Exhibit 10.2

FORM OF SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of February 7,
2008, between GTC Biotherapeutics, Inc., a Massachusetts corporation (the
“Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser” and collectively the
“Purchasers”).

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the “Securities Act”), the Company desires to issue and sell
to each Purchaser, and each Purchaser, severally and not jointly, desires to
purchase from the Company, securities of the Company as more fully described in
this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:

ARTICLE I.

DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement,
for all purposes of this Agreement, the following terms have the meanings set
forth in this Section 1.1:

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 405 under the
Securities Act. With respect to a Purchaser, any investment fund or managed
account that is managed on a discretionary basis by the same investment manager
as such Purchaser will be deemed to be an Affiliate of such Purchaser.

“Beneficial Owner” means with respect to any securities, any Person or any of
such Person’s Affiliates, representatives or associates, directly or indirectly,
who (i) “beneficially own” such securities as determined pursuant to Rule 13d-3
under the Exchange Act, (ii) has the right to acquire, vote or dispose of such
securities or (iii) has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of such securities.

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

 

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“Closing” means the closing of the purchase and sale of the Securities pursuant
to Section 2.1.

“Closing Date” has the meaning ascribed to such term in Section 2.1.

“Closing Price” means on any particular date (a) the last reported closing bid
price per share of Common Stock during regular trading hours on such date on the
Trading Market (as reported by Bloomberg L.P. at 4:15 p.m. (New York City
time)), or (b) if there is no such price on such date, then the closing bid
price on the Trading Market on the date nearest preceding such date (as reported
by Bloomberg L.P. at 4:15 p.m. (New York City time)) , or (c) if the Common
Stock is not then listed or quoted on a Trading Market and if prices for the
Common Stock are then reported in the “pink sheets” published by Pink Sheets LLC
(or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported, or
(d) if the shares of Common Stock are not then publicly traded the fair market
value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Purchasers of a majority of the Shares and any
outstanding Warrant Shares, in the aggregate, still held by the Purchasers and
reasonably acceptable to the Company, the fees and expenses of which shall be
paid by the Company.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, par value $0.01 per share,
and any other class of securities into which such securities may hereafter be
reclassified or changed into.

“Common Stock Equivalents” means any securities of the Company or the Subsidiary
which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

“Company Counsel” means Edwards Angell Palmer & Dodge LLP, with offices located
at 111 Huntington Avenue, Boston, Massachusetts 02199.

“Disclosure Schedules” means the Disclosure Schedules of the Company delivered
concurrently herewith.

“Discussion Time” has the meaning ascribed to such term in Section 3.2(g).

“DTC” means The Depositary Trust Company.

“DWAC” has the meaning ascribed to such term in Section 2.3(a).

“Evaluation Date” has the meaning ascribed to such term in Section 3.1(r).

 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to
employees, officers or directors of the Company pursuant to any stock or option
plan duly adopted for such purpose, by a majority of the non-employee members of
the Board of Directors or a majority of the members of a committee of
non-employee directors established for such purpose, (b) securities upon the
exercise or exchange of or conversion of any Securities issued hereunder and/or
other securities issued and outstanding on the date of this Agreement and
exercisable or exchangeable for or convertible into shares of Common Stock,
provided that such securities have not been amended since the date of this
Agreement to increase the number of such securities or to decrease the exercise,
exchange or conversion price of such securities and (c) securities issued
pursuant to acquisitions or strategic transactions approved by a majority of the
disinterested directors of the Company, provided that any such issuance shall
only be to a Person which is, itself or through its subsidiaries, an operating
company in a business synergistic with the business of the Company and in which
the Company receives benefits in addition to the investment of funds, but shall
not include a transaction in which the Company is issuing securities primarily
for the purpose of raising capital or to an entity whose primary business is
investing in securities.

“FDA” has the meaning ascribed to such term in Section 3.1(ff).

“FDCA” has the meaning ascribed to such term in Section 3.1(ff).

“MZRL” means Morse, Zelnick, Rose & Lander, LLP with offices located at 405 Park
Avenue, Suite 1401, New York New York 10022.

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

“Indebtedness” shall have the meaning ascribed to such term in Section 3.1(y).

“Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.1(o).

“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.

“Material Adverse Effect” shall mean (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business, or
financial condition of the Company and the Subsidiary, taken as a whole;
provided, however, that such an effect shall not be deemed to have occurred
based on low cash position, continuing losses from operations or notice from the
Trading Market of non-compliance with the minimum bid price requirement for
continued listing, or (iii) a material adverse effect on the Company’s ability
to perform in any material respect on a timely basis its obligations under any
Transaction Document.

 

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“Material Permits” shall have the meaning ascribed to such term in
Section 3.1(m).

“Per Unit Purchase Price” equals $0.87.

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

“Pharmaceutical Product” has the meaning ascribed to such term in
Section 3.1(gg).

“Placement Agent” means Rodman & Renshaw, LLC.

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.

“Prospectus” means the prospectus dated May 2, 2007 contained in the
Registration Statement.

“Prospectus Supplement” means the supplement (or supplements) to the Prospectus
relating to the placement of the Securities and the plan of distribution thereof
complying with Rule 424(b) under the Securities Act and filed with the
Commission and delivered by the Company to each Purchaser at the Closing.

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.

“Registration Statement” means the registration statement (File No. 333-142564)
filed with the Commission on May 2, 2007 and declared effective by the
Commission on May 18, 2007, registering the issuance of the Shares, the Warrants
and the Warrant Shares by the Company.

“Required Approvals” shall have the meaning ascribed to such term in
Section 3.1(e).

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

“Securities” means the Shares, the Warrants and the Warrant Shares.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

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“Shares” means the shares of Common Stock issued or issuable to each Purchaser
pursuant to this Agreement and excludes the Warrant Shares.

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock).

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be
paid for Units purchased hereunder as specified below such Purchaser’s name on
the signature page of this Agreement and next to the heading “Subscription
Amount,” in United States dollars and in immediately available funds.

