Common Stock Purchase Agreement dated as of July 3, 2003



 EXHIBIT 10.1 
  
 COMMON STOCK PURCHASE AGREEMENT 
  
 DATED AS OF JULY 3, 2003 
  
 BY AND BETWEEN 
  
 CV THERAPEUTICS, INC. 
  
 AND 
  
 ACQUA WELLINGTON
NORTH AMERICAN EQUITIES FUND, LTD. 








	ARTICLE I.    DEFINITIONS	  	1
			
	 Section 1.1
	  	Definitions	  	1
		
	ARTICLE II.    PURCHASE AND SALE OF COMMON STOCK	  	5
			
	 Section 2.1
	  	Purchase and Sale of Stock	  	5
	 Section 2.2
	  	The Shares	  	5
	 Section 2.3
	  	Registration Statement	  	5
	 Section 2.4
	  	Purchase Price and Effective Date	  	5
		
	ARTICLE III.    REPRESENTATIONS AND WARRANTIES	  	5
			
	 Section 3.1
	  	Representations and Warranties of the Company	  	5
	 Section 3.2
	  	Representatives and Warranties of the Purchaser	  	12
		
	ARTICLE IV.    COVENANTS	  	13
			
	 Section 4.1
	  	Securities Compliance	  	13
	 Section 4.2
	  	Registration and Listing	  	14
	 Section 4.3
	  	Compliance with Laws	  	14
	 Section 4.4
	  	Keeping of Records and Books of Account	  	14
	 Section 4.5
	  	Limitations on Holdings and Issuances	  	14
	 Section 4.6
	  	Post-Effective Amendment to Registration Statement	  	14
	 Section 4.7
	  	Other Agreements and Other Financings	  	15
	 Section 4.8
	  	Stop Orders	  	15
	 Section 4.9
	  	Amendments to the Registration Statement	  	16
	 Section 4.10
	  	Prospectus Delivery	  	16
	 Section 4.11
	  	Selling Restrictions; Volume Limitations	  	16
	 Section 4.12
	  	Non-Public Information	  	17
	 Section 4.13
	  	Carlin Equities Corp.	  	17
		
	 ARTICLE V.    OPINION OF COUNSEL AND CERTIFICATE; CONDITIONS TO THE SALE AND PURCHASE OF THE
SHARES
	  	17
			
	 Section 5.1
	  	Opinion of Counsel and Certificate	  	17
	 Section 5.2
	  	Conditions Precedent to the Obligation of the Company to Sell the Shares	  	17
	 Section 5.3
	  	Conditions Precedent to the Obligation of the Purchaser To Accept a Draw Down or Call Option Grant and Purchase the Shares	  	18
		
	ARTICLE VI.    DRAW DOWN TERMS; CALL OPTION	  	20
			
	 Section 6.1
	  	Draw Down Terms	  	20
	 Section 6.2
	  	Purchaser’s Call Option	  	22
	 Section 6.3
	  	Aggregate Limit	  	23









	ARTICLE VII.    TERMINATION	  	24
			
	 Section 7.1
	  	Term, Termination by Mutual Consent	  	24
	 Section 7.2
	  	Other Termination	  	24
	 Section 7.3
	  	Effect of Termination	  	24
		
	ARTICLE VIII.    INDEMNIFICATION	  	25
			
	 Section 8.1
	  	General Indemnity	  	25
	 Section 8.2
	  	Indemnification Procedures	  	26
		
	ARTICLE IX.    MISCELLANEOUS	  	27
			
	 Section 9.1
	  	Fees and Expenses	  	27
	 Section 9.2
	  	Specific Enforcement, Consent to Jurisdiction	  	27
	 Section 9.3
	  	Entire Agreement; Amendment	  	28
	 Section 9.4
	  	Notices	  	28
	 Section 9.5
	  	Waivers	  	29
	 Section 9.6
	  	Headings	  	29
	 Section 9.7
	  	Successors and Assigns	  	29
	 Section 9.8
	  	Governing Law	  	29
	 Section 9.9
	  	Survival	  	29
	 Section 9.10
	  	Counterparts	  	29
	 Section 9.11
	  	Publicity	  	29
	 Section 9.12
	  	Severability	  	30
	 Section 9.13
	  	Further Assurances	  	30








 COMMON STOCK PURCHASE AGREEMENT 
  
 This COMMON STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of July 3, 2003, is made by and
between CV Therapeutics, Inc., a Delaware corporation (the “Company”) and Acqua Wellington North American Equities Fund, Ltd., an international business company incorporated under the laws of the Commonwealth of The Bahamas (the
“Purchaser”). 
  
 RECITALS 
  
 WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Purchaser and the Purchaser shall purchase up to a maximum of $100,000,000 of shares of the Company’s common stock, $.001 par value per share (“Common
Stock”), or the Nasdaq Limit (as such term is defined below), whichever occurs first. 
  
 NOW, THEREFORE, the parties hereto agree as follows: 
  
 AGREEMENT 
  
 ARTICLE I.

 DEFINITIONS 
  
 Section 1.1    Definitions. 
  
 (a)    “Acceptable Financing” shall have the meaning assigned to such term in Section 4.7(b) hereof. 
  
 (b)    “Aggregate Limit” shall have the
meaning assigned to such term in Section 2.1 hereof. 
  
 (c)    “Articles” shall have the meaning assigned to such term in Section 3.1(c) hereof. 
  
 (d)    “Bylaws” shall have the meaning assigned to such term in Section 3.1(c) hereof. 
  
 (e)    “Call Option” means the
transactions contemplated under Section 6.2 of this Agreement. 
  
 (f)    “Call Option Amount” shall mean the actual amount of proceeds received by the Company by a Call Option under this Agreement. 
  
 (g)    “Call Option Amount Requested” shall mean the amount of a Call Option requested
by the Company as provided in Section 6.2 hereof. 
  
 (h)    “Call Option Notice” shall mean a notice sent to the Company on the Trading Day the Purchaser elects to exercise a Call Option, as provided in Section 6.2(e) hereof, 

  

 1 








 
and substantially in the form attached hereto as Exhibit E. 
  

(i)    “Commission” shall mean the Securities and Exchange Commission or any successor entity. 
  
 (j)    “Commission Documents” shall mean
all reports, schedules, forms, statements and other documents filed by the Company with the Commission pursuant to the reporting requirements of the Exchange Act, including material filed pursuant to Section 13(a) or 15(d) of the Exchange Act, which
have been previously filed by the Company and which shall be filed by the Company in the future during the Investment Period, including, without limitation the Form 10-K filed by the Company for the year ended December 31, 2002 (the “2002
Form 10-K”), and shall include all information contained in such filings and all filings incorporated by reference therein. 
  
 (k)    “Commission Filings” means the Registration Statement, as the same may be amended from time to time, and all
other filings made by the Company with the Commission prior to or after the Effective Date pursuant to the Exchange Act. 
  
 (l)    “Common Stock” shall have the meaning assigned to such term in the Recitals. 
  
 (m)    “Draw Down” means the
transactions contemplated under Section 6.1 of this Agreement. 
  
 (n)    “Draw Down Amount” means the actual amount of proceeds received by the Company by a Draw Down under this Agreement. 
  
 (o)    “Draw Down Amount Requested” shall mean the amount of a Draw Down requested by
the Company in its Draw Down Notice as provided in Section 6.1(j) hereof. 
  
 (p)    “Draw Down Discount Price” shall have the meaning assigned to such term in Section 6.1(b) hereof. 
  
 (q)    “Draw Down Exercise Date” shall have the meaning assigned to such term in
Section 6.1(a) hereof. 
  
 (r)    “Draw Down Notice” shall mean a notice sent by the Company to exercise a Draw Down as provided in Section 6.1(j) hereof. 
  
 (s)    “Draw Down Pricing Period” shall mean a period of eighteen (18) consecutive
Trading Days following a Draw Down Notice, or such other period mutually agreed upon by the Purchaser and the Company. 
  
 (t)    “Effective Date” shall mean July 3, 2003. 
  
 (u)    “Environmental Laws” shall have the meaning assigned to such term in Section
3.1(r) hereof. 
  
 (v)    “Event
Period” shall have the meaning assigned to such term in Section 

  

 2 








 
7.2 hereof. 
  
 (w)    “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder. 
  
 (x)    “GAAP” shall mean generally accepted accounting principles in the United States of America as applied by the Company. 
  
 (y)    “Indebtedness” shall have the meaning assigned to such term in Section 3.1(k)
hereof. 
  
 (z)    “Investment
Period” shall have the meaning assigned to such term in Section 7.1 hereof. 
  
 (aa)    “Market Capitalization” shall be calculated on the Trading Day preceding each Draw Down Pricing Period and shall be the product of (x) the number of shares of Common Stock
outstanding and (y) the closing bid price of the Common Stock, both as determined by Bloomberg Financial LP using the DES and HP functions. 
  
 (bb)    “Material Adverse Effect” shall mean any effect on the business, operations, properties or financial
condition of the Company that is material and adverse to the Company and its subsidiaries and affiliates, taken as a whole, and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of
the Company to enter into and perform any of its obligations under this Agreement in any material respect. 
  
 (cc)    “Material Agreements” shall have the meaning assigned to such term in Section 3.1(s) hereof. 
  
 (dd)    “Material Change in Ownership”
shall mean that the owners of 5% or more of the outstanding Common Stock and the Company’s officers and directors shall beneficially own in the aggregate less than 2% of the outstanding Common Stock. 
  
 (ee)    “Nasdaq” means the Nasdaq
National Market or any successor thereto. 
  
 (ff)    “Nasdaq Limit” means that number of shares which is one less than twenty percent (20.0%) of the issued and outstanding shares of the Company’s Common Stock as of the Effective Date.

  
 (gg)    “Other Financing”
shall have the meaning assigned to such term in Section 4.7(b) hereof. 
  
 (hh)    “Plan” shall have the meaning assigned to such term in Section 3.1(y) hereof. 
  
 (ii)    “Post-Effective Amendment” shall have the meaning assigned to such term in Section 2.3 hereof. 
  
 (jj)    “Prospectus” as used in this
Agreement means the prospectus in the form 

  

 3 








 
to be included in the Post-Effective Amendment, as supplemented by any supplement to the Prospectus filed with the Commission pursuant to Rule 424(b)
promulgated under Securities Act, or, if the prospectus included in the Post-Effective Amendment omits information in reliance on Rule 430A under the Securities Act, and such information is included in a prospectus filed with the Commission pursuant
to Rule 424(b) under the Securities Act, the term “prospectus” as used in this Agreement means the prospectus in the form to be included in the Post-Effective Amendment as supplemented by the addition of the Rule 430A information
contained in the Prospectus filed with the Commission pursuant to Rule 424(b). 
  
 (kk)    “Registration Statement” shall mean the registration statement on Form S-3, Commission File Number 333-59318, under the Securities Act, filed by the Company with the
Commission, as such Registration Statement may be amended from time to time, including by the Post-Effective Amendment (as defined in Section 2.3 hereof). 
  
