Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of December 4, 2006,
by and among Immunicon Corporation, a Delaware corporation, with headquarters
located at 3401 Masons Mill Road, Suite 100, Huntingdon Valley, Pennsylvania
19006 the “Company”), and the investors listed on the Schedule of Buyers
attached hereto (individually, a “Buyer” and collectively, the “Buyers”).

WHEREAS:

A. The Company and the Buyers desire to enter into this transaction to purchase
the Notes (as defined below) and Warrants (as defined below) pursuant to a
currently effective shelf registration statement on Form S-3 (Registration
Number 333-124714), which has at least $55,344,965 of initial offering price of
unallocated securities available for sale as of the date hereof, which
registration statement has been declared effective in accordance with the
Securities Act of 1933, as amended (the “1933 Act”), by the United States
Securities and Exchange Commission (the “SEC”).

B. The Company has authorized the issuance of a new series of subordinated
unsecured convertible notes of the Company, in the form attached hereto as
Exhibit A (the “Notes”), which Notes shall be convertible into shares of common
stock, par value $0.001 per share, of the Company (the “Common Stock”) (as
converted, the “Conversion Shares”), in accordance with the terms of the Notes,
which Conversion Shares shall be issued pursuant to the Registration Statement
(as defined below), or, if such Registration Statement is not available at the
time of issuance of such Conversion Shares, as securities exempt from
registration pursuant to Section 3(a)(9) of the 1933 Act.

C. Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms
and conditions stated in this Agreement, (i) that aggregate principal amount of
the Notes set forth opposite such Buyer’s name in column (3) on the Schedule of
Buyers attached hereto (which aggregate amount for all Buyers shall be
$30,000,000) and (ii) warrants, in substantially the form attached hereto as
Exhibit B (the “Warrants”), to acquire up to that number of additional shares of
Common Stock set forth opposite such Buyer’s name in column (4) of the Schedule
of Buyers (as exercised, collectively, the “ Warrant Shares”), which Warrant
Shares shall be issued pursuant to the Registration Statement (as defined below)
or, if such Registration Statement is not available at the time of issuance of
such Warrant Shares, shall be issued solely pursuant to the cashless exercise
provisions of the Warrant as securities exempt from registration pursuant to
Section 3(a)(9) of the 1933 Act.

D. The Notes, the Conversion Shares, the Warrants and the Warrant Shares
collectively are referred to herein as the “Securities”.

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NOW, THEREFORE, the Company and each Buyer hereby agree as follows:

1. PURCHASE AND SALE OF NOTES AND WARRANTS.

(a) Purchase of Notes and Warrants.

(i) Notes and Warrants. Subject to the satisfaction (or waiver) of the
conditions set forth in Sections 6 and 7 below, the Company shall issue and sell
to each Buyer, and each Buyer severally, but not jointly, shall purchase from
the Company on the Closing Date (as defined below), (x) a principal amount of
Notes as is set forth opposite such Buyer’s name in column (3) on the Schedule
of Buyers and (y) Warrants to acquire up to that number of Warrant Shares as is
set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers,
(the “Closing”).

(ii) Closing. The date of the Closing (the “Closing Date”) shall be, on the date
of notification of satisfaction (or waiver) of the conditions to the Closing set
forth in Sections 6 and 7 below at the offices of Schulte Roth & Zabel LLP, 919
Third Avenue, New York, New York 10022 unless otherwise mutually agreed to by
the Company and each Buyer. The Closing shall be deemed to have occurred at
10:00 a.m., New York City time on the Closing Date.

(iii) Purchase Price.

(1) The aggregate purchase price for the Notes and the Warrants to be purchased
by each such Buyer at the Closing (the “Purchase Price”) shall be the amount set
forth opposite each Buyer’s name in column (5) of the Schedule of Buyers. Each
Buyer shall pay $1,000 for each $1,000 of principal amount of Notes and related
Warrants to be purchased by such Buyer at the Closing.

(2) The Buyers and the Company agree that the Notes and the Warrants constitute
an “investment unit” for purposes of Section 1273(c)(2) of the Internal Revenue
Code of 1986, as amended (the “Code”). Prior to the date hereof, the Buyers and
the Company have agreed that the Warrants shall have a value of $0.13 for
purposes of the allocation of the issue price of such investment unit between
the Notes and the Warrants in accordance with Section 1273(c)(2) of the Code and
Treasury Regulation Section 1.1273-2(h), and neither the Buyers nor the Company
shall take any position inconsistent with such allocation in any tax return or
in any judicial or administrative proceeding in respect of taxes.

(b) Form of Payment. On the Closing Date, (i) each Buyer shall pay its Purchase
Price to the Company for the Notes and the Warrants to be issued and sold to
such Buyer at the Closing, by wire transfer of immediately available funds in
accordance with the Company’s written wire instructions and (ii) the Company
shall deliver to each Buyer the Notes (allocated in the principal amounts as
such Buyer shall request) which such Buyer is then purchasing hereunder along
with the Warrants (allocated in the amounts as such Buyer shall request) which
such Buyer is purchasing, in each case duly executed on behalf of the Company
and registered in the name of such Buyer or its designee.

 

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2. BUYER’S REPRESENTATIONS AND WARRANTIES. Each Buyer, severally and not
jointly, represents and warrants with respect to only itself that:

(a) Organization; Authority. Such Buyer is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by the applicable Transaction Documents
(as defined below) and otherwise to carry out its obligations thereunder. The
execution, delivery and performance by such Buyer of the transactions
contemplated by this Agreement has been duly authorized by all necessary action
on the part of such Buyer. This Agreement has been duly executed by such Buyer,
and when delivered by such Buyer in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Buyer, enforceable
against it in accordance with its terms, except (i) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (ii) as enforceability of any indemnification and
contribution provisions may be limited under the federal and state securities
laws and public policy, and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.

(b) No Conflicts. The execution, delivery and performance by such Buyer of this
Agreement and the consummation by such Buyer of the transactions contemplated
hereby will not (i) result in a violation of the organizational documents of
such Buyer or (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 agreement, indenture or instrument to which such Buyer is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws) applicable to such Buyer,
except in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of such Buyer to perform its obligations hereunder.

(c) Residency. Such Buyer is a resident of that jurisdiction specified below its
address on the Schedule of Buyers.

(d) Certain Trading Activities. Other than with respect to this Agreement and
the transactions contemplated herein, since the time that such Buyer was first
contacted by the Company, the Agent (as defined below) or any other Person
regarding this investment in the Company neither the Buyer nor any Affiliate of
such Buyer which (x) had knowledge of the transactions contemplated hereby,
(y) has or shares discretion relating to such Buyer’s investments or trading or
information concerning such Buyer’s investments and (z) is subject to such
Buyer’s review or input concerning such Affiliate’s investments or trading
(collectively, “Trading Affiliates”) has directly or indirectly, nor has any
Person acting on behalf of or pursuant to any understanding with such Buyer or
Trading Affiliate, effected or agreed to effect any transactions in the
securities of the Company. Such Buyer hereby covenants and agrees not to, and
shall cause its Trading Affiliates not to, engage, directly or indirectly, in
any transactions in the securities of the Company or involving the Company’s
securities during the period from the date hereof until such time as (i) the
transactions contemplated by this Agreement are first

 

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publicly announced as described in Section 4(i) hereof or (ii) this Agreement is
terminated in full pursuant to Section 8 hereof. Notwithstanding the foregoing,
for avoidance of doubt, nothing contained herein shall constitute a
representation or warranty, or preclude any actions, with respect to the
identification of the availability of, or securing of, available shares to
borrow in order to effect short sales or similar transactions in the future. For
the purpose of this Agreement, “Person” means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.

(e) Acquiring Person. Such Buyer, after giving effect to the transactions
contemplated hereby, will not be the beneficial owner of 20% or more of the
Company’s outstanding Common Stock. For purposes of this Section 2(f),
beneficial ownership shall be determined pursuant to a Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the “1934 Act”).

The Company acknowledges and agrees that each Buyer does not make or has not
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 2.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to each of the Buyers that, as of the date hereof and as of the Closing
Date:

(a) Shelf Registration Statement. A “shelf” registration statement on Form S-3
(File No. 333-124714) with respect to the Securities has been prepared by the
Company in conformity in all material respects with the requirements of the 1933
Act, and the rules and regulations (the “Rules and Regulations”) of the SEC
thereunder and has been filed with the SEC. The Company and the transactions
contemplated by this Agreement meet the requirements and comply with the
conditions for the use of Form S-3. The Registration Statement (as defined
below) meets the requirements of Rule 415(a)(1)(x) under the 1933 Act and
complies in all material respects with said rule. Copies of such registration
statement, including any amendments thereto, the base prospectus (meeting in all
material respects the requirements of the Rules and Regulations) contained
therein and the exhibits, financial statements and schedules, as finally amended
and revised, have heretofore been delivered by the Company to the Buyers. Such
registration statement, together with any registration statement filed by the
Company pursuant to Rule 462(b) under the 1933 Act, is herein referred to as the
“Registration Statement”, which shall be deemed to include all information
omitted therefrom in reliance upon Rules 430A, 430B or 430C under the 1933 Act
and contained in the Prospectus referred to below, has become effective under
the 1933 Act and no post-effective amendment to the Registration Statement
(except to the extent that the Company’s filing of its Form 10-K on March 15,
2006, as amended by the Company’s Form 10-K/A filed on April 13, 2006
(collectively, the “Annual Report”) constitutes such a post-effective amendment)
has been filed as of the date of this Agreement. The term “Prospectus” as used
in this Agreement means the form of base prospectus together with the final
prospectus supplement relating to the Securities (the “Prospectus Supplement”)
first filed with the SEC pursuant to and within the time limits described in
Rule 424(b) under the 1933 Act. Any preliminary prospectus relating to the
Securities prior to the date hereof is referred to as a “Preliminary
Prospectus”. Any reference

 

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herein to the Registration Statement, any Preliminary Prospectus or the
Prospectus or to any amendment or supplement to any of the foregoing documents
shall be deemed to refer to and include any documents incorporated by reference
therein, and, in the case of any reference herein to the Prospectus, also shall
be deemed to include any documents incorporated by reference therein, and any
supplements or amendments thereto, filed with the SEC after the date of filing
of the Prospectus Supplement under Rule 424(b) under the 1933 Act and prior to
the termination of the offering of the Securities.

