EX-10.1






Exhibit 10.1




STANDBY PURCHASE AGREEMENT




     This Standby Purchase Agreement (this “Agreement”), dated as of April 4, 2009, is
entered into by and between BioMimetic Therapeutics, Inc., a Delaware corporation (the
“Company”), and Novo A/S (the “Standby Purchaser”), a Danish private limited
liability company.



     WHEREAS, the Company proposes, as soon as practicable after the Rights Offering Registration
Statement (as defined herein) becomes effective, to commence an offering to each of the holders of
its common stock, $0.001 par value (the “Common Stock”), of record as of the close of
business on the record date to be determined by the Company’s Board of Directors (the “Record
Date”), of non-transferable rights (the “Rights”) to subscribe for and purchase
additional shares of Common Stock (the “New Shares”) at a subscription price per share of
$8.50 for an aggregate offering amount of up to $17,000,000 (the “Subscription Price” and,
such offering, the “Rights Offering”); and



     WHEREAS, pursuant to the Rights Offering, the Company will distribute to each of its
stockholders of record, at no charge, one Right for each share of Common Stock held by the
stockholder of record as of the Record Date, and each Right will entitle the holder thereof to
purchase 0.107 New Shares from the Company (with fractional shares rounded up to the next whole
number of shares) at the Subscription Price (the “Basic Subscription Privilege”); and



     WHEREAS, each holder of Rights who exercises its Basic Subscription Privilege in full will be
entitled to subscribe for, at the Subscription Price, Unsubscribed Shares (as defined herein) to
the extent that other holders of Rights do not exercise all of their respective Basic Subscription
Privileges (the “Over-Subscription Privilege”); and



     WHEREAS, any holder of Rights, after exercising in full its Basic Subscription Privilege and
Over-Subscription Privilege, who has a subscription right to purchase a fractional share will be
permitted to subscribe for one additional full share in lieu of the fractional share that would
have been granted, without furnishing any additional rights (the “Step-Up Privilege”); and



     WHEREAS, in order to facilitate the Rights Offering, the Company has requested the Standby
Purchaser to agree, and the Standby Purchaser has agreed, subject to the terms and conditions of
this Agreement, that, to the extent New Shares are not purchased by the Company’s stockholders
pursuant to the exercise of Rights, the Standby Purchaser shall be deemed to have exercised such
Rights immediately prior to the expiration of the Offering Period and shall purchase such shares
from the Company at the Subscription Price pursuant to the exercise of such Rights (the
“Unsubscribed Shares”), subject to a maximum total commitment of $15,000,000.



     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained
and other good and valuable consideration, the Company and the Standby Purchaser, intending to be
legally bound hereby, agree as follows:



 









 





     Section 1. Definitions.



     (a) Certain Defined Terms. The following terms used herein shall have the meanings set forth
below:



          (i) “Agreement” has the meaning set forth in the preamble hereto.




          (ii) “Base Prospectus” means the prospectus relating to the Common Stock included with
the Rights Offering Registration Statement, including the documents incorporated by reference
therein.




          (iii) “Basic Subscription Privilege” has the meaning set forth in the recitals hereto.




          (iv) “Board” means the board of directors of the Company.




          (v) “Business Day” shall mean any day that is not a Saturday, a Sunday, or a day on
which banks are required or permitted to be closed in the State of New York.




          (vi) “Closing” has the meaning set forth in Section 2(b).




          (vii) “Closing Date” has the meaning set forth in Section 2(b).




          (viii) “Commission” means the United States Securities and Exchange Commission.




          (ix) “Common Stock” has the meaning set forth in the recitals hereto.




          (x) “Company” has the meaning set forth in the preamble hereto.




          (xi) “Company Stockholder Approval” means, in compliance with Section 203 of the DGCL,
approval of the Company’s issuance of the New Shares to the Standby Purchaser by 66 2/3% of the
Company’s voting stock not owned by an interested stockholder.




          (xii) “DGCL” means the Delaware General Corporation Law.




          (xiii) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the Commission thereunder.




          (xiv) “Intellectual Property” has the meaning set forth in Section 5(n).




          (xv) “Interwest Partners” means InterWest Partners X, LP.




          (xvi) “InterWest Purchase Agreement” has the meaning set forth in Section 6(a)(vii).




          (xvii) “Issuer Free Writing Prospectus” means each “free writing prospectus” (as
defined in Rule 405 of the Securities Act) prepared by or on behalf of the Company or used or
referred to by the Company in connection with the Rights Offering.




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          (xviii) “Losses” has the meaning set forth in Section 10(a)(i).

          (xix) “Material Adverse Effect” means the occurrence, either individually or in the
aggregate, of any material adverse effect on the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of the Company and of
the Subsidiaries taken as a whole, except any of the following, either alone or in combination,
shall not be deemed a Material Adverse Effect: (i) effects caused by changes or circumstances
affecting general market conditions in the U.S. economy or that are generally applicable to the
industry in which the Company operates, provided that such effects do not adversely affect the
Company in a disproportionate manner, (ii) effects resulting from or relating to the announcement
or disclosure of the sale of the Rights Offering or other transactions contemplated by this
Agreement, or (iii) effects caused by any event, occurrence or condition resulting from or relating
to the taking of any action in accordance with this Agreement.

          (xx) “New Shares” shall have the meaning set forth in the recitals hereto.

          (xxi) “Offering Period” means the period of time from the Record Date until the
expiration date of the Rights Offering.

          (xxii) “Over-Subscription Privilege” has the meaning set forth in the recitals hereto.

          (xxiii) “Person” means an individual, corporation, partnership, association, joint
stock company, limited liability company, joint venture, trust, governmental entity, unincorporated
organization or other legal entity.

          (xxiv) “Preliminary Prospectus” means the preliminary prospectus supplement to the
Base Prospectus relating to the Rights Offering, filed with the Commission, pursuant to Rule 424
under the Securities Act, together with the Base Prospectus, including the documents incorporated
by reference therein.

          (xxv) “Products” has the meaning set forth in Section 5(n).

          (xxvi) “Prospectus” means the final prospectus supplement to the Base Prospectus
relating to the Rights Offering filed with the Commission, pursuant to Rule 424 under the
Securities Act, together with the Base Prospectus, including the documents incorporated by
reference therein.

          (xxvii) “Proxy Statement” means the definitive proxy statement filed with the
Commission relating to the Company Stockholder Approval and the transactions contemplated
hereunder, together with all amendments, supplements and exhibits thereto.

          (xxviii) “Record Date” has the meaning set forth in the recitals hereto.

          (xxix) “Rights” has the meaning set forth in the recitals hereto.

          (xxx) “Rights Offering” has the meaning set forth in the recitals hereto.

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          (xxxi) “Rights Offering Expiration Date” means the date on which the subscription
period under the Rights Offering expires.




          (xxxii) “Rights Offering Registration Statement” means the Company’s Registration
Statement on Form S-3 under the Securities Act or such other appropriate form under the Securities
Act, pursuant to which the shares of Common Stock underlying the Rights will be registered pursuant
to the Securities Act.




          (xxxiii) “Rules and Regulations” means the rules and regulations promulgated under the
Securities Act.




          (xxxiv) “Securities Act” means the Securities Act of 1933, as amended and the rules
and regulations promulgated by the Commission thereunder.




          (xxxv) “Shelf Base Prospectus” means the prospectus relating to the Common Stock
included with the Shelf Registration Statement, including the documents incorporated by reference
therein.




          (xxxvi) “Shelf Prospectus” means the final prospectus supplement to the Shelf Base
Prospectus relating to the Shelf Registration Statement filed with the Commission, pursuant to Rule
424 under the Securities Act, together with the Shelf Base Prospectus, including the documents
incorporated by reference therein.




          (xxxvii) “Shelf Registration Statement” shall mean the Company’s Registration
Statement on Form S-3 under the Securities Act or such other appropriate form under the Securities
Act, pursuant to which, among other securities, the Standby Purchase Commitment will be registered
pursuant to the Securities Act.




          (xxxviii) “Specified Courts” has the meaning set forth in Section 11(f).




          (xxxix) “Standby Purchase Commitment” means the number of New Shares allocated to the
Standby Purchaser by the Company at the Standby Purchase Commitment Price following the close of
the Offering Period pursuant to the terms of this Agreement.




          (xl) “Standby Purchase Commitment Price” means the Subscription Price.




          (xli) “Standby Purchaser” has the meaning set forth in the preamble hereto.




          (xlii) “Step-Up Privilege” has the meaning set forth in the recitals hereto.




          (xliii) “Subscription Agent” has the meaning set forth in Section 6(a).




          (xliv) “Subscription Price” has the meaning set forth in the recitals hereto.




          (xlv) “Subsidiary” or “Subsidiaries” has the meaning set forth in Section 5(a).




          (xlvi) “Unsubscribed Shares” has the meaning set forth in the recitals hereto.





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     Section 2. Standby Purchase Commitment.



     (a) Standby Purchase Commitment.


          (i) If and to the extent Unsubscribed Shares are not purchased by the Company’s other
stockholders pursuant to the exercise of Rights (including the Basic Subscription Privilege and the
Over-Subscription Privilege) under the Rights Offering, the Standby Purchaser shall be deemed to
have exercised such Rights immediately prior to the expiration of the Rights Offering and shall be
entitled to and hereby agrees to purchase from the Company, and the Company hereby agrees to sell
to the Standby Purchaser, at the Subscription Price, all such remaining New Shares, subject to a
maximum total commitment of the Standby Purchaser of $15,000,000, including any New Shares
purchased by the Standby Purchaser in the Rights Offering pursuant to its Basic Subscription
Privilege.



          (ii) The Standby Purchaser and the Company hereby agree that it is the intent of both parties
that the Standby Purchaser, by virtue of acting hereunder, shall not be deemed an “underwriter”
within the definition of Section 2(a)(11) of the Securities Act or deemed to be engaged in
broker-dealer activity requiring registration under Section 15 of the Exchange Act, and the Standby
Purchaser and Company shall in the fulfillment of their obligations hereunder act in accordance
with this mutual understanding.



     (b) Closing. On the basis of the representations and warranties and subject to the terms and
conditions herein set forth, the closing of the purchase and sale of the Standby Purchase
Commitment (the “Closing”) shall take place at the offices of Morrison & Foerster LLP, at
10:00 a.m., New York City time, on or before the third Business Day after the Rights Offering
Expiration Date; provided, that the Closing may take place at such other place, time or
date as shall be mutually agreed upon by the Company and the Standby Purchaser (the date of the
Closing, the “Closing Date”).


     (c) Deliveries at Closing.


          (i) At the Closing, the Company shall deliver to the Standby Purchaser the following:



               (1) A certificate or certificates in book-entry form, registered in the name of the Standby
Purchaser, representing the Standby Purchase Commitment that is allocated to the Standby Purchaser.
The certificate or certificates for the Standby Purchase Commitment shall be registered in such
names and in such denominations as the Standby Purchaser may request not less than two Business
Days prior to the Closing Date.