 (ll)    “Section 6.1(m) Notice” shall have the meaning assigned to such term in Section 6.1(m) hereof. 
  
 (mm)    “Securities Act” shall mean the
Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder. 
  
 (nn)    “Settlement Date” shall have the meaning assigned to such term in Section 6.1(d) hereof. 
  
 (oo)    “Shares” shall mean,
collectively, the shares of Common Stock of the Company issuable to the Purchaser upon exercise of any Draw Down and those shares of Common Stock issuable to the Purchaser upon exercise of any Call Option. 
  
 (pp)    “Significant Subsidiary” shall
have the meaning assigned to such term in Section 3.1(g) hereof. 
  
 (qq)    “Subsidiary” shall mean any corporation or other entity of which at least a majority of the securities or other ownership interest having ordinary voting power (absolutely or contingently) for
the election of directors or other persons performing similar functions are at the time owned directly or indirectly by the Company and/or any of its other subsidiaries. 
  
 (rr)    “Threshold Price” is the lowest price at which the Company may set in the Draw
Down Notice to sell Shares during each Draw Down Pricing Period (not taking into account the Draw Down Discount Price during such Draw Down Pricing Period); provided, however, that at no time shall the Threshold Price be set below ten dollars
($10.00) per share unless the Company and the Purchaser mutually agree. 
  
 (ss)    “Trading Day” shall mean a trading day on the Nasdaq. 
  
 (tt)    “Trading Day Number” shall have the meaning assigned to such term in Section 6.1(m) hereof. 
  
 (uu)    “Truncated Draw Down Allocation
Amount” shall mean the portion of the Draw Down Amount Requested that is allocated to the purchase of Shares in accordance with Section 6.1 hereof for each Trading Day in a reduced Draw Down Pricing Period (as provided in 

  

 4 








 
Section 6.1(m) hereof) that (i) the VWAP equals or exceeds the Threshold Price, and (ii) the VWAP is below the Threshold Price and the Purchaser elects to
purchase the Common Stock at the Threshold Price in accordance with clauses (i) and (m) of Section 6.1 hereof. 
  
 (vv)    “VWAP” shall mean the daily volume weighted average price (based on a Trading Day from 9:30 a.m. to 4:00 p.m.
(New York time)) of the Company on the Nasdaq as reported by Bloomberg Financial LP using the AQR function. 
  
 ARTICLE II. 
 PURCHASE AND SALE OF COMMON STOCK 
  
 Section 2.1     Purchase and Sale of
Stock.  Subject to the terms and conditions of this Agreement, the Company shall issue and sell to the Purchaser and the Purchaser shall purchase from the Company during the Investment Period up to a maximum of $100,000,000 of
shares of Common Stock or the Nasdaq Limit, whichever occurs first (the “Aggregate Limit”) through (i) up to twenty-four (24) Draw Downs (unless the Purchaser and the Company mutually agree to a different number of Draw Downs)
during the Investment Period as provided in Section 6.1 hereof and (ii) one (1) or more Call Options which the Company may in its discretion grant to the Purchaser and which may be exercised by the Purchaser during the applicable Draw Down Pricing
Period, as provided in Section 6.2 hereof. The aggregate dollar amount of all Draw Down Amounts and Call Option Amounts pursuant to the terms and conditions of this Agreement shall not exceed the Aggregate Limit. 
  
 Section 2.2    The
Shares.  The Company has or will have authorized and has or will have reserved, and covenants to continue to so reserve once reserved, subject to Section 4.3(b) hereof, free of preemptive rights and other similar contractual rights
of stockholders, a sufficient number of its authorized but unissued shares of its Common Stock to cover the Shares to be issued in connection with all Draw Downs and Call Options requested under this Agreement, in any case prior to the issuance to
the Purchaser of such Shares under this Agreement. 
  
 Section 2.3    Registration Statement.  The Company has prepared and filed with the Commission in accordance with the provisions of the Securities Act, the Registration Statement, which was
declared effective by the Commission on July 24, 2001. Pursuant to Section 4.6, the Company will file with the Commission a post-effective amendment to the Registration Statement describing this Agreement (the “Post-Effective
Amendment”). 
  
 Section
2.4    Purchase Price and Effective Date.  In consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the Company agrees to
issue and sell to the Purchaser, and the Purchaser agrees to purchase, that number of the Shares to be issued in connection with each Draw Down and exercise of each Call Option in accordance with the terms and conditions of this Agreement.
 
  
 ARTICLE III. 
 REPRESENTATIONS AND WARRANTIES 
  
 Section 3.1    Representations and Warranties of the Company.  The Company hereby makes the following
representations and warranties to the Purchaser as of the Effective Date: 
  

 5 








 (a)    Organization, Good Standing and Power.  The Company is
a corporation duly incorporated, validly existing and in good standing under the laws of Delaware and has the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted. As
of the Effective Date, the Company does not have any subsidiaries (as defined in Section 3.1(g)) except as set forth in the Commission Documents, the Commission Filings or on Schedule 3.1(a) attached hereto. The Company and each such Subsidiary is
duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary except for any jurisdiction in which the
failure to be so qualified will not have a Material Adverse Effect. 
  
 (b)    Authorization, Enforcement.  The Company has the requisite corporate power and authority to enter into and perform this Agreement and to issue and sell the Shares in accordance with the
terms hereof. Except for approvals of the Company’s Board of Directors or a committee thereof as may be required in connection with any issuance and sale of Shares to the Purchaser hereunder, the execution, delivery and performance of this
Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and, except as contemplated by Section 2.2, no further consent or authorization of
the Company or its Board of Directors or stockholders is required. This Agreement has been duly executed and delivered by the Company. This Agreement constitutes, or shall constitute when executed and delivered, a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating
to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application. 
  
 (c)    Capitalization.  The authorized capital stock of the Company and the shares thereof issued and
outstanding as of the Effective Date are set forth in the Commission Documents, the Commission Filings or on Schedule 3.1(c) attached hereto. All of the outstanding shares of Common Stock have been duly and validly authorized, and are fully paid and
nonassessable. Except as set forth in this Agreement or as set forth in the Commission Documents, the Commission Filings or on Schedule 3.1(c) attached hereto, as of the Effective Date, no shares of Common Stock are entitled to preemptive rights or
registration rights and there are no outstanding options, warrants, scrip, rights to subscribe to, call or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company.
Furthermore, except as set forth in this Agreement, the Commission Documents, the Commission Filings or on Schedule 3.1(c) attached hereto, as of the Effective Date, there are no contracts, commitments, understandings, or arrangements by which the
Company is or may become bound to issue additional shares of the capital stock of the Company or options, securities or rights convertible into shares of capital stock of the Company. Except for customary transfer restrictions contained in
agreements entered into by the Company in order to sell restricted securities or as set forth in the Commission Documents, the Commission Filings or on Schedule 3.1(c) attached hereto, as of the Effective Date, the Company is not a party to, and it
has no knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock of the Company. Except as set forth in the Commission Documents, the Commission Filings or on Schedule 3.1(c) attached hereto, the offer and
sale of all capital stock, 

  

 6 








 
convertible securities, rights, warrants, or options of the Company issued prior to the Effective Date complied with all applicable federal and state
securities laws, and no stockholder has a right of rescission or damages with respect thereto which would have a Material Adverse Effect. The Company has furnished or made available to the Purchaser true and correct copies of the Company’s
Certificate of Incorporation as in effect on the Effective Date (the “Articles”), and the Company’s Bylaws as in effect on the Effective Date (the “Bylaws”). 
  
 (d)    Issuance of Shares.  The
Shares to be issued under this Agreement have been or will be (prior to issuance to the Purchaser hereunder) duly authorized by all necessary corporate action and, when paid for or issued in accordance with the terms hereof, the Shares shall be
validly issued and outstanding, fully paid and nonassessable, and the Purchaser shall be entitled to all rights accorded to a holder of Common Stock. 
  
 (e)    No Conflicts.  The execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated herein do not (i) violate any provision of the Company’s Articles or Bylaws, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the
Company is a party, (iii) create or impose a lien, charge or encumbrance on any property of the Company under any agreement or any commitment to which the Company is a party or by which the Company is bound or by which any of its respective
properties or assets are bound, or (iv) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or any
of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries are bound or affected, except, in all cases, for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect. The Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement, or issue and sell the Shares to the Purchaser in accordance with the terms hereof (other than any filings which may be required
to be made by the Company with the Commission or Nasdaq subsequent to the Effective Date, including but not limited to the Post-Effective Amendment under Section 2.3, and any registration statement, prospectus or prospectus supplement which has been
or may be filed pursuant hereto); provided, however, that, for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the representations, warranties and agreements of the Purchaser herein.

  
 (f)    Commission Documents,
Financial Statements.  The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act and, except as disclosed in the Commission Documents, the Commission Filings or on Schedule 3.1(f) attached hereto, as of
the Effective Date the Company has timely filed all Commission Documents. The Company has delivered or made available to the Purchaser true and complete copies of the Commission Documents filed with the Commission since December 31, 2002 and prior
to the Effective Date. The Company has not provided to the Purchaser any information which, according to applicable law, rule or regulation, should have been disclosed publicly by the Company but which has not been so disclosed, other than with
respect to the transactions contemplated by this Agreement. 
  

 7 








 
As of its date, the 2002 Form 10-K complied in all material respects with the requirements of the Exchange Act and other federal, state and local laws, rules
and regulations applicable to it, and, as of its date, such Form 10-K did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the Commission Documents comply as to form in all material respects with applicable accounting requirements and the published
rules and regulations of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements), and fairly present in all material
respects the financial position of the Company and its subsidiaries as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

  
 (g)    Subsidiaries.  The Commission Documents, the Commission Filings or Schedule 3.1(g) attached hereto set forth each Significant Subsidiary of the Company as of the Effective Date, showing the
jurisdiction of its incorporation or organization and showing the percentage of the Company’s ownership of the outstanding stock or other interests of such Significant Subsidiary. Except as set forth in the Commission Documents, the Commission
Filings or Schedule 3.1(g) attached hereto, none of such subsidiaries is a Significant Subsidiary. “Significant Subsidiary” shall mean a “significant subsidiary” as defined in Regulation S-X. 
  
 (h)    No Material Adverse Effect or Material
Change in Ownership.  Since the Effective Date, the Company has not experienced or suffered any Material Adverse Effect except continued losses from operations, or any Material Change in Ownership. 
  
 (i)    No Undisclosed
Liabilities.  Except as disclosed in the Commission Documents, the Commission Filings or on Schedule 3.1(i) attached hereto, neither the Company nor any of its subsidiaries has any liabilities, obligations, claims or losses
(whether liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise) that would be required to be disclosed on a balance sheet of the Company or any Subsidiary (including the notes thereto) in conformity with GAAP
and are not disclosed in the Commission Documents or Commission Filings, other than those incurred in the ordinary course of the Company’s or its subsidiaries respective businesses since March 31, 2003 and which, individually or in the
aggregate, do not or would not have a Material Adverse Effect. 
  