(b) Prospectus. As of the Applicable Time (as defined below) and as of the
Closing Date (as defined below), neither (x) the General Use Free Writing
Prospectus(es) (as defined below) issued at or prior to the Applicable Time, the
Statutory Prospectus (as defined below), all considered together (collectively,
the “General Disclosure Package”), nor (y) any individual Limited Use Free
Writing Prospectus (as defined below), when considered together with the General
Disclosure Package, included or will include any untrue statement of a material
fact or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted from any
Issuer Free Writing Prospectus, in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of the Buyers,
specifically for use therein. As used in this subsection and elsewhere in this
Agreement:

(i) “Applicable Time” means 5:30 p.m. (New York time) on the date of this
Agreement or such other time as agreed to by the Company and the Buyers.

(ii) “Statutory Prospectus” as of any time means the Preliminary Prospectus
relating to the Securities that is included in the Registration Statement
immediately prior to that time.

(iii) “Issuer Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 under the 1933 Act, relating to the
Securities in the form filed or required to be filed with the SEC or, if not
required to be filed, in the form retained in the Company’s records pursuant to
Rule 433(g) under the 1933 Act.

(iv) “General Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is identified on Schedule I to this Agreement.

(v) “Limited Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not a General Use Free Writing Prospectus.

(c) Organization. The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement, the General Disclosure
Package and the Prospectus. The Company has no significant subsidiaries (as such
term is defined in Rule 1-02 of Regulation S-X promulgated by the SEC) other
than as listed in Exhibit 21.1 to the Annual Report (collectively, the
“Subsidiaries”). Each of the Subsidiaries has been duly organized and is validly
existing as an entity in good standing under the laws of the jurisdiction of its
organization, with corporate

 

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power and authority to own or lease its properties and conduct its business as
described in the Registration Statement, the General Disclosure Package and the
Prospectus. The Subsidiaries are the only subsidiaries, direct or indirect, of
the Company. The Company and each of the Subsidiaries are duly qualified to
transact business in all jurisdictions in which the conduct of their business
requires such qualification, except where the failure to be so qualified would
not reasonably be expected to (i) result in any material adverse change, or any
development that would reasonably be expected to result in a material adverse
change, in or affecting the business, results of operations, or financial
condition of the Company and of the Subsidiaries taken as a whole, whether or
not occurring in the ordinary course of business, or (ii) prevent, burden or
impair the consummation of the transactions contemplated by this Agreement
(collectively a “Material Adverse Effect”). The outstanding shares of capital
stock of each of the Subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable and are owned by the Company or another
Subsidiary free and clear of all liens, encumbrances and equities and claims,
except as described in the Registration Statement and the Annual Report; and no
options, warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into shares of capital stock
or ownership interests in the Subsidiaries are outstanding.

(d) Authorization; Enforcement; Validity. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Notes, the Irrevocable Transfer Agent Instructions (as
defined in Section 5(b)), the Warrants and each of the other agreements entered
into by the parties hereto in connection with the transactions contemplated by
this Agreement (collectively, the “Transaction Documents”) and to issue the
Securities in accordance with the terms hereof and thereof. The execution and
delivery of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby, including, without
limitation, the issuance of the Notes and the Warrants, the reservation for
issuance and the issuance of the Conversion Shares issuable upon conversion of
the Notes and the reservation for issuance and issuance of Warrant Shares
issuable upon exercise of the Warrants have been duly authorized by the
Company’s Board of Directors, no further filing, consent, or authorization is
required by the Company’s Board of Directors or its stockholders. This Agreement
and the other Transaction Documents of even date herewith have been duly
executed and delivered by the Company, and constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.

(e) Issuance of Securities. The outstanding shares of Common Stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; the Securities to be issued and sold by the Company have been
duly authorized and when issued and paid for as contemplated herein will be
validly issued, fully paid and non-assessable; and no preemptive rights of
stockholders exist with respect to any of the Securities or the issue and sale
thereof. As of the Closing, a number of shares of Common Stock shall have been
duly authorized and reserved for issuance which equals or exceeds 130% of the
aggregate of the maximum number of shares of Common Stock issuable as of the
Closing Date (i) upon conversion of the Notes and (ii) upon exercise of the
Warrants. Neither the filing of the

 

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Registration Statement nor the offering or sale of the Securities as
contemplated by this Agreement gives rise to any rights, other than those which
have been waived or satisfied, for or relating to the registration of any shares
of Common Stock. Upon conversion or exercise in accordance with the Notes or the
Warrants, as the case may be, the Conversion Shares and the Warrant Shares,
respectively, will be validly issued, fully paid and nonassessable and free from
all preemptive or similar rights, taxes, liens and charges with respect to the
issue thereof, with the holders being entitled to all rights accorded to a
holder of Common Stock.

(f) Equity Capitalization. As of the date hereof and as of the Closing Date, the
Company has or will have, as the case may be, an authorized, issued and
outstanding capitalization as is set forth in the Registration Statement and the
Prospectus (subject, in each case, to the issuance of shares of Common Stock
upon exercise of stock options and warrants disclosed as outstanding in the
Registration Statement and the Prospectus and the grant or issuance of options
or shares under existing equity compensation plans or stock purchase plans
described in the Registration Statement or the Prospectus), and such authorized
capital stock conforms to the description thereof set forth in the Registration
Statement and the Prospectus. All of the Securities conform to the description
thereof contained in the Registration Statement and the Prospectus. The form of
certificates for the Conversion Shares and the Warrant Shares will conform to
the corporate law of the jurisdiction of the Company’s incorporation.

(g) Disclosure.

(i) The SEC has not issued an order preventing or suspending the use of any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus
relating to the proposed offering of the Securities, and no proceeding for that
purpose or pursuant to Section 8A of the 1933 Act has been instituted or, to the
Company’s knowledge, threatened by the SEC. The Registration Statement contains,
and the Prospectus and any amendments or supplements thereto will conform to the
requirements of the 1933 Act and the Rules and Regulations. The documents
incorporated, or to be incorporated, by reference in the Prospectus, at the time
filed with the SEC conformed in all material respects, or will conform in all
respects, to the requirements of the 1934 Act, or the 1933 Act, as applicable,
and the Rules and Regulations. The Registration Statement and any amendment
thereto do not contain, and on the Closing Date will not contain, any untrue
statement of a material fact and do not omit, and on the Closing Date will not
omit, to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus and any amendments
and supplements thereto do not contain, and on the Closing Date will not
contain, any untrue statement of a material fact; and do not omit, and on the
Closing Date will not omit, to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted from the
Registration Statement or the Prospectus, or any such amendment or supplement,
in reliance upon, and in conformity with, written information furnished to the
Company by or on behalf of the Buyers, specifically for use therein.

(ii) Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Securities or until any earlier date that the Company notified or notifies the
Buyers as described in the next sentence, did not, does not and will not include
any information that conflicted, conflicts or will

 

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conflict with the information contained in the Registration Statement or the
Prospectus, including any document incorporated by reference therein that has
not been superseded or modified. If at any time following issuance of an Issuer
Free Writing Prospectus, there occurred or occurs an event or development as a
result of which such Issuer Free Writing Prospectus included or would include an
untrue statement of a material fact or omitted or would omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances, not misleading, the Company has notified or will notify promptly
the Buyers so that any use of such Issuer Free Writing Prospectus may cease
until it is amended or supplemented. The foregoing two sentences do not apply to
statements or omissions from any Issuer Free Writing Prospectus based upon and
in conformity with written information furnished to the Company by the Buyers
specifically for use therein.

(iii) The Company confirms that neither it nor any other Person acting on its
behalf has provided any of the Buyers or their agents or counsel with any
information that constitutes or could reasonably be expected to constitute
material, nonpublic information, that is not included in the 8-K Filing (as
defined below). The Company understands and confirms that each of the Buyers
will rely on the foregoing representations in effecting transactions in
securities of the Company. All disclosure provided to the Buyers regarding the
Company or any of its Subsidiaries, their business and the transactions
contemplated hereby, including the Schedules to this Agreement, furnished by or
on behalf of the Company does not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. No event or circumstance has occurred or information
exists with respect to the Company or any of its Subsidiaries or its or their
business, properties, prospects, operations or financial conditions, 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.