“Subsidiary” means GTC Holdings Ltd., a Cayman Island entity, and shall, where
applicable, include any subsidiary of the Company formed or acquired after the
date hereof that is a “significant subsidiary” as determined in accordance with
Regulation S-X.

“Time of Sale Information” means the Prospectus, Prospectus Supplements and any
“free-writing prospectuses” (as defined by Rule 405 under the Securities Act)
filed by the Company and delivered to the Purchaser on or prior to the date of
this Agreement.

“Trading Day” means a day on which the New York Stock Exchange is open for
trading.

“Trading Market” means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading: the American Stock Exchange, the
Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select
Market, the New York Stock Exchange or the OTC Bulletin Board and any successors
to any of such markets or exchanges.

“Transaction Documents” means this Agreement and the Warrants and any other
documents or agreements to be delivered to, or entered into with, the Purchasers
and executed in connection with the transactions contemplated hereunder.

“Transfer Agent” means American Stock Transfer & Trust Company, the current
transfer agent of the Company, with a mailing address of 6201 15th Avenue,
Brooklyn, New York 11219 and a facsimile number of 718-921-8206, and any
successor transfer agent of the Company.

“Unit” means a unit consisting of one Share of Common Stock and a common stock
purchase warrant to purchase one Warrant Share.

“Variable Rate Transaction” has the meaning ascribed to such term in
Section 4.12(b).

“Warrants” means, collectively, the Common Stock purchase warrants, in the form
attached as Exhibit A hereto, delivered to the Purchasers at the Closing in
accordance with Section 2.3(b) hereof, which Warrants shall be exercisable at
any time on or after six months after the date of the Warrants and have a term
of exercise equal to seven years.

 

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“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.

ARTICLE II.

PURCHASE AND SALE

2.1 Closing.

Upon the terms and subject to the conditions set forth herein, the Company
agrees to sell, and the Purchasers, severally and not jointly, agree to
purchase, up to an aggregate of $6,000,000 worth of Units. On the third Trading
Day following the date of this Agreement or such other date as the parties shall
mutually agree (the “Closing Date”), (a) the Company and each Purchaser shall
deliver the items set forth in Section 2.4, (b) each Purchaser shall deliver or
caused to be delivered to the Company immediately available funds equal to each
Purchaser’s Subscription Amount pursuant to Section 2.2 and (c) the Company
shall deliver or cause to be delivered to each Purchaser the Shares and a
certificate evidencing the Warrants purchased by such Purchaser under the
Agreement in accordance with Section 2.3 (the “Closing”). The Closing shall
occur at the offices of MZRL or such other location as the parties shall
mutually agree.

2.2 Delivery of Funds.

On the Closing Date, upon the satisfaction by the Company of the conditions set
forth in Section 2.4(b) hereof, each Purchaser shall deliver to the Company by
wire transfer immediately available funds equal to the Purchaser’s Subscription
Amount to the following account:

 

ABA Routing No.:    121-140-399 Bank:    Silicon Valley Bank Account No.:   
3300345727 Beneficiary Name:    GTC Biotherapeutics, Inc.

2.3 Delivery of Shares and Warrants.

(a) Shares. On or prior to the Closing Date, the Purchaser shall direct the
broker-dealer at which the account or accounts to be credited with the Shares
being purchased by such Purchaser are maintained (which broker/dealer shall be a
DTC participant) to set up a Deposit/Withdrawal at Custodian (“DWAC”)
instructing the Transfer Agent to credit such account or accounts by means of an
electronic book-entry delivery on the Closing Date with such number of Shares
equal to the Purchaser’s Subscription Amount divided by the Per Unit Purchase
Price.

Immediately upon receipt by the Company of immediately available funds from each
Purchaser equal to such Purchaser’s Subscription Amount, the Company shall
direct the Transfer Agent to credit such Purchaser’s account or accounts with
the Shares pursuant to the information contained in the DWAC.

 

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(b) Warrants. Immediately upon receipt by the Company of immediately available
funds from each Purchaser equal to such Purchaser’s Subscription Amount, the
Company shall also deliver or cause to be delivered to such Purchaser (or to
MZRL on behalf of the Purchaser) an original certificate evidencing the Warrant
registered in the name of such Purchaser to purchase up to a number of shares of
Common Stock equal to 100% of such Purchaser’s Subscription Amount divided by
the Per Unit Purchase Price, with an exercise price equal to $0.87, subject to
adjustment as set forth in the form attached as Exhibit A hereto.

2.4 Closing Conditions and Deliverables.

(a) The obligations of the Company hereunder in connection with the Closing are
subject to the following conditions being met:

(i) the accuracy in all material respects on the Closing Date of the
representations and warranties of the Purchasers contained herein;

(ii) all obligations, covenants and agreements of each Purchaser required to be
performed at or prior to the Closing Date shall have been performed; and

(iii) the delivery to the Company by or on behalf of each Purchaser, on or prior
to the Closing Date, of the following items:

(A) this Agreement duly executed by such Purchaser; and

(B) such Purchaser’s Subscription Amount by wire transfer to the account as
specified in writing by the Company.

(b) The respective obligations of the Purchasers hereunder in connection with
the Closing are subject to the following conditions being met:

(i) the accuracy in all material respects on the Closing Date of the
representations and warranties of the Company contained herein;

(ii) all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;

(iii) the delivery by the Company, on or prior to the Closing Date, of the
following items:

(A) this Agreement duly executed by the Company;

(B) a legal opinion of Company Counsel, substantially in the form of Exhibit B
attached hereto;

 

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(C) a copy of the irrevocable instructions to the Transfer Agent to deliver via
DWAC Shares equal to such Purchaser’s Subscription Amount divided by the Per
Unit Purchase Price, registered in the name of such Purchaser;

(D) a copy of the certificate issued by the Company evidencing the Warrant
registered in the Purchaser’s name; and

(E) the Prospectus and Prospectus Supplement (which may be delivered in
accordance with Rule 172 under the Securities Act).

