Exhibit 10.19

CONVERSION AGREEMENT

THIS CONVERSION AGREEMENT (the “Agreement”) is made and entered into on the 11th
day of May, 2007, by and between CORAUTUS GENETICS INC., a Delaware corporation
(the “Company”), and BOSTON SCIENTIFIC CORPORATION, a Delaware corporation
(“BSC”).

WHEREAS, the Company has issued to BSC One Million Three Hundred Eighty-Five
Thousand Three Hundred Seventy-Seven (1,385,377) shares of the Company’s
Series D Preferred Stock (“Series D Preferred Shares”) pursuant to that certain
Investment Agreement dated July 30, 2003, and the Certificate of Designation of
Preferences and Rights of Series D Preferred Stock dated and filed with the
Secretary of State of the State of Delaware on July 29, 2003 (“Series D
Designation”); and

WHEREAS, pursuant to Series D Designation, the Series D Preferred Shares
currently are convertible into 1,420,339 shares of the Company’s common stock,
par value $0.001 per share (“Common Stock”); and

WHEREAS, the Company has issued to BSC Two Million Four Hundred Seventy-Five
Thousand Six Hundred Fifty-Nine (2,475,659) shares of the Company’s Series E
Preferred Stock (“Series E Preferred Shares” and together with the Series D
Preferred Shares, the “Preferred Shares”) pursuant to that certain
Recapitalization Agreement, dated June 30, 2006, as amended October 31, 2006
(“Recapitalization Agreement”), and the Certificate of Designation of
Preferences and Rights of Series E Preferred Stock dated and filed with the
Secretary of State of the State of Delaware on June 29, 2006 (“Series E
Designation”); and

WHEREAS, pursuant to the Series E Designation the Series E Preferred Shares
currently are convertible into 2,475,659 shares of Common Stock; and

WHEREAS, pursuant to the Series E Designation the holder of the Series E
Preferred Shares is entitled to receive a stock dividend with value equal to the
annual rate of 6% of the Series E Preferred Shares original issuance price; and

WHEREAS, the Company’s Board of Directors declared a dividend of Series E
Preferred Stock convertible into 74,270 shares of Common Stock and payable to
the holders of Series E Preferred Shares (“Dividend”); and

WHEREAS, pursuant to that certain Agreement and Plan of Merger and
Reorganization, by and among the Company, VIA Pharmaceuticals, Inc. (“VIA”), and
Resurgens Merger Corp., dated February 7, 2007, the Company has agreed to issue
Common Stock to the stockholders of VIA (“Issuance”) upon the closing date of
the merger transaction contemplated thereby (“Merger”); and

WHEREAS, pursuant to the Series D Designation and the Series E Designation, the
Series D Preferred Shares and Series E Preferred Shares are entitled to
conversion price adjustments upon the issuance of capital stock of the Company
for consideration to the Company below a certain specified price, subject to
limitations set forth in the Recapitalization Agreement; and

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WHEREAS, after giving effect to the Dividend, the Issuance and the corresponding
conversion price adjustments, the Series D Preferred Shares and the Series E
Preferred Shares are convertible into 5,205,173 and 3,926,042 shares of Common
Stock, respectively; and

WHEREAS, the Company and BSC desire to undertake a conversion of the Preferred
Shares, whereby BSC shall convert all of the Preferred Shares for 9,131,215
shares of Common Stock effective immediately prior to the consummation of the
Merger (“Effective Time”); and

WHEREAS, the Company and BSC desire to set forth the registration rights with
respect to the Conversion Shares (as below defined); and

WHEREAS, the Company and BSC desire to terminate certain agreements between the
parties.

NOW THEREFORE, in consideration of the premises set forth above, the promises
and the covenants hereinafter contained and other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1. CONVERSION OF PREFERRED SHARES.

1.1 Conversion of Preferred Shares for Common Stock. At the Effective Time, BSC
shall convert the Preferred Shares into 9,131,215 shares of Common Stock
(“Conversion Shares”).

1.2 Stock Certificate. At the Effective Time, the Company shall cancel all
outstanding certificates evidencing the Preferred Shares and subsequently shall
deliver to BSC a certificate reflecting the issuance of the Conversion Shares.

1.3 Termination of Preferences and Rights of the Preferred Shares. As of the
Effective Time, all of the preferences and rights of the Preferred Shares
granted pursuant to the Series D Designation and Series E Designation shall be
forever terminated and extinguished.

 

2. ADDITIONAL AGREEMENTS AND COVENANTS

2.1 Termination of Certain Agreements. At the Effective Time, the following
agreements shall be terminated, and no party shall have any continuing rights or
obligations thereunder:

 

  •  

That certain Investor Rights Agreement by and between the Company and BSC, dated
July 30, 2003;

 

  •  

That certain Investment Agreement by and between the Company and BSC, dated
July 30, 2003;

 

  •  

That certain Investment Agreement by and between the Company and BSC, dated
June 27, 2005;

 

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  •  

That certain Registration Rights Agreement by and between the Company and BSC,
dated June 27, 2005; and

 

  •  

The Recapitalization Agreement.

2.2 Registration Rights of Conversion Shares.

(i) Demand Registration

If at any time after the 270th day following the Effective Time BSC shall
request the Company in writing (each, a “Demand”) to register under the
Securities Act of 1933, as amended (“Securities Act”), a specified number of
Conversion Shares, the Company shall use commercially reasonable efforts to
effect the registration under the Securities Act of the Conversion Shares which
the Company has been so requested to register as soon as reasonably practicable
so as to permit the sale thereof, and in connection therewith shall prepare and
file a registration statement with the SEC under the Securities Act
(“Registration Statement”) to effect such registration; provided, that each such
request shall (a) specify the number of shares of Conversion Shares intended to
be offered and sold, (b) describe the nature or method of the proposed offer and
sale thereof and (c) contain the undertaking of BSC to provide all such
information and materials and take all such action as may be required in order
to permit the Company to comply with all applicable requirements of the SEC and
to obtain any desired acceleration of the effective date of such Registration
Statement; provided, further, that with respect to any Demands under this
Section 2.2(i), the anticipated aggregate offering price of the Conversion
Shares covered by such registration exceeds $2,000,000 (net of underwriting
discounts and commissions).

(ii) Selection of Underwriter(s)

If the registration pursuant to Section 2.2(i) relates to an underwritten
offering, the managing or lead underwriter(s) shall be an underwriter(s) of
nationally recognized standing selected by the Company, which shall be
reasonably acceptable to BSC; provided, if the foregoing is inconsistent with
any agreement that is in effect between the Company and an underwriter on the
date hereof (but not as such agreement may be hereafter amended), then BSC shall
have the right to approve the co-lead manager.