(h) Offering Materials. The Company has not, directly or indirectly, distributed
and will not distribute any offering material in connection with the offering
and sale of the Securities other than any Preliminary Prospectus, the
Prospectus, any Permitted Free Writing Prospectus (as defined below) and other
materials, if any, permitted under the 1933 Act. The Company will file with the
SEC all Issuer Free Writing Prospectuses in the time required under Rule 433(d)
under the 1933 Act. The Company has satisfied or will satisfy the conditions in
Rule 433 under the 1933 Act to avoid a requirement to file with the SEC any
electronic road show.

(i) Ineligible Issuer Status. At the time of filing the Registration Statement
and (ii) as of the date hereof (with such date being used as the determination
date for purposes of this clause (ii)), the Company was not and is not an
“ineligible issuer” (as defined in Rule 405 under the 1933 Act, without taking
into account any determination by the SEC pursuant to Rule 405 under the 1933
Act that it is not necessary that the Company be considered an ineligible
issuer), including, without limitation, for purposes of Rules 164 and 433 under
the 1933 Act with respect to the offering of the Securities as contemplated by
the Registration Statement.

(j) Financial Statements. The condensed consolidated financial statements of the
Company and the Subsidiaries, together with related notes and schedules as set
forth or incorporated by reference in the Registration Statement, the General
Disclosure Package and the

 

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Prospectus, present fairly in all material respects the financial position and
the results of operations and cash flows of the Company and the consolidated
Subsidiaries, at the indicated dates and for the indicated periods. Such
condensed consolidated financial statements and related schedules have been
prepared in accordance with generally accepted principles of accounting
(“GAAP”), consistently applied throughout the periods involved, except as
disclosed therein, and all adjustments necessary for a fair presentation of
results for such periods have been made. The summary and selected consolidated
financial and statistical data included or incorporated by reference in the
Registration Statement, the General Disclosure Package and the Prospectus
presents fairly in all material respects the information shown therein, at the
indicated dates and for the indicated periods, and such data has been compiled
on a basis consistent with the financial statements presented therein and the
books and records of the Company. All disclosures, if any, contained in the
Registration Statement, the General Disclosure Package and the Prospectus
regarding “non-GAAP financial measures” (as such term is defined by the Rules
and Regulations) comply in all material respects with Regulation G of the 1934
Act and Item 10 of Regulation S-K under the 1933 Act, to the extent applicable.
The Company and the Subsidiaries do not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet obligations
or any “variable interest entities” within the meaning of Financial Accounting
Standards Board Interpretation No. 46), not disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus. There are no
financial statements (historical or pro forma) that are required to be included
in the Registration Statement, the General Disclosure Package or the Prospectus
that are not included as required.

(k) Accountants. Deloitte & Touche LLP, who have certified certain of the
financial statements filed with the SEC as part of, or incorporated by reference
in, the Registration Statement, the General Disclosure Package and the
Prospectus, has represented to the Company that it is an independent registered
public accounting firm with respect to the Company and the Subsidiaries within
the meaning of the 1933 Act and the applicable Rules and Regulations and the
Public Company Accounting Oversight Board (United States) (the “PCAOB”).

(l) Weaknesses or Changes in Internal Accounting Controls. Except as disclosed
in the Registration Statement, the General Disclosure Package and the
Prospectus, neither the Company nor any of the Subsidiaries is aware of (i) any
material weakness in its internal control over financial reporting or
(ii) change in internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.

(m) Sarbanes- Oxley. Solely to the extent that the Sarbanes-Oxley Act of 2002,
as amended, and the rules and regulations promulgated by the SEC and the Nasdaq
Global Market thereunder (collectively, the “Sarbanes-Oxley Act”) has been
applicable to the Company, there is and has been no failure on the part of the
Company to comply in all material respects with any provision of the
Sarbanes-Oxley Act. The Company has taken all necessary actions to ensure that
it is in compliance in all material respects with all provisions of the
Sarbanes-Oxley Act that are in effect with respect to which the Company is
required to comply and is actively taking steps to ensure that it will be in
compliance with the other provisions of the Sarbanes-Oxley Act which will become
applicable to the Company.

 

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(n) Litigation. There is no action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of the
Subsidiaries before any court or administrative agency or otherwise which if
determined adversely to the Company or any of the Subsidiaries would have,
individually or in the aggregate, a Material Adverse Effect, except as set forth
in the Registration Statement, the General Disclosure Package and the
Prospectus.

(o) Title. The Company and the Subsidiaries have good and marketable title to
all of the material properties and assets reflected in the condensed
consolidated financial statements hereinabove described or described in the
Registration Statement, the General Disclosure Package and the Prospectus,
subject to no lien, mortgage, pledge, charge or encumbrance of any kind except
those reflected in such financial statements or described in the Registration
Statement, the General Disclosure Package and the Prospectus or which are not
material in amount or would not materially interfere with the use to be made of
such properties or assets. The Company and the Subsidiaries occupy their leased
properties under valid and binding leases conforming in all material respects to
the description thereof set forth in the Registration Statement, the General
Disclosure Package and the Prospectus.

(p) Taxes. The Company and the Subsidiaries have filed all Federal, State, local
and foreign tax returns which have been required to be filed and have paid all
taxes indicated by such returns and all assessments received by them or any of
them to the extent that such taxes have become due and are not being contested
in good faith and for which an adequate reserve for accrual has been established
in accordance with GAAP. All tax liabilities have been adequately provided for
in the condensed consolidated financial statements of the Company in accordance
with GAAP, and the Company does not know of any actual or proposed additional
material tax assessments.

(q) Absence of Certain Changes. Since the respective dates as of which
information is given in the Registration Statement, the General Disclosure
Package and the Prospectus, as each may be amended or supplemented, there has
not been any Material Adverse Effect, and there has not been any material
transaction entered into by the Company or the Subsidiaries, other than
transactions in the ordinary course of business and transactions described in
the Registration Statement, the General Disclosure Package and the Prospectus,
as each may be amended or supplemented. The Company and the Subsidiaries have no
material contingent obligations which are not disclosed in the Company’s
condensed consolidated financial statements which are included in the
Registration Statement, the General Disclosure Package and the Prospectus.

(r) No Conflicts. Neither the Company nor any of the Subsidiaries is or with the
giving of notice or lapse of time or both, will be, (i) in violation of its
certificate of incorporation, by-laws, or other organizational documents or
(ii) in violation of or in default under any agreement, lease, contract,
indenture or other instrument or obligation to which it is a party or by which
it, or any of its properties, is bound and, solely with respect to this clause
(ii), which violation or default would have a Material Adverse Effect. The
execution and delivery of this Agreement and the consummation of the
transactions herein contemplated and the fulfillment of the terms hereof will
not conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or other

 

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agreement or instrument to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary or any of their respective properties is
bound, or of the certificate of incorporation or by-laws of the Company or any
law, order, rule or regulation judgment, order, writ or decree applicable to the
Company or any Subsidiary of any court or of any government, regulatory body or
administrative agency or other governmental body having jurisdiction, except to
the extent that such conflict, breach or default would not have a Material
Adverse Effect.

(s) Contracts. There is no document, contract or other agreement required to be
described in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required by the 1933 Act or the Rules and Regulations. Each description of a
contract, document or other agreement in the Registration Statement and the
Prospectus accurately reflects in all material respects the terms of the
underlying contract, document or other agreement. Each contract, document or
other agreement described in the Registration Statement and Prospectus or listed
in the exhibits to the Registration Statement or incorporated by reference is in
full force and effect and is valid and enforceable by and against the Company in
accordance with its terms (except as rights to indemnity and contribution
thereunder may be limited by federal or state securities laws and matter of
public policy and except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principle). Neither the Company nor any of its Subsidiaries nor, to
the Company’s knowledge, any other party is in default in the observance or
performance of any term or obligation to be performed by it under any such
agreement or any other agreement or instrument to which the Company or its
Subsidiaries is a party or by which the Company or its Subsidiaries or their
respective properties or businesses may be bound, and no event has occurred
which with notice or lapse of time or both would constitute such a default, in
any such case in which the default or event, individually or in the aggregate,
would have a Material Adverse Effect.

(t) Regulatory Approvals. Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the SEC, the
National Association of Securities Dealers, Inc. (the “NASD”) or such additional
steps as may be required under state securities or Blue Sky laws) has been
obtained or made and is in full force and effect.

(u) Intellectual Property. Except as described in the Registration Statement or
in any document incorporated by reference therein, the Company and each of the
Subsidiaries hold all material licenses, certificates and permits from
governmental authorities which are necessary to the conduct of their businesses
in the manner in which they are being conducted; the Company and the
Subsidiaries each own or possess the right to use all patents, patent rights,
trademarks, trade names, service marks, service names, copyrights, license
rights, know-how (including trade secrets and other unpatented and unpatentable
proprietary or confidential information, systems or procedures) and other
intellectual property rights (“Intellectual Property”) necessary to carry on
their business in all material respects in the manner in which it is being
conducted; to the Company’s knowledge, neither the Company nor any of the
Subsidiaries has infringed, and none of the Company or the Subsidiaries have
received notice of

 

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conflict with, any Intellectual Property of any other person or entity. The
Company has taken all steps reasonably necessary to secure ownership interests
in Intellectual Property created for it by any contractors. There are no
outstanding options, licenses or agreements of any kind relating to the
Intellectual Property of the Company that are required to be described in the
Registration Statement, the General Disclosure Package and the Prospectus and
are not described therein in all material respects. The Company is not a party
to or bound by any options, licenses or agreements with respect to the
Intellectual Property of any other person or entity that are required to be set
forth in the Prospectus and are not described therein in all material respects.
None of the technology employed by the Company and material to the Company’s
business has been obtained or is being used by the Company in violation of any
contractual obligation binding on the Company or, to the Company’s knowledge,
any of its officers, directors or employees or, to the Company’s knowledge,
otherwise in violation of the rights of any persons; the Company has not
received any written or oral communications alleging that the Company has
violated, infringed or conflicted with, or, by conducting its business as set
forth in the Registration Statement, the General Disclosure Package and the
Prospectus, would violate, infringe or conflict with, any of the Intellectual
Property of any other person or entity. The Company knows of no infringement by
others of Intellectual Property owned by or licensed to the Company.