 (j)    No Undisclosed Events or Circumstances.  No event or circumstance has occurred or exists with respect to the Company or its subsidiaries or their respective businesses, properties,
prospects, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed, except for events or circumstances
which, individually or in the aggregate, do not or would not have a Material Adverse Effect. 
  
 (k)    Indebtedness.  The Commission Documents or Commission Filings as of March 31, 2003 set forth all outstanding secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has commitments through such 

  

 8 








 
date. For the purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed in excess of
$1,000,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others in excess of $1,000,000, whether or not the same are
or should be reflected in the Company’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present
value of any lease payments in excess of $1,000,000 due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness. 
  
 (l)    Title To Assets.  Each of
the Company and its subsidiaries has good and marketable title to all of their respective real and personal property reflected in the Commission Documents or the Commission Filings, free of any mortgages, pledges, charges, liens, security interests
or other encumbrances, except for those indicated in the Commission Documents, the Commission Filings or on Schedule 3.1(l) attached hereto or those that do not or would not have a Material Adverse Effect. All said real property leases of the
Company are valid and subsisting and in full force and effect in all material respects. 
  
 (m)    Actions Pending.  There is no action, suit, claim, investigation or proceeding pending or, to the knowledge of the Company, threatened against the Company or any
Subsidiary which questions the validity of this Agreement or the transactions contemplated hereby or any action taken or to be taken pursuant hereto or thereto. Except as set forth in the Commission Documents, the Commission Filings or on Schedule
3.1(m) attached hereto, there is no action, suit, claim, investigation or proceeding pending or, to the knowledge of the Company, threatened, against or involving the Company, any Subsidiary or any of their respective properties or assets and which,
if determined adversely to the Company or its Subsidiary, would have a Material Adverse Effect. 
  
 (n)    Compliance With Law.  The business of the Company and the subsidiaries has been and is presently being
conducted in all material respects in accordance with all applicable federal, state and local governmental laws, rules, regulations and ordinances, except as set forth in the Commission Documents, the Commission Filings or on Schedule 3.1(n)
attached hereto, and except as, individually or in the aggregate, do not or would not have a Material Adverse Effect. The Company and each of its subsidiaries have all franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals necessary for the conduct of its business as now being conducted by it, except where the failure to possess such franchises, permits, licenses, consents and other governmental or regulatory authorizations and approvals,
individually or in the aggregate, do not or would not have a Material Adverse Effect. 
  
 (o)    Certain Fees.  Except for the placement fee payable by the Company to Alder Creek Capital, L.L.C., Member NASD/SIPC, no brokers, finders or financial advisory fees or
commissions will be payable by the Company or any Subsidiary with respect to the transactions contemplated by this Agreement. 
  
 (p)    Disclosure.  To the best of the Company’s knowledge, neither this Agreement or the Schedules
hereto nor any other documents, certificates or instruments furnished to the Purchaser by or on behalf of the Company or any Subsidiary in connection with 

  

 9 








 
the transactions contemplated by this Agreement contain any untrue statement of a material fact or omits to state a material fact necessary in order to make
the statements made herein or therein, in the light of the circumstances under which they were made herein or therein, not misleading. 
  
 (q)    Operation Of Business.  The Company or one or more of its subsidiaries owns or controls all patents,
trademarks, service marks, trade names, copyrights, licenses and authorizations of the Company or its subsidiaries as set forth in the Commission Documents, the Commission Filings or on Schedule 3.1(q) attached hereto, and all rights with respect to
the foregoing, which are necessary for the conduct of its business as now conducted without, to the Company’s knowledge, any conflict with the rights of others, except to the extent set forth in the Commission Documents or the Commission
Filings and except to the extent that any such conflict would not have a Material Adverse Effect. 
  
 (r)    Environmental Compliance.  Except as disclosed in the Commission Documents, Commission Filings or on
Schedule 3.1(r) attached hereto, the Company and each of its subsidiaries have obtained all material approvals, authorization, certificates, consents, licenses, orders and permits or other similar authorizations of all governmental authorities, or
from any other person, that are required under any Environmental Laws, except for any approvals, authorization, certificates, consents, licenses, orders and permits or other similar authorizations the failure of which to obtain does not or would not
have a Material Adverse Effect. “Environmental Laws” shall mean all applicable laws relating to the protection of the environment including, without limitation, all requirements pertaining to reporting, licensing, permitting,
controlling, investigating or remediating emissions, discharges, releases or threatened releases of hazardous substances, chemical substances, pollutants, contaminants or toxic substances, materials or wastes, whether solid, liquid or gaseous in
nature, into the air, surface water, groundwater or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of hazardous substances, chemical substances, pollutants, contaminants or
toxic substances, material or wastes, whether solid, liquid or gaseous in nature. Except for such instances as would not individually or in the aggregate have a Material Adverse Effect, to the best of the Company’s knowledge, there are no past
or present events, conditions, circumstances, incidents, actions or omissions relating to or in any way affecting the Company or its subsidiaries that violate or could reasonably be expected to violate any Environmental Law after the Effective Date
or that could reasonably be expected to give rise to any environmental liability, or otherwise form the basis of any claim, action, demand, suit, proceeding, hearing, study or investigation (i) under any Environmental Law, or (ii) based on or
related to the manufacture, processing, distribution, use, treatment, storage (including without limitation underground storage tanks), disposal, transport or handling, or the emission, discharge, release or threatened release of any hazardous
substance. 
  
 (s)    Material
Agreements.  Except as set forth in the Commission Documents, the Commission Filings or on Schedule 3.1(s) attached hereto, neither the Company nor any Subsidiary of the Company is a party to any written or oral contract,
instrument, agreement, commitment, obligation, plan or arrangement, a copy of which would be required to be filed with the Commission as an exhibit to an annual report on Form 10-K (collectively, “Material Agreements”). The Company
and each of its subsidiaries has in all material respects performed all the obligations required to be performed by them to date under the Material Agreements, have received no notice of default by the Company thereunder and, to the best of the
Company’s knowledge, are not in default under any Material Agreement now in effect, the 

  

 10 








 
result of which would have a Material Adverse Effect. 
  
 (t)    Transactions With Affiliates.  Except as set forth in the Commission Documents, the Commission Filings
or on Schedule 3.1(t) attached hereto, there are no loans, leases, agreements, contracts, royalty agreements, management contracts or arrangements or other continuing transactions exceeding $60,000 between (a) the Company or any Subsidiary, on the
one hand, and (b) any person or entity who would be covered by Item 404(a) of Regulation S-K, on the other hand. 
  
 (u)    Securities Act.  The Company has complied in all material respects with all applicable federal and
state securities laws in connection with the offer, issuance and sale of the Shares hereunder. 
  
 (i)    Each Prospectus included as part of the Post-Effective Amendment or as part of any amendment or supplement thereto, or filed
pursuant to Rule 424 under the Securities Act, will comply when so filed in all material respects with the provisions of the Securities Act. The Commission has not issued any order preventing or suspending the use of any Prospectus. 
  
 (ii)    The Company meets the requirements for the use
of Form S-3 under the Securities Act. The Post-Effective Amendment, in the form in which it will become effective, and also in such form as it may be amended or supplemented from time to time, and the Prospectus and any supplement or amendment
thereto when filed with the Commission under Rule 424(b) under the Securities Act, will comply in all material respects with the provisions of the Securities Act and will not at any such time 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 in the light of the circumstances under which they are made, not misleading, except that this representation and warranty does not apply to statements in
or omissions from the Post-Effective Amendment or the Prospectus made in reliance upon and in conformity with information relating to the Purchaser furnished to the Company in writing by or on behalf of the Purchaser expressly for use therein.

  
 (iii)    The Company has not distributed
and, prior to the completion of the distribution of the Shares, will not distribute any offering material in connection with the offering and sale of the Shares other than the Registration Statement, the related prospectus or other materials, if
any, permitted by the Securities Act. 
  
 (v)    Employees.  As of the Effective Date, neither the Company nor any Subsidiary of the Company has any collective bargaining arrangements or agreements covering any of its employees, except as
set forth in the Commission Documents, the Commission Filings or on Schedule 3.1(v) attached hereto. As of the Effective Date, except as disclosed in the Registration Statement, the Commission Documents, the Commission Filings or Schedule 3.1(v), no
officer, consultant or key employee of the Company or any Subsidiary whose termination, either individually or in the aggregate, would have a Material Adverse Effect, has terminated or, to the knowledge of the Company, has any present intention of
terminating his or her employment or engagement with the Company or any Subsidiary. 
  
 (w)    Use of Proceeds.  The proceeds from the sale of the Shares will be used 

  

 11 








 
by the Company and its subsidiaries as set forth in the Post-Effective Amendment. 
  
 (x)    Public Utility Holding Company Act and Investment Company Act
Status.  The Company is not a “holding company” or a “public utility company” as such terms are defined in the Public Utility Holding Company Act of 1935, as amended. The Company is not, and as a
result of and immediately upon Effective Date will not be, an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as
amended. 
  
 (y)    ERISA.  No liability to the Pension Benefit Guaranty Corporation has been incurred with respect to any Plan by the Company or any of its subsidiaries which is or would have a Material
Adverse Effect. The execution and delivery of this Agreement and the issue and sale of the Shares will not involve any transaction which is subject to the prohibitions of Section 406 of ERISA or in connection with which a tax could be imposed
pursuant to Section 4975 of the Internal Revenue Code of 1986, as amended. As used in this Section 3.1(y), the term “Plan” shall mean an “employee pension benefit plan” (as defined in Section 3 of ERISA) which is or
has been established or maintained, or to which contributions are or have been made, by the Company or any Subsidiary or by any trade or business, whether or not incorporated, which, together with the Company or any Subsidiary, is under common
control, as described in Section 414(b) or (c) of the Code. 
  
 (z)    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 this Agreement and the transactions contemplated hereunder. 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 this Agreement
and the transactions contemplated hereunder and any advice given by the Purchaser or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereunder is merely incidental to the Purchaser’s
purchase of the Shares. 
  
 Section
3.2    Representatives and Warranties of the Purchaser.  The Purchaser hereby makes the following representations and warranties to the Company: 
  
 (a)    Organization and Standing of the
Purchaser.  The Purchaser is an international business company duly incorporated, validly existing and in good standing under the laws of the Commonwealth of The Bahamas. 
  