(iv) there shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and

(v) from the date hereof to the Closing Date, trading in the Common Stock shall
not have been suspended by the Commission or the Company’s principal Trading
Market (except for any suspension of trading of limited duration agreed to by
the Company, which suspension shall be terminated prior to the Closing), and, at
any time prior to the Closing Date, trading in securities generally as reported
by Bloomberg L.P. shall not have been suspended or limited, or minimum prices
shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been
declared either by the United States or New York State authorities nor shall
there have occurred any material outbreak or escalation of hostilities or other
national or international calamity of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each case, in the
reasonable judgment of each Purchaser, makes it impracticable or inadvisable to
purchase the Securities at the Closing.

Each Purchaser’s obligations are expressly not conditioned on the purchase of
Securities by any or all of the other Purchasers.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company. Except as set forth in the
Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof
and shall qualify any representation or otherwise made herein to the extent of
the disclosure contained in the corresponding section of the Disclosure
Schedule, the Company hereby makes the following representations and warranties
to each Purchaser:

(a) Subsidiaries. The Subsidiary is the Company’s only “significant subsidiary”
as determined in accordance with Regulation S-X. Except as described in the SEC
Reports, the Company owns, directly or indirectly, all of the capital stock or
other equity interests of the Subsidiary free and clear of any Liens, and all of
the issued and outstanding shares of capital stock of the Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities.

 

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(b) Organization and Qualification. The Company and the Subsidiary are each
entities duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of their incorporation or
organization (as applicable), with the requisite power and authority to own and
use their properties and assets and to carry on their business as currently
conducted. Neither the Company nor the Subsidiary is in violation or default of
any of the provisions of their respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the
Company and the Subsidiary is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which
the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not reasonably be expected to result in a
Material Adverse Effect and no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.

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

(d) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company, the issuance and sale of the Securities and the
consummation by the Company of the other transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any provision of the
Company’s or the Subsidiary’s certificate or articles of incorporation, bylaws
or other organizational or charter documents, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, result in the creation of any Lien upon any of
the properties or assets of the Company or the Subsidiary, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or the Subsidiary is a party or by which any
property or asset of the Company or the Subsidiary is bound or affected, or
(iii) subject to

 

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the Required Approvals, conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except in
the case of each of clauses (ii) and (iii), such as would not reasonably be
expected to result in a Material Adverse Effect.

(e) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
(i) filings required pursuant to Section 4.4 of this Agreement, (ii) the filing
with the Commission of the Prospectus Supplement, (iii) application(s) to each
applicable Trading Market for the listing of the Shares and Warrant Shares for
trading thereon in the time and manner required thereby and (iv) such filings as
are required to be made under applicable Federal and state securities laws
(collectively, the “Required Approvals”).

(f) Issuance of the Securities; Registration. The Securities are duly authorized
and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company, other than restrictions on
transfer provided for in the Transaction Documents. The Warrant Shares, when
issued in accordance with the terms of the Warrants, will be validly issued,
fully paid and nonassessable, free and clear of all Liens imposed by the
Company, other than restrictions on transfer provided for in the Transaction
Documents. On the Closing Date, the Shares will be listed and freely tradable,
and the Warrants Shares will authorized for listing, on the Trading Market. The
Company has reserved from its duly authorized capital stock the maximum number
of shares of Common Stock issuable pursuant to this Agreement and the Warrants.
The Company has prepared and filed the Registration Statement in conformity with
the requirements of the Securities Act, which became effective on May 18, 2007,
including the Prospectus, and such amendments and supplements thereto as may
have been required to the date of this Agreement. The Registration Statement is
effective under the Securities Act and the Company has not received any notice,
or has any knowledge, of (i) the issuance of any stop order by the Commission
preventing or suspending the effectiveness of the Registration Statement or
suspending or preventing the use of the Prospectus by the Commission or (ii) the
institution, or threat thereof, by the Commission of any proceedings for that
purpose. The Company, if required by the rules and regulations of the
Commission, proposes to file the Prospectus Supplement, with the Commission
pursuant to Rule 424(b). At the time the Registration Statement and any
amendments thereto became effective, at the date of this Agreement and at the
Closing Date, the Registration Statement and any amendments thereto conformed
and will conform in all material respects to the requirements of the Securities
Act and did not and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; and the Prospectus, the Prospectus Supplement and the
free-writing prospectuses, if any, and any amendments or

 

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supplements thereto, each as of its respective date, conformed and will conform
in all material respects to the requirements of the Securities Act and did not
and will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

(g) Capitalization. The capitalization of the Company as of December 30, 2007
(the last day of its most recently completed fiscal year) is set forth in
Schedule 3.1(g) hereto. Except (i) as a result of the purchase and sale of the
Securities, (ii) as described in Schedule 3.1(g) or (iii) pursuant to the
exercise of employee stock options under the Company’s stock option plans, the
issuance of shares of Common Stock to employees pursuant to the Company’s
employee stock purchase plans and pursuant to the conversion or exercise of
securities exercisable, exchangeable or convertible into Common Stock under any
of the Company’s equity incentive plans (the “Common Stock Equivalents”), there
are no outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company or
the Subsidiary is or may become bound to issue additional shares of Common Stock
or Common Stock Equivalents. Except as described in Schedule 3.1(g) hereto, no
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the
Transaction Documents, which right has not been waived with respect to the
transactions contemplated by the Transaction Documents. Except as described in
Schedule 3.1(g) hereto, the issuance and sale of the Securities will not
obligate the Company to issue shares of Common Stock or other securities to any
Person (other than the Purchasers) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset
price under any of such securities. All of the outstanding shares of capital
stock of the Company are validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, and none of
such outstanding shares was issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors or others is required
for the issuance and sale of the Securities. Except as described in, or
incorporated into, the Registration Statement, there are no stockholders
agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company’s stockholders.

