
     Section 10.2 Reporting Entity for the Common Stock. The reporting entity
relied upon for the determination of the trading price or trading volume of the
Common Stock on any given Trading Day for the purposes of this Agreement shall
be Bloomberg, L.P. or any successor thereto. The written mutual consent of the
Investor and the Company shall be required to employ any other reporting entity.
     Section 10.3 Brokerage. Each of the parties hereto represents that it has
had no dealings in connection with this transaction with any finder or broker
who will demand payment of any fee or commission from the other party. The
Company on the one hand, and the Investor,

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on the other hand, agree to indemnify the other against and hold the other
harmless from any and all liabilities to any Persons claiming brokerage
commissions or finder’s fees on account of services purported to have been
rendered on behalf of the indemnifying party in connection with this Agreement
or the transactions contemplated hereby.
     Section 10.4 Notices. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served,
(ii) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice given in accordance herewith, in each case with
a copy to the e-mail address set forth beside the facsimile number for the
addressee below. Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:
If to the Company:
OXiGENE, Inc.
230 Third Avenue
Waltham, MA 02451
Facsimile: 781-547-6800
Attention: Richard Chin, M.D.
with a copy (which shall not constitute notice) to:
Mintz Levin Cohn Ferris Glovsky and Popeo P.C.
One Financial Center
Boston, MA 02111
Facsimile: 617-542-2241
Attention: Megan N. Gates, Esq.
if to the Investor:
Kingsbridge Capital Limited
Attention: Mr. Tony Hillman
P.O. Box 1075
Elizabeth House
9 Castle Street
St. Helier
Jersey
JE42QP
Channel Islands
Telephone: 011-44-1534-636-041

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Facsimile: 011-44-1534-636-042
Email: admin@kingsbridgecap.com; and adamgurney@kingsbridgecap.com
with a copy (which shall not constitute notice) to:
Kingsbridge Corporate Services Limited
Kingsbridge House
New Abbey
Kilcullen, County Kildare
Republic of Ireland
Telephone: 011-353-45-481-811
Facsimile: 011-353-45-482-003
Email: adamgurney@kingsbridge.ie; emmagalway@kingsbridge.ie; and
pwhelan@kingsbridge.ie
and another copy (which shall not constitute notice) to:
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038
Facsimile: (212) 806-5400
Attention: Keith M. Andruschak, Esq. – kandruschak@stroock.com
     Either party hereto may from time to time change its address for notices
under this Section by giving at least ten (10) days’ prior written notice of
such changed address to the other party hereto.
     Section 10.5 Assignment. Neither this Agreement nor any rights of the
Investor or the Company hereunder may be assigned by either party to any other
Person.
     Section 10.6 Amendment; No Waiver. No party shall be liable or bound to any
other party in any manner by any warranties, representations or covenants except
as specifically set forth in this Agreement, the Warrant and the Registration
Rights Agreement. Except as expressly provided in this Agreement, neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by both parties hereto. The failure of
the either party to insist on strict compliance with this Agreement, or to
exercise any right or remedy under this Agreement, shall not constitute a waiver
of any rights provided under this Agreement, nor estop the parties from
thereafter demanding full and complete compliance nor prevent the parties from
exercising such a right or remedy in the future.
     Section 10.7 Entire Agreement. This Agreement, the Registration Rights
Agreement and the Warrant set forth the entire agreement and understanding of
the parties relating to the subject matter hereof and supersedes all prior and
contemporaneous agreements, negotiations and understandings between the parties,
both oral and written, relating to the subject matter hereof.
     Section 10.8 Severability. If any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall

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continue in full force and effect without said provision; provided that, if the
severance of such provision materially changes the economic benefits of this
Agreement to either party as such benefits are anticipated as of the date
hereof, then such party may terminate this Agreement on five (5) business days
prior written notice to the other party. In such event, the Registration Rights
Agreement will terminate simultaneously with the termination of this Agreement;
provided that in the event that this Agreement is terminated by the Company in
accordance with this Section 10.8 and the Warrant Shares either have not been
registered for resale by the Investor in accordance with the Registration Rights
Agreement or are otherwise not freely tradable (if and when issued) in
accordance with applicable law, then the Registration Rights Agreement in
respect of the registration of the Warrant Shares shall remain in full force and
effect.
     Section 10.9 Title and Subtitles. The titles and subtitles used in this
Agreement are used for the convenience of reference and are not to be considered
in construing or interpreting this Agreement.
     Section 10.10 Counterparts. This Agreement may be executed in multiple
counterparts, each of which may be executed by less than all of the parties and
shall be deemed to be an original instrument which shall be enforceable against
the parties actually executing such counterparts and all of which together shall
constitute one and the same instrument.
     Section 10.11 Choice of Law. This Agreement shall be construed under the
laws of the State of New York.
     Section 10.12 Specific Enforcement, Consent to Jurisdiction.
               (a) The Company and the Investor acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that either party shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement by the other party and to enforce specifically the terms and
provisions hereof or thereof, this being in addition to any other remedy to
which either party may be entitled by law or equity.
               (b) Each of the Company and the Investor (i) hereby irrevocably
submits to the jurisdiction of the United States District Court and other courts
of the United States sitting in the State of New York for the purposes of any
suit, action or proceeding arising out of or relating to this Agreement and
(ii) hereby waives, and agrees not to assert in any such suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
such court, that the suit, action or proceeding is brought in an inconvenient
forum or that the venue of the suit, action or proceeding is improper. Each of
the Company and the Investor consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing in
this Section 10.12 shall affect or limit any right to serve process in any other
manner permitted by law.