               (2) A certificate of an officer of the Company on its behalf to the effect that the
representations and warranties of the Company contained in this Agreement are true and correct in
all material respects as of the date hereof, and that as of the Closing Date the Company has
complied with all covenants and other obligations of the Company set forth in this Agreement.


               (3) A legal opinion of counsel to the Company substantially in the form attached hereto as
Exhibit A.


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          (ii) At the Closing, the Standby Purchaser shall deliver to the Company the following:




               (1) The Standby Purchase Commitment Price for the Standby Purchase Commitment, which shall be
paid by the Standby Purchaser to the Company in U.S. federal (same day) funds to an account
designated in writing by the Company at least two Business Days prior to the Closing Date.



               (2) A certificate of the Standby Purchaser to the effect that the representations and
warranties of the Standby Purchaser are true and correct in all material respects on and as of the
date hereof.



     Section 3. Representations and Warranties of the Standby Purchaser. The Standby Purchaser
represents and warrants to the Company, as of the date hereof and as of the Closing Date, as
follows:



     (a) Organization. The Standby Purchaser is a limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of formation and has the
requisite limited liability company power and authority to carry on its business as it is now being
conducted.



     (b) Due Authorization. The Standby Purchaser has the requisite limited liability company
power and authority to enter into this Agreement and to consummate the transactions contemplated
hereby and the execution and delivery by the Standby Purchaser of this Agreement, the purchase of
the Standby Purchase Commitment and the consummation of the transactions contemplated hereby (a)
are within the limited liability company power and authority of the Standby Purchaser and (b) have
been duly authorized by all necessary limited liability company action of the Standby Purchaser.
This Agreement has been duly and validly executed and delivered by the Standby Purchaser. Assuming
the due authorization, execution and delivery by the Company of this Agreement, this Agreement
constitutes a valid and binding obligation of the Standby Purchaser enforceable against it in
accordance with its terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws relating to enforcement of creditors’ rights
generally, and general equitable principles relating to the availability of remedies and the public
policy underlying such laws.



     (c) No Conflicts. The execution, delivery and performance of this Agreement by the Standby
Purchaser, the purchase of the Standby Purchase Commitment and the consummation by the Standby
Purchaser of the other transactions contemplated by this Agreement and the compliance by the
Standby Purchaser with the terms of this Agreement do not and will not conflict with or do not
result and will not result in any breach or violation of any of the terms or provisions of, or do
not constitute or will not constitute a default under, do not cause or will not cause (or do not
permit or will not permit) the maturation or acceleration of any liability or obligation or the
termination of any right under, or do not result in the creation or imposition of any lien, charge
or encumbrance upon, any property or assets of the Standby Purchaser pursuant
to the terms of (i) the charter or bylaws or other applicable organizational documents of the
Standby Purchaser; (ii) any indenture, mortgage, deed of trust, voting trust agreement,
stockholders’ agreement, note agreement or other agreement or instrument to which the Standby



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Purchaser is a party or by which it is bound or to which its respective property is subject; or
(iii) any statute, judgment, decree, order, rule or regulation applicable to the Standby Purchaser
of any government, arbitrator, court, regulatory body or administrative agency or other
governmental agency or body, domestic or foreign, having jurisdiction over the Standby Purchaser or
its activities or properties, which materially and adversely affects the business or properties of
the Standby Purchaser.



     (d) No Consent. No authorization, approval, consent or license of any government,
governmental instrumentality or court, domestic or foreign (other than under the Securities Act and
the securities or blue sky laws of the various states) is required for the purchase of the shares
underlying the Standby Purchase Commitment, if any, to be purchased by the Standby Purchaser
hereunder and the consummation by such Standby Purchaser of the transactions contemplated by this
Agreement.



     (e) Information. The Standby Purchaser and its advisers have been furnished with all
materials relating to the business, finances and operations of the Company and materials relating
to the offer and sale of the Standby Purchase Commitment which have been requested by such Standby
Purchaser or its advisers. The Standby Purchaser is familiar with the business in which the
Company is engaged, and based upon its knowledge and experience in financial and business matters,
the Standby Purchaser is familiar with the investments of the type that it is undertaking to
purchase; is fully aware of the problems and risks involved in making an investment of this type;
and is capable of evaluating the merits and risks of this investment.



     (f) Confidentiality. The Standby Purchaser and its affiliates acknowledge that, in receiving
information about the terms of this Agreement and about the Company in connection with this
Agreement, they may have received material non-public information within the meaning of the U.S.
federal securities laws. As such, if and to the extent that the Standby Purchaser or its
affiliates have received material non-public information within the meaning of the U.S. federal
securities laws, neither the Standby Purchaser nor its affiliates has and none of them will
purchase (other than in connection with the Standby Purchase Commitment) or sell any securities of
the Company, in a transaction that would violate applicable U.S. federal securities laws as a
result of the Standby Purchaser or its affiliates having any such material non-public information,
from the date of this Agreement until after the Closing Date or the earlier termination of the
Standby Purchaser’s obligations under Section 2 of this Agreement.



     (g) Short Sales. Since being contacted by the Company, the Standby Purchaser has not taken
any action that has caused the Standby Purchaser to have, directly or indirectly, sold or agreed to
sell any shares of Common Stock, effected any short sale, whether or not against the box,
established any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) with
respect to the Common Stock, granted any other right (including, without limitation, any put or
call option) with respect to the Common Stock or with respect to any security that includes,
relates to or derived any significant part of its value from the Common Stock.



     (h) Market Stabilization. The Standby Purchaser has not taken and the Standby Purchaser will
not take, directly or indirectly, any action designed to or that might reasonably be expected to
result in stabilization or manipulation of the price of the shares of Common Stock to facilitate
the sale or resale of the Standby Purchase Commitment.



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     (i) Control. The Standby Purchaser is acquiring the Standby Purchase Commitment in the
ordinary course of its business and not with the purpose nor with the effect of changing or
influencing the control of the Company, nor in connection with or as a participant in any
transaction having such purpose or effect, including any transaction subject to Rule 13d-3(b) under
the Exchange Act.



     (j) Accredited Investor Status. The Standby Purchaser was not created for the purpose of
acquiring the Standby Purchase Commitment and is an “accredited investor,” as that term is as
defined in Rule 501(a) of Regulation D under the Securities Act. The Standby 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 Standby Purchase Commitment, and has so evaluated the merits and
risks of such investment. The Standby Purchaser is able to bear the economic risk of an investment
in the Standby Purchase Commitment and, at the present time, is able to afford a complete loss of
such investment. The Standby Purchaser understands that its investment in the Standby Purchase
Commitment involves a significant degree of risk. Such Standby Purchaser is a “qualified
institutional buyer” (as defined in Rule 144A promulgated under the Securities Act).



     (k) Acquisition for Investment. The Standby Purchaser is acquiring the Standby Purchase
Commitment as principal for its own account for investment purposes only and not with a view to or
for distributing or reselling such Standby Purchase Commitment or any part thereof, has no present
intention of distributing any of such Standby Purchase Commitment and has no arrangement or
understanding with any other Persons regarding the distribution of such Standby Purchase
Commitment; provided, however, that in making such representation, the Standby
Purchaser does not agree to hold the Standby Purchase Commitment for any minimum or specific term
and reserves the right to sell, transfer or otherwise dispose of the Standby Purchase Commitment at
any time in accordance with federal and state securities laws applicable to such sale, transfer or
disposition.



     (l) Relationship with Company. The Standby Purchaser has no position or office with the
Company and owns 3,326,159 shares of the Company’s Common Stock as of the date of this Agreement.



     (m) Standby Purchaser Activities. The Standby Purchaser is not a broker-dealer and does not
need to be registered as a broker-dealer.



     Section 4. Covenants of the Standby Purchaser.



     Neither the Standby Purchaser nor any of its affiliates will contact or communicate with any
Rights holders regarding the Standby Purchase Commitment without first notifying the Company.



     Section 5. Representations and Warranties of the Company. The Company hereby represents and
warrants to the Standby Purchaser as follows:



     (a) Organization and Qualification. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of incorporation with corporate
power and authority to own or lease its properties and conduct its



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business as described in the SEC
Reports (as defined below) and the Company is qualified to do business as a foreign corporation in
each jurisdiction in which qualification is required, except where failure to so qualify would not
have a Material Adverse Effect. The Company’s subsidiaries (each a “Subsidiary” and
collectively the “Subsidiaries”) are listed on Exhibit B to this Agreement and are the only
subsidiaries, direct or indirect, of the Company. Each Subsidiary is a direct or indirect wholly
owned subsidiary of the Company. Each Subsidiary is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, with corporate power and authority to
own or lease its properties and conduct its business as currently carried out, and is qualified to
do business as a foreign corporation in each jurisdiction in which qualification is required,
except where failure to so qualify would not have a Material Adverse Effect.



     (b) Authorized Capital Stock. As of the date hereof, the authorized, issued and outstanding
share capital of the Company is as set forth on Schedule 5(b) hereto. The issued and
outstanding shares of Common Stock have been duly authorized and validly issued, are fully paid and
nonassessable, have been issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to subscribe for or
purchase securities. Other than employee stock options, the Company does not have outstanding any
options to purchase, or any preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible securities or obligations.
With respect to each of the Subsidiaries (i) all the issued and outstanding shares of such
Subsidiary’s capital stock have been duly authorized and validly issued, are fully paid and
nonassessable, have been issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to subscribe for or
purchase securities, and are owned by the Company free and clear of all liens, encumbrances and
equities and claims, and (ii) there are no outstanding options to purchase, or any preemptive
rights or other rights to subscribe for or to purchase, any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of such Subsidiary’s capital stock
or any such options, rights, convertible securities or obligations.



     (c) Issuance, Sale and Delivery of the New Shares. The New Shares will have been duly
authorized (assuming Company Stockholder Approval) and, when issued, delivered and paid for in the
manner set forth in this Agreement, will be validly issued, fully paid and nonassessable. No
preemptive rights or other rights to subscribe for or purchase any shares of Common Stock of the
Company exist with respect to the issuance and sale of the New Shares by the Company pursuant to
this Agreement.



     (d) Due Execution, Delivery and Performance of the Agreements. The Company has full legal
right, corporate power and authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Company. This Agreement constitutes a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or affecting the enforcement of creditors’ rights and the
application of equitable principles relating to the availability of remedies, and except as rights
to indemnity or contribution, including but not limited to, indemnification provisions set



9









 







forth in
Section 9 of this Agreement may be limited by federal or state securities law or the public policy
underlying such laws. The execution and performance of this Agreement by the Company and the
consummation of the transactions herein contemplated will not violate any provision of the
certificate of incorporation or bylaws of the Company or the organizational documents of any
Subsidiary and will not result in the creation of any lien, charge, security interest or
encumbrance upon any assets of the Company or any Subsidiary pursuant to the terms or provisions
of, or will not conflict with, result in the breach or violation of, or constitute, either by
itself or upon notice or the passage of time or both, a default under any agreement, mortgage, deed
of trust, lease, franchise, license, indenture, permit or other instrument to which any of the
Company or any Subsidiary is a party or by which any of the Company or any Subsidiary or their
respective properties may be bound or affected and in each case that would have a Material Adverse
Effect or, to the Company’s knowledge, any statute or any authorization, judgment, decree, order,
rule or regulation of any court or any regulatory body, administrative agency or other governmental
agency or body applicable to the Company or any Subsidiary or any of their respective properties.
No consent, approval, authorization or other order of any court, regulatory body, administrative
agency or other governmental agency or body is required for the execution and delivery of this
Agreement or the consummation of the transactions contemplated by this Agreement, except for
compliance with the Blue Sky laws and federal securities laws applicable to the offering of the New
Shares.