(h) SEC Reports; Financial Statements. The Company has complied in all material
respects with requirements to file all reports, schedules, forms, statements and
other documents required to be filed by the Company under the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for one year preceding the
date hereof (or such shorter period as the Company was required by law or
regulation to file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports”) on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC

 

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Reports prior to the expiration of any such extension. As of their respective
filing dates, the SEC Reports complied in all material respects with the
requirements of the Exchange Act and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except to the extent corrected by subsequently filed documents with
the Commission. The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by
GAAP, and fairly present in all material respects the financial position of the
Company and its consolidated subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments.

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

(j) Litigation. Except as described in Schedule 3.1(j) hereto, there is no
Proceeding against or affecting the Company, the Subsidiary or any of their
respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or
the Securities or (ii) would, if there were an unfavorable

 

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decision, reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor the Subsidiary, nor any director or officer thereof, is or has
been the subject of any Action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary duty.
There has not been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the Commission involving the Company or any
current or former director or officer of the Company.

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

(l) Compliance. Neither the Company nor the Subsidiary (i) is in default under
or in violation of (and no event has occurred that has not been waived that,
with notice or lapse of time or both, would result in a default by the Company
or the Subsidiary under), nor has the Company or the Subsidiary received notice
of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is in violation of any
order of any court, arbitrator or governmental body, or (iii) is or has been in
violation of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws
applicable to its business and all such laws that affect the environment, except
in each case as would not reasonably be expected to result in a Material Adverse
Effect.

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

 

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(n) Title to Assets. Except as described in, or incorporated by reference into,
the Registration Statement, the Company and the Subsidiary have good and
marketable title in fee simple to all real property owned by them that is
material to the business of the Company and the Subsidiary and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiary, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiary and Liens for the payment of
federal, state or other taxes, the payment of which is neither delinquent nor
subject to penalties. Any real property and facilities held under lease by the
Company and the Subsidiary are held by them under valid, subsisting and
enforceable leases with which the Company and the Subsidiary are in compliance.

(o) Patents and Trademarks. The Company and the Subsidiary have, or have rights
to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and
other similar intellectual property rights necessary or material for use in
connection with their respective businesses as described in the SEC Reports
except where failure to so have would not reasonably be expected to have a
Material Adverse Effect (collectively, the “Intellectual Property Rights”).
Neither the Company nor the Subsidiary has received any written notice that any
of the Intellectual Property Rights used by the Company or the Subsidiary
violates or infringes upon the rights of any Person. To the knowledge of the
Company, (i) all such Intellectual Property Rights are enforceable and
(ii) there is no existing infringement by another Person of any of the
Intellectual Property Rights of others. The Company and the Subsidiary have
taken reasonable security measures to protect the secrecy, confidentiality and
value of all of their intellectual properties, except where failure to do so
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

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

(q) Transactions With Affiliates and Employees. Except as set forth in the SEC
Reports, to the Company’s knowledge, none of the officers, directors or
employees of the Company is presently a party to any transaction with the
Company or the Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of

 

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$60,000 other than for (i) payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the Company and
(iii) other employee benefits, including stock option agreements under any stock
option plan of the Company.

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

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

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

 

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(u) Registration Rights. Except as described in Schedule 3.1(u) hereto, no
Person has any right to cause the Company to effect the registration under the
Securities Act of any securities of the Company.

(v) Listing and Maintenance Requirements. The Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act nor has the Company received any notification that the Commission is
contemplating terminating such registration. Except as disclosed in the SEC
Reports with respect to the Company’s receipt of a notice that it is not in
compliance with the minimum bid requirement for continued listing on the Nasdaq
Global Market, the Company has not, in the 12 months preceding the date hereof,
received notice from the Trading Market on which the Common Stock is or has been
listed or quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market. Other than the
minimum bid requirement for continued listing on the Trading Market, the Company
is, and has no reason to believe that it will not continue to be during the next
twelve months, in compliance with all such listing and maintenance requirements.

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

(x) Disclosure. Except with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor, to the Company’s knowledge, any other Person acting on its
behalf has provided any of the Purchasers or their agents or counsel with any
information that it believes constitutes or might constitute material,
non-public information which is not otherwise disclosed in the Prospectus
Supplement. The Company understands and confirms that the Purchasers will rely
on the foregoing representation in effecting transactions in securities of the
Company. All disclosure furnished by or on behalf of the Company to the
Purchasers regarding the Company, its business and the transactions contemplated
hereby with respect to the representations and warranties made herein are true
and correct with respect to such representations and warranties and do not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were made and when
made, not misleading. The Company acknowledges and agrees that no Purchaser
makes or has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof.

 

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(y) No Integrated Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2 hereof, neither the
Company, nor any of its Affiliates, nor any Person acting on its or their behalf
has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would cause
this offering of the Securities to be integrated with prior offerings by the
Company for purposes of any applicable shareholder approval provisions of any
Trading Market on which any of the securities of the Company are listed or
designated.

(z) Solvency. Based on the consolidated financial condition of the Company as of
the Closing Date, after giving effect to the receipt by the Company of the
proceeds from the sale of the Securities hereunder, (i) the Company’s fair
saleable value of its assets exceeds the amount that will be required to be paid
on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s
assets do not constitute unreasonably small capital to carry on its business as
now conducted and as proposed to be conducted for the current fiscal year
including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof, and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt
when such amounts are required to be paid. The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt). The
Company has no knowledge of any facts or circumstances which lead it to believe
that it will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing Date.
Schedule 3.1(z) hereto sets forth all outstanding secured and unsecured
Indebtedness of the Company or the Subsidiary, or for which the Company or the
Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
means (a) any liabilities for borrowed money or amounts owed in excess of
$50,000 (other than trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements and other contingent obligations in
respect of Indebtedness of others, whether or not the same are or should be
reflected in the Company’s balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (c) the present
value of any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP. Neither the Company nor the Subsidiary is
in default with respect to any Indebtedness.