(v) FDA; Studies. Since the respective dates as of which information is set
forth in the Registration Statement, the General Disclosure Package and the
Prospectus, (i) all of the descriptions of the Company’s legal and governmental
proceedings and procedures before the United States Food and Drug Administration
(the “FDA”) or any other national, departmental, state or local governmental
body exercising comparable authority are true and correct in all material
respects, (ii) the studies, tests and preclinical and clinical trials conducted
by or on behalf of the Company and its Subsidiaries that are described in the
Registration Statement, the General Disclosure Package and the Prospectus were
and, if still pending, are (a) with respect to the foregoing conducted by
employees of the Company or any of its Subsidiaries (“Company Studies”), being
conducted in accordance with experimental protocols, procedures and controls
pursuant to, where applicable, accepted professional scientific standards, in
each case in all necessary respects and in all material respects; and (b) with
respect to the foregoing conducted on behalf of the Company or independently by
others using the Company’s or any of its Subsidiaries’ technologies, products or
product candidates (“Independent Studies”), to the Company’s knowledge, after
due inquiry, being conducted in accordance with experimental protocols,
procedures and controls pursuant to, where applicable, accepted professional
scientific standards, in each case in all necessary respects and in all material
respects; (iii) the descriptions of the results of the Company Studies, and, to
the Company’s knowledge, after due inquiry, the Independent Studies, contained
in the Registration Statement, the General Disclosure Package and the Prospectus
are true and correct in all material respects; and (iv) except as disclosed in
the Registration Statement, the General Disclosure Package and the Prospectus,
neither the Company nor its Subsidiaries have received any notices or
correspondence from the FDA, or any national, state or local governmental body
exercising comparable authority requiring the termination, suspension or
material modification of any of the Company Studies or Independent Studies.

(w) Manipulation of Prices. Neither the Company, nor to the Company’s knowledge,
any of its affiliates, has taken or may take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to

 

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constitute, the stabilization or manipulation of the price of the shares of
Common Stock to facilitate the sale or resale of the Securities.

(x) Investment Company Act. Neither the Company nor any Subsidiary is or, after
giving effect to the offering and sale of the Securities contemplated hereunder
and the application of the net proceeds from such sale as described in the
Prospectus, will be an “investment company” within the meaning of such term
under the Investment Company Act of 1940 as amended (the “1940 Act”), and the
rules and regulations of the SEC thereunder.

(y) Internal Accounting Controls.

(i) The Company and each of the Subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(ii) The Company has established and maintains “disclosure controls and
procedures” (as defined in Rules 13a-14(c) and 15d-14(c) under the 1934 Act);
the Company’s “disclosure controls and procedures” are reasonably designed to
ensure that all information (both financial and non-financial) required to be
disclosed by the Company in the reports that it files or submits under the 1934
Act is recorded, processed, summarized and reported within the time periods
specified in the rules and regulations of the 1934 Act, and that all such
information is accumulated and communicated to the Company’s management as
appropriate to allow timely decisions regarding required disclosure and to make
the certifications of the Chief Executive Officer and Chief Financial Officer of
the Company required under the 1934 Act with respect to such reports.

(z) Industry and Market Data. The statistical, industry-related and
market-related data included in the Registration Statement, the General
Disclosure Package and the Prospectus are based on or derived from sources which
the Company reasonably and in good faith believes are reliable and accurate, and
such data agree in all material respects with the sources from which they are
derived.

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

 

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(bb) Office of Foreign Assets Control. Neither the Company nor, to the Company’s
knowledge, any director, officer, agent, employee or affiliate of the Company is
currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.

(cc) Insurance. The Company and each of the Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses.

(dd) Employee Benefits. The Company and each Subsidiary is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder (“ERISA”); no “reportable event” (as
defined in ERISA) has occurred with respect to any “pension plan” (as defined in
ERISA) for which the Company and each Subsidiary would have any material
liability; the Company and each Subsidiary has not incurred and does not expect
to incur material liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the “Code”); and each “pension plan”
for which the Company or any Subsidiary would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification.

(ee) Transactions with Affiliates. To the Company’s knowledge, there are no
affiliations or associations between any member of the NASD and any of the
Company’s officers, directors or 5% or greater securityholders, except as set
forth in the Registration Statement. There are no relationships or related-party
transactions involving the Company or any of the Subsidiaries or, to the
knowledge of the Company, any other person required to be described in the
Prospectus which have not been described as required.

(ff) Environmental Laws. Neither the Company nor any of the Subsidiaries is in
violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “environmental laws”), owns or operates any real
property contaminated with any substance that is subject to environmental laws,
is liable for any off-site disposal or contamination pursuant to any
environmental laws, or is subject to any claim relating to any environmental
laws, which violation, contamination, liability or claim would, individually or
in the aggregate, have a Material Adverse Effect; and the Company is not aware
of any pending investigation which would reasonably be expected to lead to such
a claim.

 

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(gg) Listing; 1934 Act Registration. The Common Stock has been approved for
listing subject to notice of issuance on the Nasdaq Global Market (the
“Principal Market”). The Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Common Stock under the
1934 Act or the quotation of the Common Stock on the Principal Market, nor, has
the Company received any notification that the SEC or the Principal Market is
contemplating terminating such registration or quotation.

(hh) Contributions; Foreign Corrupt Practices. Neither the Company nor any of
the Subsidiaries has made any contribution or other payment to any official of,
or candidate for, any federal, state or foreign office in violation of any law
which violation is required to be disclosed in the Prospectus.

(ii) No Integrated Offering. The Company has not sold or issued any securities
that would be integrated with the offering of the Securities contemplated by
this Agreement pursuant to the 1933 Act, the Rules and Regulations or the
interpretations thereof by the SEC.

(jj) Brokerage Fees; Commissions. Except as described in the Registration
Statement and the Prospectus, neither the Company nor any of its Subsidiaries is
a party to any contract, agreement or understanding with any person that would
give rise to a valid claim against the Company or the Buyers for a brokerage
commission, finder’s fee or like payment in connection with the offering and
sale of the Securities. The Company shall pay, and hold the Buyer harmless
against, any liability, loss or expense (including, without limitation,
attorneys’ fees and out-of-pocket expenses) arising in connection with any such
claim.

(kk) Consents. Other than as described in Section 3(t) hereof, or as have been
obtained, filed or made, neither the Company nor any of its Subsidiaries is
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court, governmental agency or any regulatory or
self-regulatory agency or any other Person in order for it to execute, deliver
or perform any of its obligations under or contemplated by the Transaction
Documents, in each case in accordance with the terms hereof or thereof. The
Company and its Subsidiaries are unaware of any facts or circumstances that
might prevent the Company from obtaining or effecting any of the registration,
application or filings pursuant to the preceding sentence. The Company is not in
violation of the listing requirements of the Principal Market and has no
knowledge of any facts that would reasonably lead to delisting or suspension of
the Common Stock in the foreseeable future.

(ll) Acknowledgment Regarding Buyer’s Purchase of Securities. The Company
acknowledges and agrees that each Buyer is acting solely in the capacity of an
arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that no Buyer is (i) an officer
or director of the Company, (ii) to the knowledge of the Company, an “affiliate”
of the Company or any of its Subsidiaries (as defined in Rule 144 of the 1933
Act) or (iii) to the knowledge of the Company, a “beneficial owner” of more than
10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the
1934 Act). The Company further acknowledges that no Buyer is acting as a
financial advisor or fiduciary of the Company or any of its Subsidiaries (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated hereby and thereby, and any

 

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advice given by a Buyer or any of its representatives or agents in connection
with the Transaction Documents and the transactions contemplated hereby and
thereby is merely incidental to such Buyer’s purchase of the Securities. The
Company further represents to each Buyer that the Company’s decision to enter
into the Transaction Documents has been based solely on the independent
evaluation by the Company and its representatives.

(mm) Dilutive Effect. The Company understands and acknowledges that the number
of Conversion Shares issuable upon conversion of the Notes and the Warrant
Shares issuable upon exercise of the Warrants will increase in certain
circumstances. The Company further acknowledges that its obligation to issue
Conversion Shares upon conversion of the Notes in accordance with this Agreement
and the Notes and its obligation to issue the Warrant Shares upon exercise of
the Warrants in accordance with this Agreement and the Warrants is, in each
case, absolute and unconditional regardless of the dilutive effect that such
issuance may have on the ownership interests of other stockholders of the
Company.