     (e) Reporting Company; Form S-3. The Company is not an “ineligible issuer” (as defined in
Rule 405 promulgated under the Securities Act) and is eligible to register the New Shares for
resale by the Standby Purchaser on a registration statement on Form S-3 under the Securities Act.
The Company is subject to the reporting requirements of the Exchange Act, and has filed all reports
required thereby. Provided neither the Standby Purchaser nor any holder of common stock is deemed
to be an underwriter with respect to any shares, to the Company’s knowledge, there exist no facts
or circumstances (including without limitation any required approvals or waivers or any
circumstances that may delay or prevent the obtaining of accountant’s consents) that reasonably
could be expected to prohibit or delay the preparation and filing of the Rights Offering
Registration Statement or the Shelf Registration Statement that will be available for the resale of
the New Shares by the Standby Purchaser.



     (f) Rights Offering Registration Statement and Prospectus and Shelf Registration Statement and
Shelf Prospectus. At the time each of the Rights Offering Registration Statement and Shelf
Registration Statement becomes effective, such registration statement will comply in all material
respects with the requirements of the Securities Act and will not 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. The Prospectus, at the time the Rights Offering Registration
Statement becomes effective and at the Closing Date, and the Shelf Prospectus, at the time the
Shelf Registration Statement becomes effective, will 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 light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties in this
subsection shall not apply to statements in or omissions from the Rights Offering Registration
Statement or the Prospectus, or the Shelf Registration Statement or the Shelf Prospectus, made in
reliance upon and in conformity with the information furnished to the Company in writing by the
Standby Purchaser for use in the Rights Offering Registration Statement or in the Prospectus, or in
the



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Shelf Registration Statement or the Shelf Prospectus. The documents incorporated by reference
into each of the Prospectus and the Shelf Prospectus, when they become effective or at the time
they are filed with the Commission, as the case may be, will comply in all material respects with
the applicable provisions of the Exchange Act.



     (g) Proxy Statement. The Proxy Statement will not, on the date it is first mailed to
stockholders of the Company, 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 therein,
in light of the circumstances under which they are made, not misleading and will not, at the time
of the Company Stockholder Approval, omit to state any material fact necessary to correct any
statement in any earlier communication from the Company with respect to the solicitation of proxies
for the Company Stockholder Approval which shall have become false or misleading in any material
respect. The Proxy Statement will comply as to form in all material respects with the applicable
requirements of the Exchange Act. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to information furnished to the Company in writing by the
Standby Purchaser for inclusion or incorporation by reference in any of the foregoing documents.



     (h) Accountants. Ernst & Young LLP, who has expressed its opinion with respect to the
consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2008, which will be incorporated by reference into the (A) Rights Offering
Registration Statement and the Prospectus that forms a part thereof, and the (B) Shelf Registration
Statement and the Shelf Prospectus that forms a part thereof, are registered independent public
accountants as required by the Securities Act and the rules and regulations promulgated by the
Commission thereunder and by the rules of the Public Company Accounting Oversight Board.



     (i) No Defaults or Consents. Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions contemplated hereby
(including, without limitation, the issuance and sale by the Company of the New Shares) will give
rise to a right to terminate or accelerate the due date of any payment due under, or conflict with
or result in the breach of any term or provision of, or constitute a default (or an event which
with notice or lapse of time or both would constitute a default) under, except such defaults that
individually or in the aggregate would not cause a Material Adverse Effect, or require any consent
or waiver under, or result in the execution or imposition of any lien, charge or encumbrance upon
any properties or assets of the Company or its subsidiaries pursuant to the terms of, any
indenture, mortgage, deed of trust or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which either the Company or its subsidiaries or any of their
properties or businesses is bound, or any franchise, license, permit, judgment, decree, order,
statute, rule or regulation applicable to the Company or any of its subsidiaries or
violate any provision of the charter or by-laws of the Company or any of its subsidiaries,
except for such consents or waivers which have already been obtained and are in full force and
effect.



     (j) Contracts. The material contracts to which the Company is a party that are filed pursuant
to the Securities Act or the Exchange Act, with the Commission by the Company have been duly and
validly authorized, executed and delivered by the Company and constitute the legal, valid and
binding agreements of the Company, enforceable by and against it in accordance



11









 







with their
respective terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws relating to enforcement of creditors’ rights
generally, and general equitable principles relating to the availability of remedies, and except as
rights to indemnity or contribution may be limited by federal or state securities laws and the
public policy underlying such laws.



     (k) No Actions. There are no legal or governmental actions, suits or proceedings pending or,
to the Company’s knowledge, threatened against the Company or any Subsidiary before or by any
court, regulatory body or administrative agency or any other governmental agency or body, domestic,
or foreign, which actions, suits or proceedings, individually or in the aggregate, might reasonably
be expected to have a Material Adverse Effect; and no labor disturbance by the employees of the
Company exists or, to the Company’s knowledge, is imminent, that might reasonably be expected to
have a Material Adverse Effect. Neither the Company nor any Subsidiary is a party to or subject to
the provisions of any injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental agency or body that might have a Material Adverse
Effect.



     (l) Properties. The Company and each Subsidiary has good and marketable title to all the
properties and assets described as owned by it in the consolidated financial statements, free and
clear of all liens, mortgages, pledges, or encumbrances of any kind except (i) those, if any,
reflected in such consolidated financial statements, or (ii) those that are not material in amount
and do not adversely affect the use made and proposed to be made of such property by the Company or
its Subsidiaries. The Company and each Subsidiary holds its leased properties under valid and
binding leases. The Company and any Subsidiary owns or leases all such properties as are necessary
to its operations as now conducted.



     (m) No Material Adverse Change. Except as set forth on Schedule 5(m), since December
31, 2008, (i) the Company and its Subsidiaries have not incurred any material liabilities or
obligations, indirect, or contingent, or entered into any material agreement or other transaction
that is not in the ordinary course of business or that could reasonably be expected to result in a
material reduction in the future earnings of the Company; (ii) the Company and its Subsidiaries
have not sustained any material loss or interference with their businesses or properties from fire,
flood, windstorm, accident or other calamity not covered by insurance; (iii) the Company and its
Subsidiaries have not paid or declared any dividends or other distributions with respect to their
capital stock and none of the Company or any Subsidiary is in default in the payment of principal
or interest on any outstanding debt obligations; (iv) there has not been any change in the capital
stock of the Company or its Subsidiaries other than the sale of the Shares hereunder and shares or
options issued pursuant to employee equity incentive plans or purchase plans approved by the Board,
or indebtedness material to the Company or its Subsidiaries (other than in the ordinary course of
business and any required scheduled
payments); and (v) there has not occurred any event that has caused or could reasonably be
expected to cause a Material Adverse Effect.



     (n) Intellectual Property. To the Company’s knowledge, the Company owns, or has obtained
valid and enforceable licenses for, or other legal rights to use, the inventions, patent
applications, patents, utility models, industrial property, trademarks (both registered and
unregistered), trade names, service marks (both registered and unregistered), service names,



12









 







copyrights, trade secrets, customer lists, designs, manufacturing or other processes, computer
software, systems, data compilations, research results, know-how or other proprietary rights and
information owned or licensed by the Company, or used in the Company’s business as presently
conducted with respect to the research, development, testing and marketing of Augment Bone Graft,
Augment Injectable Bone Graft, and the other product candidates (collectively, the
“Products”), except as set forth on Schedule 5(n) or where the failure to own,
license or otherwise enjoy such rights would not, individually or in the aggregate, have a Material
Adverse Effect (collectively, “Intellectual Property”). To the Company’s knowledge, all of
such patents, registered trademarks and registered copyrights owned or licensed by the Company have
been duly registered in, filed in or issued by the United States Patent and Trademark Office (the
“USPTO”), the United States Copyright Office or the corresponding offices of other
jurisdictions and have been maintained and renewed in accordance with all applicable provisions of
law and administrative regulations in the United States and all such other jurisdictions, except
where the failure to do so, individually or in the aggregate, would not have a Material Adverse
Effect. The Company has taken all steps required in accordance with sound business practice and
business judgment to establish and preserve its ownership of or rights to all material Intellectual
Property. Except as set forth on Schedule 5(n), to the Company’s knowledge, there are no
third parties who have or will be able to establish rights to any Intellectual Property related to
the Products. To the Company’s knowledge, there is no infringement by third parties of any of the
Intellectual Property. Except as set forth on Schedule 5(n), to the Company’s knowledge,
there is no pending or threatened action, suit, proceeding or claim by others challenging the
Company’s rights in or to any Intellectual Property, and the Company is unaware of any facts that
could form a reasonable basis for any such action, suit, proceeding or claim. Except as set forth
on Schedule 5(n), there is no pending, or to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the validity, enforceability or scope of any
Intellectual Property, and the Company is unaware of any facts that could form a reasonable basis
for any such action, suit, proceeding or claim. To the Company’s knowledge, the Company has not
formerly and presently is not infringing or violating the Intellectual Property of any other
person. Except as set forth on Schedule 5(n), there is no pending, or to the Company’s
knowledge, threatened action, suit, proceeding or claim by another that the Company infringes or
otherwise violates any Intellectual Property, and the Company is unaware of any facts that could
form a reasonable basis for any such action, suit, proceeding or claim. To the Company’s
knowledge, the manufacture, use, sale, offer for sale or import of any Product by the Company would
not infringe any claim of any patent of another, except that of a licensor who has granted the
Company a license under any such patent. No proceeding charging the Company with infringement of
any adversely held Intellectual Property has been filed. The Company is in compliance with the
terms of all agreements pursuant to which Intellectual Property has been licensed to the Company.
All such agreements are in full force and effect and there is no default by the Company thereto,
and to the Company’s knowledge, no notice of default thereunder has been threatened against the
Company. To the Company’s knowledge, sublicenses granted to
others are now in compliance with the terms of all agreements pursuant to which Intellectual
Property has been sublicensed by the Company. To the Company’s knowledge, all such agreements are
in full force and effect and there is no default by any sublicensee thereto. To the Company’s
knowledge, there is no patent or patent application containing claims that interfere with the
issued or pending claims of any patent owned by or licensed to the Company. The Company is not
aware of any fact from which it could reasonably be inferred that an individual



13









 







associated with the
filing and prosecution of any patent owned by or licensed to the Company failed to disclose to the
USPTO all information known to that individual to be material to patentability. The Products fall
within the scope of one or more claims of one or more patents owned by or licensed to the Company.
Upon the making, selling, offering for sale or importing into the United States of any product
covered by one or more claims of a United States patent owned or licensed by the Company, the
Company will comply with the marking and notice requirements of 35 U.S.C. § 287(a).