(aa) Tax Status. Except for matters that would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect, the
Company and each Subsidiary has filed all necessary federal, state and foreign
income and franchise tax returns and has paid or accrued all taxes shown as due
thereon, and the Company has no knowledge of a tax deficiency which has been
asserted or threatened against the Company or the Subsidiary.

 

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

(cc) Accountants. PricewaterhouseCoopers LLP is the Company’s auditor. To the
knowledge and belief of the Company, PricewaterhouseCoopers LLP (i) is a
registered public accounting firm as required by the Exchange Act and (ii) is
expected to express its opinion with respect to the financial statements to be
included in the Company’s Annual Report on Form 10-K for the year ended
December 30, 2007.

(dd) Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company
acknowledges and agrees that each of the Purchasers is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby. The Company further acknowledges that
no Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or any
of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Purchasers’ purchase of the Securities. The Company further represents to each
Purchaser that the Company’s decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.

(ee) Acknowledgement Regarding Purchaser’s Trading Activity. Anything in this
Agreement or elsewhere herein to the contrary notwithstanding (except for
Sections 3.2(e) and 4.14 hereof), it is understood and acknowledged by the
Company (i) that none of the Purchasers have been asked by the Company to agree,
nor has any Purchaser agreed with the Company, to desist from purchasing or
selling, long and/or 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 Purchaser, specifically 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 Purchaser, and
counter-parties in “derivative” transactions to which any such Purchaser is a
party, directly or indirectly, presently may have a “short” position in the
Common Stock, and (iv) that each Purchaser 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
(a) one or more Purchasers may engage in hedging activities at various times
during the period that the Securities are outstanding, including, without
limitation, during the

 

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periods that the value of the Warrant Shares deliverable with respect to
Securities are being determined and (b) such hedging activities (if any) could
reduce the value of the existing stockholders’ equity interests in the Company
at and after the time that the hedging activities are being conducted. The
Company acknowledges that such aforementioned hedging activities do not
constitute a breach of any of the Transaction Documents.

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

(gg) FDA. As to each product subject to the jurisdiction of the U.S. Food and
Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as
amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged,
labeled, tested, distributed, sold, and/or marketed by the Company or any of its
Subsidiaries (each such product, a “Pharmaceutical Product”), such
Pharmaceutical Product is being manufactured, packaged, labeled, tested,
distributed, sold and/or marketed by the Company in compliance with all
applicable requirements under FDCA and similar laws, rules and regulations
relating to registration, investigational use, premarket clearance, licensure,
or application approval, good manufacturing practices, good laboratory
practices, good clinical practices, product listing, quotas, labeling,
advertising, record keeping and filing of reports, except where the failure to
be in compliance would not have a Material Adverse Effect. There is no pending,
completed or, to the Company’s knowledge, threatened, action (including any
lawsuit, arbitration, or legal or administrative or regulatory proceeding,
charge, complaint, or investigation) against the Company or any of its
Subsidiaries, and none of the Company or any of its Subsidiaries has received
any notice, warning letter or other communication from the FDA or any other
governmental entity, which (i) contests the premarket clearance, licensure,
registration, or approval of, the uses of, the distribution of, the
manufacturing or packaging of, the testing of, the sale of, or the labeling and
promotion of any Pharmaceutical Product, (ii) withdraws its approval of,
requests the recall, suspension, or seizure of, or withdraws or orders the
withdrawal of advertising or sales promotional materials relating to, any
Pharmaceutical Product, (iii) imposes a clinical hold on any clinical
investigation by the Company or any of its Subsidiaries, (iv) enjoins production
at any facility of the Company or any of its Subsidiaries, (v) enters or
proposes to enter into a consent decree of permanent injunction with the Company
or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company or any of its Subsidiaries, and which,
either individually or in the aggregate, would have a Material Adverse Effect.
The properties, business and operations of the Company have been and are being
conducted in all material respects in accordance with all applicable laws, rules
and regulations of the FDA. The Company has not been informed by the FDA that
the FDA will prohibit the marketing, sale, license or use in the

 

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United States of any product proposed to be developed, produced or marketed by
the Company nor has the FDA expressed any concern as to approving or clearing
for marketing any product being developed or proposed to be developed by the
Company.

3.2 Representations and Warranties of the Purchasers. Each Purchaser, for itself
and for no other Purchaser, hereby represents and warrants as of the date hereof
and as of the Closing Date to the Company as follows:

(a) Organization; Authority. Such Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with full right, corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder and thereunder. The execution,
delivery and performance by such Purchaser of this Agreement and the
transactions contemplated hereby have been duly authorized by all necessary
corporate or similar action on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and
when delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

(b) Non-US Jurisdictions. The Purchaser has been informed, and acknowledges,
that no action has been or will be taken in any jurisdiction outside the United
States by the Company or the Placement Agent that would permit an offering of
the Securities, or possession or distribution of offering materials in
connection with the issue of the Securities in any jurisdiction outside the
United States where action for that purpose is required. Each Purchaser outside
the United States will comply with all applicable laws and regulations in each
foreign jurisdiction in which it purchases, offers, sells or delivers Securities
or has in its possession or distributes any offering material, in all cases at
its own expense. The Purchaser has been informed, and acknowledges, that the
Placement Agent is not authorized to make and have not made any representation
or use of any information in connection with the issue, placement, purchase and
sale of the Securities, except as set forth or incorporated by reference in the
Time of Sale Information.

(c) Own Account. Such Purchaser is acquiring the Securities as principal for its
own account and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any of
such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Securities
(this representation and warranty not limiting such Purchaser’s right to sell
the Securities immediately pursuant to the Registration Statement

 

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or otherwise in compliance with applicable federal and state securities laws) in
violation of the Securities Act or any applicable state securities law. Such
Purchaser is acquiring the Securities hereunder in the ordinary course of its
business.