 (b)    Authorization and
Power.  The Purchaser has the requisite corporate power and authority to enter into and perform this Agreement and to purchase the Shares in accordance with the terms hereof. The execution, delivery and performance of this
Agreement by Purchaser and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and no further consent or authorization of the Purchaser, its Board of Directors or stockholders
is required. This Agreement has been duly executed and delivered by the Purchaser. This Agreement constitutes, or shall constitute when executed and delivered, a valid and binding obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership, or similar laws relating to, or affecting generally the enforcement
of, creditor’s 

  

 12 








 
rights and remedies or by other equitable principles of general application. 
  
 (c)    No Conflicts.  The execution, delivery and performance of this Agreement
and the consummation by the Purchaser of the transactions contemplated hereby and thereby or relating hereto do not and will not (i) result in a violation of such Purchaser’s charter documents or bylaws or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, mortgage, deed of trust, indenture, note,
bond, license, lease agreement, instrument or obligation to which the Purchaser is a party, (iii) create or impose or lien, charge or encumbrance on any property of the Purchaser under any agreement or any commitment to which the Purchaser is party
or by which the Purchaser is bound or by which any of its respective properties or assets are bound, or (iv) result in a violation of any law, rule, or regulation, or any order, judgment or decree of any court or governmental agency applicable to
the Purchaser or its properties, except for such conflicts, defaults and violations as would not, individually or in the aggregate, prohibit or otherwise interfere with the ability of the Purchaser to enter into and perform its obligations under
this Agreement in any material respect. The Purchaser is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of
its obligations under this Agreement or to purchase the Shares in accordance with the terms hereof; provided, however, that for purposes of the representation made in this sentence, the Purchaser is assuming and relying upon the accuracy of the
representations, warranties and agreements of the Company herein. 
  
 (d)    Information.  The Purchaser and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the
offer and sale of the Shares which have been requested by the Purchaser. The Purchaser and its advisors, if any, have been afforded the opportunity to ask questions of the Company. The Purchaser has sought such accounting, legal and tax advice as it
has considered necessary to make an informed investment decision with respect to its acquisition of the Shares. The Purchaser understands that it (and not the Company) shall be responsible for its own tax liabilities that may arise as a result of
this investment or the transactions contemplated by this Agreement. 
  
 (e)    Carlin Equities Corp.  Carlin Equities Corp. (“Carlin”) is not an affiliate of the Purchaser and will receive commissions from the Purchaser which will not exceed customary
brokerage commissions. 
  
 ARTICLE IV. 
 COVENANTS 
  
 The Company covenants with the Purchaser, and the Purchaser covenants with the Company, as follows, which covenants of one party are for the benefit of
the other party, during the Investment Period. 
  
 Section
4.1    Securities Compliance.  The Company shall notify the Commission and Nasdaq, if applicable, in accordance with their rules and regulations, of the transactions contemplated by this Agreement, and
shall take all other necessary action and proceedings as may be required and permitted by applicable law, rule and regulation, for the legal and valid 

  

 13 








 
issuance of the Shares to the Purchaser. 
  
 Section 4.2    Registration and Listing.  The Company will take all action necessary to cause its
Common Stock to continue to be registered under Sections 12(b) or 12(g) of the Exchange Act, will comply in all respects with its reporting and filing obligations under the Exchange Act, and will not take any action or file any document (whether or
not permitted by the Securities Act) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under the Exchange Act or Securities Act, except as permitted herein. The Company will take all action
necessary to continue the listing or trading of its Common Stock and the listing of the Shares purchased by Purchaser hereunder on Nasdaq or any relevant market or system, if applicable, and will comply in all respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the Nasdaq or any relevant market or system. 
  
 Section 4.3    Compliance with Laws. 
  
 (a)    The Company shall comply, and cause each Subsidiary to comply, with all applicable laws, rules,
regulations and orders (including without limitation Rule 415(a)(4) under the Securities Act) noncompliance with which would have a Material Adverse Effect. 
  
 (b)    The Purchaser shall comply with all applicable laws, rules, regulations and orders in connection with this Agreement and the
transactions contemplated hereby. Without limiting the foregoing, the Purchaser shall comply with the requirements of the Securities Act and the Exchange Act including without limitation Rule 415(a)(4) under the Securities Act and Rule 10b-5 and
Regulation M under the Exchange Act. 
  
 Section
4.4    Keeping of Records and Books of Account.  The Company shall keep and cause each Subsidiary to keep adequate records and books of account, in which complete entries will be made in accordance
with GAAP consistently applied, reflecting all financial transactions of the Company and its subsidiaries, and in which, for each fiscal year, all proper reserves for depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
purposes in connection with its business shall be made. 
  
 Section 4.5    Limitations on Holdings and Issuances.  At no time during the term of this Agreement shall the Purchaser directly or indirectly own more than fourteen and nine-tenths percent
(14.9%) of the then issued and outstanding shares of Common Stock. The Company will not be obligated to issue and the Purchaser will not be obligated to purchase any shares of the Common Stock which would result in the issuance under this Agreement
to Purchaser at any time of more than fourteen and nine-tenths percent (14.9%) of the then issued and outstanding shares of the Common Stock. 
  
 Section 4.6    Post-Effective Amendment to Registration Statement.  The Company will endeavor to cause
the Post-Effective Amendment to be filed and declared effective as soon as reasonably practicable and will advise the Purchaser promptly and, if requested by the Purchaser, will confirm such advice in writing, when it receives notice that the
Registration Statement, as so amended, has become effective. 
  

 14 








 Section 4.7    Other Agreements and Other Financings. 
  
 (a)    The Company shall not enter into any agreement in
which the terms of such agreement would restrict or impair the right to perform of the Company or any Subsidiary under this Agreement or the Articles. 
  
 (b)    The Company shall notify the Purchaser if the Company enters into any definitive agreement with a third party, the principal
purpose of which is to secure an Other Financing (as defined below) during a Draw Down Pricing Period. During such Draw Down Pricing Period, the Purchaser shall have the option to purchase Shares of the Draw Down Amount Requested by the Company for
such Draw Down Pricing Period at (i) the Purchaser’s price as provided in this Agreement, (ii) the third party’s price, net of such third party’s discount and fees, or (iii) the Purchaser may elect to not purchase Common Stock for
that Draw Down Pricing Period. “Other Financing” shall mean (x) the issuance of Common Stock or securities convertible into Common Stock at a net discount (after all fees and discounts associated with the transaction) to the then
current market price of the Common Stock; provided, however, that stock options granted under the Company’s stock option plans or shareholder rights plan and the issuance of shares of Common Stock upon the exercise thereof, shares of Common
Stock issued under the Company’s employee stock purchase plans, shares of Common Stock issuable upon conversion of options or convertible securities issued on or prior to the Effective Date, shares of Common Stock and/or warrants to purchase
shares of Common Stock issued for the purposes of licensing agreements and/or collaborative agreements with third parties and the issuance of shares of Common Stock upon the exercise thereof, and warrants to purchase shares of Common Stock issued in
connection with equipment financings and/or real property leases (or amendments thereto) and the issuance of shares of Common Stock upon the exercise thereof (each, an “Acceptable Financing”) shall not be Other Financings; (y) the
implementation by the Company of a mechanism for the reset of the purchase price of the Common Stock to below the then current market price of the Common Stock; or (z) the issuance of Common Stock with warrants that is not an Acceptable Financing.

  
 Section 4.8    Stop
Orders.  The Company will advise the Purchaser promptly and, if requested by the Purchaser, will confirm such advice in writing: (i) of the Company’s receipt of notice of any request by the Commission for amendment of or a
supplement to the Registration Statement, any Prospectus or for additional information; (ii) of the Company’s receipt of notice of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of
the suspension of qualification of the Shares for offering or sale in any jurisdiction or the initiation of any proceeding for such purpose; and (iii) of the Company becoming aware of the happening of any event, which makes any statement of a
material fact made in the Post-Effective Amendment or the Prospectus (as then amended or supplemented) untrue or which requires the making of any additions to or changes in the Post-Effective Amendment or the Prospectus (as then amended or
supplemented) in order to state a material fact required by the Securities Act to be stated therein or necessary in order to make the statements therein not misleading, or of the necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Securities Act or any other law. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, the Company will make commercially reasonable efforts to obtain
the withdrawal of such order at the earliest possible time. 
  

 15 








 Section 4.9    Amendments to the Registration
Statement.  The Company will not file any amendment to the Registration Statement that relates to the Purchaser, this Agreement or the transactions contemplated hereby or make any amendment or supplement to the Prospectus that
relates to the Purchaser, this Agreement or the transactions contemplated hereby of which the Purchaser shall not previously have been advised or to which the Purchaser shall reasonably object after being so advised unless it is necessary to amend
the Registration Statement or make any amendment or supplement to the Prospectus to comply with the Securities Act or any other applicable law or regulation, in which case the Company shall expeditiously furnish to the Purchaser a reasonable number
of copies thereof. In addition, for so long as, in the reasonable opinion of counsel for the Purchaser and counsel for the Company, a Prospectus is required to be delivered in connection with any purchase of Shares by the Purchaser, the Company will
not file any Prospectus or Prospectus supplement with respect to the Shares without delivering a copy of such Prospectus or Prospectus supplement to the Purchaser promptly following such filing. It is understood that the Company may file amendments
to the Registration Statement and make amendments and supplements to the Prospectus in connection with offerings pursuant to the Registration Statement to parties other than the Purchaser, and that such amendments and supplements shall not be
covered by the first two (2) sentences of this Section 4.9. 
  
 Section 4.10    Prospectus Delivery.  The Company shall file with the Commission a Prospectus supplement on the first Trading Day immediately following the end of each Draw Down Pricing
Period, and will deliver to the Purchaser, without charge, in such quantities as reasonably requested by the Purchaser, copies of each form of Prospectus and Prospectus supplement on each Settlement Date. The Company consents to the use of the
Prospectus (and of any amendment or supplement thereto) in accordance with the provisions of the Securities Act and with the securities or Blue Sky laws of the jurisdictions in which the Shares may be sold by the Purchaser, in connection with the
offering and sale of the Shares and for such period of time thereafter as the Prospectus is required by the Securities Act to be delivered in connection with sales of the Shares. If during such period of time any event shall occur that in the
judgment of the Company and its counsel or in the judgment of counsel for the Purchaser is required to be set forth in the Prospectus (as then amended or supplemented) or should be set forth therein in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if it is necessary to supplement or amend the Prospectus to comply with the Securities Act or any other applicable law or regulation, the Company will forthwith prepare and,
subject to Section 4.9 above, file with the Commission an appropriate supplement or amendment to such Prospectus, and will expeditiously furnish to the Purchaser a reasonable number of copies thereof. 
  
 Section 4.11    Selling Restrictions; Volume
Limitations. 
  