     (o) Compliance. The Company has all necessary licenses, authorizations, consents and
approvals and has made all necessary filings required under any federal, state, local or foreign
law, regulation or rule, and has obtained all necessary licenses, authorizations, consents and
approvals from other persons, in order to conduct its business, except where the absence of such
license, authorization, consent, approval or filing would not, individually or in the aggregate,
have a Material Adverse Effect. The Company is not in violation of, or in default under, and has
not received notice of any proceedings relating to revocation or modification of, any such license,
authorization, consent or approval or any federal, state, local or foreign law, regulation or rule
or any decree, order or judgment applicable to the Company, except where such violation, default,
revocation or modification would not, individually or in the aggregate, have a Material Adverse
Effect. None of the Company nor its Subsidiaries has been advised, nor do any of them have any
reason to believe, that it is not conducting business in compliance with all applicable laws, rules
and regulations of the jurisdictions in which it is conducting business, including, without
limitation, all applicable local, state and federal environmental laws and regulations, except
where failure to be so in compliance would not have a Material Adverse Effect.



     (p) Taxes. The Company and each Subsidiary has filed on a timely basis (giving effect to
extensions) all required federal, state and foreign income and franchise tax returns and has paid
or accrued all taxes shown as due thereon, and none of the Company or any subsidiary has knowledge
of a tax deficiency that has been or might be asserted or threatened against it that could have a
Material Adverse Effect. All tax liabilities accrued through the date hereof have been adequately
provided for on the books of the Company.



     (q) Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other than income
taxes) that are required to be paid in connection with the sale and transfer of the New Shares to
be sold to the Purchaser hereunder will have been, fully paid or provided for by the Company and
all laws imposing such taxes will have been fully complied with.



     (r) Investment Company. The Company is not an “investment company” or an “affiliated person”
of, or “promoter” or “principal underwriter” for an investment company, within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the Commission
promulgated thereunder.



     (s) Offering Materials. Each of the Company, its directors and officers has not distributed
and will not distribute prior to the Closing Date any offering material, including any “free
writing prospectus” (as defined in Rule 405 promulgated under the Securities Act), in connection
with the offering and sale of the New Shares.



14









 





     (t) Insurance. The Company maintains insurance underwritten by insurers of recognized
financial responsibility, of the types and in the amounts that the Company reasonably believes is
adequate for its business, including, but not limited to, insurance covering all real and personal
property owned or leased by the Company against theft, damage, destruction, acts of vandalism and
all other risks customarily insured against, with such deductibles as are customary for companies
in the same or similar business, all of which insurance is in full force and effect.



     (u) Price of Common Stock. Neither the Company nor any Subsidiary, nor, to the Company’s
knowledge, any of their respective directors, officers, affiliates or controlling persons, has
taken, and will not take, directly or indirectly, any action designed to cause or result in, or
that has constituted or that might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of the Common Stock to facilitate the sale or resale of the
New Shares.



     (v) Non-Public Information. The Company has not disclosed to the Purchaser information that
would constitute material non-public information as of the Closing Date other than the existence of
the transaction contemplated hereby.



     (w) Off-Balance Sheet Arrangements. There is no transaction, arrangement or other
relationship between the Company and an unconsolidated or other off-balance sheet entity that is
required to be disclosed by the Company in its Exchange Act filings and is not so disclosed or that
otherwise would be reasonably likely to have a Material Adverse Effect. There are no such
transactions, arrangements or other relationships with the Company that may create contingencies or
liabilities that are not otherwise disclosed by the Company in its Exchange Act filings.



     (x) Governmental Permits, Etc. The Company and each Subsidiary has all franchises, licenses,
certificates and other authorizations from such federal, state or local government or governmental
agency, department or body that are currently necessary for the operation of the business of the
Company as currently conducted, except where the failure to possess currently such franchises,
licenses, certificates and other authorizations is not reasonably expected to have a Material
Adverse Effect. Neither the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any such permit that, if the subject of an
unfavorable decision, ruling or finding, could reasonably be expected to have a Material Adverse
Effect.



     (y) Financial Statements. The consolidated financial statements of the Company and the
related notes and schedules thereto included in its Exchange Act filings fairly present the
financial position, results of operations, stockholders’ equity and cash flows of the Company and
its consolidated Subsidiaries at the dates and for the periods specified therein. Such financial
statements and the related notes and schedules thereto have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the periods involved
(except as otherwise noted therein) and all adjustments necessary for a fair presentation of
results for such periods have been made; provided, however, that the unaudited
financial statements are subject to normal year-end audit adjustments (which are not expected to be
material) and do not contain all footnotes required under generally accepted accounting principles.




15












 





     (z) Listing Compliance. The Company is in compliance with the requirements of the NASDAQ
Global Market for continued listing of the Common Stock thereon. The Company has taken no action
designed to, or likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act or the listing of the Common Stock on the NASDAQ Global Market, nor has the
Company received any notification that the Commission or the NASDAQ Global Market is contemplating
terminating such registration or listing. The transactions contemplated by this Agreement will not
contravene the rules and regulations of the NASDAQ Global Market. The Company will comply with all
requirements of the NASDAQ Global Market with respect to the issuance of the New Shares and shall
cause the New Shares to be listed on the NASDAQ Global Market and listed on any other exchange on
which the Company’s common stock is listed on or before the Closing Date.



     (aa) Internal Accounting Controls. The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are executed in
accordance with management’s general or specific authorization; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Company has disclosure controls
and procedures (as defined in Rules 13a-14 and 15d-14 under the Exchange Act) that are designed to
ensure that material information relating to the Company is made known to the Company’s principal
executive officer and the Company’s principal financial officer or persons performing similar
functions. The Company is otherwise in compliance in all material respects with all applicable
provisions of the Sarbanes-Oxley Act of 2002, as amended and the rules and regulations promulgated
thereunder.



     (bb) Foreign Corrupt Practices. Neither the Company, nor any Subsidiary, nor, to the
knowledge of the Company, any director, officer, agent, employee or other Person acting on behalf
of the Company or any Subsidiary has, in the course of its actions for, or on behalf of, the
Company (i) used any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment
to any foreign or domestic government official or candidate for any federal, state or foreign
office in violation of any law; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic government
official or employee.



     (cc) Employee Relations. Neither the Company nor any Subsidiary is a party to any collective
bargaining agreement or employs any member of a union. The Company and each Subsidiary believe
that their relations with their employees are good. The Company is not engaged in any unfair labor
practice except for matters which would not, individually or in the aggregate, have a Material
Adverse Effect, (i) there is (A) no unfair labor practice complaint pending or, to the Company’s
knowledge, threatened against the Company before the National Labor Relations Board, and no
grievance or arbitration proceeding arising out of or under collective bargaining agreements is
pending or threatened, (B) no strike, labor dispute, slowdown or stoppage pending or, to the
Company’s knowledge, threatened against the Company and



16









 







(C) no union representation dispute currently existing concerning the employees of the Company,
and (ii) to the Company’s knowledge, (A) no union organizing activities are currently taking place
concerning the employees of the Company and (B) there has been no violation of any federal, state,
local or foreign law relating to discrimination in the hiring, promotion or pay of employees or any
applicable wage or hour laws. No executive officer of the Company (as defined in Rule 501(f)
promulgated under the Securities Act) has notified the Company that such officer intends to leave
the Company or otherwise terminate such officer’s employment with the Company. No executive
officer of the Company, 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, non-competition agreement, or any other agreement or any restrictive
covenant, and the continued employment of each such executive officer does not subject the Company
or any Subsidiary to any liability with respect to any of the foregoing matters.



     (dd) Environmental Matters. The Company and its properties, assets and operations is and has
been in compliance with, and holds all permits, authorizations and approvals required under,
Environmental Laws (as defined below), except to the extent that failure to so comply or to hold
such permits, authorizations or approvals would not, individually or in the aggregate, have a
Material Adverse Effect; there are no past, present or, to the Company’s knowledge, reasonably
anticipated future events, conditions, circumstances, activities, practices, actions, omissions or
plans that could reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect or to interfere with or prevent material compliance by the Company with
Environmental Laws; except as would not, individually or in the aggregate, have a Material Adverse
Effect, the Company (i) to the Company’s knowledge is not the subject of any investigation, (ii)
has not received any notice or claim, (iii) is not a party to or affected by any pending or to the
Company’s knowledge threatened action, suit or proceeding, nor, to the best of the Company’s
knowledge, is there any basis for any such suit or proceeding, (iv) is not bound by any judgment,
decree or order, (v) has not entered into any agreement, in each case relating to any alleged
violation of any Environmental Law or any actual or alleged release or threatened release or
cleanup at any location of any Hazardous Materials (as defined below), (vi) has not arranged for
the disposal of any Hazardous Material at, or transported any Hazardous Material to, any site for
which the Company is or may be liable except by a licensed contractor in accordance with applicable
laws, (vii) is not bound by any lien, nor is any lien reasonably expected to be recorded on the
property or (viii) to the Company’s knowledge, it does not currently own or lease or has not
previously owned or leased any property that contains or contained or includes or included any
asbestos, polychlorinated biphenyls, or any underground storage tanks, piping, or sumps (or other
underground structures) which contain or contained Hazardous Materials or contains or contained any
environmental conditions (other than resulting from the fact that the property is located on a
cemetery), including, without limitation, any wetlands or endangered species, that will impede use
or redevelopment of such property (as used herein, “Environmental Law” means any federal,
state, local or foreign law, statute, ordinance, rule, regulation, order, decree, judgment,
injunction, permit, license, authorization or other binding requirement, or common law, relating to
health, safety or the protection, cleanup or restoration of the environment or natural resources,
including but not limited to those relating to the distribution, processing, generation, treatment,
storage, disposal, transportation, other handling or release or threatened release of Hazardous
Materials, and “Hazardous Materials” means any material (including, without limitation,
pollutants, contaminants, hazardous or toxic



17









 







substances, wastes, asbestos, silica, mixed dust, bacteria, mold or fungi) that is regulated
by or may give rise to liability under any Environmental Law); other than as set forth on
Schedule 5(dd), there have been no environmental studies, investigations, reports
or assessments concerning the Company or any currently or previously owned or leased properties
within its possession or control.



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



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



     (gg) ERISA. The Company and each Subsidiary is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder (“ERISA”);
neither the Company nor any Subsidiary has ever maintained any “defined benefit plan” (as defined
in Section 3(35) of ERISA).



     (hh) Integration; Other Issuances of Shares. Neither the Company nor its subsidiaries or any
affiliates, nor any Person acting on its or their behalf, has issued any shares of Common Stock or
shares of any series of preferred stock or other securities or instruments convertible into,
exchangeable for or otherwise entitling the holder thereof to acquire shares of Common Stock which
would be integrated with the sale of the Shares to the Purchaser for purposes of the Securities Act
or of any applicable stockholder approval provisions, including, without limitation, under the
rules and regulations of any exchange or automated quotation system on which any of the securities
of the Company are listed or designated, nor will the Company or its subsidiaries or affiliates
take any action or steps that would require registration of any of the Shares under the Securities
Act or cause the offering of the Shares to be integrated with other offerings. Assuming the
accuracy of the representations and warranties of the Purchaser, the offer and sale of the Shares
by the Company to the Purchaser pursuant to this Agreement will be exempt from the registration
requirements of the Securities Act.