(d) Purchaser Status. At the time such Purchaser was offered the Securities, it
was, and at the date hereof it is, and on each date on which it exercises any
Warrants, it will be either: (i) an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act. Such Purchaser is not required to be registered as a broker-dealer under
Section 15 of the Exchange Act.

(e) Experience of Such Purchaser. Such Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so evaluated the
merits and risks of such investment. Such Purchaser is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.

(f) No Advice. The Purchaser understands that nothing in this Agreement, the
Registration Statement, the Time of Sale Information or any other materials
presented to the Purchaser in connection with the purchase and sale of the
Securities constitutes legal, tax or investment advice. The Purchaser has
consulted such legal, tax and investment advisers as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the
Securities.

(g) Short Sales and Confidentiality Prior To The Date Hereof. Other than
consummating the transactions contemplated hereunder, such Purchaser has not,
nor has any Person acting on behalf of or pursuant to any understanding with
such Purchaser, directly or indirectly executed any purchases or sales,
including Short Sales, of the securities of the Company during the period
commencing from the time that such Purchaser was first contacted by Company, the
Placement Agent or any other Person inquiring whether the Purchaser had an
interest in participating in, and/or setting forth the material terms of, the
transactions contemplated hereunder (“Discussion Time”). Notwithstanding the
foregoing, in the case of a Purchaser that is a multi-managed investment vehicle
whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such
Purchaser’s assets, and with respect to the transactions contemplated by this
Agreement in fact had no such direct knowledge, the representation set forth
above shall only apply with respect to the portion of assets managed by the
portfolio manager that made the investment decision to purchase the Securities
covered by this Agreement. Other than to other Persons party to this Agreement,
such Purchaser has maintained the confidentiality of all disclosures made to it
in connection with this transaction (including the existence and terms of this
transaction).

(h) The Purchaser, alone or together with its Affiliates, representatives or
associates, shall not become the Beneficial Owner of fifteen (15) percent or
more of the Company’s Common Stock outstanding by virtue of receiving Securities
under the Transaction Documents.

 

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ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1 Warrant Shares. If all or any portion of a Warrant is exercised at a time
when there is an effective registration statement to cover the issuance of the
Warrant Shares or if the Warrant is exercised via cashless exercise, the Warrant
Shares issued pursuant to any such exercise shall be issued free of all legends.
If at any time following the date hereof the Registration Statement (or any
subsequent registration statement registering the Warrant Shares) is not
effective or is not otherwise available for the sale of the Warrant Shares, the
Company shall promptly notify the holders of the Warrants in writing that such
registration statement is not then effective and thereafter shall promptly
notify such holders when the registration statement is effective again and
available for the sale of the Warrant Shares. The Company shall use reasonable
best efforts to keep a registration statement (including the Registration
Statement) registering the issuance of the Warrant Shares effective until all
Warrant Shares have been issued or all Warrants have expired, whichever occurs
earlier; provided that such obligation shall expire before such date if the
Company delivers to the Purchaser a written opinion of counsel to the Company
that all Purchasers may resell the Warrant Shares received other than by
cashless exercise without registration under the Act and without restrictions as
to the manner, timing and volume of such sale.

4.2 Furnishing of Information. Until the Warrants have expired, the Company
covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act. As long as any
Purchaser owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Securities under Rule 144. The Company
further covenants that it will take such further action as any holder of
Securities may reasonably request, to the extent required from time to time to
enable such Person to sell such Securities without registration under the
Securities Act within the requirements of the exemption provided by Rule 144.

4.3 Integration. The Company shall not sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in Section 2
of the Securities Act) that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of any Trading Market such
that it would require shareholder approval prior to the closing of such other
transaction unless shareholder approval is obtained before the closing of such
subsequent transaction.

4.4 Securities Laws Disclosure; Publicity. The Company shall, (a) by 9:00 a.m.
(New York City time) on the Business Day immediately following the date of this
Agreement, issue a press release describing, and announcing the completion of,
the transactions contemplated hereby, and (b) no later than the fourth Business
Day following the date of this Agreement, file with the Commission a Current
Report on Form 8-K, disclosing the material terms of the transactions
contemplated hereby, and at the Company’s discretion, filing the Transaction

 

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Documents as exhibits thereto. The Company and each Purchaser shall consult with
each other in issuing any other press releases with respect to the transactions
contemplated hereby, and neither the Company nor any Purchaser shall issue any
such press release or otherwise make any such public statement without the prior
consent of the Company, with respect to any press release of any Purchaser, or
without the prior consent of each Purchaser, with respect to any press release
of the Company, which consent shall not unreasonably be withheld or delayed,
except if such disclosure is required by law or the rules of the Trading Market,
in which case the disclosing party shall promptly provide the other party with
prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (i) as required by federal securities law in connection with
the filing of final Transaction Documents (including signature pages thereto)
with the Commission and (ii) to the extent such disclosure is required by law or
Trading Market regulations, in which case the Company shall provide the
Purchasers with prior notice of such disclosure permitted under this subclause
(ii).

4.5 Shareholder Rights Plan. Assuming the accuracy of the Purchaser’s
representations and warranties set forth in Section 3.2, no claim will be made
or enforced by the Company or, with the consent of the Company, any other
Person, that any Purchaser is an “Acquiring Person” under any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or similar anti-takeover plan or arrangement in effect or
hereafter adopted by the Company, or that any Purchaser could be deemed to
trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents.

4.6 Non-Public Information. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company covenants and agrees that neither it nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto such Purchaser shall have executed a written agreement regarding
the confidentiality and use of such information. The Company understands and
confirms that each Purchaser shall be relying on the foregoing covenant in
effecting transactions in securities of the Company.

4.7 Use of Proceeds. The Company shall use the net proceeds from the sale of the
Securities hereunder for working capital purposes and shall not use such
proceeds for (a) the satisfaction of any portion of the Company’s debt (other
than payment of trade payables in the ordinary course of the Company’s business
and prior practices), (b) the redemption of any Common Stock or Common Stock
Equivalents or (c) the settlement of any outstanding litigation.