 (a)    The Purchaser
covenants that prior to the Investment Period, during the Investment Period and for a period of three (3) months after the termination of this Agreement, neither the Purchaser nor any of its affiliates nor any entity managed by the Purchaser will,
directly or indirectly, sell any securities of the Company except the Shares that it owns or has the right to purchase pursuant to the provisions of a Draw Down Notice. Prior to the Investment Period, during the Investment Period and for a period of
three (3) months after any termination of this Agreement, neither the Purchaser nor any of its affiliates nor any entity managed by the Purchaser will ever enter into a short position with respect to shares of Common Stock of the Company, including
in any account of the Purchaser’s or in any account directly or indirectly 

  

 16 








 
managed by the Purchaser or any affiliate of the Purchaser or any entity managed by the Purchaser, except that the Purchaser may sell Shares that it is
obligated to purchase under a pending Draw Down Notice but has not yet taken possession of so long as the Purchaser covers any such sales with the Shares purchased pursuant to such Draw Down Notice. Prior to, during the Investment Period and for a
period of three (3) months after the termination of this Agreement, the Purchaser shall not grant any option to purchase or acquire any right to dispose or otherwise dispose for value of any shares of Common Stock or any securities convertible into,
or exchangeable for, or warrants to purchase, any shares of Common Stock, or enter into any swap, hedge or other agreement that transfers, in whole or in part, the economic risk of ownership of the Common Stock, except for such sales permitted by
the preceding two sentences. In addition, on a daily Trading Day basis, the Purchaser agrees to restrict the volume of sales of Shares by the Purchaser, its affiliates and any entity managed by the Purchaser to no more than twenty percent (20%) of
the total trading volume of the Common Stock, as reported on Bloomberg Financial LP using HP function, for such Trading Day. 
  
 (b)    In addition to the foregoing, in connection with any sale of the Company’s securities (including any short sale permitted
by the preceding paragraph), the Purchaser shall comply in all respects with all applicable laws, rules, regulations and orders, including, without limitation, the requirements of the Securities Act and the Exchange Act, including, without
limitation, Rule 415(a)(4) under the Securities Act and Regulation M and Rule 10b-5 under the Exchange Act. 
  
 Section 4.12    Non-Public Information.  Neither the Company nor any of its directors, officers or
agents shall disclose any material non-public information about the Company to the Purchaser. 
  
 Section 4.13    Carlin Equities Corp.  Unless the Purchaser has notified the Company that it will use a different broker-dealer and the Company has filed an amendment
to the Registration Statement to that effect, the Purchaser will use Carlin as its broker-dealer to effectuate all sales, if any, of the shares of Common Stock that it may purchase from the Company pursuant to this Agreement. 

  
 ARTICLE V. 
 OPINION OF COUNSEL AND CERTIFICATE; CONDITIONS TO THE SALE AND 
 PURCHASE OF THE SHARES 
  
 Section 5.1    Opinion of Counsel and Certificate.  In connection with the execution and delivery of this Agreement, the Purchaser has received (i) an opinion of outside counsel to the
Company, dated the Effective Date, in the form of Exhibit A hereto, and (ii) a certificate from the Company, dated the Effective Date, in the form of Exhibit B hereto. 
  
 Section 5.2    Conditions Precedent to the
Obligation of the Company to Sell the Shares.  The obligation hereunder of the Company to issue and sell the Shares to the Purchaser under any Draw Down Notice or Call Option is subject to the satisfaction or waiver of each of the
conditions set forth below. These conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion. 
  

 17 








 (a)    Accuracy of the Purchaser’s Representations and
Warranties.  Except for representations and warranties that are expressly made as of a particular date, the representations and warranties of the Purchaser in this Agreement shall be true and correct in all material respects as of
the date when made and as of each Draw Down Exercise Date and each Settlement Date as though made at that time. 
  
 (b)    Registration Statement.  The Company shall have a dollar amount of Shares registered under the
Registration Statement which are in an amount equal to or in excess of the dollar amount worth of Shares issuable pursuant to such Draw Down Notice or Call Option. The Post-Effective Amendment shall have been declared effective by the Commission and
shall have been amended or supplemented, as required, to disclose the sale of the Shares prior to each Settlement Date, as applicable, and there shall be no stop order suspending effectiveness of the Registration Statement. 
  
 (c)    Performance by the
Purchaser.  The Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Purchaser
at or prior to each Draw Down Exercise Date and each Settlement Date, as applicable. 
  
 (d)    No Injunction.  No statute, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement. 
  
 (e)    No Suspension, Etc.  Trading in the Common Stock shall not have been suspended by the Commission or the
Nasdaq (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to each Draw Down Exercise Date and applicable Settlement Date), and, at any time prior to each Draw Down Exercise
Date and applicable Settlement Date, none of the events described in clauses (i), (ii) and (iii) of Section 4.8 hereof shall have occurred, trading in securities generally as reported on Nasdaq shall not have been suspended or limited, nor shall a
banking moratorium have been declared either by the United States or New York State authorities, nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity or crisis of such magnitude
in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of the Company, makes it impracticable or inadvisable to issue the Shares. 
  
 (f)    No Proceedings or
Litigation.  No action, suit or proceeding before any arbitrator or any governmental authority shall have been commenced, and no investigation by any governmental authority shall have been threatened, against the Company or any
Subsidiary, or any of the officers, directors or affiliates of the Company or any Subsidiary seeking to restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions. 

 
 Section 5.3    Conditions Precedent to
the Obligation of the Purchaser To Accept a Draw Down or Call Option Grant and Purchase the Shares.  The obligation hereunder of the Purchaser to accept a Draw Down or Call Option grant and to acquire and pay for the Shares is
subject to the satisfaction or waiver, at or before each Draw Down Exercise Date and each 

  

 18 








 
Settlement Date, of each of the conditions set forth below. The conditions are for the Purchaser’s sole benefit and may be waived by the Purchaser at
any time in its sole discretion. 
  
 (a)    Accuracy of the Company’s Representations and Warranties.  Except for representations and warranties that are expressly made as of a particular date, each of the representations and
warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Draw Down Exercise Date, as though made at that time, including, without limitation, under Section 3.1(h) hereof. 
  
 (b)    Registration
Statement.  The Company shall have a dollar amount of Shares registered under the Registration Statement which are in an amount equal to or in excess of the dollar amount worth of Shares issuable pursuant to such Draw Down Notice
or Call Option. The Post-Effective Amendment shall have been declared effective by the Commission and shall have been amended or supplemented, as required, to disclose the sale of the Shares prior to each Settlement Date, as applicable. 

 
 (c)    No Suspension.  Trading
in the Common Stock shall not have been suspended by the Commission or the Nasdaq (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to each Draw Down Exercise Date), and,
at any time prior to such Draw Down Exercise Date, trading in securities generally as reported on Nasdaq shall not have been suspended or limited, nor shall a banking moratorium have been declared either by the United States or New York State
authorities, nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity or crisis of such magnitude in its effect on, or any material adverse change in, any financial market which, in
each case, in the reasonable judgment of the Purchaser, makes it impracticable or inadvisable to issue the Shares. 
  
 (d)    Performance by the Company.  The Company shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to each Draw Down Exercise Date and each Settlement Date and shall have delivered the Compliance
Certificate substantially in the form attached hereto as Exhibit C. 
  
 (e)    No Injunction.  No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement. 
  
 (f)    No Proceedings or Litigation.  No action, suit or proceeding before any arbitrator or any governmental
authority shall have been commenced, and no investigation by any governmental authority shall have been threatened, against the Company or any subsidiary, or any of the officers, directors or affiliates of the Company or any subsidiary seeking to
restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions. 
  
 (g)    Aggregate Limit.  The issuance and sale of the Shares issuable pursuant to such Draw Down Notice
or Call Option will not violate Section 6.3 hereof. 
  

 19 








 (h)    Shares Authorized.  The Shares issuable
pursuant to such Draw Down Notice or Call Option will have been duly authorized by all necessary corporate action of the Company. 
  
 (i)    Opinion of Counsel.  Subsequent to the effective date of the Post-Effective Amendment and prior to the
first Draw Down under this Agreement, the Purchaser shall have received (i) an opinion of outside counsel to the Company in substantially the form set forth as Exhibit F hereto or as otherwise reasonably acceptable to the Purchaser’s
counsel and (ii) an opinion of in house counsel to the Company in substantially the form set forth as Exhibit G hereto or as otherwise reasonably acceptable to the Purchaser’s counsel. 
  
 ARTICLE VI. 
 DRAW DOWN TERMS; CALL OPTION 
  
 Section 6.1    Draw Down Terms.  Subject to the satisfaction of the conditions set forth in this Agreement, and subject to Section 6.3 below, the parties agree
(unless otherwise mutually agreed upon by the parties in writing) as follows: 
  
 (a)    The Company may, in its sole discretion, issue a Draw Down Notice (as defined in Section 6.1(j) hereof) for a specified Draw Down Amount Requested of up to (i) $6,000,000 if the Threshold
Price for the Draw Down Amount Requested as set forth in such Draw Down Notice is equal to or greater than $10.00 and less than $25.00 or (ii) $8,000,000 if the Threshold Price for the Draw Down Amount Requested as set forth in such Draw Down Notice
is equal to or greater than $25.00, which Draw Down and Draw Down Notice the Purchaser will be obligated to accept. The date the Company issues any Draw Down Notice in accordance with this Section 6.1 shall be a “Draw Down Exercise
Date” for purposes of this Agreement. 
  
 (b)    Subject to Section 6.1(i) below, the number of Shares to be issued by the Company to the Purchaser in connection with each Draw Down shall be equal to the sum of the quotients (for each Trading Day of the Draw
Down Pricing Period for which the VWAP equals or exceeds the Threshold Price) of (x) 1/18th (or such other fraction based on the length of the Draw Down Pricing Period) of the Draw Down Amount divided by (y) the specified percentage of the VWAP set
forth in Section 6.1(k) hereof or such other percentage mutually agreed upon by the Purchaser and the Company (the “Draw Down Discount Price”) of the Common Stock. 
  
 (c)    Only one Draw Down shall be allowed in each Draw Down Pricing Period. 
  
 (d)    Each Draw Down shall be settled on the second
Trading Day after the end of each Draw Down Pricing Period (the “Settlement Date”). 
  
 (e)    There shall be a minimum of five (5) Trading Days between the end of a Draw Down Pricing Period and the commencement of the
next Draw Down Pricing Period. 
  
 (f)    There shall be a maximum of twenty-four (24) Draw Downs during the Investment Period. 
  

 20 








 (g)    At the end of each Draw Down Pricing Period, the Purchaser’s total Draw
Down commitment under this Agreement (which as of the Effective Date equals $100,000,000 of shares of Common Stock or the Nasdaq Limit, whichever occurs first) shall be reduced by the total amount of the Draw Down Amount and the Call Option Amount,
if any, for such Draw Down Pricing Period. 
  
 (h)    Each Draw Down will automatically expire immediately after the last Trading Day of each Draw Down Pricing Period. 
  