     (ii) No General Solicitation. Neither the Company nor, to the Company’s knowledge, any person
acting on behalf of the Company has offered or sold any of the Shares by any form of general
solicitation or general advertising.



18









 





     (jj) Acknowledgment Regarding Purchaser’s Purchase of Shares. The Company acknowledges and
agrees that the Purchaser is acting solely in the capacity of an arm’s length purchaser with
respect to the Transaction Documents and the transactions contemplated hereby and thereby. The
Company further acknowledges that the Purchaser is not 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 the Purchaser or any of its respective
representatives or agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchaser’s purchase of the Shares. The Company
further represents to the 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.



     (kk) No Additional Agreements. The Company does not have any agreement or understanding with
the Purchaser with respect to the transactions contemplated by the Transaction Documents other than
as specified in the Transaction Documents.



     (ll) No Brokers’ Fees. The Company has not incurred any liability for any finder’s or
broker’s fee or agent’s commission in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.



     (mm) Clinical Trials. The preclinical tests, clinical trials and other studies, tests and
research conducted by or on behalf of or sponsored by the Company that are described in, or the
results of which are referred to in, the SEC Reports were and, if still pending, are to the
Company’s knowledge being conducted in all material respects in accordance with protocols filed
with the appropriate regulatory authorities for each such test or trial and in accordance with all
statutes, laws, rules and regulations, as the case may be, and with standard medical and scientific
research procedures except where such failure to comply would not have a Material Adverse Effect;
the Company has not received any notices or other correspondence from the FDA or any committee
thereof or from any other U.S. or foreign government or drug or medical device regulatory agency
requiring the termination or suspension of any product or clinical trials that are described or
referred to in the SEC Reports; the Company has not notified the FDA of any “unanticipated adverse
device effects” as defined in 21 CFR 812.3(s) with respect to any product, clinical or pre-clinical
studies, tests or research that are described in the SEC Reports or the results of which are
referred to in the SEC Reports, and the Company has operated and currently is in compliance in all
material respects with all applicable rules and regulations of the FDA and comparable foreign drug
or medical device regulatory agencies outside of the United States except where such failure to
comply would not have a Material Adverse Effect.



     Section 6. Covenants of the Company.



     (a) Until the Closing Date or the earlier termination of the Standby Purchaser’s obligations
under Section 2 of this Agreement, the Company covenants and agrees as follows:



          (i) As contemplated by Section 203 of the DGCL, to use commercially reasonable efforts to have
the Board recommend to the stockholders of the Company to approve the sale of the New Shares to the
Standby Purchaser;




19









 








          (ii) To as soon as reasonably practicable (A) seek the Company Stockholder Approval and (B)
file with the Commission the Rights Offering Registration Statement and the Proxy Statement and pay
the applicable fees in accordance with the Securities Act;




          (iii) To use commercially reasonable efforts to cause the Rights Offering Registration
Statement, and any amendments thereto to become effective as promptly as possible, and to cause the
Proxy Statement to be cleared by the Commission as promptly and practicable;




          (iv) To use commercially reasonable efforts to effectuate the Rights Offering;




          (v) As soon as reasonably practicable after the Company is advised or obtains knowledge
thereof, to advise the Standby Purchaser with a confirmation in writing, of (A) the time when the
Rights Offering Registration Statement, or any amendments thereto has been filed or declared
effective or the Prospectus or any amendment or supplement thereto has been filed, (B) the issuance
by the Commission of any stop order, or of the initiation or threatening of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus or any amendment or supplement
thereto, (C) the issuance by any state securities commission of any notice of any proceedings for
the suspension of the qualification of the New Shares for offering or sale in any jurisdiction or
of the initiation, or the threatening, of any proceeding for that purpose, (D) the receipt of any
comments from the Commission, and (E) any request by the Commission for any amendment to the Rights
Offering Registration Statement, any amendment or supplement to the Prospectus or for additional
information. The Company will use its commercially reasonable efforts to prevent the issuance of
any such order or the imposition of any such suspension and, if any such order is issued or
suspension is imposed, to obtain the withdrawal thereof as promptly as possible;




          (vi) To notify, or to cause the subscription agent for the Rights Offering (the
“Subscription Agent”) to notify the Standby Purchaser, on each Friday during the exercise
period of the Rights, or more frequently if reasonably requested by the Standby Purchaser, of the
aggregate number of Rights known by the Company or the Subscription Agent to have been exercised
pursuant to the Rights Offering as of the close of business on the preceding Business Day or the
most recent practicable time before such request, as the case may be;




          (vii) Not to issue any shares of capital stock of the Company, or options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, securities convertible into or
exchangeable for capital stock of the Company, or other agreements or rights to purchase or
otherwise acquire capital stock of the Company, except for (A) shares of Common Stock issuable upon
exercise of the Company’s presently outstanding stock options, (B) new stock options and other
awards granted to employees of the Company after the date hereof under the Company’s incentive
plans; (C) to InterWest Partners pursuant to that certain Purchase Agreement by and between the
Company and InterWest Partners dated as of April 3, 2009 (the “InterWest Purchase
Agreement”) and (D) pursuant to the Rights Offering;




          (viii) Not to authorize any stock split, stock dividend, stock combination or similar
transaction affecting the number of issued and outstanding shares of Common Stock;




20









 








          (ix) Not to declare or pay any dividends on its Common Stock or repurchase any shares of
Common Stock, other than ordinary quarterly dividends, regularly declared and paid in accordance
with past practice;




          (x) Not to incur any indebtedness or guarantees thereof, other than borrowings in the ordinary
course of business and consistent with past practice; and




          (xi) On or before the Closing Date, to deliver to the Standby Purchaser a copy of the
Prospectus and any “issuer free writing prospectus” as defined in Rule 433 of the Securities Act
relating to the New Shares that (A) is required to be filed with the Commission by the Company, or
(B) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the
terms of the New Shares or the offering of the New Shares that does not reflect the final terms,
and to give the Standby Purchaser the opportunity to review and comment on any disclosure in the
Prospectus and any “issuer free writing prospectus” relating to the Standby Purchaser.




     (b) Post-Closing Covenants. The Company agrees and covenants as follows:



     (i) To, within 30 days after the Closing Date, prepare and file the Shelf Registration
Statement, which registration statement shall contain (except if otherwise required pursuant to
written comments received from the Commission upon a review of such Registration Statement) a plan
of distribution substantially similar to the “Plan of Distribution” section attached hereto as
Exhibit C (which may be modified to respond to comments, if any, provided by the
Commission);



     (ii) use its best efforts, subject to receipt of necessary information from the Standby
Purchaser, to cause the Commission to declare the Shelf Registration Statement effective not later
than September 30, 2009;



     (iii) To promptly prepare and file with the Commission such amendments and supplements to the
Shelf Registration Statement and the prospectus used in connection therewith as may be necessary to
keep the Shelf Registration Statement effective until the earlier of (A) three years from the
effective date thereof, and (B) such time as the New Shares become eligible for resale by the
Standby Purchaser without any volume limitations or other restrictions pursuant to Rule 144 under
the Securities Act or any other rule of similar effect; provided that, for the avoidance of doubt,
in no event shall the Company have any obligation to keep the Shelf Registration Statement
effective after such time as all of the Shares have been sold pursuant to the Registration
Statement or Rule 144;



     (iv) To deliver to the Standby Purchaser a copy of the prospectus used in connection with the
Shelf Registration Statement and to give the Standby Purchaser the opportunity to review and
comment on any disclosure in the prospectus relating to the Standby Purchaser;



     (v) To take all action reasonably necessary to maintain the listing of the New Shares on the
NASDAQ Global Market;



21









 





     (vi) To furnish to the Standby Purchaser with respect to the Shares registered under the Shelf
Registration Statement (and to each underwriter, if any, of such Registrable Securities) such
number of copies of prospectuses and such other documents as the Standby Purchaser may reasonably
request, in order to facilitate the public sale or other disposition of all or any of the Share by
the Standby Purchaser;



     (vii) To all file documents required of the Company for normal Blue Sky clearance in states
specified in writing by the Standby Purchaser; provided, however, that the Company
shall not be required to qualify to do business or consent to service of process in any
jurisdiction in which it is not now so qualified or has not so consented;



     (viii) To bear all expenses in connection with the procedures in paragraphs (i) through (vii)
of this Section 6.1(b) and the registration of the Shares pursuant to the Shelf Registration
Statement, other than fees and expenses, if any, of counsel or other advisers to the Standby
Purchaser or underwriting discounts, brokerage fees and commissions incurred by the Standby
Purchaser, if any, in connection with the offering of the Shares pursuant to the Shelf Registration
Statement; and



     (ix) in order to enable the Standby Purchaser to sell the Shares under Rule 144 under the
Securities Act, for a period of three years from Closing, use best efforts to comply with the
requirements of Rule 144, including without limitation, its best efforts to comply with the
requirements of Rule 144(c)(1) with respect to public information about the Company and to timely
file all reports required to be filed by the Company under the Exchange Act.


The Company understands that the Standby Purchaser disclaims being an underwriter, but the Standby
Purchaser being deemed an underwriter shall not relieve the Company of any obligations it has
hereunder. A draft of the proposed form of the questionnaire related to the Shelf Registration
Statement to be completed by the Standby Purchaser is attached hereto as Appendix I.




     Section 7. Restrictions on Transfer.



     (a) Restrictions on Transfer. The Standby Purchaser shall not, and shall ensure that its
affiliates do not, purchase, sell, transfer, assign, convey, gift, mortgage, pledge, encumber,
hypothecate or otherwise dispose of, directly or indirectly (“Transfer”), any New Shares
purchased in the Standby Purchase Commitment; provided, however, that the foregoing
shall not restrict in any manner a Transfer (i) by the Standby Purchaser (x) to one or more of its
Affiliates or (y) by a partnership to a partner of such partnership or a retired partner of such
partnership or to the estate of any such partner or retired partner, or by a limited liability
company to a member of such limited liability company or a retired member or to the estate of any
such member or retired member, provided that the transferee in each case agrees in writing to be
subject to the terms of this Section 7(a), or (ii) by a Standby Purchaser to any other person in a
private transaction if the Company first shall have been furnished with an opinion of legal
counsel, reasonably satisfactory to the Company, to the effect that such Transfer is exempt from
the registration requirements of the Securities Act or (iii) made in accordance with Rule 144 under
the Securities Act; provided, that the Company shall have the right to receive an opinion
of legal



22









 







counsel for the Standby Purchaser, reasonably satisfactory to the Company, to the effect
that
such Transfer is exempt from the registration requirements of the Securities Act, prior to the
removal of the legend subject to Rule 144 or (iv) made pursuant to a registration statement
declared effective by the Commission. Any purported Transfers of New Shares purchased in the
Standby Purchase Commitment in violation of this Section 7 shall be null and void and no right,
title or interest in or to such New Shares purchased in the Standby Purchase Commitment shall be
transferred to the purported transferee, buyer, donee, assignee or encumbrance holder. The Company
will not give, and will not permit the Company’s transfer agent to give, any effect to such
purported Transfer in its stock records.