(nn) Application of Takeover Protections; Rights Agreement. The Company and its
board of directors have taken all necessary action, if any, in order to exempt
the Company’s issuance of the Securities and any Buyer’s ownership of the
Securities from the provisions of any control share acquisition, business
combination or other similar anti-takeover provision under the Certificate of
Incorporation of the Company or the laws of the state of its incorporation which
is or could become applicable to any Buyer as a result of the transactions
contemplated by this Agreement. The Company does not have any stockholder rights
plan or similar arrangement relating to accumulations of beneficial ownership of
Common Stock or a change in control of the Company.

(oo) Subsidiary Rights. The Company or one of its Subsidiaries has the
unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its
Subsidiaries as owned by the Company or such Subsidiary, except as described in
the agreements evidencing the Senior Indebtedness (as defined in the Notes).

(pp) Off Balance Sheet Arrangements. There is no transaction, arrangement, or
other relationship between the Company and an unconsolidated or other off
balance sheet entity that is required to be disclosed by the Company in its 1934
Act filings and is not so disclosed or that otherwise would be reasonably likely
to have a Material Adverse Effect.

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

(rr) Acknowledgement Regarding Buyers’ Trading Activity. Anything in this
Agreement or elsewhere herein to the contrary notwithstanding, but subject to
compliance by the Buyers with applicable law, it is understood and acknowledged
by the Company (i) that none of the Buyers have been asked by the Company or its
Subsidiaries to agree, nor has any Buyer agreed with the Company or its
Subsidiaries, to desist from purchasing or selling, long and/or

 

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short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Securities for any specified term;
(ii) that past or future open market or other transactions by any Buyer,
including, without limitation, short sales or “derivative” transactions, before
or after the closing of this or future private placement transactions, may
negatively impact the market price of the Company’s publicly-traded securities;
(iii) that any Buyer, and counter parties in “derivative” transactions to which
any such Buyer is a party, directly or indirectly, presently may have a “short”
position in the Common Stock, and (iv) that each Buyer shall not be deemed to
have any affiliation with or control over any arm’s length counter-party in any
“derivative” transaction. The Company further understands and acknowledges that,
subject to compliance by the Buyers with applicable law, (a) one or more Buyers
may engage in hedging and/or trading activities at various times during the
period that the Securities are outstanding, including, without limitation,
during the periods that the value of the Conversion Shares and the Warrant
Shares deliverable with respect to Securities are being determined and (b) such
hedging and/or trading activities (if any) could reduce the value of the
existing stockholders’ equity interests in the Company at and after the time
that the hedging and/or trading activities are being conducted.

(ss) U.S. Real Property Holding Corporation. The Company is not, nor has it ever
been, a U.S. real property holding corporation within the meaning of Section 897
of the Internal Revenue Code of 1986, as amended, and the Company shall so
certify upon any Buyer’s request.

4. COVENANTS.

(a) Best Efforts. Each party shall use its best efforts timely to satisfy each
of the conditions to be satisfied by it as provided in Sections 6 and 7 of this
Agreement.

(b) Maintenance of Registration Statement.

(i) For so long as any of the Notes or Warrants remain outstanding, the Company
shall use its reasonable best efforts to maintain the effectiveness of the
Registration Statement for the issuance thereunder of the Registrable Securities
(as defined below); provided that, if at any time while the Notes or the
Warrants are outstanding the Company shall be ineligible to utilize Form S-3 (or
any successor form) for the purpose of issuance of the Registrable Securities
the Company shall use its reasonable best efforts to promptly amend the
Registration Statement on such other form as may be necessary to maintain the
effectiveness of the Registration Statement for this purpose. For the purpose of
this Agreement, “Registrable Securities” means (i) the Conversion Shares issued
or issuable upon conversion of the Notes, (ii) the Warrant Shares issued or
issuable upon exercise of the Warrants and (iii) any shares of capital stock of
the Company issued or issuable with respect to the Conversion Shares, the Notes,
the Warrant Shares and the Warrants as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise, without
regard to any limitations on conversions of the Notes or exercises of the
Warrants.

(c) Prospectus Supplement and Blue Sky. In the manner required by law, the
Company shall have delivered to the Buyers, and as soon as practicable after the
Closing the Company shall file, the Prospectus Supplement with respect to the
Securities as required under

 

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and in conformity with the 1933 Act, including Rule 424(b) thereunder. If
required, the Company, on or before the Closing Date, shall take such action as
the Company shall reasonably determine is necessary in order to obtain an
exemption for or to qualify the Securities for sale to the Buyers at the Closing
pursuant to this Agreement under applicable securities or “Blue Sky” laws of the
states of the United States (or to obtain an exemption from such qualification),
and shall provide evidence of any such action so taken to the Buyers on or prior
to the Closing Date. The Company shall make all filings and reports relating to
the offer and sale of the Securities required under applicable securities or
“Blue Sky” laws of the states of the United States following the Closing Date.

(d) Use of Proceeds. The Company will use the proceeds from the sale of the
Securities in the manner described in the Registration Statement and the
Prospectus, except as otherwise limited by any prohibitions contained in the
Notes for so long as such Notes are outstanding.

(e) Listing. The Company shall promptly secure the listing of all of the
Conversion Shares and Warrant Shares upon each national securities exchange and
automated quotation system, if any, upon which the Common Stock is then listed
(subject to official notice of issuance) and shall use its reasonable best
efforts to maintain, in accordance with the Notes and Warrants, such listing of
all Conversion Shares and Warrant Shares from time to time issuable under the
terms of the Transaction Documents. The Company use reasonable best efforts to
maintain the Common Stocks’ authorization for quotation on the Principal Market
or if such authorization is not able to be maintained, on another Eligible
Market (as defined in the Notes). Neither the Company nor any of its
Subsidiaries shall take any action which would be reasonably expected to result
in the delisting or suspension of the Common Stock on the Principal Market. The
Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 4(e).

(f) Fees. Subject to Section 8 below, at Closing, the Company shall pay an
expense allowance to Portside Growth and Opportunity Fund (a Buyer) or its
designee(s) (in addition to any other expense amounts paid to any Buyer prior to
the date of this Agreement) for all actual and accountable reasonable costs and
expenses incurred in connection with the transactions contemplated by the
Transaction Documents (including all reasonable legal fees and disbursements in
connection therewith, documentation and implementation of the transactions
contemplated by the Transaction Documents and due diligence in connection
therewith), in an amount not to exceed $45,000 (in addition to any other expense
amounts paid to any Buyer prior to the date of this Agreement), which amount
shall be withheld by such Buyer from its Purchase Price at the Closing. The
Company shall be responsible for the payment of any placement agent’s fees,
financial advisory fees, or broker’s commissions (other than for Persons engaged
by any Buyer) relating to or arising out of the transactions contemplated
hereby. The Company shall pay, and hold each Buyer harmless against, any
liability, loss or expense (including, without limitation, reasonable attorney’s
fees and out-of-pocket expenses) arising in connection with any claim relating
to any such payment.

(g) Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged in compliance with applicable law by any holder of
Securities (an “Investor”) in connection with a bona fide margin agreement or
other loan or financing

 

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arrangement that is secured by the Securities. The pledge of Securities shall
not be deemed to be a transfer, sale or assignment of the Securities hereunder,
and no Investor effecting a pledge of Securities shall be required to provide
the Company with any notice thereof or otherwise make any delivery to the
Company pursuant to this Agreement or any other Transaction Document. The
Company hereby agrees, subject to applicable securities laws, to execute and
deliver such documentation as a pledgee of the Securities may reasonably request
in connection with a pledge of the Securities to such pledgee by an Investor.

(h) Disclosure of Transactions and Other Material Information. On or before 8:30
a.m., New York City time, on the first Business Day following the date of this
Agreement, the Company shall issue a press release and file a Current Report on
Form 8-K describing the terms of the transactions contemplated by the
Transaction Documents in the form required by the 1934 Act and attaching the
material Transaction Documents (including, without limitation, this Agreement,
the form of the Notes and the form of Warrant) as exhibits to such filing
(including all attachments, the “8-K Filing”). As of immediately following the
filing of the 8-K Filing with the SEC, no Buyer shall be in possession of any
material, nonpublic information received from the Company, any of its
Subsidiaries or any of their respective officers, directors, employees or
agents, that is not disclosed in the 8-K Filing or in prior filings with the
SEC. For so long as the Notes and Warrants are outstanding, the Company shall
not, and shall cause each of its Subsidiaries and its and each of their
respective officers, directors, employees and agents, not to, provide any Buyer
with any material, nonpublic information regarding the Company or any of its
Subsidiaries from and after the filing of the 8-K Filing with the SEC without
the express written consent of such Buyer. For so long as the Notes and Warrants
are outstanding, if a Buyer has, or believes it has, received any such material,
nonpublic information regarding the Company or any of its Subsidiaries provided
in breach of the preceding sentence, it shall provide the Company with written
notice thereof in which case the Company shall, within five (5) Trading Days (as
defined in the Notes) of receipt of such notice, make public disclosure of any
such material, nonpublic information provided in breach of the preceding
sentence. In the event of a breach of the foregoing covenant by the Company, any
of its Subsidiaries, or any of its or their respective officers, directors,
employees and agents, in addition to any other remedy provided herein or in the
Transaction Documents, a Buyer shall have the right to make a public disclosure,
in the form of a press release, public advertisement or otherwise, of such
material, nonpublic information without the prior approval by the Company, its
Subsidiaries, or any of its or their respective officers, directors, employees
or agents. No Buyer shall have any liability to the Company, its Subsidiaries,
or any of its or their respective officers, directors, employees, stockholders
or agents for any such disclosure. Subject to the foregoing, neither the
Company, its Subsidiaries nor any Buyer shall issue any press releases or any
other public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior
approval of any Buyer, to make any press release or other public disclosure with
respect to such transactions (i) in substantial conformity with the 8-K Filing
and contemporaneously therewith and (ii) as is required by applicable law,
regulation or any Eligible Market on which the Company’s securities are then
listed or quoted (provided that in the case of clause (i) each Buyer shall be
consulted by the Company in connection with any such press release or other
public disclosure prior to its release). Without the prior written consent of
any applicable Buyer, neither the Company nor any of its Subsidiaries or
affiliates shall disclose the name of such Buyer in any filing, announcement,
release or otherwise other than in connection

 

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with the Registration Statement unless such disclosure is required by law,
regulation or any Eligible Market on which the Company’s securities are then
listed or quoted.