(iii) Priority in Demand Registration

If a registration pursuant to Section 2.2(i) involves an underwritten offering,
and the managing or lead underwriter(s) shall advise BSC in writing (a copy of
which shall be provided to the Company by BSC) that, in its or their reasonable
commercial judgment, the number of Conversion Shares requested to be included in
such registration by BSC exceeds the number which can be sold in such offering
within a price range acceptable to BSC, the Company shall include in such
registration the number of securities that the Company is so advised can be sold
in such offering, as follows: (i) first, the Conversion Shares proposed to be
included by BSC, (ii) second, the securities requested to be registered by the
Company, unless otherwise provided in an agreement between the Company and
another person(s), and (iii) third, the securities of any other person(s)
proposed to be included in such registration, in accordance, as to the
priorities among such other person(s), with the rights contained in the
respective agreements into which such person(s) and the Company have entered.

 

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(iv) Limits on Demand Registrations

The Company shall not be required to effect any registration pursuant to
Section 2.2(i) or 2.2(vi) after one Demand requested by BSC pursuant to
Section 2.2(i) and/or 2.2(vi) shall have been effected.

(v) Withdrawal

BSC shall have the right to request withdrawal of any Registration Statement
filed with the SEC pursuant to Section 2.2(i) or Section 2.2(vi) (and the
Company shall so withdraw such Registration Statement) so long as such
Registration Statement has not become effective, provided that, in such case,
BSC shall pay all related out-of-pocket Registration Expenses (as defined below
in Section 2.2(xi)) reasonably incurred by the Company unless a Registration
Statement shall be effected pursuant to Section 2.2(i) or Section 2.2(vi) within
270 days after such withdrawal.

(vi) Shelf Registration

If at any time after the 270th day following the Effective Time BSC shall
request to the Company in writing, the Company shall use commercially reasonable
efforts to file and cause to be declared effective a “shelf’ Registration
Statement on any appropriate form pursuant to Rule 415 (or similar rule that may
be adopted by the SEC) under the Securities Act for Conversion Shares, which
form shall be available for the sale of the Conversion Shares in accordance with
the intended method or methods of distribution thereof. The Company agrees to
use commercially reasonable efforts to keep such Registration Statement
continuously effective and usable for resale of Conversion Shares, for a period
of twenty-four months from the date on which the SEC declares such Registration
Statement effective or such shorter period which will terminate at such time as
BSC has sold all the Conversion Shares covered by such Registration Statement;
provided, however, that the Company may elect that such Registration Statement
not be filed or usable during any Blackout Period (as defined in
Section 2.2(x)(ii)). BSC shall be entitled to a total of one “shelf’
registration pursuant to this Section 2.2(vi), which shall count as one Demand
for purposes of the limitations on Demands set forth in Section 2.2(iv).

(vii) Effective Registration Statement

A registration requested pursuant to Section 2.2(i) or 2.2(vi)shall not be
deemed to be effected if (a) a Registration Statement with respect thereto shall
not have become effective under the Securities Act and remained effective for at
least 90 days or until the completion of the distribution of the Conversion
Shares thereunder, whichever is earlier (including, without limitation, because
of a withdrawal of such Registration Statement by BSC prior to the effectiveness
thereof pursuant to Section 2.2(v) hereof), (b) after it has become effective,
such registration is interfered with for any reason by any stop order,
injunction or other order or requirement of the SEC or any other governmental
authority, or as a result of the initiation of any proceeding for such a stop
order by the SEC through no fault of BSC and the result of such interference is
to prevent BSC from disposing of such Conversion Shares proposed to be sold in

 

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accordance with the intended methods of disposition, (c) the Company exercises
its rights under Section 2.2(x)(ii), and the result is a delay in the proposed
distribution of any Conversion Shares and BSC determines not to sell such
Conversion Shares pursuant to such registration as a result of such delay, or
(d) the conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with any underwritten offering
shall not be satisfied or waived with the consent of BSC.

(viii) Piggyback Registration

Beginning on the date of the issuance of the Conversion Shares, if the Company
proposes to register any shares of Common Stock for itself or any of its
stockholders (the stockholders at such time being the “Existing Holders”) under
the Securities Act on a Registration Statement on Form S-1, Form S-2 or Form S-3
(or an equivalent general registration form then in effect), the Company shall
give written notice of such proposal at least 15 days before the anticipated
filing date, which notice shall include the intended method of distribution of
such shares, to BSC. Such notice shall specify at a minimum the number of shares
of Common Stock proposed to be registered, the proposed filing date of such
Registration Statement, any proposed means of distribution of such shares and
the proposed managing underwriter, if any. Subject to Section 2.2(ix), upon the
written request of BSC, given within 10 days after the receipt of any such
written notice by facsimile confirmed by mail (which request shall specify the
Conversion Shares intended to be disposed of by BSC), the Company will use
commercially reasonable efforts to include in the Registration Statement the
Conversion Shares referred to in BSC’s request; provided, however, that if such
Registration Statement relates to a Public Offering (as below defined), then any
participation in such Public Offering by BSC shall be on substantially the same
terms as the Company’s (or its other stockholders’) participation therein; and
provided further that the amount of Conversion Shares to be included in any such
Public Offering shall not exceed the maximum number which the managing
underwriter of such Public Offering considers in its reasonable commercial
judgment to be appropriate based on market conditions and other relevant factors
(the “Maximum Number”). BSC shall have the right to withdraw a request to
include Conversion Shares in any Public Offering pursuant to this
Section 2.2(viii) by giving written notice to the Company of its election to
withdraw such request at least ten business days prior to the proposed effective
date of such Registration Statement. For purposes hereof, “Public Offering”
shall mean the offer of shares of Common Stock or securities convertible into or
exchangeable for Common Stock on a broadly-distributed basis, not limited to
sophisticated investors (except for qualified institutional buyers pursuant to
Rule 144A under the Securities Act), pursuant to a firm-commitment or
best-efforts underwriting or purchase arrangement.