     (b) Compliance with Laws; Stop Order. The Standby Purchaser shall, and shall ensure that
their respective affiliates shall, observe and comply with the Securities Act and the Exchange Act
and the regulations promulgated thereunder and all other requirements of applicable laws in
connection with any permitted Transfer of the New Shares purchased in the Standby Purchase
Commitment, including all requirements of applicable laws relating to the use of insider
information or the trading of securities while in the possession of nonpublic information.



     (c) Restrictive Legends. The Standby Purchaser understands and agrees that the New Shares
purchased in the Standby Purchase Commitment will bear a legend substantially similar to the legend
set forth below in addition to any other legend that may be required by applicable law or by any
agreement between the Company and the Standby Purchaser:




“THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION. THE SHARES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS
AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION
EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION
UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”



     (d) Waiver of Registration Rights. The Standby Purchaser hereby waives, under the Second
Amended and Restated Information and Registration Rights Agreement, dated as of October 21, 2004,
as amended (the “Registration Rights Agreement”), by and among the Company, the Standby
Purchaser and the other parties named therein, any demand, piggyback or other registration rights
to which the Standby Purchaser may be entitled and waives any and all notice requirements under the
Registration Rights Agreement in connection with the Rights Offering and, except as expressly set
forth herein, in connection with the Rights Offering Registration Statement, the Shelf Registration
Statement and any other resale registration statement filed by the Company in connection with the
Rights Offering.



23









 





     Section 8. Conditions Precedent.



     (a) Conditions of the Standby Purchaser’s Obligations. The obligations of the Standby
Purchaser under this Agreement are subject to the performance by the Company on and as of the
Closing Date of its covenants and agreements hereunder, and the following additional conditions:



          (i) the Rights Offering relating to the Common Stock shall have been completed by the Company
in accordance with the provisions of Section 2 and allocations of shares shall have been made
thereunder;




          (ii) the Company shall have closed on the sale of Common Stock to InterWest Partners for gross
proceeds equal to approximately $8,000,000 pursuant to the InterWest Purchase Agreement for the
same price per share and the same terms and conditions as this Agreement;




          (iii) the Company shall have delivered to the Standby Purchaser the Standby Purchase
Commitment allocated hereunder to the Standby Purchaser following the close of the Offering Period;
and




          (iv) all conditions precedent to performance by the Company of its obligations under this
Agreement shall have been satisfied or waived.




          (b) Conditions of the Company’s Obligations. The obligations of the Company under this
Agreement are subject to the performance by the Standby Purchaser on and as of the Closing Date of
its covenants and agreements hereunder, and the following additional conditions:




          (i) the representations and warranties of the Standby Purchaser contained in this Agreement
shall be true and correct;




          (ii) all conditions precedent contained in this Agreement to be performed by the Company shall
have been performed and complied with in all material respects by the Company; and




          (iii) the Standby Purchaser shall have delivered to the Company the Standby Purchase
Commitment Price for the Standby Purchase Commitment allocated hereunder to the Standby Purchaser
following the close of the Offering Period, if any.




     (c) Conditions of the Standby Purchaser and the Company’s Obligations. The obligations of the
Standby Purchaser and the Company under this Agreement are subject to the following conditions:



24









 





          (i) the Rights Offering Registration Statement shall have become effective and no stop order
suspending the effectiveness thereof shall be in effect and no proceedings therefor shall be
pending or threatened by the Commission; and




          (ii) having obtained Company Stockholder Approval.




     (d) In case any of the conditions specified in this Section 8 shall not be fulfilled, this
Agreement may be terminated by either party by giving notice to the other party. Any such
termination shall be without liability of the Standby Purchaser to the Company and without
liability of the Company to the Standby Purchaser.



     Section 9. Termination.



     (a) Termination. This Agreement may be terminated at any time prior to the Closing Date:



          (i) by mutual written agreement of the Company and the Standby Purchaser; or




          (ii) by either the Company or the Standby Purchaser at any time after June 30, 2009 if the
Closing has not occurred by such time other than because of a breach of any covenant or agreement
on the part of such party set forth in this Agreement or because any representation or warranty of
such party set forth in this Agreement shall not be true and correct.




     (b) Effect of Termination. If this Agreement is terminated by either the Company or the
Standby Purchaser pursuant to the provisions of this Section 9, this Agreement shall forthwith
become void and there shall be no further obligations on the part of the Company or the Standby
Purchaser, except for the provisions of Sections 9, 10 and 11, which shall survive any termination
of this Agreement; provided, that nothing in this Section 9(b) shall relieve any party from
liability for any willful breach of this Agreement.



     Section 10. Indemnification.



     For the purpose of this Section 10 the term “Standby Purchaser/Affiliate” shall mean
any affiliate of the Standby Purchaser, including a transferee who is an affiliate of the Standby
Purchaser, and any person who controls the Standby Purchaser or any affiliate of the Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.



          (a) Indemnification by the Company. The Company agrees to indemnify and hold harmless the
Standby Purchaser and each Standby Purchaser/Affiliate, against any losses, claims, damages,
liabilities or expenses, joint or several, to which the Standby Purchaser or Standby
Purchaser/Affiliates may become subject, under the Securities Act, the Exchange Act, or any other
federal or state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages, liabilities or expenses (or actions in respect
thereof as contemplated below) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Shelf Registration Statement,



25









 






including the
Shelf Prospectus, financial statements and schedules, and all other documents filed as a part
thereof, as amended at the time of effectiveness of the Shelf Registration Statement, including any
information deemed to be a part thereof as of the time of effectiveness pursuant to paragraph (b)
of Rule 430A, or pursuant to Rules 430B, 430C or 434, of the Rules and Regulations, or the Shelf
Prospectus, in the form first filed with the Commission pursuant to Rule 424(b) of the Regulations,
or filed as part of the Shelf Registration Statement at the time of
effectiveness if no Rule 424(b) filing is required or any amendment or supplement thereto,
(ii) the omission or alleged omission to state in any of the foregoing of a material fact required
to be stated therein or necessary to make the statements in the Shelf Registration Statement or any
amendment or supplement thereto not misleading or in the Shelf Prospectus or any amendment or
supplement thereto not misleading in light of the circumstances under which they were made, (iii)
any breach of a representation or warranty or breach of or failure to perform any covenant or
agreement on the part of the Company contained in this Agreement, or any other agreement or
instrument furnished by the Company to the Standby Purchaser pursuant to this Agreement or (iv)
third party claims or demands relating to the fact that the Standby Purchaser is a party to this
Agreement; and the Company will promptly reimburse the Standby Purchaser and each Standby
Purchaser/Affiliate for any legal and other expenses as such expenses are reasonably incurred by
the Standby Purchaser or such Standby Purchaser/Affiliate in connection with investigating,
defending or preparing to defend, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the Company will not be
liable for amounts paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall not be unreasonably
withheld, and the Company will not be liable in any such case to the extent that any such loss,
claim, damage, liability or expense arises out of or is based upon (i) an untrue statement or
alleged untrue statement or omission or alleged omission made in the Shelf Registration Statement,
the Shelf Prospectus or any amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Standby Purchaser expressly for
use therein, or (ii) the failure of the Standby Purchaser to comply with the covenants and
agreements contained in this Agreement with respect to the sale of the Shares, or (iii) the
inaccuracy of any representation or warranty made by the Standby Purchaser herein or (iv) any
statement or omission in any Shelf Prospectus that is corrected in any subsequent Shelf Prospectus
that was delivered to the Standby Purchaser prior to the pertinent sale or sales by the Standby
Purchaser or (v) the gross negligence or willful misconduct of the Standby Purchaser or any of its
Affiliates.




          (b) Indemnification by the Purchaser. The Standby Purchaser will indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the Shelf Registration
Statement and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims, damages, liabilities
or expenses to which the Company, each of its directors, each of its officers who signed the Shelf
Registration Statement or controlling person may become subject, under the Securities Act, the
Exchange Act, or any other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, but only if such settlement is effected with
the written consent of the Purchaser) insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or are based upon (i)
any breach of a representation or warranty or breach of or failure to perform any covenant or
agreement on the part of the Standby Purchaser contained in



26









 






this Agreement, or any other agreement
or instrument furnished by the Company to the Standby Purchaser pursuant to this Agreement, (ii)
any failure to comply with the covenants and agreements contained in this Agreement with respect to
the sale of the Shares or (iii) any untrue or alleged untrue statement of any material fact
contained in the Shelf Registration Statement, the Shelf Prospectus, or any amendment or supplement
thereto or any omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the
statements in the Shelf Registration Statement or any amendment or supplement thereto not
misleading or in the Shelf Prospectus or any amendment or supplement thereto not misleading in the
light of the circumstances under which they were made, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or alleged omission was
made in the Shelf Registration Statement, the Shelf Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished to the Company by or
on behalf of the Standby Purchaser expressly for use therein; and the Standby Purchaser will
reimburse the Company, each of its directors, each of its officers who signed the Shelf
Registration Statement or controlling person for any legal and other expense reasonably incurred by
the Company, each of its directors, each of its officers who signed the Shelf Registration
Statement or controlling person in connection with investigating, defending, settling, compromising
or paying any such loss, claim, damage, liability, expense or action; provided,
however, that (i) the Standby Purchaser’s aggregate liability under this Section 10(b)
shall not exceed the amount of proceeds received by the Standby Purchaser on the sale of the Shares
pursuant to the Shelf Registration Statement and (ii) the Standby Purchaser will not be required to
indemnify the Company to the extent that the liabilities arise from the gross negligence or willful
misconduct of the Company or any of its affiliates.




          (c) Indemnification Procedures. Promptly after receipt by an indemnified party under this
Section 10 of notice of the threat or commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this Section 10 promptly
notify the indemnifying party in writing thereof, but the omission to notify the indemnifying party
will not relieve it from any liability that it may have to any indemnified party for contribution
or otherwise under the indemnity agreement contained in this Section 10 to the extent it is not
prejudiced as a result of such failure. In case any such action is brought against any indemnified
party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that it may wish, jointly
with all other indemnifying parties similarly notified, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party, and the indemnifying party and
the indemnified party shall have reasonably concluded, based on an opinion of counsel reasonably
satisfactory to the indemnifying party, that there may be a conflict of interest between the
positions of the indemnifying party and the indemnified party in conducting the defense of any such
action or that there may be legal defenses available to it and/or other indemnified parties that
are different from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume such legal defenses and
to otherwise participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified party of its
election to assume the defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this Section 10 for any legal
or other expenses subsequently incurred by



27









 






such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso to the preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the expenses of more than
one separate counsel, reasonably satisfactory to such indemnifying party, representing all of the
indemnified parties who are parties to such action) or (ii) the indemnifying party shall not have
employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified party within a
reasonable time after notice of commencement of action, in each of which cases the reasonable fees
and expenses of counsel shall be at the expense of the indemnifying party. The indemnifying party
shall not be liable for any settlement of any action without its written consent. In no event
shall any indemnifying party be liable in respect of any amounts paid in settlement of any action
unless the indemnifying party shall have approved in writing the terms of such settlement;
provided, that such consent shall not be unreasonably withheld. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or could have been a
party and indemnification could have been sought hereunder by such indemnified party from all
liability on claims that are the subject matter of such proceeding.