4.8 Indemnification of Purchasers. Subject to the provisions of this
Section 4.8, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling

 

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persons (each, a “Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation that any such Purchaser Party may
suffer or incur as a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the Company in this
Agreement or in the other Transaction Documents or (b) any action instituted
against a Purchaser, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such Purchaser, with
respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of such Purchaser’s representations,
warranties or covenants under the Transaction Documents or any agreements or
understandings such Purchaser may have with any such stockholder or any
violations by the Purchaser of state or federal securities laws or any conduct
by such Purchaser which constitutes fraud, gross negligence, willful misconduct
or malfeasance). If any action shall be brought against any Purchaser Party in
respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and the Company
shall have the right to assume the defense thereof with counsel of its own
choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of
such separate counsel, a material conflict on any material issue between the
position of the Company and the position of such Purchaser Party, in which case
the Company shall be responsible for the reasonable fees and expenses of no more
than one such separate counsel. The Company will not be liable to any Purchaser
Party under this Agreement (i) for any settlement by a Purchaser Party effected
without the Company’s prior written consent, which shall not be unreasonably
withheld or delayed; or (ii) to the extent, but only to the extent that a loss,
claim, damage or liability is attributable to any Purchaser Party’s breach of
any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction Documents.

4.9 Reservation of Common Stock. As of the date hereof, the Company has reserved
and the Company shall continue to reserve and keep available until the
expiration of the Warrants, free of preemptive rights, a sufficient number of
shares of Common Stock for the purpose of enabling the Company to issue the
Shares pursuant to this Agreement and the Warrant Shares pursuant to any
exercise of the Warrants.

4.10 Listing of Common Stock. The Company hereby agrees to use reasonable best
efforts to maintain the listing of the Common Stock, including the Shares and
Warrant Shares, on a Trading Market. The Company further agrees, if the Company
applies to have the Common Stock traded on any other Trading Market, it will
include in such application all of the Shares and Warrant Shares, and will take
such other action as is necessary to cause all of the Shares and Warrant Shares
to be listed on such other Trading Market as promptly as possible. The Company
will use reasonable best efforts to continue the listing and trading of its
Common Stock, including the Shares and Warrant Shares, on a Trading Market and
compliance with the Company’s reporting, filing and other obligations under the
bylaws or rules of the Trading Market.

 

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4.11 Equal Treatment of Purchasers. No consideration shall be offered or paid to
any Person by the Company to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents unless the same consideration is
also offered to all of the parties to the Transaction Documents. For purposes,
this constitutes a separate right granted to each Purchaser by the Company and
negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

4.12 Subsequent Equity Sales.

(a) From the date hereof until 90 days after the Closing Date, neither the
Company nor the Subsidiary shall issue shares of Common Stock or Common Stock
Equivalents; provided, however, that such period shall be reduced to 45 days
after the Closing Date if on any Trading Day thereafter the last sale price of
the Company’s Common Stock during normal trading hours, as reported, is at least
$0.90 per share. Notwithstanding anything to the contrary, the applicable
restriction period set forth in this Section 4.12(a) shall be extended for the
number of Trading Days during such period in which trading in the Common Stock
is suspended by any Trading Market.

(b) From the date hereof until the earlier of (i) such time as no Purchaser
holds any of the Securities or (ii) one (1) year from the Closing Date, the
Company shall be prohibited from effecting or entering into an agreement to
effect any Subsequent Financing involving a Variable Rate Transaction. “Variable
Rate Transaction” means a transaction in which the Company issues or sells
(i) any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive additional shares of Common
Stock either (A) at a conversion, exercise or exchange rate or other price that
is based upon and/or varies with the trading prices of or quotations for the
shares of Common Stock at any time after the initial issuance of such debt or
equity securities, or (B) with a conversion, exercise or exchange price that is
subject to being reset at some future date after the initial issuance of such
debt or equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for
the Common Stock or (ii) enters into any agreement, including, but not limited
to, an equity line of credit, whereby the Company may sell securities at a
future determined price. Any Purchaser shall be entitled to obtain injunctive
relief against the Company to preclude any such issuance, which remedy shall be
in addition to any right to collect damages

(c) Notwithstanding the foregoing, this Section 4.12 shall not apply in respect
of an Exempt Issuance.

4.13 Short Sales and Confidentiality After The Date Hereof. Each Purchaser,
severally and not jointly with the other Purchasers, covenants that neither it
nor any Affiliate acting on its behalf or pursuant to any understanding with it
will engage in any transactions in the Company’s securities, including any Short
Sales, during the period commencing at the Discussion Time and ending at the
time that the transactions contemplated by this Agreement are first publicly
announced as described in Section 4.4. Each Purchaser covenants and agrees that
it will not use

 

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any of the Shares acquired pursuant to this Agreement to cover any short
position in the Company’s Common Stock if doing so would be in violation of
applicable securities laws. Each Purchaser, severally and not jointly with the
other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company as
described in Section 4.4, such Purchaser will maintain the confidentiality of
the existence and terms of this transaction and the information included in the
Disclosure Schedules. Notwithstanding the foregoing, no Purchaser makes any
representation, warranty or covenant hereby that it will not engage in Short
Sales in the securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced as described in
Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s assets, the covenant set forth above
shall only apply with respect to the portion of assets managed by the portfolio
manager that made the investment decision to purchase the Securities covered by
this Agreement.

4.14 Delivery of Securities After Closing. The Company shall deliver, or cause
to be delivered, the respective Securities purchased by each Purchaser to such
Purchaser within three (3) Trading Days of the date of this Agreement.

4.15 Capital Changes. Until the one year anniversary of the Closing Date, the
Company shall not undertake a reverse or forward stock split or reclassification
of the Common Stock without the prior written consent of the Purchasers holding
a majority of the outstanding Shares and any Warrant Shares, in the aggregate,
still held by the Purchasers, except for any reverse stock split effected in
good faith by the Company in order to satisfy the minimum bid price requirement
for continued listing on the Nasdaq Global Market or the Nasdaq Capital Market.