 (i)    If the VWAP on a given Trading Day in the Draw Down Pricing Period is less than the Threshold Price, then the total amount of
the Draw Down Amount Requested will be reduced by 1/18th (or such other fraction based on the length of the Draw Down Pricing Period) and no Shares will be purchased or sold with respect to such Trading Day, except as provided below. If trading in
the Common Stock is suspended for any reason for more than three (3) hours in any Trading Day, the price of the Common Stock may, at the Purchaser’s option, be deemed to be below the Threshold Price for that Trading Day. For each Trading Day
during a Draw Down Pricing Period that the VWAP is below the Threshold Price, the Purchaser may elect in its sole discretion to purchase the Common Stock at the Threshold Price multiplied by the applicable percentage set forth in Section 6.1(k) at
the end of such Draw Down Pricing Period. The Purchaser will inform the Company via facsimile transmission no later than 8:00 p.m. (New York time) on the last Trading Day of such Draw Down Pricing Period as to the number of Shares, if any, the
Purchaser chooses to purchase under such circumstances. 
  
 (j)    As a condition to exercise of any Draw Down, the Company must provide a notice to the Purchaser of the Company’s exercise of any Draw Down via facsimile transmission before commencement of trading on the
first Trading Day of the Draw Down Pricing Period covered by such notice (the “Draw Down Notice”), substantially in the form attached hereto as Exhibit D. The Draw Down Notice shall specify the Draw Down Amount Requested, set
the Threshold Price for such Draw Down, designate the first Trading Day of the Draw Down Pricing Period and specify the Call Option(s), if any, that the Company wishes to grant to the Purchaser during the Draw Down Pricing Period and the applicable
Threshold Price for such Call Option (the “Call Option Threshold Price”). At no time shall the Purchaser be required to purchase more than $8,000,000 of the Common Stock for a given Draw Down Pricing Period (excluding the Common
Stock purchased pursuant to a Call Option). 
  
 (k)    With respect to any Draw Down, if the Market Capitalization is equal to or above $1 billion, the Draw Down Discount Price shall be 96.20% of the VWAP. If the Market Capitalization is below $1 billion and equal to
or above $750 million, the Draw Down Discount Price shall be 95.70% of the VWAP. If the Market Capitalization is below $750 million and equal to or above $500 million, the Draw Down Discount Price shall be 95.20% of the VWAP. From $500 million to
$300 million, for each $100 million decrease in Market Capitalization, the Draw Down Discount Price shall be decreased by 0.50% incrementally. 
  
 (l)     On each Settlement Date, the Company shall deliver the Shares purchased by the Purchaser to the Purchaser or its designees via
DWAC, against payment therefor to the Company’s designated account by wire transfer of immediately available funds, provided that the Shares are received by the Purchaser no later than 1:00 p.m. (New York time), or of next day available funds
if the Shares are received thereafter. In certain circumstances and as set forth in 

  

 21 








 
Section 9.1(b), a failure by the Company to deliver such Shares may result in the payment of liquidated damages by the Company to the Purchaser. 

 
 (m)    If during a Draw Down Pricing Period the
Company elects to reduce the number of Trading Days in such Draw Down Pricing Period, the Company will notify the Purchaser before commencement of trading on any Trading Day (a “Section 6.1(m) Notice”) and the last Trading Day of
such Draw Down Pricing Period shall be the Trading Day preceding the receipt of the Section 6.1(m) Notice; provided, however, that if the Company delivers the Section 6.1(m) Notice during trading hours on a Trading Day, then the last Trading Day of
such Draw Down Pricing Period shall be the Trading Day on which the Section 6.1(m) Notice was received by the Purchaser. 
  
 The Purchaser will purchase the Truncated Draw Down Allocation Amount for each of the Trading Days prior to receipt of the Section 6.1(m) Notice, for an
aggregate purchase price determined in accordance with clauses (b) and (i) of this Section 6.1. 
  
 In addition, upon receipt of the Section 6.1(m) Notice, the Purchaser may, at its option, elect to purchase Shares in an additional dollar amount equal to
the product of the Draw Down Amount Requested, first multiplied by (x) a fraction, the numerator of which equals one (1) and the denominator of which equals eighteen (18) or such other number of Trading Days in such Draw Down Pricing Period as the
parties may have mutually agreed upon with respect to such Draw Down Pricing Period (eighteen or such other mutually agreed upon number being referred to herein as the “Trading Day Number”), and next multiplied by (y) that number
that is equal to the Trading Day Number minus the number of Trading Days in the reduced Draw Down Pricing Period. The price per share for such additional dollar amount shall equal (i) the aggregate total of Truncated Draw Down Allocation Amounts
during the reduced Draw Down Pricing Period divided by (ii) the number of Shares to be purchased during such reduced Draw Down Pricing Period. 
  
 Upon receipt of the Section 6.1(m) Notice, the Purchaser may (x) elect to purchase the Common Stock at the Threshold Price for any Trading Day that the
VWAP was below the Threshold Price during the reduced Draw Down Pricing Period in accordance with Section 6.1(i) hereof, (y) elect to purchase the Common Stock in the additional amount as set forth in the preceding paragraph of this Section 6.1(m),
and (z) elect to exercise any unexercised Call Options (for a Call Option Amount not in excess of $1,000,000) by issuing a Call Option Notice to the Company, in each such case, no later than 10:00 a.m. (New York time) on the first Trading Day after
the end of the reduced Draw Down Pricing Period. The exercise price of the Call Option shall be based on the VWAP on the last Trading Day of the reduced Draw Down Pricing Period (in lieu of the VWAP as specified in clause (A) of Section 6.2(b)
hereof) and otherwise determined in accordance with Section 6.2(b) hereof. 
  
 The Settlement Date for the Draw Down Amount and any Call Options exercised during a reduced Draw Down Pricing Period shall be the second Trading Day after receipt of the Section 6.1(m) Notice. 
  
 Section 6.2    Purchaser’s Call
Option.  Subject to the satisfaction of the conditions set forth in this Agreement, and subject to Section 6.3 below, the parties agree (unless otherwise mutually agreed upon by the parties in writing) as follows: 
  

 22 








 (a)    The Company may, in its sole discretion, grant to the Purchaser the right to
exercise one (1) or more Call Options during each Draw Down Pricing Period for a specified Call Option Amount Requested; provided, however, that (i) each Call Option Amount Requested shall be for a minimum of $50,000, (ii) the aggregate total of all
Call Option Amounts Requested during a Draw Down Pricing Period may not exceed $8,000,000, and (iii) the Call Option Amount on any Trading Day during the Draw Down Pricing Period may not exceed $1,000,000. The Call Option Amount Requested and the
Call Option Threshold Price shall be set forth in the Draw Down Notice. 
  
 (b)    The number of shares of Common Stock to be issued in connection with each Call Option shall equal (i) the Call Option Amount divided by (ii) the applicable percentage set forth in this Section 6.2(b) multiplied by
the greater of (A) the VWAP for the Common Stock on the day the Purchaser issues its Call Option Notice or (B) the Call Option Threshold Price. If the Market Capitalization is equal to or above $1 billion, the Draw Down Discount Price shall be
96.20% of the VWAP. If the Market Capitalization is below $1 billion and equal to or above $750 million, the Draw Down Discount Price shall be 95.70% of the VWAP. If the Market Capitalization is below $750 million and equal to or above $500 million,
the Draw Down Discount Price shall be 95.20% of the VWAP. From $500 million to $300 million, for each $100 million decrease in Market Capitalization, the Draw Down Discount Price shall be decreased by 0.50% incrementally. 
  
 (c)    Each Call Option exercised shall be settled on the
next Settlement Date. 
  
 (d)    The Call
Option Threshold Price designated by the Company in its Draw Down Notice shall apply to each Call Option. 
  
 (e)    For each Call Option that the Purchaser exercises pursuant to this Section 6.2, as a condition to such exercise the Purchaser
must issue a Call Option Notice (as defined in Section 1.1(h) hereof) to the Company no later than 8:00 p.m. (New York time) on the day such Call Option is exercised. If the Purchaser does not exercise a Call Option by 8:00 p.m. (New York time) on
the last day of the applicable Draw Down Pricing Period, the Purchaser’s Call Options with respect to that Draw Down Pricing Period shall automatically terminate. 
  
 Section 6.3    Aggregate Limit.  Notwithstanding anything to the contrary
herein, in no event may the Company issue a Draw Down Notice or grant a Call Option to the extent that the sale of shares of Common Stock pursuant thereto and pursuant to all prior Draw Down Notices or Call Options issued hereunder would cause the
Company to sell or the Purchaser to purchase shares of Common Stock which in the aggregate are in excess of the Aggregate Limit. If the Company issues a Draw Down Notice or Call Option that otherwise would permit the Purchaser to purchase shares of
Common Stock which would cause the aggregate purchases by Purchaser hereunder to exceed the Aggregate Limit, such Draw Down Notice or Call Option shall be void ab initio to the extent of the amount by which the dollar value of shares or
number of shares, as the case may be, of Common Stock otherwise issuable pursuant to such Draw Down Notice or Call Option together with the dollar value of shares or number of shares, as the case may be, of all other Common Stock purchased by the
Purchaser pursuant hereto would exceed the Aggregate Limit. 
  

 23 








 ARTICLE VII. 
 TERMINATION 
  
 Section
7.1    Term, Termination by Mutual Consent.  Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earlier of (i) twenty eight (28) consecutive months
from the Effective Date (the “Investment Period”), (ii) the date that the entire dollar amount of Shares registered under the Registration Statement have been issued and sold and (iii) the date the Purchaser shall have purchased the
first to occur of $100,000,000 of shares of Common Stock or the Nasdaq Limit. The Company may terminate this Agreement effective upon three (3) days’ written notice to the Purchaser under Section 9.4; provided, however, that such termination
does not occur during a Draw Down Pricing Period or prior to a Settlement Date. This Agreement may be terminated at any time by mutual written consent of the parties, effective as of the date of such mutual written consent unless otherwise provided
in such written consent. 
  
 Section
7.2    Other Termination.  The Company shall inform the Purchaser, and the Purchaser shall have the right to terminate this Agreement within the subsequent thirty (30) days (the “Event
Period”), effective upon written notice to the Company under Section 9.4 in the Event Period, if during the Investment Period (x) the Company enters into a definitive agreement with any third party, the principal purpose of which is to
secure any equity financing which provides for (i) the issuance of the Common Stock or securities convertible into Common Stock at a discount to the then current market price of the Common Stock, other than an underwritten public offering or an
Acceptable Financing (as defined in Section 4.7(b) hereof), or (ii) the implementation by the Company of a mechanism for the reset of the purchase price of the Common Stock to below the then current market price of the Common Stock, or (y) an event
resulting in a Material Adverse Effect or Material Change in Ownership has occurred. In such event, the Purchaser may terminate this Agreement upon one (1) business day’s prior written notice during the Event Period. 
  