          (d) Contribution. If the indemnification provided for in this Section 10 is required by its
terms but is for any reason held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party under paragraphs (a), (b) or (c) of this Section 10 in respect to any losses,
claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying
party shall contribute to the amount paid or payable by the indemnified party as a result of any
losses, claims, damages, liabilities or expenses referred to herein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the Standby Purchaser from
the sale of the Shares hereunder or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but the relative fault of the Company and the Standby
Purchaser in connection with the statements or omissions or inaccuracies in the representations and
warranties in this Agreement and/or the Shelf Registration Statement that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Standby Purchaser on the
other shall be deemed to be in the same proportion as the amount paid by the Standby Purchaser to
the Company pursuant to this Agreement for the Shares purchased by the Standby Purchaser that were
sold pursuant to the Shelf Registration Statement bears to the difference (the
“Difference”) between the amount the Standby Purchaser paid for the Shares that were sold
pursuant to the Shelf Registration Statement and the amount received by the Standby Purchaser from
such sale. The relative fault of the Company on the one hand and the Standby Purchaser on the
other shall be determined by reference to, among other things, whether the untrue or alleged
statement of a material fact or the omission or alleged omission to state a material fact or the
inaccurate or the alleged inaccurate representation and/or warranty relates to information supplied
by the Company or by the Standby Purchaser and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in paragraph (c) of this
Section 10, any legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions


28









 







set forth in paragraph (c) of
this Section 10 with respect to the notice of the threat or commencement of any threat or action
shall apply if a claim for contribution is to be made under this paragraph (d); provided,
however, that no additional notice shall be required with respect to any threat or action
for which notice has been given under paragraph (c) for purposes of indemnification. The Company
and the Standby Purchaser agree that it would not be just and equitable if contribution pursuant to
this Section 10 were determined solely by pro rata allocation
(even if the Standby Purchaser were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations referred to in
this paragraph. Notwithstanding the provisions of this Section 10, the Standby Purchaser shall not
be required to contribute any amount in excess of the amount by which the Difference exceeds the
amount of any damages that the Standby Purchaser has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. 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.




     Section 11. Miscellaneous.



     (a) Attorney’s Fees. Upon the Closing or earlier termination of the Standby Purchaser’s
obligations under Section 2 of this Agreement, the Company will reimburse the Standby Purchaser for
all of its attorney’s fees up to $20,000 incurred by the Standby Purchaser in connection with this
Agreement and the purchase of the Standby Purchase Commitment, upon the Company’s receipt of all
reasonably requested documentation to support the incurrence by the Standby Purchaser of such
expense.



     (b) Amendments. The provisions of this Agreement may not be amended or waived, except that
the Standby Purchase Commitment and the Standby Purchase Commitment Price may be modified in
writing by the Company and the Standby Purchaser at any time prior to the Closing Date.



     (c) Notices. All notices, requests, consents and other communications hereunder shall be in
writing, shall be mailed first-class registered or certified airmail, e-mail, confirmed facsimile
or nationally recognized overnight express courier postage prepaid, and shall be deemed given when
so mailed and shall be delivered as addressed as follows:



     If to the Company to:


BioMimetic Therapeutics, Inc.

389 Nichol Mill Lane

Franklin, Tennessee 37067

Attention: General Counsel

Facsimile: 615-844-1281




29









 





     With a copy to:


Morrison & Foerster LLP

1290 Avenue of the Americas

New York, New York 10104-0050

Attention: Anna T. Pinedo, Esq.

Facsimile: 212-469-7900




     If to the Standby Purchaser to:


Novo A/S

Krogshøjvej 41

DK-2880 Bagsvaerd

Denmark

Attention: Thorkil Kastberg Christensen

Facsimile: +45-4442-4430




     With a copy to:


Faber Daeufer & Rosenberg PC

110 East 59th Street, 33rd Floor

New York, New York 10022

Attention: Joseph L. Faber, Esq.

Facsimile: 781-795-4747




     (d) Successors. This Agreement shall be to the benefit of and be binding upon the Standby
Purchaser and the Company and, with respect to the provisions of Indemnification hereof, the
several parties (in addition to the Standby Purchaser and the Company) indemnified under the
provisions of said Section 10, and their respective personal representatives, successors and
assigns. Nothing in this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained.



     (e) Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, and all of which together shall be deemed to be one and the same
instrument.



     (f) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Any legal suit, action or proceeding arising out of or based upon
this Agreement or the transactions contemplated hereby may be instituted in the federal courts of
the United States of America located in the City and County of New York or the courts of the State
of New York in each case located in the City and County of New York (collectively, the
“Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction
(except for proceedings instituted in regard to the enforcement of a judgment of any such court, as
to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding.
Service of any process, summons, notice or document by mail to such party’s address set forth
above shall be effective service of process for any suit, action or other



30









 







proceeding brought in any such court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any such court that
any such suit, action or other proceeding brought in any such court has been brought in an
inconvenient forum.



     (g) Entire Agreement. This Agreement sets forth the entire agreement between the Company and
the Standby Purchaser with respect to the subject matter hereof. Any prior agreements or
understandings among the Company and the Standby Purchaser regarding the subject matter hereof,
whether written or oral, are superseded by this Agreement.



 [Intentionally Left Blank]




31









 





     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as
of the day and year first written above.



	 	 	 	 	 	 	 
	 	 	BIOMIMETIC THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Samuel E. Lynch
 

Samuel E. Lynch
	 	 
	 

	 	Title:
	 	President & CEO	 	 
	 
	 	 	 	 	 	 
	 	 	NOVO A/S	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Henrik Gürtler
 

Henrik Gürtler
	 	 
	 

	 	Title:
	 	CEO	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Thorkil Kastberg Christensen
 

Thorkil Kastberg Christensen
	 	 
	 

	 	Title:
	 	CFO	 	 







 











 





Schedule 5(b)




Authorized Capital Stock



(as of April 2, 2009)



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Issued and	 	Available for
	 	 	Authorized	 	Outstanding	 	Issuance
	Preferred Stock, par value 0.001 per share
	 	 	15,000,000	 	 	 	—	 	 	 	15,000,000	 
	Common Stock, par value 0.001 per share
	 	 	37,500,000	 	 	 	18,744,515	 	 	 	18,755,485	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	52,500,000	 	 	 	18,744,515	 	 	 	33,755,485	 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Issuable upon	 	 
	 	 	 	 	 	 	exercise of	 	 
	 	 	 	 	 	 	outstanding	 	Available for
	 	 	Authorized	 	options/Issued	 	Issuance
	2001 Long-Term Stock Incentive Plan
	 	 	4,019,723	 	 	 	2,643,155	(1)	 	 	635,898	 
	2005 Employee Stock Purchase Plan
	 	 	200,000	 	 	 	48,948	 	 	 	151,052	 
	401(k) Profit Sharing Plan & Trust
	 	 	100,000	 	 	 	26,041	 	 	 	73,959	 








 




			
	(1)	 	Does not include 740,670 shares of common stock issued prior to the
date hereof upon the exercise of outstanding options.






 









 







Schedule 5(m)




Material Adverse Changes




None.





 









 







Schedule 5(n)




Intellectual Property



On March 25, 2009, the Company’s counsel received an e-mail from GlaxoSmithKline asserting that the
Company’s AUGMENT trademark is confusingly similar to GlaxoSmithKline’s trademark for AUGMENTIN, an
antibiotic. GlaxoSmithKline claims that given the nature of the products at issue, it is concerned
that confusion between these marks may create health and safety concerns. GlaxoSmithKline asked
that BioMimetic voluntarily withdraw all trademark applications for AUGMENT worldwide and proceed
with a different mark. GlaxoSmithKline indicated that if the Company does not withdraw its
trademark applications, GlaxoSmithKline will proceed with oppositions against applications for
AUGMENT worldwide.



The Company’s trademark application in the US for AUGMENT is currently under final rejection by the
US Trademark Office based on the previous registration of the trademark AUGMENTRX by a third party.
The Trademark Office asserts that the marks are highly similar and the goods are substantially
related and, therefore, it has refused the Company’s registration of AUGMENT on the Principal
Register under Section 2(d) of the United States Trademark Act of 1946.





 









 







Schedule 5(dd)




Environmental Matters



The Company has the following environmental reports:





	1.	 	Roberts Alley & Associates, Inc. — Phase I Environmental Report 2004.






 









 







Exhibit A




FORM OF LEGAL OPINION




     1. The Company is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware, with authority to own, lease and operate its properties and
conduct its business as described in the SEC Documents, to execute and deliver the Purchase
Agreements and to perform its obligations thereunder, including, without limitation, to issue, sell
and deliver the Shares as contemplated by the Purchase Agreement. The Company is duly qualified to
transact business as a foreign corporation and to own, lease and operate its properties in the
State of Tennessee and is in good standing under the laws of the State of Tennessee.



     2. The Purchase Agreement has been duly authorized, executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company.



     3. The Shares have been duly authorized and, upon delivery to the Purchaser against payment
therefor in accordance with the terms of the Purchase Agreement, will be validly issued, fully paid
and nonassessable; and the issuance of the Shares is not subject to preemptive or similar rights.



     4. The Company has an authorized and outstanding capitalization as set forth in the SEC
Documents as of the date set forth therein.



     5. The execution, delivery and performance of each Purchase Agreement by the Company, the
issuance and sale of the Shares by the Company and the consummation by the Company of the
transactions contemplated by the Purchase Agreements do not and will not conflict with, result in
any breach or violation of or constitute a default under (nor constitute any event which with
notice, lapse of time or both would result in any breach or violation of or constitute a default
under or give the holder of any indebtedness (or a person acting on such holder’s behalf) the right
to require the repurchase, redemption or repayment of all or a part of such indebtedness under) (or
result in the creation or imposition of a lien, charge or encumbrance on any property or assets of
the Company pursuant to) (i) the charter or bylaws of the Company, or (ii) any indenture, mortgage,
deed of trust, bank loan or credit agreement or other evidence of indebtedness, or any license,
lease, contract or other agreement or instrument to which the Company is a party or by which any of
its properties may be bound or affected which is filed as an exhibit to the SEC Documents, or (iii)
any federal or New York law or the Delaware General Corporation Law, applicable to the Company and
applicable for transactions of the type contemplated by the Underwriting Agreement or (iv) any
decree, judgment or order known to us to be applicable to the Company or its properties.



     6. The capital stock of the Company, including the Shares, conform in all material respects to
the description thereof contained under the Company’s Form 8-A filed with the Commission on April
26, 2006.