ARTICLE V.

MISCELLANEOUS

5.1 Termination. This Agreement may be terminated by any Purchaser, as to such
Purchaser’s obligations hereunder only and without any effect whatsoever on the
obligations between the Company and the other Purchasers, by written notice to
the other parties, if the Closing has not been consummated on or before the
fifth Business Day following the date of this Agreement; provided, however, that
no such termination will affect the right of any party to sue for any breach by
the other party (or parties).

5.2 Fees and Expenses. Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all transfer
agent fees, stamp taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Purchasers.

5.3 Entire Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, the Prospectus and the Prospectus Supplement, contain the
entire

 

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understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.

5.4 Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto prior to 5:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto on a day that is not a
Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day,
(c) the 2nd Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as set forth on the signature pages attached
hereto.

5.5 Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by the
Company and Purchasers holding at least 75% of the Shares and any outstanding
Warrant Shares, in the aggregate, still held by the Purchasers or, in the case
of a waiver, by the party against whom enforcement of any such waived provision
is sought. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such
right.

5.6 Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.

5.7 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser (other than by merger). Any
Purchaser may assign any or all of its rights under this Agreement to any Person
to whom such Purchaser assigns or transfers any Securities, provided such
transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of the Transaction Documents that apply to the
“Purchasers.”

5.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.8.

5.9 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the laws of the State of New York,
without regard to the principles of conflicts of law that would require the
application of the laws of any other jurisdiction (other than the Massachusetts
Business Corporation Act of the Commonwealth of Massachusetts,

 

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which shall apply to the issuance of the securities and the internal governance
of the Company). Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective Affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City 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 (including with respect to the enforcement of any of the
Transaction Documents), 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
improper or is an inconvenient venue for such proceeding. 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 via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any other manner permitted by law. If
either party shall commence an action or proceeding to enforce any provisions of
the Transaction Documents, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.

5.10 Survival. The representations and warranties contained herein shall survive
the Closing and the delivery of the Shares and Warrant Shares until the two
(2) year anniversary of the date of this Agreement.

5.11 Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together 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, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

5.12 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

 

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5.13 Replacement of Securities. If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction. The applicant
for a new certificate or instrument under such circumstances shall also pay any
reasonable third-party costs (including customary indemnity) associated with the
issuance of such replacement Securities.

5.14 Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agrees to waive and not to
assert in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.

5.15 Independent Nature of Purchasers’ Obligations and Rights. The obligations
of each Purchaser under any Transaction Document are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in their review and negotiation of the Transaction
Documents. For reasons of administrative convenience only, Purchasers and their
respective counsel have chosen to communicate with the Company through MZRL.
MZRL does not represent any of the Purchasers but only the Placement Agent. The
Company has elected to provide all Purchasers with the same terms and
Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by the Purchasers.

5.16 Liquidated Damages. The Company’s obligations to pay any partial liquidated
damages or other amounts owing under the Transaction Documents is a continuing
obligation of the Company and shall not terminate until all unpaid partial
liquidated damages and other amounts have been paid notwithstanding the fact
that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been canceled.

5.17 Construction. The parties agree that each of them and/or their respective
counsel has reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments hereto.

 

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5.18 Waiver of Jury Trial. In any action, suit or proceeding in any jurisdiction
brought by any party against any other party, the parties each knowingly and
intentionally, to the greatest extent permitted by applicable law, hereby
absolutely, unconditionally, irrevocably and expressly waives forever trial by
jury.

[Remainder of page intentionally left blank;

signature pages to follow.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

GTC BIOTHERAPEUTICS, INC. By:  

 

Name:   Geoffrey F. Cox Title:   Chairman, Chief Executive Officer and President

Address for Notice:

175 Crossing Boulevard

Framingham, MA 01702

Tel: 508-620-9700

Fax: 508-370-5353

With a copy to (which shall not constitute notice):

Edwards Angell Palmer & Dodge LLP

111 Huntington Avenue

Boston, MA 02199

Attn: Nathaniel S. Gardiner

Tel: 617-239-0100

Fax: 617-227-4420

[Remainder of page intentionally left blank;

Purchaser signature page to follow.]

 

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IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

Name of Purchaser:                                      
                                        
                                        
                                        
                                                               Signature of
Authorized Signatory of Purchaser:                                      
                                        
                                        
                                                Name of Authorized
Signatory:                                      
                                        
                                        
                                                                               
  Title of Authorized Signatory:                                      
                                        
                                        
                                        
                                          Telephone Number of
Purchaser:                                      
                                        
                                        
                                                                             
Email Address of Purchaser:                                      
                                        
                                        
                                        
                                              Fax Number of
Purchaser:                                      
                                        
                                        
                                        
                                                   Address for Notice to
Purchaser: Exact Name that Shares are to be Registered
In:                                       
                                        
                                        
                                                 Relationship between Purchaser
and Registered Holder:                                       
                                        
                                                                          Social
Security Number or Tax Identification Number of Registered
Holder:                                       
                                                                          Name
of DTC Participant:                                      
                                        
                                        
                                        
                                                   DTC Participant
Number:                                       
                                        
                                        
                                        
                                                   Name of Account at DTC
Participant:                                      
                                        
                                        
                                                                     Account
Number at DTC Participant:                                      
                                        
                                        
                                                                      Exact Name
that Warrants are to be Registered In:                                       
                                        
                                        
                                            Address of Registered Holder for
Delivery of Warrants (if not same as address for Notice to Purchaser):
Subscription Amount: $                     Purchase Price Per Unit:
$                     Number of Shares:                              Number of
Warrant Shares:                              EIN Number:
                            

[Purchaser Signature Page to GTC Biotherapeutics, Inc. Securities Purchaser
Agreement]

 

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Exhibit A

Form of Warrant

--------------------------------------------------------------------------------

Exhibit B

Form of Opinion