 Section 7.3    Effect of
Termination.  In the event of termination by the Company or the Purchaser, written notice thereof shall forthwith be given to the other party as provided in Section 9.4 and the transactions contemplated by this Agreement shall be
terminated without further action by either party. If this Agreement is terminated as provided in Section 7.1 or 7.2 herein, this Agreement shall become void and of no further force and effect, except as provided in Section 9.9 hereof. Nothing in
this Section 7.3 shall be deemed to release the Company or the Purchaser from any liability for any breach under this Agreement, or to impair the rights of the Company and the Purchaser to compel specific performance by the other party of its
obligations under this Agreement. 
  

 24 








 ARTICLE VIII. 
 INDEMNIFICATION 
  
 Section 8.1    General Indemnity. 
  
 (a)    Indemnification by the Company.  The Company will indemnify and hold harmless the Purchaser, Carlin and each person, if any, who controls the Purchaser or Carlin
within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act from and against any losses, claims, damages, liabilities and expenses (including reasonable costs of defense and investigation and all attorneys’ fees)
to which the Purchaser, Carlin and each such controlling person may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages, liabilities and expenses (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a material fact contained, or incorporated by reference, in the Registration Statement relating to Common Stock being sold to the Purchaser (including any Prospectus or Prospectus
supplement relating thereto), or any amendment or supplement to it, or (ii) the omission or alleged omission to state in the Registration Statement or any document incorporated by reference in the Registration Statement, a material fact required to
be stated therein or necessary to make the statements therein not misleading. 
  
 The Company will reimburse the Purchaser, Carlin and each such controlling person promptly upon demand for any legal or other costs or expenses reasonably incurred by the Purchaser, Carlin or such controlling person
in investigating, defending against, or preparing to defend against any such claim, action, suit or proceeding, except that the Company will not be liable to the extent any loss, claim, damage, liability or expense arises out of, or is based upon,
an untrue statement, alleged untrue statement, omission or alleged omission, included in any Prospectus or Prospectus supplement or any amendment or supplement to the Prospectus or Prospectus supplement in reliance upon, and in conformity with,
written information furnished by either the Purchaser, Carlin to the Company for inclusion in the Prospectus or Prospectus supplement. 
  
 (b)    Indemnification by the Purchaser.  The Purchaser will indemnify and hold harmless the Company, each of
its directors and officers, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act from and against any losses, claims, damages, liabilities and expenses
(including reasonable costs of defense and investigation and all attorneys fees) to which the Company and each such controlling person may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages, liabilities
and expenses (or actions in respect thereof) arise out of or are based upon (i) an untrue statement, alleged untrue statement, omission or alleged omission, included in any Prospectus or Prospectus supplement or any amendment or supplement to the
Prospectus or Prospectus supplement in reliance upon, and in conformity with, written information furnished by the Purchaser to the Company for inclusion in the Prospectus or Prospectus supplement, or (ii) the omission or alleged omission to state
in any Prospectus or Prospectus supplement or any amendment or supplement to it a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, but only to the extent, the untrue statement,
alleged untrue statement, omission or alleged omission was made in reliance upon, and in conformity with, written information furnished by the Purchaser to the Company for inclusion in the Prospectus or Prospectus supplement or an amendment or


  

 25 








 
supplement to it. 
  
 The Purchaser will reimburse the Company and each such director, officer or controlling person promptly upon demand for any legal or other costs or
expenses reasonably incurred by the Company or the other person in investigating, defending against, or preparing to defend against any loss, claim, damage, liability or expense arising out of, or based upon, an untrue statement, alleged untrue
statement, omission or alleged omission, included in any Prospectus or Prospectus supplement or any amendment or supplement to the Prospectus or Prospectus supplement in reliance upon, and in conformity with, written information furnished by the
Purchaser to the Company for inclusion in the Prospectus or Prospectus supplement. 
  
 Section 8.2    Indemnification Procedures.  Promptly after a person receives notice of a claim or the commencement of an action for which the person intends to seek
indemnification under Section 8.1, the person will notify the indemnifying party in writing of the claim or commencement of the action, suit or proceeding; provided, however, that failure to notify the indemnifying party will not relieve the
indemnifying party from liability under Section 8.1, except to the extent it has been materially prejudiced by the failure to give notice. The indemnifying party will be entitled to participate in the defense of any claim, action, suit or proceeding
as to which indemnification is being sought, and if the indemnifying party acknowledges in writing the obligation to indemnify the party against whom the claim or action is brought, the indemnifying party may (but will not be required to) assume the
defense against the claim, action, suit or proceeding with counsel satisfactory to it. After an indemnifying party notifies an indemnified party that the indemnifying party wishes to assume the defense of a claim, action, suit or proceeding, the
indemnifying party will not be liable for any legal or other expenses incurred by the indemnified party in connection with the defense against the claim, action, suit or proceeding except that if, in the opinion of counsel to the indemnifying party,
one or more of the indemnified parties should be separately represented in connection with a claim, action, suit or proceeding, the indemnifying party will pay the reasonable fees and expenses of one separate counsel for the indemnified parties.
Each indemnified party, as a condition to receiving indemnification as provided in Section 8.1, will cooperate in all reasonable respects with the indemnifying party in the defense of any action or claim as to which indemnification is sought. No
indemnifying party will be liable for any settlement of any action effected without its prior written consent. No indemnifying party will, without the prior written consent of the indemnified party, effect any settlement of a pending or threatened
action with respect to which an indemnified party is, or is informed that it may be, made a party and for which it would be entitled to indemnification, unless the settlement includes an unconditional release of the indemnified party from all
liability and claims which are the subject matter of the pending or threatened action. 
  
 If for any reason the indemnification provided for in this Agreement is not available to, or is not sufficient to hold harmless, an indemnified party in respect of any loss or liability referred to in Section 8.1 as
to which it is entitled to indemnification thereunder, each indemnifying party will, in lieu of indemnifying the indemnified party, contribute to the amount paid or payable by the indemnified party as a result of such loss or liability, (i) in the
proportion which is appropriate to reflect the relative benefits received by the indemnifying party on the one hand and by the indemnified party on the other from the sale of Shares which is the subject of the claim, action, suit or proceeding which
resulted in the loss or liability or (ii) if that allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the 

  

 26 








 
relative benefits of the sale of such Shares, but also the relative fault of the indemnifying party and the indemnified party with respect to the statements
or omissions which are the subject of the claim, action, suit or proceeding that resulted in the loss or liability, as well as any other relevant equitable considerations. 
  
 ARTICLE IX. 
 MISCELLANEOUS 
  
 Section
9.1    Fees and Expenses. 
  
 (a)    Each party shall bear its own fees and expenses related to the transactions contemplated by this Agreement; provided, however, that the Company shall pay, at the Effective Date, all reasonable attorneys’ fees
and expenses (exclusive of disbursements and out-of-pocket expenses) incurred by the Purchaser up to $50,000 in connection with the preparation, negotiation, execution and delivery of this Agreement. In addition, the Company shall pay all reasonable
attorneys’ fees and expenses incurred by the Purchaser in connection with any amendments, modifications or waivers of this Agreement. The Company shall pay all stamp or other similar taxes and duties levied in connection with issuance of the
Shares pursuant hereto. 
  
 (b)    If the
Company issues a Draw Down Notice and fails to deliver the Shares on the applicable Settlement Date, and such failure continues for ten (10) Trading Days, the Company shall pay the Purchaser, in cash or restricted shares of Common Stock, at the
option of the Purchaser, as liquidated damages for such failure and not as a penalty, an amount equal to two percent (2%) of the payment required to be paid by the Purchaser on such Settlement Date (i.e., the sum of the Draw Down Amount and the Call
Option Amount) for the initial thirty (30) days following such Settlement Date until the Shares have been delivered, and an additional two percent (2%) for each additional thirty (30) day period thereafter until the Shares have been delivered, which
amount shall be prorated for such periods less than thirty (30) days. 
  
 Section 9.2    Specific Enforcement, Consent to Jurisdiction. 
  
 (a)    The Company and the Purchaser acknowledge and agree that irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that either party shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement by the other party and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which either party may be entitled by law or equity. 
  
 (b)    Each of the Company and the Purchaser (i) hereby
irrevocably submits to the jurisdiction of the United States District Court and other courts of the United States sitting in the State of New York for the purposes of any suit, action or proceeding arising out of or relating to this Agreement, and
(ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the
venue of the suit, action or proceeding is improper. Each of the Company and the Purchaser consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall 

  

 27 








 
constitute good and sufficient service of process and notice thereof. Nothing in this Section shall affect or limit any right to serve process in any other
manner permitted by law. 
  
 Section
9.3    Entire Agreement; Amendment.  This Agreement represents the entire agreement of the parties with respect to the subject matter hereof, and there are no promises, undertakings, representations or
warranties by either party relative to subject matter hereof not expressly set forth herein. No provision of this Agreement may be amended other than by a written instrument signed by both parties hereto. 
  
 Section
9.4    Notices.  Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery, by telex (with
correct answer back received), telecopy or facsimile (with telecopy or facsimile machine confirmation of delivery received) at the address or number designated below (if delivered on a business day during normal business hours where such notice is
to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The address for such communications shall be: 
  

	If to the Company:	  	CV Therapeutics, Inc.
	 	  	3172 Porter Drive
	 	  	Palo Alto, CA 94304
	 	  	Telephone Number: (650) 475-9611
	 	  	Fax: (650) 858-0388
	 	  	Attention:	  	Tricia Borga Suvari
	 	  	 	  	Vice President and General Counsel
		
	With copies to:	  	Latham & Watkins
	 	  	505 Montgomery Street, Suite 1900
	 	  	San Francisco, CA 94111
	 	  	Telephone Number: (415) 395-8131
	 	  	Fax: (415) 395-8095
	 	  	Attention: Laura L. Gabriel, Esq.
		
	If to the Purchaser:	  	Acqua Wellington North American Equities Fund, Ltd.
	 	  	c/o Fortis Fund Services (Bahamas) Ltd.
	 	  	Montage Sterling Centre
	 	  	East Bay Street, P.O. Box 55-6238
	 	  	Nassau, Bahamas
	 	  	Telephone Number: (242) 394-2700
	 	  	Fax: (242) 394-9667
	 	  	Attention: Anthony L. M. Inder Rieden
		
	With copies to:	  	Jenkens & Gilchrist Parker Chapin LLP
	 	  	The Chrysler Building
	 	  	405 Lexington Avenue
	 	  	New York, NY 10174

  

 28 









	 	  	Telephone Number: (212) 704-6000
	 	  	Fax: (212) 704-6157
	 	  	Attention: Christopher S. Auguste, Esq.

  
 Either party hereto
may from time to time change its address for notices by giving at least ten (10) days advance written notice of such changed address to the other party hereto. 
  

Section 9.5    Waivers.  No waiver by either party of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provisions, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in
any manner impair the exercise of any such right accruing to it thereafter. No provision of this Agreement may be waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. 
  
 Section
9.6    Headings.  The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this Agreement for any other purpose and shall not be deemed
to limit or affect any of the provisions hereof. 
  
 Section
9.7    Successors and Assigns.  The Purchaser may not assign this Agreement to any person without the prior consent of the Company, in the Company’s sole discretion. This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and assigns. The assignment by a party to this Agreement of any rights hereunder shall not affect the obligations of such party under this Agreement. 
  
 Section 9.8    Governing
Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to the choice of law provisions. 
  
 Section
9.9    Survival.  The representations and warranties of the Company and the Purchaser contained in Article III and the covenants contained in Article IV shall survive the execution and delivery hereof
until the termination of this Agreement, and the agreements and covenants set forth in Article VIII of this Agreement shall survive the execution and delivery hereof. 
  
 Section 9.10    Counterparts.  This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the same instrument and shall become effective when counterparts have been signed by each party and delivered to the other parties hereto, it being understood that all
parties need not sign the same counterpart. In the event any signature is delivered by facsimile transmission, the party using such means of delivery shall cause four additional executed signature pages to be physically delivered to the other
parties within five days of the execution and delivery hereof. 
  
 Section 9.11    Publicity.  On or after the Effective Date, the Company may issue a press release or otherwise make a public statement or announcement with respect to this Agreement or the
transactions contemplated hereby or the existence of this Agreement (including, without limitation, by filing a copy of this Agreement with the Commission); provided, however, that prior to issuing any such press release, making any such public
statement or announcement, the 

  

 29 








 
Company shall consult with the Purchaser on the form and substance of such press release or other disclosure. 
  
 Section
9.12    Severability.  The provisions of this Agreement are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of the
provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this
Agreement, and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the
maximum extent possible. 
  
 Section
9.13    Further Assurances.  From and after the date of this Agreement, upon the request of the Purchaser or the Company, each of the Company and the Purchaser shall execute and deliver such
instrument, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement. 
  

 30 








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

	CV THERAPEUTICS, INC.
		
	By:	 	 /s/  Louis G. Lange, M.D., Ph.D.


	 	 	Name:  Louis G. Lange, M.D., Ph.D.
	 	 	Title:    Chairman and Chief Executive Officer
	
	ACQUA WELLINGTON NORTH AMERICAN EQUITIES FUND, LTD.
		
	By:	 	 /s/  Anthony L.M. Inder Rieden


	 	 	Name:  Anthony L.M. Inder Rieden
	 	 	Title:    Director


  

 31 








 EXHIBIT A TO THE 
 COMMON STOCK PURCHASE AGREEMENT 
 OPINION OF OUTSIDE COUNSEL 
  
  

 32 








 EXHIBIT B TO THE 
 COMMON STOCK PURCHASE AGREEMENT 
 CERTIFICATE OF THE COMPANY 
  
 CLOSING CERTIFICATE 
  
 July 3, 2003 
  
 The undersigned, Tricia Borga Suvari, Assistant Secretary of CV Therapeutics, Inc., a Delaware corporation (the
“Company”), delivers this certificate in connection with the Common Stock Purchase Agreement, dated as of July 3, 2003 (the “Agreement”), by and among the Company and Acqua Wellington North American Equities Fund, Ltd. (the
“Purchaser”), and hereby certifies on the date hereof, that (capitalized terms used herein without definition have the meanings assigned to them in the Agreement): 
  
 1.    Attached hereto as Exhibit A is a true, complete and correct copy of the Amended and
Restated Certificate of Incorporation of the Company as filed with the Secretary of State of the State of Delaware. The Certificate of Incorporation of the Company has not been further amended or restated, and no document with respect to any
amendment to the Amended and Restated Certificate of Incorporation of the Company has been filed in the office of the Secretary of State of the State of Delaware since the date shown on the face of the state certification relating to the
Company’s Amended and Restated Certificate of Incorporation, which is in full force and effect on the date hereof, and no action has been taken by the Company in contemplation of any such amendment or the dissolution, merger or consolidation of
the Company. 
  
 2.    Attached hereto as
Exhibit B is a true and complete copy of the Amended and Restated By-laws of the Company, as amended and restated through, and as in full force and effect on, the date hereof, and no proposal for any amendment, repeal or other modification to
the Amended and Restated By-laws of the Company has been taken or is currently pending before the Board of Directors or stockholders of the Company. 
  
 3.    The Board of Directors of the Company has approved the transactions contemplated by the Agreement; said approval has not been
amended, rescinded or modified and remains in full force and effect as of the date hereof. 
  
 4.    Each person who, as an officer of the Company, or as attorney-in-fact of an officer of the Company, signed (i) the Agreement and (ii) any other document delivered prior hereto or on the date
hereof in connection with the transactions contemplated by the Agreement, was duly elected, qualified and acting as such officer or duly appointed and acting as such attorney-in-fact, and the signature of each such person appearing on any such
document is his genuine signature. 
  
 5.    Latham & Watkins is entitled to rely on this certificate in connection with the opinions that such firm is rendering pursuant to Sections 5.1 of the Agreement. 
  

 33 








 IN WITNESS WHEREOF, I have signed my name as of the date first above written. 
  

	

	By:	 	Tricia Borga Suvari
	 	 	Assistant Secretary


  
  

 34 








 EXHIBIT C TO THE 
 COMMON STOCK PURCHASE AGREEMENT 
 COMPLIANCE CERTIFICATE 
  
 In connection with the issuance of shares of common stock of CV Therapeutics,
Inc. (the “Company”) pursuant to the Draw Down Notice, dated ____________ delivered by the Company to Acqua Wellington North American Equities Fund, Ltd. (the “Purchaser”) pursuant to Article VI of the Common Stock
Purchase Agreement dated as of July 3, 2003, by and between the Company and Acqua Wellington North American Equities Fund, Ltd. (the “Agreement”), the undersigned hereby certifies as follows: 
  
 1.    The undersigned is the duly elected _____________
of the Company. 
  
 2.    Except as set forth
in the attached Schedule, the representations and warranties of the Company set forth in Section 3.1 of the Agreement are true and correct in all material respects as though made on and as of the date hereof, except for representations and
warranties that speak as of a particular date. 
  
 3.    The Company has performed in all material respects all covenants and agreements to be performed by the Company on or prior to the Draw Down Exercise Date and the Settlement Date related to the Draw Down Notice and
has complied in all material respects with all obligations and conditions contained in Section 5.3 of the Agreement. 
  
 Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Agreement. 
  
 The undersigned has executed this Certificate this _____ day of
_____________, _____. 
  

	By:	 	  


		
	 Name:
	 	  


		
	Title:	 	  




  

 35 








 EXHIBIT D TO THE 
 COMMON STOCK PURCHASE AGREEMENT 
 FORM OF DRAW DOWN NOTICE 
  
 Reference is made to the Common Stock Purchase Agreement dated as of July 3,
2003, (the “Purchase Agreement”) between CV Therapeutics, Inc., a Delaware corporation (the “Company”), and Acqua Wellington North American Equities Fund, Ltd. Capitalized terms used and not otherwise defined herein
shall have the meanings given such terms in the Purchase Agreement. 
  
 In accordance with and pursuant to Section 6.1 of the Purchase Agreement, the Company hereby issues this Draw Down Notice to exercise a Draw Down request for the Draw Down Amount indicated below. 
  

	Draw Down Amount:	 	  


		
	Call Option Amount Requested:	 	  


		
	Draw Down Pricing Period start date:	 	  


		
	Draw Down Pricing Period end date:	 	  


		
	Settlement Date:	 	  


		
	Draw Down Threshold Price:	 	  


		
	Call Option Threshold Price:	 	  


		
	Minimum Threshold Price:	 	  


		
	Dollar Amount and Number of Shares of Common Stock Currently Unissued under the Registration Statement:	 	  


		
	Dollar Amount and Number of Shares of Common Stock Currently Available under the Aggregate Limit:	 	  



  

	 	 	 	 	 	 	CV THERAPEUTICS, INC.
					
	Dated:	 	  

	 	 	 	By:	 	  


	 	 	 	 	 	 	 	 	 Name:
 Title:

				
	 	 	 	 	 	 	 Address:
 Facsimile
No.


  

 36 








 AGREED AND ACCEPTED 
  
 ACQUA WELLLINGTON NORTH 
 AMERICAN EQUITIES FUND, LTD.

  

	By:	 	  


	 	 	Name:
	 	 	Title:

  
  

 37 








 EXHIBIT E TO THE 
 COMMON STOCK PURCHASE AGREEMENT 
 FORM OF CALL OPTION NOTICE 
  

		
	To:	 	  


	Fax#:	 	  



  
 Reference is made to
the Common Stock Purchase Agreement dated as of July 3, 2003 (the “Purchase Agreement”) between CV Therapeutics, Inc., a Delaware corporation (the “Company”), and Acqua Wellington North American Equities Fund, Ltd.
Capitalized terms used and not otherwise defined herein shall have the meanings given such terms in the Purchase Agreement. 
  
 In accordance with and pursuant to Section 6.2 of the Purchase Agreement, the Purchaser hereby issues this Call Option Notice to exercise a Call Option
for the Call Option Amount indicated below. 
  

	Call Option Amount Exercised:	 	  


		
	Number of Shares to be purchased:	 	  


		
	VWAP on the date hereof:	 	  


		
	Draw Down Discount Price:	 	  


		
	Settlement Date:	 	  


		
	Threshold Price:	 	  


		
	Minimum Threshold Price:	 	  



  

	Dated:	 	  

	 	 	 	ACQUA WELLINGTON NORTH AMERICAN EQUITIES FUND, LTD.
					
	 	 	 	 	 	 	By:	 	  


	 	 	 	 	 	 	 	 	 Name:
 Title:

				
	 	 	 	 	 	 	 Address:
 Facsimile
No.


  

 38 








 EXHIBIT F TO THE 
 COMMON STOCK PURCHASE AGREEMENT 
 OPINION OF OUTSIDE COUNSEL 
  
  

 39 








 EXHIBIT G TO THE 
 COMMON STOCK PURCHASE AGREEMENT 
 OPINION OF IN HOUSE COUNSEL 
  
  

 40 








 DISCLOSURE SCHEDULE 
 RELATING TO THE COMMON STOCK 
 PURCHASE AGREEMENT, DATED AS OF JULY 3, 2003 
 AMONG CV THERAPEUTICS, INC. AND 
 ACQUA WELLINGTON NORTH AMERICAN EQUITIES FUND, LTD. 
  
  
 This disclosure schedule is made and given pursuant to Section 3 of the Common Stock Purchase Agreement, dated as of July 3, 2003 (the
“Agreement”), by and between CV Therapeutics, Inc. (the “Company”) and Acqua Wellington North American Equities Fund, Ltd. Unless the context otherwise requires, all capitalized terms are used herein as defined in the Agreement.
The numbers below correspond to the section numbers of representations and warranties in the Agreement most directly modified by the below exceptions. 
  

 41