(ix) Priority in a Piggyback Registration

If the lead managing underwriter for any Public Offering to be effected in which
BSC seeks registration pursuant to Section 2.2(viii) shall advise the Company
and BSC (each, a “Seller” and, collectively, the “Sellers”) in writing that the
number of shares of Common Stock sought to be included in such Public Offering
(including those sought to be offered by the Company, those sought to be offered
by BSC pursuant to Section 2.2(viii) and those sought to be offered by Existing
Holders) is more than the Maximum Number, the shares of Common Stock to be
included in such Public Offering shall be allocated pursuant to the following
procedures: First, the Company shall be entitled to include all of the
securities that it has proposed to include;

 

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Second, to the Existing Holder, if any, that requested the Registration
Statement be filed for the Public Offering pursuant to a rights agreement
between the Company and such Existing Holder; and Third, to the extent that any
other securities may be included without exceeding the Maximum Number, to BSC on
a basis no less favorable than that of any other holder of the Company’s
securities (other than the requesting Existing Holder immediately above).

(x) Obligations of the Company

(i) Whenever the Company is required by the provisions of this Agreement to use
commercially reasonable efforts to effect the registration of any Common Stock
under the Securities Act, the Company shall, as expeditiously as possible,
(i) prepare and file with the SEC a Registration Statement with respect to such
Conversion Shares, and shall use commercially reasonable efforts to cause such
Registration Statement to become effective and to remain effective until the
sale of all of the shares of Conversion Shares so registered or, in the case of
a “shelf” registration statement filed pursuant to Section 2.2(vi), for the
period specified in that Section; (ii) prepare and file with the SEC such
amendments and supplements to such Registration Statement and the prospectus
used in connection therewith as may be reasonably necessary to make and to keep
such Registration Statement effective and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all securities
proposed to be registered pursuant to such Registration Statement until the sale
of all of the shares of Conversion Shares so registered or, in the case of a
“shelf” registration statement filed pursuant to Section 2.2(vi), for the period
specified in that Section; and (iii) take all such other action either necessary
or desirable to permit the shares of Conversion Shares held by BSC to be
registered and disposed of in accordance with the method of disposition
described herein.

(ii) Notwithstanding the foregoing, if the Company shall furnish to BSC a
certificate signed by its Chairman, Chief Executive Officer or Chief Financial
Officer stating that filing a Registration Statement or maintaining
effectiveness of a current Registration Statement would have a serious
detrimental effect on the Company or its stockholders in relation to any
material financing, acquisition or other corporate transaction, and the Company
has determined in good faith that such registration rights are not in the best
interests of the Company and its shareholders, the Company shall be entitled to
postpone filing or suspend the use by BSC of the Registration Statement for a
reasonable period of time, but not in excess of 180 consecutive calendar days (a
“Blackout Period”). The Company shall be entitled to exercise such suspension
rights more than one time in any calendar year; provided that such exercise
shall not prevent BSC from being entitled to at least 180 days of effective
registration rights per year and that no suspension period may commence if it is
less than 30 calendar days from the prior such suspension period.

(iii) In connection with any Registration Statement pursuant to which BSC shares
are being registered, the following provisions shall apply:

(1) The Company shall furnish to BSC, prior to the filing thereof with the SEC,
a copy of any Registration Statement, and each amendment thereof and each
amendment or supplement, if any, to the prospectus included therein and shall
afford BSC, the managing underwriters, and their respective counsel, if any, a
reasonable opportunity within a reasonable time period to review and comment on
copies of all such documents (including a reasonable opportunity to review
copies of any documents to be incorporated by reference therein and all exhibits
thereto) proposed to be filed.

 

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(2) The Company shall take such action as may be necessary so that: (i) any
Registration Statement and any amendment thereto and any Prospectus forming part
thereof and any amendment or supplement thereto (and each report or other
document incorporated therein by reference) complies in all material respects
with the Securities Act and the Securities Exchange Act of 1934, as amended, and
the respective rules and regulations thereunder, (ii) any Registration Statement
and any amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(iii) any prospectus forming part of any Registration Statement, and any
amendment or supplement to such prospectus, does not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.

(3) The Company shall advise BSC and, if requested by BSC, confirm such advice
in writing of:

a. when a Registration Statement and any amendment thereto has been filed with
the SEC and when the Registration Statement or any post-effective amendment
thereto has become effective;

b. any request by the SEC for amendments or supplements to the Registration
Statement or the prospectus included therein or for additional information;

c. the issuance by the SEC of any stop order suspending effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose;

d. the receipt by the Company of any notification with respect to the suspension
of the qualification of the securities included therein for sale in any
jurisdiction or the initiation of any proceeding for such purpose; and

e. the happening of any event that requires the making of any changes in the
Registration Statement or the prospectus so that, as of such date, the
Registration Statement and the prospectus do not contain an untrue statement of
a material fact and do not omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
prospectus, in the light of the circumstances under which they were made) not
misleading (which advice shall be accompanied by an instruction to suspend the
use of the prospectus relating to such Conversion Shares until the requisite
changes have been made).

(4) The Company shall use commercially reasonable efforts to prevent the
issuance, and if issued to obtain the withdrawal, of any order suspending the
effectiveness of the Registration Statement relating to such Conversion Shares
at the earliest possible time.

 

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(5) The Company shall furnish to BSC with respect to the Registration Statement
relating to such Conversion Shares, without charge, such number of copies of
such Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and all reports, other documents and
exhibits (including those incorporated by reference) as BSC shall reasonably
request.

(6) The Company shall furnish to BSC such number of copies of any prospectus
(including any preliminary prospectus and any amended or supplemented
Prospectus) relating to such Conversion Shares, in conformity with the
requirements of the Securities Act, as BSC may reasonably request in order to
effect the offering and sale of the shares of such Conversion Shares to be
offered and sold, but only while the Company shall be required under the
provisions hereof to cause the Registration Statement to remain effective, and
the Company consents (except during a Blackout Period or event contemplated by
Section 2.2(x)(iii)(3)(c)-(e)) to the use of the prospectus or any amendment or
supplement thereto by BSC in connection with the offering and sale of the
Conversion Shares covered by the prospectus or any amendment or supplement
thereto.

(7) Prior to any offering of securities pursuant to any Registration Statement,
the Company shall use commercially reasonable efforts to register or qualify the
Conversion Shares covered by such Registration Statement under the securities or
blue sky laws of such states as BSC shall reasonably request, and do any and all
other acts and things either reasonably necessary or advisable to enable BSC to
consummate the public sale or other disposition of the Conversion Shares in
jurisdictions where BSC desires to effect such sales or other disposition;
provided that the Company shall not be required to take any action that would
subject it to the general jurisdiction of the courts of any jurisdiction in
which it is not so subject, to qualify as a foreign corporation in any
jurisdiction where the Company is not so qualified or subject it to taxation in
any such jurisdiction.