(i) Additional Notes; Variable Securities; Dilutive Issuances. For so long as
any Notes remain outstanding, the Company will not issue any Notes other than to
the Buyers as contemplated hereby and the Company shall not issue any other
securities that would cause a breach or default under the Notes. For so long as
any Notes or Warrants remain outstanding, the Company shall not, in any manner,
issue or sell any rights, warrants or options to subscribe for or purchase
Common Stock or directly or indirectly convertible into or exchangeable or
exercisable for Common Stock at a price which varies or may vary with the market
price of the Common Stock, including by way of one or more reset(s) to any fixed
price unless the conversion, exchange or exercise price of any such security
cannot be less than the Conversion Floor Price (as defined in the Notes) and the
Exercise Floor Price (as defined in the Warrants), as applicable, unless the
Company has previously obtained the Required Stockholder Approval (as defined in
the Note) and the Required Stockholder Approval (as defined in the Warrants), as
applicable. For so long as any Notes or Warrants remain outstanding, the Company
shall not, in any manner, enter into or affect any Dilutive Issuances (as
defined in the Notes) if the effect of such Dilutive Issuance is to cause, or
but for the Securities Limitations would cause, the Company to be required to
issue upon conversion of any Note or exercise of any Warrant any shares of
Common Stock in excess of that number of shares of Common Stock which the
Company may issue upon conversion of the Notes and exercise of the Warrants
without breaching the Company’s obligations under the rules or regulations of
the Principal Market, in each case without giving effect to (w) the limitations
on conversion contained in the Notes, (x) the application of any Conversion
Floor Price, (y) the limitations on exercise contained in the Warrants, and
(z) the application of any Exercise Floor Price (the “Securities Limitations”).

(j) Corporate Existence. For so long as any Notes or Warrants remain
outstanding, the Company shall not be party to any Fundamental Transaction (as
defined in the Notes) unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Notes and the
Warrants.

(k) Reservation of Shares. The Company shall take all action necessary to at all
times have authorized, and reserved for the purpose of issuance, no less than
130% of the sum of the number of shares of Common Stock issuable (i) upon
conversion of the Notes issued at the Closing and (ii) upon exercise of the
Warrants issued at the Closing (without taking into account any limitations on
the Conversion of the Notes or exercise of the Warrants set forth in the Notes
and Warrants, respectively).

(l) Conduct of Business. The business of the Company and its Subsidiaries shall
not be conducted in violation of any law, ordinance or regulation of any
governmental entity, except where such violations would not result, either
individually or in the aggregate, in a Material Adverse Effect.

 

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(m) Additional Issuances of Securities.

(i) For purposes of this Section 4(m), the following definitions shall apply.

(1) “Convertible Securities” means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for shares of Common Stock.

(2) “Options” means any rights, warrants or options to subscribe for or purchase
shares of Common Stock or Convertible Securities.

(3) “Common Stock Equivalents” means, collectively, Options and Convertible
Securities.

(4) “Shelf Offering” means any Subsequent Placement of Common Stock or Common
Stock Equivalents directly by the Company or through an underwriter of the
Company to buyers of such Common Stock or Common Stock Equivalents under an
effective shelf registration statement pursuant to Rule 415 of the 1933 Act.

(5) “Other Subsequent Placements” means any Subsequent Placements other than a
Shelf Offering.

(ii) From the date hereof until the date that is thirty (30) Trading Days (as
defined in the Notes) following the effective date of the Prospectus Supplement
(the “Trigger Date”), the Company will not, directly or indirectly, file any
registration statement with the SEC other than the Registration Statement and
shall not file any Prospectus Supplement with respect to any Subsequent
Placement (as defined below). From the date hereof until the Trigger Date, the
Company will not, directly or indirectly, offer, sell, grant any option to
purchase, or otherwise dispose of (or announce any offer, sale, grant or any
option to purchase or other disposition of) any of its or its Subsidiaries’
equity or equity equivalent securities, including without limitation any debt,
preferred stock or other instrument or security that is, at any time during its
life and under any circumstances, convertible into or exchangeable or
exercisable for shares of Common Stock or Common Stock Equivalents (any such
offer, sale, grant, disposition or announcement being referred to as a
“Subsequent Placement”).

(iii) From the Trigger Date until the second anniversary of the Closing Date,
the Company will not, directly or indirectly, effect any Subsequent Placement
unless the Company shall have first complied with this Section 4(m)(iii).

(1) The Company shall deliver to each Buyer a written notice (the “Offer
Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”)
of the securities being offered (the “Offered Securities”) in a Subsequent
Placement, which Offer Notice shall (w) identify and describe the Offered
Securities, (x) describe the price and other terms upon which they are to be
issued, sold or exchanged, and the number or amount of the Offered Securities to
be issued, sold or exchanged, (y) identify the persons or entities (if known) to
which or with which the Offered Securities are to be offered, issued, sold or
exchanged and (z) offer to issue and sell to or exchange with such Buyers at
least thirty percent (30%) of the Offered Securities, allocated among such
Buyers (a) based on such Buyer’s pro rata portion of the aggregate principal
amount of Notes purchased hereunder (the “Basic Amount”), and (b)

 

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with respect to each Buyer that elects to purchase its Basic Amount, any
additional portion of the Offered Securities attributable to the Basic Amounts
of other Buyers as such Buyer shall indicate it will purchase or acquire should
the other Buyers subscribe for less than their Basic Amounts (the
“Undersubscription Amount”), which process shall be repeated (other than any
requirement to provide an updated Offer Notice reflecting such Undersubscription
Amount which shall not be required to be repeated in the event that such process
is appropriately described in the initial Offer Notice) until the Buyers shall
have an opportunity to subscribe for any remaining Undersubscription Amount.

(2) To accept an Offer, in whole or in part, such Buyer must deliver a written
notice to the Company prior to the end of (x) with respect to a Shelf Offering,
the third (3rd) Business Day or (y) with respect to an Other Subsequent
Placement, the tenth (10th) Business Day after such Buyer’s receipt of the Offer
Notice (the “Offer Period”), setting forth the portion of such Buyer’s Basic
Amount that such Buyer elects to purchase and, if such Buyer shall elect to
purchase all of its Basic Amount, the Undersubscription Amount, if any, that
such Buyer elects to purchase (in either case, the “Notice of Acceptance”);
provided, however, that such Buyers may not accept an Offer by electing to
purchase less than 5% of the Offered Securities on an aggregate basis. If the
Basic Amounts subscribed for by all Buyers are less than the total of all of the
Basic Amounts, then each Buyer who has set forth an Undersubscription Amount in
its Notice of Acceptance shall be entitled to purchase, in addition to the Basic
Amounts subscribed for, the Undersubscription Amount it has subscribed for;
provided, however, that if the Undersubscription Amounts subscribed for exceed
the difference between the total of all the Basic Amounts and the Basic Amounts
subscribed for (the “Available Undersubscription Amount”), each Buyer who has
subscribed for any Undersubscription Amount shall be entitled to purchase only
that portion of the Available Undersubscription Amount as the Basic Amount of
such Buyer bears to the total Basic Amounts of all Buyers that have subscribed
for Undersubscription Amounts, subject to rounding by the Company to the extent
its deems reasonably necessary. Notwithstanding anything to the contrary
contained herein, if the Company desires to modify or amend the terms and
conditions of the Offer prior to the expiration of the Offer Period, the Company
may deliver to the Buyers a new Offer Notice and the Offer Period shall expire
on (x) with respect to a Shelf Offering, the third (3rd) Business Day or
(y) with respect to an Other Subsequent Placement, the tenth (10th) Business Day
after such Buyer’s receipt of such new Offer Notice.

(3) The Company shall have fifteen (15) Business Days from the expiration of the
Offer Period above to offer, issue, sell or exchange all or any part of such
Offered Securities as to which a Notice of Acceptance has not been given by the
Buyers (the “Refused Securities”), but only to the offerees described in the
Offer Notice (if so described therein) and only upon terms and conditions
(including, without limitation, unit prices and interest rates) that are not
more favorable to the acquiring person or persons or less favorable to the
Company than those set forth in the Offer Notice and (ii) to publicly announce
(a) the execution of such Subsequent Placement Agreement, and (b) either (x) the
consummation of the transactions contemplated by such Subsequent Placement
Agreement or (y) the termination of such Subsequent Placement Agreement, which
shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent
Placement Agreement and any documents contemplated therein filed as exhibits
thereto.