     7. The Rights Offering Registration Statement has become, and is, effective under the
Securities Act, and we are not aware that any stop order suspending the effectiveness thereof



 









 




has been issued or any proceedings for that purpose have been instituted or are pending or
threatened under the Securities Act, and any required filing of the Rights Offering Prospectus and
any supplement thereto pursuant to Rule 424 under the Securities Act has been made in the manner
and within the time period required by such Rule 424 and in the manner and within the time period
required by Rule 430A under the Securities Act; and the class of securities consisting of the
Common Stock has become registered under Section 12(g) of the Exchange Act.




     8. The Rights Offering Registration Statement, as of the effective date thereof and the date
hereof, and the Rights Offering Prospectus as of its date, complied and comply, as to form in all
material respects with the requirements of the Securities Act (as in effect on such date) (except
as to the financial statements, supporting schedules, financial statement footnotes and other
financial and statistical information included therein, as to which we express no opinion).



     9. To our knowledge, (i) the Company is not a party to any legal or governmental action or
proceeding that challenges the validity or enforceability, or seeks to enjoin the performance, of
the Purchase Agreement; and (ii) there are no actions, suits, claims, investigations or proceedings
pending, threatened or contemplated to which the Company or any of its directors or officers is or
would be a party or to which any of their respective properties is or would be subject at law or in
equity, before or by any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency which are required to be described in the SEC Documents but are
not so described as required.



     10. The Company is not, and, immediately after giving effect to the offering and sale of the
Shares, will not be an “investment company” or an entity “controlled” by an “investment company,”
as such terms are defined in the Investment Company Act.



     11. To our knowledge, there are no rights to have securities of the Company registered under
the Registration Statement contemplated by the Purchase Agreement which have not been waived by the
holders of such rights or which have not expired by reason of lapse of time or otherwise.




A-2









 







Exhibit B




	 	 	 
	 	 	State or Other Jurisdiction of
	Name of Subsidiary	 	Incorporation/Organization
	 
	 	 
	BioMimetic Therapeutics Limited

	 	England and Wales
	BioMimetic Therapeutics Pty Ltd.

	 	Australia







 









 







Exhibit C




PLAN OF DISTRIBUTION



The selling stockholders may resell or redistribute the securities listed elsewhere in this
prospectus from time to time on any stock exchange or automated interdealer quotation system on
which the securities are listed, in the over-the-counter market, in privately negotiated
transactions, or in any other legal manner, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to prevailing market prices or at negotiated
prices. Persons who are pledgees, donees, transferees, or other successors in interest of any of
the named selling stockholders (including but not limited to persons who receive securities from a
named selling stockholder as a gift, partnership distribution or other non-sale-related transfer
after the date of this prospectus) may also use this prospectus and are included when we refer to
“selling stockholders” in this prospectus. The selling stockholders may sell the shares being
offered from time to time in one or more transactions:





	 	•	 	on the Nasdaq Global Market or otherwise;
	 
	 	•	 	in the over-the-counter market;
	 
	 	•	 	in negotiated transactions;
	 
	 	•	 	through broker-dealers, who may act as agents or principals;
	 
	 	•	 	through one or more underwriters on a firm commitment or best efforts basis;
	 
	 	•	 	through the writing of options on shares, whether the options are listed on an
options exchange or otherwise;
	 
	 	•	 	a combination of such methods of sale; or
	 
	 	•	 	Any other method permitted pursuant to applicable law.





     The selling stockholders may also transfer the securities by gift. We do not know of any
current arrangements by the selling stockholders for the sale or distribution of any of the
securities.



     The selling stockholders also may sell the shares pursuant to Rule 144 adopted under the
Securities Act, as permitted by that rule. The selling stockholders may effect transactions by
selling shares directly to purchasers or to or through broker-dealers. The broker-dealers may act
as agents or principals. The broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the selling stockholders or the purchasers of the shares. The
compensation of any particular broker-dealer may be in excess of customary commissions. Because the
selling stockholders and broker-dealers that participate with the selling stockholders in the
distribution of shares may be deemed to be “underwriters” within the meaning of Section 2(11) of
the Securities Act, the selling stockholders will be subject to the prospectus delivery



 









 




requirements of the Securities Act. Any commissions received by them and any profit on the
resale of shares may be deemed to be underwriting compensation.




     The selling stockholders have advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding the sale of their
securities. There is no underwriter or coordinating broker acting in connection with the proposed
sale of shares by the selling stockholders.



     From time to time, one or more of the selling stockholders may pledge, hypothecate or grant a
security interest in some or all of the securities owned by them. The pledgees, secured parties or
persons to whom the securities have been hypothecated will, upon foreclosure in the event of
default, be deemed to be selling stockholders. The number of a selling stockholder’s securities
offered under this prospectus will decrease as and when it takes such actions. The plan of
distribution for that selling stockholder’s securities will otherwise remain unchanged.



     Under applicable rules and regulations under the Exchange Act, any person engaged in the
distribution of the shares may not simultaneously engage in market making activities with respect
to our common stock for a period of two business days prior to the commencement of such
distribution. In addition, each selling stockholder will be subject to applicable provisions of the
Exchange Act and the associated rules and regulations under the Exchange Act, including Regulation
M, which provisions may limit the timing of purchases and sales of shares of our common stock by
the selling stockholders. We will make copies of this prospectus available to the selling
stockholders and have informed them of the need to deliver copies of this prospectus to purchasers
at or prior to the time of any sale of the shares.



     We will bear all costs, expenses and fees in connection with the registration of the shares.
The selling stockholders will bear all commissions and discounts, if any, attributable to the sales
of the shares. The selling stockholders may agree to indemnify any broker-dealer or agent that
participates in transactions involving sales of the shares against certain liabilities, including
liabilities arising under the Securities Act.



     We have agreed to indemnify the selling stockholders and their respective officers, directors,
employees, agents and representatives, and each other person who may be subject to liability
because of his, her or its connection with the selling stockholder, against specified liabilities,
including liabilities under the federal securities laws. The selling stockholders have agreed to
indemnify us, our officers, directors, employees, agents and representatives and each other person
subject to liability because of his, her or its connection with us, against specified liabilities
arising from information provided by the selling stockholder for use in this prospectus, including
liabilities under the federal securities laws.



     The securities offered hereby were originally issued to the selling stockholders pursuant to
an exemption from the registration requirements of the Securities Act. We agreed to register the
securities under the Securities Act, and to keep the registration statement of which this
prospectus is a part effective, as to any selling stockholder, until such time as all of the shares
of common stock held by such selling stockholder registered under the registration statement of
which this prospectus is a part can be sold in any one day, without registration, in compliance
with Rule 144 of the Securities Act. Other than underwriting discounts and commissions, if any,



C-2









 






we have agreed to bear all reasonable expenses incurred in connection with the registration
and sale of the common stock offered by the selling stockholders.



     Upon notification to us by a selling stockholder that any material arrangement has been
entered into with broker-dealers for the sale or purchase of shares, we will file a supplement to
this prospectus, if required, disclosing:




	 	•	 	the name of the participating broker-dealers, underwriters or agents;
	 
	 	•	 	the number of shares involved;
	 
	 	•	 	the price at which such shares were sold;
	 
	 	•	 	the public offering price;
	 
	 	•	 	the commissions paid or discounts or concessions allowed to such broker-dealers,
where applicable;
	 
	 	•	 	the fees or other items constituting compensation to underwriter, agents or
broker-dealers with respect to a particular transaction, where applicable; and
	 
	 	•	 	other facts material to the transaction.




In addition, upon being notified by a selling stockholder that a donee or pledgee intends to sell
more than 500 shares, we will file a supplement to this prospectus.





C-3









 







APPENDIX I




BIOMIMETIC THERAPEUTICS, INC.




STOCK CERTIFICATE QUESTIONNAIRE




     Pursuant to Section 3 of the Agreement, please provide us with the following information:



	 	 	 	 	 
	1.

	 	The exact name that your Shares are
to be registered in (this is the
name that will appear on your stock
certificate(s)). You may use a
nominee name if appropriate:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	2.

	 	The relationship between the
Purchaser of the Shares and the
Registered Holder listed in
response to item 1 above:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	3.

	 	The mailing address of the
Registered Holder listed in
response to item 1 above:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	4.

	 	The Social Security Number or Tax
Identification Number of the
Registered Holder listed in
response to item 1 above:	 	 
	 

	 	 	 	 






 









 





Appendix     I

(Page 2 of 3)




BIOMIMETIC THERAPEUTICS, INC.

REGISTRATION STATEMENT QUESTIONNAIRE




     In connection with the preparation of the Registration Statement, please provide us with the
following information:



     SECTION 1. Pursuant to the “Selling Stockholder” section of the Registration Statement, please
state your or your organization’s name exactly as it should appear in the Registration Statement:


 



 




     SECTION 2. Please provide the number of shares that you or your organization will own
immediately after Closing, including those Shares purchased by you or your organization pursuant to
this Purchase Agreement and those shares purchased by you or your organization through other
transactions and provide the number of shares that you have or your organization has the right to
acquire within 60 days of Closing:


 



 




     SECTION 3. Have you or your organization had any position, office or other material
relationship within the past three years with the Company or its affiliates?



                    o Yes          o No



     If yes, please indicate the nature of any such relationships below:


 



 



 



 




 









 





     SECTION 4. Are you (i) FINRA Member (see definition), (ii) a Controlling (see definition)
shareholder of FINRA Member, (iii) a Person Associated with a Member of FINRA (see definition), or
(iv) an Underwriter or a Related Person (see definition) with respect to the proposed offering; or
(b) do you own any shares or other securities of any FINRA Member not purchased in the open market;
or (c) have you made any outstanding subordinated loans to any FINRA Member?



     Answer: o Yes     o No If “yes,” please describe below


 



 



 



 




     FINRA Member. The term “FINRA member” means either any broker or dealer admitted to
membership in the Financial Industry Regulatory Authority, Inc. (“FINRA”). (FINRA Manual,
By-laws of FINRA Regulation, Inc. Article I, Definitions)



     Control. The term “control” (including the terms “controlling,” “controlled by” and
“under common control with”) means the possession, direct or indirect, of the power, either
individually or with others, to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by contract, or otherwise. (Rule 405
under the Securities Act of 1933, as amended)



     Person Associated with a member of FINRA. The term “person associated with a member
of FINRA” means every sole proprietor, partner, officer, director, branch manager or executive
representative of any FINRA Member, or any natural person occupying a similar status or performing
similar functions, or any natural person engaged in the investment banking or securities business
who is directly or indirectly controlling or controlled by a FINRA Member, whether or not such
person is registered or exempt from registration with FINRA pursuant to its bylaws. (FINRA Manual,
By-laws of FINRA Regulation, Inc. Article I, Definitions)



     Underwriter or a Related Person. The term “underwriter or a related person” means,
with respect to a proposed offering, underwriters, underwriters’ counsel, financial consultants and
advisors, finders, members of the selling or distribution group, and any and all other persons
associated with or related to any of such persons. (FINRA Interpretation)