(8) In connection with any offering of Conversion Shares registered pursuant to
this Agreement, the Company shall (x) furnish BSC, at the Company’s expense, on
a timely basis with certificates free of any restrictive legends representing
ownership of the Conversion Shares being sold in such denominations and
registered in such names as BSC shall request and (y) instruct the transfer
agent and registrar of the Conversion Shares to release any stop transfer orders
with respect to the Conversion Shares and to cooperate with BSC and its
underwriters (if any).

(9) Upon the occurrence of any event contemplated by
Section 2.2(x)(iii)(3)(c)-(e) above, the Company shall promptly prepare a
post-effective amendment to any Registration Statement or an amendment or
supplement to the related prospectus or file any other required document so
that, as thereafter delivered to purchasers of the Conversion Shares included
therein, the prospectus will not include an untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. If
the Company notifies BSC of the occurrence of any Blackout Period or any event
contemplated by Section 2.2(x)(iii)(3)(c)-(e) above, BSC shall suspend the use
of the prospectus, until the requisite changes to the prospectus have been made.

 

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(10) The Company shall, if requested, promptly include or incorporate in a
prospectus supplement or post-effective amendment to a Registration Statement,
such information as the managing underwriters administering an underwritten
offering of the Conversion Shares registered thereunder reasonably request to be
included therein and to which the Company does not reasonably object and shall
make all required filings of such prospectus supplement or post-effective
amendment as soon as practicable after they are notified of the matters to be
included or incorporated in such prospectus supplement or post-effective
amendment.

(11) If requested, the Company shall enter into an underwriting agreement with
an investment banking firm or firms (in the case of a registration pursuant to
Section 2.2(i) or 2.2(vi) selected by BSC) containing representations,
warranties, indemnities and agreements then customarily included by an issuer in
underwriting agreements with respect to secondary underwritten distributions,
and in connection therewith, if an underwriting agreement is entered into, the
Company shall use commercially reasonable efforts to cause the same to contain
indemnification provisions and procedures substantially identical to those set
forth in Section 2.2(xii) (or such other provisions and procedures acceptable to
the managing underwriters, if any) with respect to all parties to be indemnified
pursuant to Section 2.2(xii) and take all such other actions as are reasonably
requested by the managing underwriters for such underwritten offering in order
to expedite or facilitate the registration or the disposition of such Conversion
Shares.

(12) In the event BSC proposes to conduct an underwritten Public Offering, then
the Company shall: (i) make reasonably available for inspection by BSC and its
counsel, any underwriter participating in any distribution pursuant to such
Registration Statement, and any attorney, accountant or other agent retained by
BSC or any such underwriter, all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries as shall
be reasonably necessary to enable them to conduct a “reasonable” investigation
for purposes of Section 11(a) of the Securities Act; (ii) cause the Company’s
officers, directors and employees to make reasonably available for inspection
all relevant information reasonably requested by BSC or any such underwriter,
attorney, accountant or agent in connection with any such Registration
Statement, in each case, as is customary for similar due diligence examinations;
provided that any information that is designated in writing by the Company, in
good faith, as confidential at the time of delivery of such information shall be
kept confidential by BSC, such underwriter, or any such, attorney, accountant or
agent, unless such disclosure is made in connection with a court proceeding or
required by law, or such information becomes available to the public generally
or through a third party without an accompanying obligation of confidentiality;
(iii) obtain opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any), addressed to BSC and the
underwriters, if any, covering such matters as are customarily covered in
opinions requested in underwritten offerings and such other matters as may be
reasonably requested by BSC and underwriters (it being agreed that the matters
to be covered by such opinion or written statement by such counsel delivered in
connection with such opinions shall include in customary form, without
limitation, as of the date of the opinion and as of the effective date of the
Registration Statement or most recent post-effective amendment thereto, as the
case may be, the absence from such Registration Statement and the prospectus
included therein, as then amended or supplemented, including the documents

 

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incorporated by reference therein, of an untrue statement of a material fact or
the omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading); (iv) use its
commercially reasonable efforts to obtain “cold comfort” letters and updates
thereof from the independent public accountants of the Company (and, if
necessary, any other independent public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the
Registration Statement), addressed to BSC and the underwriters, if any, in
customary form and covering matters of the type customarily covered in “cold
comfort” letters in connection with primary underwritten offerings; and
(v) deliver such documents and certificates as may be reasonably requested by
BSC and the managing underwriters, if any, and with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Company. The foregoing actions set forth in clauses (iii), (iv) and (v) of this
Section 2.2(x)(iii)(12) shall be performed at each closing under any
underwritten offering to the extent required thereunder.

(13) The Company will use commercially reasonable efforts to cause such
Conversion Shares to be admitted for quotation on the NASDAQ Capital Market
(“NASDAQ”) or other stock exchange or trading system on which the Common Stock
primarily trades on or prior to the effective date of any Registration Statement
hereunder.

(14) The Company shall use commercially reasonable efforts to take all other
steps reasonably necessary to effect the registration, offering and sale of the
Conversion Shares covered by a Registration Statement contemplated hereby and
enter into any other customary agreements and take such other actions, including
participation of senior management in “roadshows” as are reasonably required in
order to expedite or facilitate the disposition of such Conversion Shares, and
the Company shall secure the participation of its senior management for such
purposes.

(iv) With a view to making available the benefits of certain rules and
regulations of the SEC which may at any time permit the sale of the Conversion
Shares to the public without registration, the Company agrees to:

(1) Make and keep public information available, as those terms are understood
and defined in and interpreted under Rule 144, at all times;

(2) During such time as BSC holds Conversion Shares, furnish to BSC upon
request: (i) a written statement by the Company as to its compliance with the
reporting requirements of Rule 144, (ii) a copy of the most recent annual or
quarterly report of the Company, and (iii) such other reports and documents of
the Company as BSC may reasonably request in availing itself of any rule or
regulation of the SEC allowing BSC to sell any such securities without
registration.

(xi) Expenses of Registration

(i) Except as provided in subsection (ii) of this Section, all fees and expenses
incident to the registration and sale of Conversion Shares shall be borne by the
Company whether or not a Registration Statement is filed or becomes effective,
including,

 

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without limitation, (i) all registration, qualification and filing fees
(including, without limitation, (A) fees with respect to filings required to be
made with NASDAQ and (B) fees and expenses of compliance with state securities
or blue sky laws (including, without limitation, fees and disbursements of
counsel for the Company or the underwriters, or both, in connection with blue
sky qualifications of the Conversion Shares)), (ii) messenger and delivery
expenses, word processing, duplicating and printing expenses (including, without
limitation, expenses of printing certificates for Conversion Shares in a form
eligible for deposit with The Depository Trust Company, and the relevant fees
and expenses of the Company’s transfer agent, printing preliminary prospectuses,
prospectuses, prospectus supplements, including those delivered to or for the
account of BSC as provided in this Agreement, and printing or preparing any
underwriting agreement, agreement among underwriters and related syndicate or
selling group agreements, pricing agreements and blue sky memoranda), (iii) fees
and disbursements of counsel for the Company, (iv) fees and disbursements of all
independent certified public accountants for the Company (including, without
limitation, the expenses of any “comfort letters” required by or incident to
such performance), (v) the fees and expenses of any “qualified independent
underwriter” or other independent appraiser participating in an offering
pursuant to Section 3 of Rule 2720 of the Conduct Rules of the NASD (unless such
qualified independent underwriter is required as a result of an affiliation
between an underwriter selected by BSC and BSC, in which case such fees and
expenses will be borne by BSC), (vi) Securities Act liability insurance, if the
Company so desires such insurance, (vii) all out-of-pocket expenses of the
Company (including, without limitation, expenses incurred by the Company, its
officers, directors, employees and agents performing legal or accounting duties
or preparing or participating in “roadshow” presentations or of any public
relations, investor relations or other consultants or advisors retained by the
Company in connection with any roadshow, including travel and lodging expenses
of such roadshows), and (viii) the fees and expenses incurred in connection with
the quotation or listing of shares of Common Stock on any securities exchange or
automated securities quotation system. The fees and expenses set forth in this
Section 2.2(xi)(i) are collectively referred to as “Registration Expenses”.

(ii) BSC shall pay all underwriting discounts and commissions or broker’s
commissions incurred in connection with the sale or other disposition of
Conversion Shares for or on behalf of BSC’s account as well as the fees and
expenses of BSC’s counsel.

(iii) BSC shall pay all out-of-pocket Registration Expenses reasonably incurred
by the Company unless a Registration Statement shall be effected pursuant to
Section 2.2(i) or 2.2(vi) within 270 days after a withdrawal as provided in
Section 2.2(v).

(xii) Indemnification

(i) The Company shall, without limitation as to time, indemnify and hold
harmless, to the fullest extent permitted by law, BSC and any underwriter
participating in the distribution, their respective officers, directors,
partners and agents and employees of each of them, each person who controls BSC
or any such underwriter (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act) and the officers, directors, partners,
agents and employees of each such controlling person (individually, a “BSC
Indemnified Person”) from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of investigating,
preparing to defend, defending and appearing as a

 

11

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third-party witness and attorneys’ fees and disbursements) and expenses,
including any amounts paid in respect of any settlements (collectively,
“Losses”), joint or several, without duplication, as incurred, arising out of or
based upon any untrue or alleged untrue statement of a material fact contained
in any Registration Statement, prospectus or form of prospectus, or in any
amendment or supplements thereto or in any preliminary prospectus, or arising
out of or based upon, in the case of the Registration Statement or any
amendments thereto, any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and, in the case of the prospectus or form of prospectus, or in any amendments
or supplements thereto, or in any preliminary prospectus, any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading except, in either case, (i) to the extent, but
only to the extent, that such untrue or alleged untrue statement or omission or
alleged omission has been made therein in reliance upon and in conformity with
information furnished in writing to the Company by such BSC Indemnified Person
expressly for use therein and (ii) if the person asserting any such Losses who
purchased the Conversion Shares which are the subject thereof did not receive a
copy of an amended preliminary prospectus or the final prospectus (or the final
prospectus as amended or supplemented) at or prior to the written confirmation
of the sale of such Conversion Shares to such person (if it is determined that
the Company has provided such preliminary prospectus and it was the
responsibility of such BSC Indemnified Person to provide such person with a
current copy of the prospectus or amended or supplemented prospectus, as the
case may be) and the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact made in such preliminary prospectus was
corrected in the amended preliminary prospectus or the final prospectus (or the
final prospectus as amended and supplemented).

(ii) In connection with any Registration Statement in which BSC as a holder of
Conversion Shares is participating, BSC shall, without limitation as to time,
indemnify and hold harmless, to the fullest extent permitted by law, the
Company, any underwriter participating in the distribution and their respective
directors, officers, agents and employees, each person who controls the Company
or any such underwriter (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling person (individually, a “Company Indemnified
Person”), from and against any and all Losses, as incurred, arising out of or
based upon (i) any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, prospectus, or form of prospectus, or
in any amendment or supplement thereto or in any preliminary prospectus, or
arising out of or based upon, in the case of the Registration Statement or any
amendments thereto, any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and, in the case of the prospectus, or form of prospectus, or in any amendments
or supplements thereto, or in any preliminary prospectus, any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, in either case, to the extent, but only to the
extent, that such untrue or alleged untrue statement or omission or alleged
omission has been made therein in reliance upon and in conformity with
information furnished in writing to the Company by BSC expressly for use therein
or (ii) the failure of BSC (if it is determined that it was the responsibility
of BSC) at or prior to the written confirmation of the sale of the Conversion
Shares to send or deliver a copy of an amended preliminary prospectus or the
final prospectus (or the final prospectus as amended

 

12

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or supplemented) to the person asserting any such Losses who purchased the
Conversion Shares which are the subject thereof and the untrue statement or
alleged untrue statement or omission or alleged omission of a material fact made
in such preliminary prospectus was corrected in the amended preliminary
prospectus or the final prospectus (or the final prospectus as amended and
supplemented).

(iii) Each BSC Indemnified Person and Company Indemnified Person (each an
“Indemnified Person”) shall give prompt notice to the party or parties from
which such indemnity is sought (the “Indemnifying Parties”) of the commencement
of any action or proceeding (including any governmental investigation)
(collectively “Proceedings” and individually a “Proceeding”) with respect to
which such Indemnified Person seeks indemnification or contribution pursuant
hereto; provided, however, that the failure so to notify the Indemnifying
Parties shall not relieve the Indemnifying Parties from any obligation or
liability except to the extent that the Indemnifying Party was otherwise unaware
of such Proceeding and the Indemnifying Parties shall have been materially
prejudiced by such failure. The Indemnifying Parties shall have the right,
exercisable by giving written notice to an Indemnified Person promptly after the
receipt of written notice from such Indemnified Person of such Proceeding, to
assume, at the Indemnifying Parties’ expense, the defense of any such
proceeding, with counsel reasonably satisfactory to such Indemnified Person and
shall pay as incurred the fees and disbursements of such counsel related to such
Proceeding; provided, however, that an Indemnified Person or Indemnified Persons
(if more than one such Indemnified Person is named in any Proceeding) shall have
the right to employ separate counsel in any such Proceeding and to participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person or Indemnified Persons unless: (i) the
Indemnifying Party or parties agree to pay such fees and expenses; or (ii) the
Indemnifying Parties fail promptly to assume the defense of such Proceeding or
fail promptly to employ counsel reasonably satisfactory to such Indemnified
Person or Indemnified Persons; or (iii) the named parties to any such action
(including any impleaded parties) include both an Indemnified Person and the
Indemnifying Party, and the Indemnified Person or Indemnified Persons shall have
been advised by counsel that there may be a conflict between the positions of
the Indemnifying Party or an Affiliate of the Indemnifying Party and such
Indemnified Person or Indemnified Persons in conducting the defense of such
action or proceeding or that there may be legal defenses available to such
Indemnified Person or Indemnified Persons different from or in addition to those
available to the Indemnifying Party or such Affiliate, in which case, if such
Indemnified Person or Indemnified Persons notifies the Indemnifying Parties in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Parties, the Indemnifying Parties shall not have the right to
assume the defense thereof and such counsel shall be at the expense of the
Indemnifying Parties, it being understood, however, that the Indemnifying
parties shall not, in connection with any one such Proceeding or separate but
substantially similar or related Proceedings in the same jurisdiction, arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for such Indemnified
Person or Indemnified Persons. Whether or not such defense is assumed by the
Indemnifying Parties, such Indemnifying parties or Indemnified Person or
Indemnified Persons will not be subject to any liability for any settlement made
without its or their consent (but such consent will not be unreasonably
withheld). No Indemnifying Party shall be liable for any settlement of any such
action or proceeding effected without its written consent, but if settled with
its written consent

 

13

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each Indemnifying Party jointly and severally agrees, subject to the exception
and limitations set forth above, to indemnify and hold harmless each Indemnified
Person from and against any loss or liability by reason of such settlement. No
indemnification provided for in Section 2.2(xii)(i) or 2.2(xii)(ii) shall be
available to any party who shall fail to give notice as provided in this
Section 2.2(xii)(iii) if the party to whom notice was not given was unaware of
the proceeding to which such notice would have related and was materially
prejudiced by the failure to give such notice, but the failure to give such
notice shall not relieve the indemnifying party or parties from any liability
which it or they may have to an Indemnified Person otherwise than on account of
the provisions of Section 2.2(xii)(i) or 2.2(xii)(ii). No Indemnifying party
shall, without the consent of the Indemnified Person, consent to entry of any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Person of a release from all
liability in respect of such claim or litigation.

(iv) If the indemnification provided for in this Section 2.2(xii) is unavailable
to an Indemnified Person or is insufficient to hold such Indemnified Person
harmless for any Losses in respect to which this Section 2.2(xii) would
otherwise apply by its terms, except by reasons of Section 2.2(xii)(i)(i) or
2.2(xii)(i)(ii) hereof or the failure of the Indemnified Person to give notice
as required in Section 2.2(xii)(iii) hereof (provided that the Indemnifying
Party was unaware of the proceeding to which such notice would have related and
was materially prejudiced by the failure to give such notice), then each
applicable Indemnifying Party, in lieu of indemnifying such Indemnified Person,
shall have an obligation to contribute to the amount paid or payable by such
Indemnified Person as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party, on the one
hand, and such Indemnified Person, on the other hand, in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The amount paid or payable by a party
as a result of any Losses shall be deemed to include any legal or other fees or
expenses incurred by such party in connection with any Proceeding, to the extent
such party would have been indemnified for such expenses if the indemnification
provided for in Section 2.2(xii)(i) or Section 2.2(xii)(ii) were available to
such party. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 2.2(xii)(iv) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to above. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

(v) The indemnity, contribution and expense reimbursement obligations under this
Section 2.2(xii) shall be in addition to any liability each indemnifying party
may otherwise have and shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Indemnified Person.
In the event of any conflict between the indemnification and contribution terms
as herein set forth and as set forth in any underwriting agreement entered
pursuant hereto, the underwriting agreement shall control. The obligations of
the Company and BSC under this Section 2.2(xii) shall survive the completion of
any offering of Conversion Shares in a Registration Statement.

2.3 Additional Restrictions on Transfer of Conversion Shares. BSC will make no
transfer of the Conversion Shares that is in violation of the Securities Act or
any state securities law or regulation. BSC agrees that in no event will BSC
sell, transfer, or otherwise dispose of

 

14

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any of the Conversion Shares (other than pursuant to an effective registration
statement under the Securities Act and applicable state securities laws), unless
and until BSC has first furnished to the Company an opinion, reasonably
satisfactory to the Company and its legal counsel, to the effect that such
transfer may be made without registration under the Securities Act and all
applicable state securities laws.

2.4 Legends. BSC agrees that stop transfer instructions will be given to the
Company’s transfer agent (or noted on the appropriate records of the Company)
and that there has been placed on BSC’s certificate(s) representing the
Conversion Shares a legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR UNDER THE PROVISIONS
OF ANY APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED BY THE HOLDER
HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON STATUTORY EXEMPTIONS UNDER
THE 1933 ACT AND UNDER APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY
NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED, EXCEPT IN A TRANSACTION WHICH IS
EXEMPT FROM REGISTRATION UNDER PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
THEREUNDER; AND IN THE CASE OF AN EXEMPTION, ONLY IF THE ISSUER HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH TRANSACTION DOES NOT
REQUIRE REGISTRATION OF ANY SUCH SECURITIES.

Any assignment or endorsement of the certificate(s) representing the Conversion
Shares which is in violation of the restrictions on transfer provided above and
elsewhere herein will not be recognized by the Company nor will any assignee or
endorsee of such shares be recognized as the owner thereof by the Company.

2.5 Additional Documents and Assurances. If deemed necessary by the Company or
its counsel, BSC shall execute and deliver, or cause to be executed and
delivered, all such additional instruments and documents as are required to best
effectuate the purposes and intent of this Agreement, including the cancellation
of the Preferred Shares as of the Effective Date.

 

15

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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company hereby represents and warrants to BSC as of the date hereof and as
of the Effective Time the following:

3.1 Organization. The Company is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to own and operate its properties and
assets and to carry on its business as now conducted and as presently proposed
to be conducted.

3.2 Authorization. The Company has the right, power and capacity to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery and performance of
this Agreement by the Company, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate and
stockholder action on the part of the Company. This Agreement has been duly and
validly executed and delivered by the Company and constitutes the Company’s
legal, valid and binding obligation, enforceable in accordance with its terms,
except as limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of
creditors’ rights generally, and (ii) laws relating to the availability of
specific performance, injunctive relief or other equitable remedies.

3.3 No Conflict. The execution and delivery of this Agreement by the Company,
the consummation of the transactions contemplated herein by the Company, and the
performance of the covenants and agreements of the Company will not, with or
without the giving of notice or the lapse of time, or both: (A) violate or
conflict with any of the provisions of any charter document or bylaw of the
Company; or (B) violate, conflict with or result in a breach or default under or
cause termination of any term or condition of any mortgage, indenture, contract,
license, permit, instrument, trust document, will, or other agreement, document
or instrument to which the Company is a party or by which the Company or its
properties may be bound; or (C) violate any provision of law, statute,
regulation, court order or ruling of any governmental authority to which the
Company is a party or by which it or its properties may be bound; or (D) result
in the creation or imposition of any lien, claim, charge, restriction, security
interest or encumbrance of any kind whatsoever upon any asset of the Company.

3.4 Public Filings. The Company has filed all forms, reports and documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the Securities Exchange Act of 1934, as amended (“Exchange Act”), during the
twelve (12) months preceding the date of this Agreement. As of their respective
filings dates, such reports (a) were prepared in accordance with either the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the SEC promulgated thereunder, and (b) did not, at
the time they were filed, or, if amended, as of the date of such amendment,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.

 

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3.5 Issued Shares. The Conversion Shares, when issued and delivered in
accordance with the terms hereof for the consideration expressed herein, shall
be duly and validly issued, fully paid, and nonassessable.

3.6 Government Approvals. Except for filings and/or notices necessary to comply
with the Securities Act and state securities or “blue sky” laws, no consent,
approval, qualification, order or authorization of, or filing with, any local,
state, or federal governmental authority is required on the part of the Company
by virtue of the Company’s execution and delivery of this Agreement or the
consummation of any of the transactions contemplated herein.

 

4. REPRESENTATIONS AND WARRANTIES OF BSC

BSC hereby represents and warrants to the Company as of the date hereof and the
Effective Time the following:

4.1 Organization. BSC is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation and has all requisite
corporate power and authority to own and operate its properties and assets and
to carry on its business as now conducted and as presently proposed to be
conducted.

4.2 Authorization. BSC has the right, power and capacity to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by BSC, and the consummation of the transactions contemplated
hereby, have been duly authorized by all necessary corporate and shareholder
action on the part of BSC. This Agreement has been duly and validly executed and
delivered by BSC and constitutes BSC’s legal, valid and binding obligation,
enforceable in accordance with its terms, except as limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors’ rights generally, and (ii) laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.

4.3 No Conflict. The execution and delivery of this Agreement by BSC, the
consummation of the transactions contemplated herein by BSC, and the performance
of the covenants and agreements of BSC will not, with or without the giving of
notice or the lapse of time, or both: (A) violate or conflict with any of the
provisions of any charter document or bylaw of BSC; or (B) violate, conflict
with or result in a breach or default under or cause termination of any term or
condition of any mortgage, indenture, contract, license, permit, instrument,
trust document, will, or other agreement, document or instrument to which BSC is
a party or by which it or its properties may be bound; or (C) violate any
provision of law, statute, regulation, court order or ruling of any governmental
authority to which BSC is a party or by which it or its properties may be bound;
or (D) result in the creation or imposition of any lien, claim, charge,
restriction, security interest or encumbrance of any kind whatsoever upon any
asset of BSC.

4.4 Preferred Shares. BSC is the sole owner and holder of the Preferred Shares
and BSC has not assigned or transferred, or purported to assign or transfer, to
anyone whatsoever all or any portion of or interest in the Preferred Shares. BSC
has no knowledge of any party having an interest in the Preferred Shares.

 

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4.5 Termination of Rights and Preferences of Preferred Shares. In accordance
with Section 1.3 of this Agreement, BSC understands that in exchange for the
Conversion Shares, BSC’s rights and preferences related to the Preferred Shares
are forever terminated, and BSC can no longer enforce any rights or preferences
whatsoever with regard to the Preferred Shares. Additionally, BSC acknowledges
and agrees that any and all rights to receive dividends with respect to the
Preferred Shares, whether past or future, declared or accrued and undeclared,
are hereby extinguished.

4.6 Investment Representations and Intent.

(i) Accredited Investor. BSC is an “accredited investor” as defined in Rule 501
of Regulation D promulgated under the Securities Act, and is experienced in
evaluating and investing in companies such as the Company, and has such
expertise and knowledge in financial and business matters so as to be able to
evaluate the merits and risks of an investment in the Company. BSC is able to
bear the economic risk of investment in the Conversion Shares, has adequate
means of providing for BSC’s current needs and contingencies and has no need for
liquidity with respect to the Conversion Shares.

(ii) Investment Decision. BSC is not acquiring the Conversion Shares based upon
any representation, oral or written, by the Company or any representative of the
Company with respect to the future value of, income from, or tax consequences
relating to the Conversion Shares, but rather upon an independent examination
and judgment as to the prospects of the Company. Further, BSC acknowledges that
no federal or state administrative entity responsible for securities
registration or enforcement has made any recommendation or endorsement of the
Conversion Shares or any findings as to the fairness of an investment in the
Conversion Shares.

(iii) Access to Information. BSC has received and reviewed all the information
BSC considers necessary or appropriate for deciding whether to acquire the
Conversion Shares. The Company has made available to BSC all records, documents,
books of account and other materials or information requested by BSC which the
Company has in its possession or are reasonably obtainable. BSC has had the
opportunity to ask questions of, and receive answers from, the executive
officers of the Company concerning the terms and conditions of BSC’s purchase
and the Company’s business, management, financial affairs, and to obtain
additional information necessary to verify the accuracy of any information
furnished to BSC. BSC has had the opportunity to request additional information
and there has been no information requested that has not been provided to BSC.
In making the decision to convert, BSC has relied upon BSC’s own independent
investigations of the Company.

(iv) Investment Intent. BSC is acquiring the Conversion Shares for its own
account for investment and not with a view to, or resale in connection with, any
distribution of such Conversion Shares, within the meaning of the Securities
Act, and BSC has no present intention of reselling, assigning or otherwise
disposing of all or any shares of the Conversion Shares.

 

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(v) No Registration. BSC understands that the Conversion Shares have not been
registered under the Securities Act or the securities laws of any state and that
Conversion Shares will be issued by the Company in reliance upon exemptions from
the registration requirements of such acts. BSC understands that the Company is
under no obligation to register the Conversion Shares under the Securities Act
or any state securities act or to take any other action necessary to comply with
an available exemption or regulation under any such acts (including Rule 144
under the Securities Act) in order to permit BSC to sell, transfer or otherwise
dispose of the Conversion Shares.

BSC understands and agrees that all representations and agreements made herein
form, in part, the basis for the exemptions under the Securities Act and the
applicable state securities laws relied upon by the Company in issuing the
Conversion Shares and that in issuing the Conversion Shares the Company has
relied on all representations and agreements of BSC contained herein. Acceptance
by BSC of the certificate or certificates representing the Conversion Shares
shall constitute a confirmation by BSC that all such representations and
agreements remain true and correct as of the date of acceptance of such
certificate(s) by BSC.

 

5. MISCELLANEOUS.

5.1 Entire Agreement. This Agreement (and the documents referenced herein)
constitutes the entire agreement among the parties and supersedes any prior
understanding or agreement between them with respect to the subject matter
hereof; provided, however, that this provision is not intended to abrogate any
other written agreement between the parties executed with or after this
Agreement.

5.2 Amendments and Waivers. No amendment, supplement, alteration or modification
to the terms of this Agreement shall be binding unless the same shall be in
writing and duly executed by the parties hereto. No waiver of any provision
hereof will be valid or binding on the parties hereto unless such waiver is in
writing and signed by or on behalf of the parties hereto, and no waiver on one
occasion shall be deemed to be a waiver of the same or any other provision
hereof in the future.

5.3 Survival of Warranties. The warranties, representations and covenants of the
Company and BSC contained in or made pursuant to this agreement shall survive
the execution and delivery of this Agreement and shall expire on the third
anniversary of the Effective Time.

5.4 Assignment; Successors and Assigns. No party hereto may assign all or any of
its rights, duties or obligations hereunder to any other person without the
prior written consent of the other party, except for assignments which occur by
operation of law. Except as otherwise provided herein, the terms, conditions and
obligations of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

 

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5.5 Governing Law. This Agreement shall be governed by and construed under the
laws of the State of Delaware.

5.6 Counterparts and Facsimile. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may be
executed and delivered by facsimile, and a facsimile copy of this Agreement
shall be deemed an original.

5.7 Headings. The titles, subtitles and other headings used in this Agreement
are for convenience only and shall not be considered in construing or
interpreting this Agreement.

5.8 Notices. Unless otherwise provided, all notices and other communications
required or permitted under this Agreement shall be in writing and shall be
mailed by United States first-class mail, postage prepaid, sent by facsimile
(upon confirmation of the successful transmission thereof) or delivered
personally by hand or by a nationally recognized courier addressed to the party
to be notified at the address or facsimile number set forth below or at such
other address or facsimile number as such party may designate by ten (10) days
advance written notice to the other parties thereto. All such notices and other
written communications shall be effective on five (5) days after the date of
mailing, or the date of confirmed facsimile transmission or the date of
delivery.

 

To the Company:   

Richard E. Otto

Chief Executive Officer

Corautus Genetics Inc.

70 Mansell Center, Suite 100

Roswell, Georgia 30076

Fax: (404) 526-6200

with a copy to:   

Robert E. Tritt, Esq.

McKenna, Long & Aldridge LLP

303 Peachtree Street, N.E.

Suite 5300

Atlanta, GA 30308

Fax: (404) 527-4198

to BSC:   

Chief Financial Officer

Boston Scientific Corporation

One Boston Scientific Place

Natick, MA 01760-1537

Fax: (508) 650- 8956

with a copy to:   

Craig Smith, Esq.

Assistant General Counsel

Boston Scientific Corporation

One Boston Scientific Place

Natick, MA 01760-1537

Fax: (508) 650- 8960

 

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From and after the Effective Time, all notices and other communications
described above shall no longer be provided to McKenna, Long & Aldridge LLP or
to the Company at the address provided above, but shall be provided to the
Company and its counsel at the addresses provided below.

To the Company:   

Chief Financial Officer

VIA Pharmaceuticals, Inc.

750 Battery Street, Suite 330

San Francisco CA 94111

Fax: (415) 283-2201

with a copy to:   

Michael A. Pucker

Latham & Watkins LLP

233 South Wacker Drive

Suite 5800

Chicago, IL 60606-6401

Fax: (312) 993-9767

5.9 Finder’s Fees. Each party represents that it neither is nor will be
obligated for any finder’s fee or commission in connection with the transactions
described herein. BSC agrees to indemnify and to hold the Company harmless from
any and all liability for any commission or compensation in the nature of a
finder’s fee (and the costs and expenses of defending against such liability or
asserted liability) for which BSC or any of its agents or representatives are
responsible. The Company agrees to indemnify and hold harmless BSC from any
liability for any commission or compensation in the nature of a finder’s fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees, or
representatives is responsible.

5.10 Expenses. Each party shall pay all costs and expenses it incurs with
respect to the negotiation, execution, delivery, and performance of this
Agreement.

5.11 Attorneys’ Fees. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys’ fees, costs, and disbursements actually incurred, in
addition to any other relief to which such party may be entitled.

5.12 Tax Advice. BSC has sought and received independent tax advice concerning
the federal income tax consequences of the transactions described in this
Agreement, and has not received nor relied on any tax advice from the Company or
its counsel in deciding to consummate the transactions contemplated herein.

5.13 Severability. If any one or more of the provisions of this Agreement are
held by a court of competent jurisdiction to be invalid, illegal or
unenforceable in any respect, such provision shall be excluded from this
Agreement and the remaining provisions of this Agreement shall not in any way be
affected or impaired thereby and shall be enforceable in accordance with

its terms, except that this Agreement shall not be reformed in any manner that
will deny any party the essential benefits of this Agreement unless such party
waives in writing its rights to such benefits.

 

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first above written.

 

COMPANY:

 

CORAUTUS GENETICS INC.

By:   /s/ Richard E. Otto Name:   Richard E. Otto Its:   Chief Executive Officer

 

BSC:

 

BOSTON SCIENTIFIC

CORPORATION

By:   /s/ Lawrence C. Best Name:   Lawrence C. Best Its:  

Vice President for Finance and

Administration, Chief Financial Officer