 

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(4) In the event the Company shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in
Section 4(m)(iii)(3) above), then each Buyer may, at its sole option and in its
sole discretion, reduce the number or amount of the Offered Securities specified
in its Notice of Acceptance to an amount that shall be not less than the number
or amount of the Offered Securities that such Buyer elected to purchase pursuant
to Section 4(m)(iii)(2) above multiplied by a fraction, (i) the numerator of
which shall be the number or amount of Offered Securities the Company actually
proposes to issue, sell or exchange (including Offered Securities to be issued
or sold to Buyers pursuant to Section 4(m)(iii)(3) above prior to such
reduction) and (ii) the denominator of which shall be the original amount of the
Offered Securities. In the event that any Buyer so elects to reduce the number
or amount of Offered Securities specified in its Notice of Acceptance, the
Company may not issue, sell or exchange more than the reduced number or amount
of the Offered Securities unless and until such securities have again been
offered to the Buyers in accordance with Section 4(m)(iii)(1) above.

(5) Upon the closing of the issuance, sale or exchange of all or less than all
of the Refused Securities, the Buyers shall acquire from the Company, and the
Company shall issue to the Buyers, the number or amount of Offered Securities
specified in the Notices of Acceptance, as reduced pursuant to
Section 4(m)(iii)(4) above if the Buyers have so elected, upon the terms and
conditions specified in the Offer. The purchase by the Buyers of any Offered
Securities is subject in all cases to the preparation, execution and delivery by
the Company and the Buyers of a purchase agreement relating to such Offered
Securities reasonably satisfactory in form and substance to the Buyers and their
respective counsel.

(6) Any Offered Securities not acquired by the Buyers or other persons in
accordance with Section 4(m)(iii)(3) above may not be issued, sold or exchanged
until they are again offered to the Buyers under the procedures specified in
this Agreement.

(7) The Company and the Buyers agree that if any Buyer elects to participate in
the Offer, (x) neither the agreement regarding the Subsequent Placement (the
“Subsequent Placement Agreement”) with respect to such Offer nor any other
transaction documents related thereto (collectively, the “Subsequent Placement
Documents”) shall include any term or provisions whereby any Buyer shall be
required to agree to any restrictions in trading as to any securities of the
Company owned by such Buyer prior to such Subsequent Placement and (y) the
Buyers shall be entitled to the same registration rights provided to other
investors in the Subsequent Placement.

(8) Notwithstanding anything to the contrary in this Section 4(m) and unless
otherwise agreed to by the Buyers, the Company shall either confirm in writing
to the Buyers that the transaction with respect to the Subsequent Placement has
been abandoned or shall publicly disclose its intention to issue the Offered
Securities, in

 

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either case in such a manner such that the Buyers will not be in possession of
material non-public information, by the fifteen (15th) Business Day following
delivery of the Offer Notice. If by the fifteen (15th) following delivery of the
Offer Notice no public disclosure regarding a transaction with respect to the
Offered Securities has been made, and no notice regarding the abandonment of
such transaction has been received by the Buyers, such transaction shall be
deemed to have been abandoned and the Buyers shall not be deemed to be in
possession of any material, non-public information with respect to the Company.
Should the Company decide to pursue such transaction with respect to the Offered
Securities, the Company shall provide each Buyer with another Offer Notice and
each Buyer will again have the right of participation set forth in this
Section 4(m)(iii). The Company shall not be permitted to deliver more than one
such Offer Notice to the Buyers in any 60 day period (other than the Offer
Notices contemplated by the last sentence of Section 4(m)(iii)(2) of this
Agreement).

(iv) The restrictions contained in subsections (ii) and (iii) of this
Section 4(m) shall not apply in connection with the issuance of any Excluded
Securities (as defined in the Notes).

5. REGISTER; TRANSFER AGENT INSTRUCTIONS.

(a) Register. The Company shall maintain at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to each
holder of Securities), a register for the Notes and the Warrants in which the
Company shall record the name and address of the Person in whose name the Notes
and the Warrants have been issued (including the name and address of each
transferee), the principal amount of Notes held by such Person, the number of
Conversion Shares issuable upon conversion of the Notes and the number of
Warrant Shares issuable upon exercise of the Warrants held by such Person. The
Company shall keep the register open and available at all times during business
hours for inspection of any Buyer or its legal representatives.

(b) Transfer Agent Instructions. The Company shall issue irrevocable
instructions to the Transfer Agent, and any subsequent transfer agent, to issue
certificates or credit shares to the applicable balance accounts at DTC,
registered in the name of each Buyer or its respective nominee(s), for the
Conversion Shares and the Warrant Shares in such amounts as specified from time
to time by each Buyer to the Company upon conversion of the Notes or exercise of
the Warrants in the form of Exhibit B attached hereto (the “Irrevocable Transfer
Agent Instructions”). The Company represents and warrants that no instruction
other than the Irrevocable Transfer Agent Instructions referred to in this
Section 5 will be given by the Company to the Transfer Agent, and any subsequent
transfer agent with respect to the Securities, and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and
to the extent provided in this Agreement and the other Transaction Documents.
The Company acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to a Buyer. Accordingly, the Company acknowledges that
the remedy at law for a breach of its obligations under this Section 5 will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 5, that a Buyer shall be entitled, in
addition to all other available remedies, to an order and/or injunction

 

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restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security
being required.

6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

The obligation of the Company hereunder to issue and sell the Notes and the
related Warrants to each Buyer at the Closing is subject to the satisfaction, at
or before the Closing Date, of each of the following conditions, provided that
these conditions are for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion by providing each Buyer with prior
written notice thereof:

(i) Such Buyer shall have executed each of the Transaction Documents to which it
is a party and delivered the same to the Company.

(ii) Such Buyer and each other Buyer shall have delivered to the Company the
Purchase Price (less, in the case of Portside Growth and Opportunity Fund, the
amounts withheld pursuant to Section 4(g)) for the Notes and the related
Warrants being purchased by such Buyer at the Closing by wire transfer of
immediately available funds pursuant to the wire instructions provided by the
Company.

(iii) The representations and warranties of such Buyer shall be true and correct
in all material respects (except for those representations and warranties that
are qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date, which shall be true and correct as of such specified
date), and such Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Buyer at or prior
to the Closing Date.

7. CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.

The obligation of each Buyer hereunder to purchase the Notes and the related
Warrants at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are
for each Buyer’s sole benefit and may be waived by such Buyer at any time in its
sole discretion by providing the Company with prior written notice thereof:

(i) The Company shall have duly executed and delivered to such Buyer (i) each of
the Transaction Documents and (ii) the Notes (allocated in such principal
amounts as such Buyer shall request), being purchased by such Buyer at the
Closing pursuant to this Agreement, and (iii) the related Warrants (allocated in
such amounts as such Buyer shall request) being purchased by such Buyer at the
Closing pursuant to this Agreement.

(ii) Such Buyer shall have received the opinion of Morgan, Lewis & Bockius LLP,
the Company’s counsel, dated as of the Closing Date, in substantially the form
of Exhibit D attached hereto.

 

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(iii) The Company shall have delivered to such Buyer a copy of the Irrevocable
Transfer Agent Instructions, in the form of Exhibit C attached hereto, which
instructions shall have been delivered to and acknowledged in writing by the
Company’s transfer agent.

(iv) The Company shall have delivered to such Buyer a certificate (or a fax or
pdf copy of such certificate) evidencing the formation and good standing of the
Company and each of its Subsidiaries in such entity’s jurisdiction of formation
issued by the Secretary of State (or comparable office) of such jurisdiction, as
of a date within 10 days of the Closing Date.

(v) The Company shall have delivered to such Buyer a certificate (or a fax or
pdf copy of such certificate) evidencing the Company’s qualification as a
foreign corporation and good standing issued by the Secretary of State (or
comparable office or a bring-down certificate from Corporation Service Company)
of each jurisdiction in which the Company conducts business and is required to
so qualify, as of a date within 10 days of the Closing Date.

(vi) The Company shall have delivered to such Buyer a certified copy of the
Certificate of Incorporation as certified by the Secretary of State of the State
of Delaware (or a fax or pdf copy of such certificate) within ten (10) days of
the Closing Date.

(vii) The Company shall have delivered to such Buyer a certificate, executed by
the Secretary of the Company and dated as of the Closing Date, as to (i) the
resolutions consistent with Section 3(b) as adopted by the Company’s Board of
Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of
Incorporation and (iii) the Bylaws, each as in effect at the Closing, in the
form attached hereto as Exhibit E.

(viii) The representations and warranties of the Company shall be true and
correct in all material respects (except for those representations and
warranties that are qualified by materiality or Material Adverse Effect, which
shall be true and correct in all respects) as of the date when made and as of
the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date, which shall be true and correct as
of such specified date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by the Company at or prior to the Closing Date. Such Buyer shall have
received a certificate, executed by the Chief Executive Officer of the Company,
dated as of the Closing Date, to the foregoing effect in the form attached
hereto as Exhibit F.

(ix) The Company shall have delivered to such Buyer a letter from the Company’s
transfer agent certifying the number of shares of Common Stock outstanding as of
a date within five days of the Closing Date.

(x) The Common Stock (I) shall be designated for quotation or listed on the
Principal Market and (II) shall not have been suspended, as of the Closing Date,
by the SEC or the Principal Market from trading on the Principal Market nor
shall suspension by the SEC or the Principal Market have been threatened, as of
the Closing Date, either (A) in writing

 

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by the SEC or the Principal Market or (B) by falling below the minimum listing
maintenance requirements of the Principal Market.

(xi) The Company shall have obtained all governmental, regulatory or third party
consents and approvals, if any, necessary for the sale of the Securities.

(xii) The Registration Statement shall be effective and available for the
issuance and sale of the Securities hereunder and the Company shall have
delivered to such Buyer the Prospectus and the Prospectus Supplement as required
thereunder.

(xiii) The Company shall have delivered to such Buyer such other documents
relating to the transactions contemplated by this Agreement as such Buyer or its
counsel may reasonably request.

8. TERMINATION. In the event that the Closing shall not have occurred with
respect to a Buyer on or before five (5) Business Days from the date hereof due
to the Company’s or such Buyer’s failure to satisfy the conditions set forth in
Sections 6 and 7 above (and the nonbreaching party’s failure to waive such
unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party;
provided, however, that if this Agreement is terminated pursuant to this
Section 8, the Company shall remain obligated to reimburse the non-breaching
Buyers for the expenses described in Section 4(g) above.

9. MISCELLANEOUS.

(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

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(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.

(c) Headings. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.

(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

(e) Entire Agreement; Amendments. This Agreement and the other Transaction
Documents supersede all other prior oral or written agreements between the
Buyers, the Company, their affiliates and Persons acting on their behalf with
respect to the matters discussed herein, and this Agreement, the other
Transaction Documents and the instruments referenced herein and therein contain
the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein,
neither the Company nor any Buyer makes any representation, warranty, covenant
or undertaking with respect to such matters. No provision of this Agreement may
be amended other than by an instrument in writing signed by the Company and the
holders of at least two-thirds of the aggregate number of Registrable Securities
issued and issuable hereunder and under the Notes, and any amendment to this
Agreement made in conformity with the provisions of this Section 9(e) shall be
binding on all Buyers and holders of Securities as applicable. No provision
hereof may be waived other than by an instrument in writing signed by the party
against whom enforcement is sought. No such amendment shall be effective to the
extent that it applies to less than all of the holders of the applicable
Securities then outstanding. No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of any
of the Transaction Documents unless the same consideration also is offered to
all of the parties to the Transaction Documents, holders of Notes or holders of
the Warrants, as the case may be. The Company has not, directly or indirectly,
made any agreements with any Buyers relating to the terms or conditions of the
transactions contemplated by the Transaction Documents except as set forth in
the Transaction Documents. Without limiting the foregoing, the Company confirms
that, except as set forth in this Agreement, no Buyer has made any commitment or
promise or has any other obligation to provide any financing to the Company or
otherwise.

 

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(f) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

 

Immunicon Corporation

3401 Masons Mill Road, Suite 100

Huntingdon Valley, Pennsylvania 19006

Telephone:    (877) 822-0777 Facsimile:    (215) 830-0777 Attention:    James L.
Wilcox, Esq., Vice President,    Chief Counsel and Secretary

with a copy (for informational purposes only) to:

 

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103-2921

Telephone:    (215) 963-5000 Facsimile:    (215) 963-5001 Attention:    James W.
McKenzie, Jr., Esq.

If to the Transfer Agent:

 

StockTrans, Inc.

44 West Lancaster Avenue

Ardmore, PA 19003

Telephone:    (800) 733-1121 Facsimile:    (610) 649-7302 Attention:    Robert
Winterle

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers, with copies to such Buyer’s representatives as set forth on the Schedule
of Buyers,

with a copy (for informational purposes only) to:

 

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Telephone:    (212) 756-2000 Facsimile:    (212) 593-5955 Attention:    Eleazer
N. Klein, Esq.

or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or
(C) provided by an overnight courier

 

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service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from an overnight courier service in accordance with clause (i),
(ii) or (iii) above, respectively.

(g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns,
including any purchasers of the Notes or the Warrants. The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the holders of at least two-thirds of the aggregate number of
Registrable Securities issued and issuable hereunder, including by way of a
Fundamental Transaction (unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Notes and the
Warrants). A Buyer may assign some or all of its rights hereunder without the
consent of the Company, in which event such assignee shall be deemed to be a
Buyer hereunder with respect to such assigned rights

(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

(i) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in
Sections 2 and 3, and the agreements and covenants set forth in Sections 4, 5
and 9 shall survive the Closing. Each Buyer shall be responsible only for its
own representations, warranties, agreements and covenants hereunder.

(j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as are
reasonably necessary in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

(k) Indemnification. (i) In consideration of each Buyer’s execution and delivery
of the Transaction Documents and acquiring the Securities thereunder and in
addition to all of the Company’s other obligations under the Transaction
Documents, the Company shall defend, protect, indemnify and hold harmless each
Buyer and each other holder of the Securities and all of their stockholders,
partners, members, officers, directors, employees and direct or indirect
investors and any of the foregoing Persons’ agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby or
(c) any cause of action, suit or claim brought or made against such Indemnitee
by a third party that is not an Affiliate of such

 

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Indemnitee (including for these purposes a derivative action brought on behalf
of the Company) and arising out of or resulting from (i) the execution,
delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (ii) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, or (iii) the
status of such Buyer or holder of the Securities as an investor in the Company.
To the extent that the foregoing undertaking by the Company may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law.

(ii) Promptly after receipt by an Indemnitee under this Section 9(k) of notice
of the commencement of any action or proceeding (including any governmental
action or proceeding) involving an Indemnified Liability, such Indemnitee shall,
if a claim for indemnification in respect thereof is to be made against any
indemnifying party under this Section 9(k), deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnitee; provided, however, that an Indemnitee
shall have the right to retain its own counsel with the fees and expenses of not
more than one counsel for such Indemnitee to be paid by the indemnifying party,
if, in the reasonable opinion of the Indemnitee, the representation by such
counsel of the Indemnitee and the indemnifying party would be inappropriate due
to actual or potential differing interests between such Indemnitee and any other
party represented by such counsel in such proceeding. Legal counsel referred to
in the immediately preceding sentence shall be selected by the Investors holding
at least a majority of the Purchased Shares. The Indemnitee shall cooperate
fully with the indemnifying party in connection with any negotiation or defense
of any such action or Indemnified Liabilities by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the Indemnitee that relates to such action or Indemnified Liabilities. The
indemnifying party shall keep the Indemnitee fully apprised at all times as to
the status of the defense or any settlement negotiations with respect thereto.
No indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent, provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnitee, which consent shall not be unreasonably withheld conditioned or
delayed, consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnitee of a release from all liability in
respect to such Indemnified Liabilities or litigation. Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the Indemnitee with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been made. The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnitee under this Section 9(k), except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action.

 

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(iii) The indemnification required by this Section 9(k) shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Liabilities are
incurred.

(iv) The indemnity agreements contained herein shall be in addition to (x) any
cause of action or similar right of the Indemnitee against the indemnifying
party or others, and (y) any liabilities the indemnifying party may be subject
to pursuant to the law.

(l) No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

(m) Remedies. Each Buyer and each holder of the Securities shall have all rights
and remedies set forth in the Transaction Documents and all rights and remedies
which such holders have been granted at any time under any other agreement or
contract and all of the rights which such holders have under any law. Any Person
having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law. Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all of
its obligations under the Transaction Documents, any remedy at law may prove to
be inadequate relief to the Buyers. The Company therefore agrees that the Buyers
shall be entitled to seek temporary and permanent injunctive relief in any such
case without the necessity of proving actual damages and without posting a bond
or other security.

(n) Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.

(o) Payment Set Aside. To the extent that the Company makes a payment or
payments to the Buyers hereunder or pursuant to any of the other Transaction
Documents or the Buyers enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any
bankruptcy law, foreign, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.

(p) Independent Nature of Buyers’ Obligations and Rights. The obligations of
each Buyer under any Transaction Document are several and not joint with the
obligations of any

 

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other Buyer, and no Buyer shall be responsible in any way for the performance of
the obligations of any other Buyer under any Transaction Document. Nothing
contained herein or in any other Transaction Document, and no action taken by
any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers
as, and the Company acknowledges, and each Buyer confirms, that the Buyers do
not so constitute, a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Buyers are in any way acting in
concert or as a group, and the Company will not assert any such claim with
respect to such obligations or the transactions contemplated by the Transaction
Documents and the Company acknowledges, and each Buyer confirms, that the Buyers
are not acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. The Company acknowledges
and each Buyer confirms that it has independently participated in the
negotiation of the transaction contemplated hereby with the advice of its own
counsel and advisors. Each Buyer shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of
this Agreement or out of any other Transaction Documents, and it shall not be
necessary for any other Buyer to be joined as an additional party in any
proceeding for such purpose.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

COMPANY: IMMUNICON CORPORATION By:        Name:    Title: 

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

BUYERS: [__________________________________________] By:        Name:    Title: 

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

OTHER BUYERS: [                            ] By:        Name:    Title: 

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EXHIBITS

 

Exhibit A    Form of Note Exhibit B    Form of Warrant Exhibit C    Form of
Irrevocable Transfer Agent Instructions Exhibit D    Form of Opinion of
Company’s Counsel Exhibit E    Form of Secretary’s Certificate Exhibit F    Form
of Officers Certificate

SCHEDULES

 

Schedule I    List of General Use Free Writing Prospectus

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SCHEDULE I

Confidential Summary of Terms and Conditions dated December 4, 2006