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     Section 10.13 Survival. The representations and warranties of the Company
and the Investor contained in Articles IV and V and the covenants contained in
Article V and Article VI shall survive the execution and delivery hereof and the
Closing until the termination of this Agreement, and the agreements and
covenants set forth in Article VIII and Article IX of this Agreement shall
survive the execution and delivery hereof and the Closing hereunder.
     Section 10.14 Publicity. Except as otherwise required by applicable law or
regulation, or NASDAQ rule or judicial process, prior to the Closing, neither
the Company nor the Investor shall issue any press release or otherwise make any
public statement or announcement with respect to this Agreement or the
transactions contemplated hereby or the existence of this Agreement. In the
event the Company is required by law, regulation, NASDAQ rule or judicial
process, based upon reasonable advice of the Company’s counsel, to issue a press
release or otherwise make a public statement or announcement with respect to
this Agreement prior to the Closing, the Company shall consult with the Investor
on the form and substance of such press release, statement or announcement.
Promptly after the Closing, each party may issue a press release or otherwise
make a public statement or announcement with respect to this Agreement or the
transactions contemplated hereby or the existence of this Agreement; provided
that, prior to issuing any such press release, making any such public statement
or announcement, the party wishing to make such release, statement or
announcement consults and cooperates in good faith with the other party in order
to formulate such press release, public statement or announcement in form and
substance reasonably acceptable to both parties.
     Section 10.15 Further Assurances. From and after the date of this
Agreement, upon the request of the Investor or the Company, each of the Company
and the Investor shall execute and deliver such instruments, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.
[Remainder of this page intentionally left blank.]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officer as of the date first
written.

            KINGSBRIDGE CAPITAL LIMITED
      By:         /s/ Adam Gurney         Adam Gurney
Managing Director        OXiGENE INC.
      By:        /s/ James B. Murphy         James B. Murphy        Vice
President and Chief Financial Officer     

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Exhibit A
Form of Registration Rights Agreement

 

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Exhibit B
Form of Warrant

 

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Exhibit C
Form of Draw Down Notice
Kingsbridge Capital Limited
Attention: Mr. Tony Hillman
P.O. Box 1075
Elizabeth House
9 Castle Street
St. Helier
Jersey
JE42QP
Channel Islands
Facsimile: 011-44-1534-636-042
Email: admin@kingsbridgecap.com; and adamgurney@kingsbridgecap.com
Kingsbridge Corporate Services Limited
Kingsbridge House
New Abbey
Kilcullen, County Kildare
Republic of Ireland
Facsimile: 011-353-45-482-003
Email: adamgurney@kingsbridge.ie; and pwhelan@kingsbridge.ie
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038
Facsimile: (212) 806-5400
Attention: Keith M. Andruschak, Esq. – kandruschak@stroock.com
Reference is hereby made to that certain Common Stock Purchase Agreement dated
as of February 19, 2008 (the “Agreement”) by and between OXiGENE, Inc., a
corporation organized and existing under the laws of the State of Delaware (the
“Company”), and Kingsbridge Capital Limited, an entity organized and existing
under the laws of the British Virgin Islands (the “Investor”). Capitalized terms
used and not otherwise defined herein shall have the meanings given such terms
in the Agreement.
In accordance with and pursuant to Section 3.1 of the Agreement, the Company
hereby issues this Draw Down Notice to the Investor pursuant to the terms set
forth below.
Draw Down Amount: $                     ; and
First Trading Day of Draw Down Pricing Period:                      , 200[_].
Enclosed with this Draw Down Notice is an executed copy of the Officer’s
Certificate described in Section 3.1 of the Agreement, the base form of which is
attached to such Agreement as Exhibit D.

 

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Exhibit D
Officer’s Certificate
     I, [NAME OF OFFICER], do hereby certify to Kingsbridge Capital Limited (the
“Investor”), with respect to the common stock of OXiGENE, Inc. (the “Company”)
issuable in connection with the Draw Down Notice, dated                     
(the “Notice”) attached hereto and delivered pursuant to Article III of the
Common Stock Purchase Agreement, dated February 19, 2008 (the “Agreement”), by
and between the Company and the Investor, as follows (capitalized terms used but
undefined herein have the meanings given to such terms in the Agreement):
     1. I am the duly elected [OFFICER] of the Company.
     2. The representations and warranties of the Company set forth in
Article IV of the Agreement are true and correct in all material respects as
though made on and as of the date hereof (except for such representations and
warranties that are made as of a particular date).
     3. The Company has performed in all material respects all covenants and
agreements to be performed by the Company on or prior to the date hereof related
to the Notice and has satisfied each of the conditions to the obligation of the
Investor set forth in Article VII of the Agreement.
     4. The Shares issuable in respect of the Notice will be delivered without
restrictive legend via book entry through the Depositary Trust Company to an
account designated by the Investor.
     The undersigned has executed this Certificate this ___ day of, 200[_].

         
 
  Name:    
 
       
 
  Title: