exv10w1






Exhibit 10.1




Execution Version




SECURITIES PURCHASE AGREEMENT




     This Securities Purchase Agreement (this “Agreement”) is dated as of September 23, 2010 by and
among Oncothyreon Inc., a Delaware corporation (the “Company”), and each purchaser identified on
the signature pages hereto (each, including its successors and permitted assigns, a “Purchaser” and
collectively, the “Purchasers”).



RECITALS




          A. The Company and each Purchaser is executing and delivering this Agreement in reliance upon
the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933,
as amended (the “Securities Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by
the United States Securities and Exchange Commission (the “Commission”) under the Securities Act.




          B. Each Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to
sell, upon the terms and conditions stated in this Agreement, (i) that aggregate number of shares
of common stock, par value $0.0001 per share (the “Common Stock”), of the Company, set forth below
such Purchaser’s name on the signature page of this Agreement (which aggregate amount for all
Purchasers together shall be 4,242,870 shares of Common Stock and shall be collectively referred
to herein as the “Shares”) and (ii) warrants, in substantially the form attached hereto as
Exhibit A (the “Warrants”), to acquire up to that number of additional shares of Common
Stock equal to seventy-five percent (75%) of the number of Shares purchased by such Purchaser
(rounded down to the nearest whole share) (the shares of Common Stock issuable upon exercise of or
otherwise pursuant to the Warrants collectively are referred to herein as the “Warrant Shares”).




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



          D. The Company has engaged JMP Securities LLC and ROTH Capital Partners, LLC as its exclusive
placement agents (the “Placement Agents”) for the offering of the Shares and Warrants on a “best
efforts” basis.




          E. Contemporaneously with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement, substantially in the form attached hereto
as Exhibit B (the “Registration Rights Agreement”), pursuant to which, among other things,
the Company will agree to provide certain registration rights with respect to the Shares and the
Warrant Shares under the Securities Act and the rules and regulations promulgated thereunder and
applicable state securities laws.




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



ARTICLE I.

DEFINITIONS




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



          “Acquiring Person” has the meaning set forth in Section 4.6.







 









 








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




          “Agreement” has the meaning set forth in the Preamble.




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




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




          “Buy-In” has the meaning set forth in Section 4.1(f).




          “Buy-In Price” has the meaning set forth in Section 4.1(f).




          “Closing” means the closing of the purchase and sale of the Shares and the Warrants pursuant
to this Agreement.




          “Closing Bid Price” means, for any security as of any date, (a) the last reported closing bid
price per share of Common Stock for such security on the Principal Trading Market, as reported by
Bloomberg Financial Markets, or, (b) if the Principal Trading Market begins to operate on an
extended hours basis and does not designate the closing bid price then the last bid price of such
security prior to 4:00 P.M., New York City time, as reported by Bloomberg Financial Markets, or (c)
if the foregoing do not apply, the last closing price of such security in the over-the-counter
market on the electronic bulletin board for such security as reported by Bloomberg Financial
Markets, or (d) if no closing bid price is reported for such security by Bloomberg Financial
Markets, the average of the bid prices of any market makers for such security as reported in the
“pink sheets” by Pink Sheets LLC. If the Closing Bid Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid Price of such security on such date
shall be the fair market value as mutually determined by the Company and the holder of such
security. If the Company and such holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved pursuant to Section 10 of the Warrants. All such
determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during the applicable calculation period.




          “Closing Date” means the Trading Day when all of the Transaction Documents have been executed
and delivered by the applicable parties thereto, and all of the conditions set forth in
Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied or waived, as
the case may be, or such other date as the parties may agree.




          “Commission” has the meaning set forth in the Recitals.




          “Common Stock” has the meaning set forth in the Recitals, and also includes any other class of
securities into which the Common Stock may hereafter be reclassified or changed into.




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



-2-









 






exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock or other securities that entitle the holder to receive, directly or indirectly, Common Stock.




          “Company” has the meaning set forth in the Preamble.




          “Company Counsel” means Wilson Sonsini Goodrich & Rosati, P.C. with offices located at 701
Fifth Avenue, Suite 5100, Seattle, Washington 98104.




          “Company Deliverables” has the meaning set forth in Section 2.2(a).




          “Company’s Knowledge” means with respect to any statement made to the Company’s Knowledge,
that the statement is based upon the actual knowledge of Robert Kirkman, Julie Eastland, Gary
Christianson and Shashi Karan.




          “Control” (including the terms “controlling”, “controlled by” or “under common control with”)
means the possession, direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.




          “Deadline Date” has the meaning set forth in Section 4.1(f).




          “Disclosure Materials” has the meaning set forth in Section 3.1(a).




          “Disclosure Schedules” has the meaning set forth in Section 3.1.




          “DTC” has the meaning set forth in Section 4.1(c).




          “Effective Date” means the date on which the initial Registration Statement required by
Section 2(a) of the Registration Rights Agreement is first declared effective by the Commission.




          “Environmental Laws” has the meaning set forth in Section 3.1(ff).




          “Escrow Agent” has the meaning set forth in Section 2.1(c).




          “Escrow Amount” has the meaning set forth in Section 2.1(c).




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




          “FDA” has the meaning set forth in Section 3.1(t).




          “GAAP” means U.S. generally accepted accounting principles, as applied by the Company.




          “Governmental Licenses” has the meaning set forth in Section 3.1(t).




          “Indemnified Liabilities” has the meaning set forth in Section 6.19(a).




          “Indemnitees” has the meaning set forth in Section 6.19(a).




          “Intellectual Property Rights” has the meaning set forth in Section 3.1(v).





-3-









 








          “Irrevocable Transfer Agent Instructions” means, with respect to the Company, the Irrevocable
Transfer Agent Instructions, in the form of Exhibit E, executed by the Company and
delivered to and acknowledged in writing by the Transfer Agent.




          “Lien” means any lien, charge, claim, encumbrance, security interest, right of first refusal,
preemptive right or other restrictions of any kind.




          “Lock-Up Agreement” has the meaning set forth in Section 2.2(a)(ix).




          “Material Adverse Effect” means a material adverse effect on the results of operations,
assets, business or financial condition of the Company and the Subsidiaries, taken as a whole,
except that any of the following, either alone or in combination, shall not be deemed a Material
Adverse Effect: (i) effects caused by changes or circumstances affecting general market conditions
in the U.S. economy or which are generally applicable to the industry in which the Company
operates, provided that such effects are not borne disproportionately by the Company, (ii) effects
resulting from or relating to the announcement or disclosure of the sale of the Securities or other
transactions contemplated by this Agreement, or (iii) effects caused by any event, occurrence or
condition resulting from or relating to the taking of any action in accordance with the Transaction
Documents.




          “Material Contract” means any contract of the Company that has been filed or was required to
have been filed as an exhibit to the SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of
Regulation S-K.




          “New York Courts” means the state and federal courts sitting in the Borough of Manhattan, New
York.




          “OFAC” has the meaning set forth in Section 3.1(kk).




          “Outside Date” means the fifth Trading Day following the date of this Agreement.




          “Person” means an individual, corporation, partnership, limited liability company, trust,
business trust, association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.




          “Placement Agents” has the meaning set forth in the Recitals.




          “Press Release” has the meaning set forth in Section 4.5.




          “Principal Trading Market” means the Trading Market on which the Common Stock is primarily
listed on and quoted for trading, which, as of the date of this Agreement and the Closing Date,
shall be the Nasdaq Global Market.




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




          “Purchase Price” means $3.50 per unit.




          “Purchaser” or “Purchasers” has the meaning set forth in the Recitals.




          “Purchaser Deliverables” has the meaning set forth in Section 2.2(b).





-4-









 








          “Registration Rights Agreement” has the meaning set forth in the Recitals.




          “Registration Statement” means a registration statement meeting the requirements set forth in
the Registration Rights Agreement and covering the resale by the Purchasers of the Registrable
Securities (as defined in the Registration Rights Agreement).




          “Regulation D” has the meaning set forth in the Recitals.




          “Required Approvals” has the meaning set forth in Section 3.1(l).




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




          “SEC Reports” has the meaning set forth in Section 3.1(a).




          “Secretary’s Certificate” has the meaning set forth in Section 2.2(a)(vii).




          “Securities” has the meaning set forth in the Recitals.




          “Securities Act” has the meaning set forth in the Recitals.




          “Shares” has the meaning set forth in the Recitals.




          “Short Sales” include, without limitation, (i) all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act, whether or not against the box, and all
types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, short
sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and
similar arrangements (including on a total return basis), and (ii) sales and other transactions
through non-U.S. broker dealers or foreign regulated brokers (but shall not be deemed to include
the location and/or reservation of borrowable shares of Common Stock).




          “Stock Certificate” has the meaning set forth in Section 2.1(c).




          “Subscription Amount” means, with respect to each Purchaser, the aggregate amount to be paid
for the Shares and the related Warrants purchased hereunder as indicated on such Purchaser’s
signature page to this Agreement next to the heading “Aggregate Purchase Price (Subscription
Amount)” in United States dollars and in immediately available funds.




          “Subsequent Placement” has the meaning set forth in Section 4.10.




          “Subsidiary” means any subsidiary of the Company as set forth on Exhibit 21.1 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2009.




          “Trading Affiliate” has the meaning set forth in Section 3.2(i).




          “Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its
Principal Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not
listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is
traded in the over the counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the
over the counter market




-5-









 







as reported in the “pink sheets” by Pink Sheets LLC (or any similar
organization or agency succeeding to its functions of reporting prices); provided, that in the
event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof,
then Trading Day shall mean a Business Day.




          “Trading Market” means whichever of the New York Stock Exchange, the NYSE Amex, the NASDAQ
Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin Board
on which the Common Stock is listed or quoted for trading on the date in question.




          “Transaction Documents” means this Agreement, the schedules and exhibits attached hereto, the
Warrants, the Registration Rights Agreement, and the Irrevocable Transfer Agent Instructions.




          “Transfer Agent” means Computershare Trust Company, N.A., the current transfer agent of the
Company, with a mailing address of 350 Indiana St., Suite 750, Golden, Colorado 80401 and a
facsimile number of (303) 262-0603 or any successor transfer agent for the Company.




          “Treasury” has the meaning set forth in Section 3.2(q).




          “Trigger Date” has the meaning set forth in Section 4.10.




          “Warrants” has the meaning set forth in the Recitals to this Agreement.




          “Warrant Shares” has the meaning set forth in the Recitals.




ARTICLE II.

PURCHASE AND SALE




     2.1 Closing.



          (a) Amount. Subject to the terms and conditions set forth in this Agreement, at the
Closing, the Company shall issue and sell to each Purchaser, and each Purchaser shall, severally
and not jointly, purchase from the Company, such number of shares of Common Stock equal to the
quotient resulting from dividing (i) the Subscription Amount for such Purchaser by (ii) the
Purchase Price, rounded down to the nearest whole Share. In addition, each Purchaser shall receive
a Warrant to purchase a number of Warrant Shares equal to seventy-five percent (75%) of the number
of Shares purchased by such Purchaser, rounded down to the nearest whole Share, as indicated below
such Purchaser’s name on the signature page to this Agreement. The Warrants shall have an exercise
price equal to $4.20 per Warrant Share subject to adjustment as provided in the Warrants.




          (b) Closing. The Closing of the purchase and sale of the Shares and Warrants shall
take place at the offices of Goodwin Procter LLP, The New York Times Building, 620 Eighth Avenue,
New York, New York on the Closing Date or at such other locations or remotely by facsimile
transmission or other electronic means as the parties may mutually agree.




          (c) Form of Payment. Except as may otherwise be agreed to among the Company and one
or more of the Purchasers, on or prior to the Closing Date, each Purchaser shall wire its
Subscription Amount, in United States dollars and in immediately available funds, to a non-interest
bearing escrow account established by the Company and the Placement Agents with JPMorgan Chase
Bank, N.A. (the “Escrow Agent”) as set forth on Exhibit H hereto (the aggregate amounts
received being held in escrow by the Escrow Agent are referred to herein as the “Escrow Amount”).
On the Closing Date, (a) the Company and JMP Securities LLC (on behalf of itself and ROTH Capital
Partners, LLC) shall instruct the Escrow Agent to deliver, in immediately available funds, the
Escrow Amount constituting the aggregate purchase




-6-









 







price as follows: (1) to the Placement Agents,
the fees and reimbursable expenses payable to the Placement Agents (which fees and expenses shall
be set forth in such instructions), (2) the fees to be paid to the Escrow Agent pursuant to the
Escrow Agreement dated as of the date hereof by and among the Company, the Escrow Agent and JMP
Securities (on behalf of itself and ROTH Capital Partners, LLC) and (3) the balance of the
aggregate purchase price to the Company, (b) the Company shall irrevocably instruct the Transfer
Agent to deliver to each Purchaser a stock certificate, free and clear of all restrictive and other
legends (except as expressly provided in Section 4.1(b) hereof), evidencing the number of
Shares such Purchaser is purchasing as is set forth on such Purchaser’s signature page to this
Agreement next to the heading “Number of Shares to be Acquired” (the “Stock Certificate”), within
three (3) Trading Days after the Closing and (c) the
Company shall deliver to each Purchaser a Warrant, free and clear of all restrictive and other
legends (except as expressly provided in Section 4.1(b) hereof), evidencing the number of
Warrants such Purchaser is purchasing as is set forth on such Purchaser’s signature page to this
Agreement next to the heading “Underlying Shares Subject to Warrant”, within three (3) Trading Days
after the Closing.




     2.2 Closing Deliveries. (a) On or prior to the Closing, the Company shall issue,
deliver or cause to be delivered to each Purchaser the following (the “Company Deliverables”):



               (i) this Agreement, duly executed by the Company;



               (ii) a facsimile copy of the Stock Certificate, free and clear of all restrictive legends
(except as provided in Section 4.1(b) hereof), evidencing the Shares subscribed for by such
Purchaser hereunder, registered in the name of such Purchaser as set forth on the Stock Certificate
Questionnaire included as Exhibit C-2 hereto, with the original Stock Certificate delivered
within three (3) Trading Days of Closing; provided, however that the receipt of such facsimile
shall be conditioned on the Company receiving a completed Stock Certificate Questionnaire from such
Purchaser no later than one (1) Business Day prior to the Closing Date.



               (iii) a facsimile copy of the Warrant, executed by the Company and registered in the name of
such Purchaser as set forth on the Stock Certificate Questionnaire included as Exhibit C-2
hereto, pursuant to which such Purchaser shall have the right to acquire such number of Warrant
Shares equal to seventy-five percent (75%) of the number of Shares issuable to such Purchaser
pursuant to Section 2.2(a)(ii), rounded down to the nearest whole Share, on the terms set
forth therein, with the original Warrant delivered within three (3) Trading Days of Closing;
provided, however that the receipt of such facsimile shall be conditioned on the Company receiving
a completed Stock Certificate Questionnaire from such Purchaser no later than one (1) Business Day
prior to the Closing Date.



               (iv) a legal opinion of Company Counsel, dated as of the Closing Date and in the form attached
hereto as Exhibit D, executed by such counsel and addressed to the Purchasers and the
Placement Agents;



               (v) the Registration Rights Agreement, duly executed by the Company;



               (vi) duly executed instructions to the Transfer Agent instructing the Transfer Agent to (a)
deliver, on an expedited basis, a certificate evidencing a number of Shares equal to such
Purchaser’s Subscription Amount divided by the Purchase Price, rounded down to the nearest whole
Share, registered in the name of such Purchaser and (b) establish a reserve of shares of Common
Stock to be issued upon the exercise of the Warrants in accordance with their terms;



               (vii) a certificate of the Secretary of the Company (the “Secretary’s Certificate”), dated as
of the Closing Date, (a) certifying the resolutions adopted by the Board of Directors of the
Company or a duly authorized committee thereof approving the transactions contemplated by this



-7-









 




Agreement and the other Transaction Documents and the issuance of the Securities, (b) certifying
the current versions of the certificate of incorporation, as amended, and by-laws of the Company
and (c) certifying as to the signatures and authority of persons signing the Transaction Documents
and related documents on behalf of the Company, in the form attached hereto as Exhibit F;




               (viii) the Compliance Certificate referred to in Section 5.1(i);



               (ix) a Lock-Up Agreement, substantially in the form of Exhibit I hereto (the “Lock-Up
Agreement”) executed by each person listed on Exhibit J hereto, and each such Lock-Up
Agreement shall be in full force and effect on the Closing Date;



               (x) a certificate evidencing the good standing of the Company issued by the Secretary of State
of the State of Delaware, as of a date within three (3) Business Days of the Closing Date;



               (xi) a certificate of existence and authorization issued by the Secretary of State of the
State of Washington, as of a date within three (3) Business Days of the Closing Date; and



               (xii) a certified copy of the certificate of incorporation, as certified by the Secretary of
State (or comparable office) of Delaware, as of a date within three (3) Business Days of the
Closing Date.



          (b) On or prior to the Closing, each Purchaser shall deliver or cause to be delivered to the
Company the following (the “Purchaser Deliverables”):



               (i) this Agreement, duly executed by such Purchaser;



               (ii) its Subscription Amount, in United States dollars and in immediately available funds, in
the amount set forth below such Purchaser’s name on the applicable signature page hereto under the
heading “Aggregate Purchase Price (Subscription Amount)” by wire transfer to the Escrow Account, as
set forth on Exhibit H attached hereto;



               (iii) the Registration Rights Agreement, duly executed by such Purchaser;



               (iv) a fully completed and duly executed Selling Stockholder Questionnaire in the form
attached as Annex B to the Registration Rights Agreement; and



               (v) a fully completed and duly executed Accredited Investor Questionnaire, satisfactory to the
Company, and Stock Certificate Questionnaire in the forms attached hereto as Exhibits C-1
and C-2, respectively.



ARTICLE III.

REPRESENTATIONS AND WARRANTIES




     3.1 Representations and Warranties of the Company. Except (i) as set forth in the
schedules delivered herewith (the “Disclosure Schedules”), which Disclosure Schedules shall be
deemed a part hereof and shall qualify any representation made herein to the extent of the
disclosure contained in the corresponding section of the Disclosure Schedules (provided that any
information disclosed in the Disclosure



-8-









 




Schedules under any section number shall be deemed to be
disclosed and incorporated into any other section number under the Agreement where it is reasonably
evident that such item should have been disclosed under such other section number), or (ii) as
disclosed in the SEC Reports, the Company hereby represents and warrants as of the date hereof and
the Closing Date (except for the representations and warranties that speak as of a specific date,
which shall be made as of such date), to each of the Purchasers and to the Placement Agents:




          (a) SEC Reports; Disclosure Materials. The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by it under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such
shorter period as the Company was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated by reference
therein, being collectively
referred to herein as the “SEC Reports”, and the SEC Reports filed on or after January 1,
2010, together with the Disclosure Schedules, being collectively referred to as the “Disclosure
Materials”) on a timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such extension, except the Company’s
Annual Report on Form 10-K for the year ended December 31, 2009 and where the failure to file on a
timely basis would not have or reasonably be expected to result in a Material Adverse Effect
(including, for this purpose only, any failure to qualify to register the Shares and Warrant Shares
for resale on Form S-1 or which would prevent any Purchaser from using Rule 144 to resell any
Securities). As of their respective filing dates, or to the extent corrected by a subsequent
restatement, the SEC Reports included in the Disclosure Materials complied in all material respects
with the requirements of the Securities Act and the Exchange Act and the rules and regulations of
the Commission promulgated thereunder, and none of the SEC Reports included in the Disclosure
Materials, when filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading. The Company is not, and
has never been, an issuer subject to Rule 144(i) under the Securities Act. Each of the Material
Contracts to which the Company or any Subsidiary is a party or to which the property or assets of
the Company or any of its Subsidiaries are subject has been filed as an exhibit, or duly
incorporated by reference, to the SEC Reports.




          (b) Private Placement. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2 of this Agreement and the accuracy of the information
disclosed in the Accredited Investor Questionnaires provided by the Purchasers, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the
Purchasers under the Transaction Documents. Assuming the making and the obtaining of the Required
Approvals, the issuance and sale of the Securities hereunder does not contravene the rules and
regulations of the Trading Market.




          (c) Registration Rights. Other than each of the Purchasers or the parties to that
Registration Rights Agreement, dated as of July 6, 2010, by and between the Company and Small Cap
Biotech Value, Ltd., which registration statement required to be filed thereby has been filed prior
to the date hereof, no Person has any right to cause the Company to effect the registration under
the Securities Act of any securities of the Company other than those securities which are currently
registered on an effective registration statement on file with the Commission.




          (d) Disclosure. The Company confirms that it has not provided, and to the Company’s
Knowledge, none of its officers or directors nor any other Person acting on its or their behalf has
provided, and it has not authorized the Placement Agents to provide, any Purchaser or its
respective agents or counsel with any information that constitutes material, non-public information
regarding the Company or its Subsidiaries except (i) insofar as the existence, provisions and terms
of the Transaction Documents and the proposed transactions hereunder may constitute such
information, all of which will be disclosed by the Company in the Press Release as contemplated by
Section 4.5 hereof or (ii) to such Purchaser, prior to such




-9-









 







disclosure, that has executed a
written agreement regarding the confidentiality and use of such information. The Company
understands and confirms that the Purchasers will rely on the foregoing representations in
effecting transactions in securities of the Company.




          (e) No Integrated Offering. Assuming the accuracy of the Purchasers’ representations
and warranties set forth in Section 3.2, none of the Company, its Subsidiaries nor, to the
Company’s Knowledge, any of its Affiliates or any Person acting on its behalf has, directly or
indirectly, at any time, made any offers or sales of any Company security or solicited any offers
to buy any security under circumstances that would (i) eliminate the availability of the exemption
from registration under Regulation D under the Securities Act in connection with the offer and sale
by the Company of the Securities as contemplated hereby or (ii) cause the offering of the
Securities pursuant to the Transaction Documents to be (x) integrated with prior offerings by the
Company for purposes of any applicable law or regulation or (y) aggregated with prior offerings by
the Company in a manner that would require the prior approval of the
stockholders of the Company prior to the consummation of the transactions contemplated hereby
under the rules and regulations of any Trading Market on which any of the securities of the Company
are listed or designated.




          (f) No General Solicitation. The Company has not offered or sold any of the
Securities by any form of general solicitation or general advertising.




          (g) Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company
acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s
length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated thereby and any advice given by any Purchaser or any of their
respective representatives or agents in connection with the Transaction Documents and the
transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the
Securities.




          (h) Subsidiaries. Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2009 sets forth each Subsidiary of the Company as of the Closing
Date, showing its jurisdiction of incorporation or organization, and the Company does not have any
other Subsidiaries as of the Closing Date.




          (i) Organization and Qualification. The Company and each of its Subsidiaries have
been duly organized and are validly existing and in good standing under the laws of their
respective jurisdictions of organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct the businesses in
which they are engaged, except where the failure to be so qualified or have such power or authority
would not, individually or in the aggregate, have a Material Adverse Effect.




          (j) Authorization; Enforcement; Validity. The Transaction Documents have been duly
authorized, executed and delivered by the Company, and all action required to be taken by the
Company prior to or as of the Closing Date for the consummation by the Company of the transactions
contemplated hereby has been duly and validly taken. Each of the Transaction Documents to which
the Company is a party has been duly executed and delivered by the Company and constitutes 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




-10-









 







of, creditor’s rights and remedies or by other equitable principles of
general application (including any limitation of equitable remedies) or, in the case of any
indemnification agreement, public policy.




          (k) No Conflicts. The execution, delivery and performance by the Company of the
Transaction Documents, the issuance by the Company of the Securities and the consummation by the
Company of the transactions contemplated by the Transaction Documents will not (i) conflict with or
result in a breach or violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of its Subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any
of the property or assets of the Company or any of its Subsidiaries is subject, (ii) result in any
violation of the provisions of the charter or by-laws or similar organizational documents of the
Company or any of its Subsidiaries or (iii) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory
authority,
except in the cases of clauses (i) and (iii) above as would not be reasonably expected to have
a Material Adverse Effect.




          (l) Filings, Consents and Approvals. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental or regulatory
authority is required for the execution, delivery and performance by the Company of the Transaction
Documents, the issuance by the Company of any of the Securities or the consummation of any of the
transactions contemplated by the Transaction Documents, except for (i) the filing with the
Commission of one or more Registration Statements in accordance with the requirements of the
Registration Rights Agreement, (ii) filings required by applicable state securities laws, (iii) the
filing of a Notice of Sale of Securities on Form D with the Commission under Regulation D of the
Securities Act, (iv) the filing of any requisite notices and/or application(s) to the Principal
Trading Market for the issuance and sale of the Securities and the listing of the Shares and
Warrant Shares for trading or quotation, as the case may be, thereon in the time and manner
required thereby, (v) the filings required in accordance with Section 4.5 of this Agreement
and (vi) those that have been made or obtained prior to the date of this Agreement (collectively,
the “Required Approvals”).




          (m) Issuance of the Securities. The Shares have been duly authorized and, when issued
and paid for in accordance with the terms of the Transaction Documents, will be duly and validly
issued, fully paid and nonassessable and free and clear of all Liens imposed by action or inaction
of the Company, other than restrictions on transfer provided for in the Transaction Documents or
imposed by applicable securities laws, and shall not be subject to preemptive or similar rights.
The Warrants have been duly authorized and, when issued and paid for in accordance with the terms
of the Transaction Documents, will be duly and validly issued, free and clear of all Liens, other
than restrictions on transfer provided for in the Transaction Documents or imposed by applicable
securities laws, and shall not be subject to preemptive or similar rights of stockholders. The
Warrant Shares issuable upon exercise of the Warrants have been duly authorized and, when issued
and paid for in accordance with the terms of the Transaction Documents and the Warrants will be
duly and validly issued, fully paid and nonassessable, free and clear of all Liens, other than
restrictions on transfer provided for in the Transaction Documents or imposed by applicable
securities laws, and shall not be subject to preemptive or similar rights of stockholders.
Assuming the accuracy of the representations and warranties of the Purchasers in this Agreement,
the Securities will be issued in compliance with all applicable federal and state securities laws.
As of the Closing Date, the Company shall have reserved from its duly authorized capital stock the
number of shares of Common Stock issuable upon exercise of the Warrants (without taking into
account any limitations on the exercise of the Warrants set forth in the Warrants). The Company
shall, so long as any of the Warrants are outstanding, take all action necessary to reserve and
keep available out of its authorized and unissued capital stock, solely for the purpose of
effecting the exercise of such outstanding Warrants, the number of shares of Common Stock




-11-









 







issuable
upon exercise of such outstanding Warrants (without taking into account any limitations on the
exercise of the Warrants set forth in the Warrants).




          (n) Capitalization. The authorized capital stock of the Company and the shares
thereof issued and outstanding were as set forth in the SEC Reports as of the dates reflected
therein. All of the outstanding shares of Common Stock have been duly authorized and validly
issued, and are fully paid and nonassessable. Except as set forth in the SEC Reports and the
Transaction Documents, there are no agreements or arrangements under which the Company is obligated
to register the sale of any securities under the Securities Act. Except as set forth in the SEC
Reports, no shares of Common Stock are entitled to preemptive rights and there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for, any shares of capital
stock of the Company, other than as may have been issued or became issuable subsequent to the last
filed SEC Report pursuant to the terms of an equity incentive plan maintained by the Company.
Except as set forth in the SEC Reports, there are no outstanding debt securities and 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, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, any shares of capital stock of the Company other than those
issued or granted in the ordinary course of business pursuant to the Company’s equity incentive
and/or compensatory plans or arrangements. Except for customary transfer restrictions contained in
agreements entered into by the Company to sell restricted securities or as set forth in the SEC
Reports, the Company is not a party to, any agreement restricting the voting or transfer of any
shares of the capital stock of the Company and, to the Company’s Knowledge, no such agreements
exist. Except as set forth in the SEC Reports, the offer and sale of all capital stock, convertible
or exchangeable securities, rights, warrants or options of the Company issued prior to the Closing
Date complied with all applicable federal and state securities laws, and no stockholder has any
right of rescission or damages or any “put” or similar right with respect thereto that would have a
Material Adverse Effect. Except as set forth in the SEC Reports, there are no securities or
instruments containing anti-dilution or similar provisions that will be triggered by this Agreement
or any of the other Transaction Documents or the consummation of the transactions described herein
or therein.




          (o) Financial Statements. Except as disclosed in the Disclosure Materials, the
financial statements and the related notes thereto of the Company and its consolidated Subsidiaries
incorporated by reference or included in the SEC Reports comply in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as applicable, and present
fairly the consolidated financial position of the Company and its Subsidiaries as of the dates
indicated and the results of their operations and the changes in their cash flows for the periods
specified; such financial statements have been prepared in conformity with GAAP applied on a
consistent basis throughout the periods covered thereby, and the other financial information
included or incorporated by reference in the SEC Reports has been derived from the accounting
records of the Company and its subsidiaries and presents fairly the information shown thereby.




          (p) Material Changes. Since June 30, 2010, except as specifically disclosed in a
subsequent SEC Report filed prior to the date hereof, (i) there have been no events, occurrences or
developments that have had or would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, (ii) the Company has not incurred any material liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with
the Commission, (iii) the Company has not altered materially its method of accounting or the manner
in which it keeps its accounting books and records, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or purchased, redeemed or
made any agreements to purchase or redeem any shares of its capital




-12-









 







stock (other than in connection
with repurchases of unvested stock issued to employees of the Company), and (v) the Company has not
issued any equity securities to any officer, director or Affiliate, except Common Stock issued in
the ordinary course as dividends on outstanding preferred stock or upon the exercise of warrants or
issued pursuant to existing Company stock option or upon the exercise of warrants or stock purchase
plans or executive and director compensation arrangements disclosed in the SEC Reports. Except for
the issuance of the Securities contemplated by the Transaction Documents, no event, liability or
development has occurred or exists with respect to the Company or its Subsidiaries or their
respective business, properties, operations or financial condition, that would be required to be
disclosed by the Company under applicable securities laws at the time this representation is made
that has not been publicly disclosed at least one (1) Trading Day prior to the date that this
representation is made.




          (q) Litigation. Except as described in the SEC Reports, there are no legal,
governmental or regulatory investigations, actions, suits or proceedings pending to which the
Company or any of its Subsidiaries is or may be a party or to which any property of the Company or
any of its Subsidiaries is or may be the subject that, individually or in the aggregate, could
reasonably be expected to
have a Material Adverse Effect or materially and adversely affect the ability of the Company
to perform its obligations under the Transaction Documents; no such investigations, actions, suits
or proceedings are, to the Company’s Knowledge, threatened or contemplated by any governmental or
regulatory authority or threatened by others.




          (r) Employment Matters. No labor disturbance by or dispute with employees of the
Company or any of its Subsidiaries exists or, to the Company’s Knowledge, is contemplated or
threatened. 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 SEC Reports.
Except as disclosed in the SEC Reports, no officer, consultant or key employee of the Company or
any Subsidiary whose termination, either individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect, has terminated or, to the Company’s Knowledge, has any
present intention of terminating his or her employment or engagement with the Company or any
Subsidiary.




          (s) Compliance. Neither the Company nor any of its Subsidiaries is (i) in violation
of its charter or by-laws or similar organizational documents; (ii) in default, and no event has
occurred that, with notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any
of the property or assets of the Company or any of its Subsidiaries is subject; or (iii) in
violation of any law or statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of clauses (ii) and (iii)
above, for any such default or violation that would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect.




          (t) Regulatory Permits. The Company and each of its Subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”)
issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary
to conduct the business of the Company as described in the SEC Reports, including without
limitation, all such registrations, approvals, certificates, authorizations and permits required by
the United States Food and Drug Administration (the “FDA”) or any other federal, state, local or
foreign agencies or bodies engaged in the regulation of clinical trials, pharmaceuticals, biologics
or biohazardous substances or materials, except where the failure so to possess would not, singly
or in the aggregate, result in a Material Adverse Effect; the Company and each of its Subsidiaries
are in compliance with the requirements of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, result in a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when the




-13-









 







invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect
would not, singly or in the aggregate, result in a Material Adverse Effect; and neither the Company
nor any of its Subsidiaries have received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a Material Adverse Effect. The Company
has no reason to believe that any party granting any such Governmental Licenses is considering
limiting, suspending or revoking the same in any material respect. The Company has not failed to
submit to the FDA an Investigational New Drug Application for a clinical trial it is conducting or
sponsoring, except where such failure would not, singly or in the aggregate, have a Material
Adverse Effect; all such submissions were in material compliance with applicable laws when
submitted and no material deficiencies have been asserted by the FDA with respect to any such
submissions, except any deficiencies which could not, singly or in the aggregate, have a Material
Adverse Effect.




          (u) Title to Assets. The Company and its Subsidiaries have good and valid title in
fee simple to, or have valid rights to lease or otherwise use, all items of real and personal
property reflected in the financial statements included or incorporated by reference in the SEC
Reports that are
material to the businesses of the Company and its Subsidiaries taken as a whole, in each case
free and clear of all liens, encumbrances, claims and defects and imperfections of title except
those that (i) do not materially interfere with the use made and proposed to be made of such
property by the Company and its Subsidiaries or (ii) could not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect.




          (v) Patents and Trademarks. Except as described in the SEC Reports, to the Company’s
Knowledge, (i) the Company owns, possesses or has adequate rights to use the Company Intellectual
Property Rights (as defined below), (ii) the Company has not received any written notice of any
infringement of, or conflict with, any Intellectual Property Rights of any third party, (iii) the
Company is not aware of any third party Intellectual Property Rights that would have a Material
Adverse Effect on the ability of the Company to make, use or sell its products, (iv) no third
party, including any academic or governmental organization, possesses or could obtain rights to the
Company Intellectual Property Rights which, if exercised, could enable such party to develop
products competitive with those of the Company, and (v) neither the Company nor any of its
Subsidiaries is obligated to pay a material royalty, grant a material license, or provide other
material consideration to any third party in connection with the Company Intellectual Property
Rights. Except as described in the SEC Reports or as would not have a Material Adverse Effect, (x)
the Company is not aware of any facts or circumstances that constitute an infringement by the
Company of any valid claim of a third-party patent, (y) the Company is not aware of any facts or
circumstances that constitute an infringement by the Company of, or conflict with, any non-patented
Intellectual Property Rights of any third party, and (z) the Company is not aware of any facts or
circumstances that would render any Company Intellectual Property Rights invalid or unenforceable.
For purposes of this Agreement, “Intellectual Property Rights” means patents, patent rights, patent
applications, licenses, inventions, copyrights, know how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names.




          (w) Insurance. The Company and its Subsidiaries have insurance covering their
respective properties, operations, personnel and businesses, including business interruption
insurance, which insurance is in amounts and insures against such losses and risks as are
reasonable and prudent to protect the Company and its Subsidiaries and their respective businesses;
and neither the Company nor any of its Subsidiaries has (i) received notice from any insurer or
agent of such insurer that capital improvements or other expenditures are required or necessary to
be made in order to continue such insurance or (ii) any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage at reasonable cost from similar insurers as may be necessary to continue its business.





-14-









 








          (x) Transactions With Affiliates and Employees. Except as set forth in the SEC
Reports, there are no loans, leases, agreements, contracts, royalty agreements, management
contracts, service arrangements or other continuing transactions exceeding $120,000 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 promulgated under the Securities Act, on the other hand. Except as
disclosed in the SEC Reports, there are no outstanding amounts payable to or receivable from, or
advances by the Company or any of its Subsidiaries to, and neither the Company nor any of its
Subsidiaries is otherwise a creditor of or debtor to, any beneficial owner of more than 5% of the
outstanding shares of Common Stock, or any director, employee or affiliate of the Company or any of
its Subsidiaries, other than (i) reimbursement for reasonable expenses incurred on behalf of the
Company or any of its Subsidiaries or (ii) as part of the normal and customary terms of such
persons’ employment or service as a director with the Company or any of its Subsidiaries.




          (y) Internal Accounting Controls. Except as disclosed in its SEC Reports, the Company
maintains systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of
the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by,
or under the supervision of the Company’s principal executive and principal financial officers,
or persons performing similar functions, to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. Except as disclosed in the SEC Reports, there are no material
weaknesses in the Company’s internal control over financial reporting.




          (z) Sarbanes-Oxley; Disclosure Controls. There is and has been no failure on the part
of the Company or any of the Company’s directors or officers, in their capacities as such, to
comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith, including Section 402 related to loans and Sections 302 and
906 related to certifications to the extent that the Company is or has been required to comply with
the Sarbanes-Oxley Act and such rules. Except as disclosed in the Disclosure Materials, the
Company maintains “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the
Exchange Act) that are reasonably designed to ensure that information required to be disclosed by
the Company in reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Exchange Act, and that such
information is accumulated and communicated to the Company’s management as appropriate to allow
timely decisions regarding required disclosure. The Company has carried out evaluations of the
effectiveness of its disclosure controls and procedures as required by Rule 13a-15 of the Exchange
Act.




          (aa) Certain Fees. Neither the Company nor any of its Subsidiaries is a party to any
contract, agreement or understanding with any person (other than the Transaction Documents and the
engagement letter between JMP Securities LLC and the Company) that would give rise to a valid claim
against the Company or any of its Subsidiaries or the Placement Agents for a brokerage commission,
finder’s fee or like payment in connection with the offering and sale of the Securities.




          (bb) Investment Company. The Company is not and, after giving effect to the offering
and sale of the Securities, will not be required to register as an “investment company” within the
meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder.




-15-









 








          (cc) Listing and Maintenance Requirements. The Company’s Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to, or which to the Company’s Knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act, nor has the Company received any
notification that the Commission is contemplating terminating such registration. Except as
disclosed in the SEC Reports, the Company has not, in the 10 months preceding the Closing Date,
received notice from any Trading Market on which the Common Stock is or has been listed or quoted
to the effect that the Company is not in compliance with the listing or maintenance requirements of
such Trading Market. As of the Closing Date, the Company is in compliance with all such listing and
maintenance requirements.




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




          (ee) Tax Matters. Except as would not have a Material Adverse Effect, the Company and
its Subsidiaries have paid all federal, state, local and foreign taxes and filed all tax returns
required to be paid or filed through the date hereof to the extent that such taxes have become due
and are not being contested in good faith; and except as otherwise disclosed in the SEC Reports,
there is no tax deficiency that has been, or could reasonably be expected to be, asserted against
the Company or any of its Subsidiaries or any of their respective properties or assets except as
would not have a Material Adverse Effect.




          (ff) Environmental Matters. (i) The Company and its Subsidiaries (x) are in
compliance with any and all applicable federal, state, local and foreign laws, rules, regulations,
requirements, decisions and orders relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or contaminants (collectively,
“Environmental Laws”); (y) have received and are in compliance with all permits, licenses,
certificates or other authorizations or approvals required of them under applicable Environmental
Laws to conduct their respective businesses; and (z) have not received written notice of any actual
or potential liability for the investigation or remediation of any disposal or release of hazardous
or toxic substances or wastes, pollutants or contaminants, and (ii) there are no costs or
liabilities associated with Environmental Laws of or relating to the Company or its Subsidiaries,
except in the case of each of clauses (ff)(i)(x), (ff)(i)(y) and (ff)(ii)(z) above, for any such
failure to comply, or failure to receive required permits, licenses or approvals, or cost or
liability, as would not, individually or in the aggregate, have a Material Adverse Effect.




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




          (hh) Off Balance Sheet Arrangements. There is no transaction, arrangement, or other
relationship between the Company (or any Subsidiary) and an unconsolidated or other off balance
sheet




-16-









 







entity that is required to be disclosed by the Company in SEC Reports and is not so disclosed
and would have or reasonably be expected to result in a Material Adverse Effect.




          (ii) Regulation M Compliance. The Company has not taken, directly or indirectly, any
action designed to or that could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Securities.




          (jj) PFIC. The Company is not operated in such a manner as to qualify as a passive
foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986,
as amended.




          (kk) OFAC. Neither the Company nor any Subsidiary nor, to the Company’s Knowledge, any
director, officer, agent, employee or Affiliate is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and
the Company will not directly or indirectly use the proceeds of the sale of the Securities, or
lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner
or other Person or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or
any other country sanctioned by OFAC or for the purpose of financing the activities of any Person
currently subject to any U.S. sanctions administered by OFAC.




          (ll) FDA. The Company and each of its Subsidiaries have operated and currently are in
compliance with all applicable rules and regulations of the FDA or any other federal, state, local
or foreign governmental body exercising comparable authority, except where the failure to so
operate or be in compliance would not have a Material Adverse Effect. The tests and preclinical and
clinical studies conducted by or, to the Company’s Knowledge, on behalf of the Company that are
described in the SEC Reports were and, if still pending, are being, conducted in all material
respects in accordance with the protocols submitted to the FDA or any foreign government exercising
comparable authority, procedures and controls pursuant to, where applicable, accepted professional
and scientific standards, and all applicable laws and regulations; the descriptions of the tests
and preclinical and clinical studies, and results thereof, conducted by or, to the Company’s
Knowledge, on behalf of the Company contained in the SEC Reports are accurate and complete in all
material respects; the Company is not aware of any other trials, studies or tests, the results of
which reasonably call into question the results described or referred to in the SEC Reports; and
the Company has not received any oral or written notice or correspondence from the FDA or any
foreign, state or local governmental body exercising comparable authority requiring the
termination, suspension, or clinical hold of any tests or preclinical or clinical studies, or such
written notice or correspondence from any Institutional Review Board or comparable authority
requiring the termination or suspension of a clinical study, conducted by or on behalf of the
Company, which termination, suspension, or clinical hold would reasonably be expected to have a
Material Adverse Effect.




          (mm) No Additional Agreements. The Company does not have any agreement or
understanding with any Purchaser with respect to the transactions contemplated by the Transaction
Documents other than as specified in the Transaction Documents or any written agreement regarding
the confidentiality and use of confidential information.




          (nn) Acknowledgement Regarding Purchasers’ Trading Activity. It is understood and
acknowledged by the Company that (i) none of the Purchasers has been asked to agree, nor has any
Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the
Company, or “derivative” securities based on securities issued by the Company or to hold the
Securities for any specified term; (ii) any Purchaser, and counter-parties in “derivative”
transactions to which any such Purchaser is a party, directly or indirectly, presently may have a
“short” position in the Common Stock, and (iii) each Purchaser shall not be deemed to have any
affiliation with or control over any arm’s length counter-party in




-17-









 







any “derivative” transaction.
The Company further understands and acknowledges that one or more Purchasers may engage in hedging
and/or trading activities at various times during the period that the Securities are outstanding
and such hedging and/or trading activities, if any, can reduce the value of the existing
stockholders’ equity interest in the Company both at and after the time the hedging and/or trading
activities are being conducted. The Company acknowledges that such aforementioned hedging and/or
trading activities do not constitute a breach of the Transaction Documents.




     3.2 Representations and Warranties of the Purchasers. Each Purchaser hereby,
severally but not jointly, represents and warrants as of the date hereof and as of the Closing Date
to the Company as follows:



          (a) Organization; Authority. Such Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization with the
requisite corporate, limited liability company or partnership power and authority to enter into and
to consummate the transactions contemplated by the applicable Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement
by such Purchaser and performance by such Purchaser of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate or, if such Purchaser is not a
corporation, such partnership, limited liability company or other applicable like action, on the
part of such Purchaser. Each Transaction document to which it is a party has been duly executed by
such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser, enforceable against it
in accordance with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by other equitable
principles of general application.




          (b) No Conflicts. The execution, delivery and performance by such Purchaser of this
Agreement and the Registration Rights Agreement and the consummation by such Purchaser of the
transactions contemplated hereby and thereby will not (i) result in a violation of the
organizational documents of such Purchaser, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Purchaser is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities laws) applicable to
such Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of such Purchaser to perform its obligations
hereunder.




          (c) Investment Intent. Such Purchaser understands that the Securities are “restricted
securities” and have not been registered under the Securities Act or any applicable state
securities law and is acquiring the Shares and Warrants and, upon exercise of the Warrants, will
acquire the Warrant Shares issuable upon exercise thereof as principal for its own account and not
with a view to, or for distributing or reselling such Securities or any part thereof in violation
of the Securities Act or any applicable state securities laws, provided, however, that by making
the representations herein, such Purchaser does not agree to hold any of the Securities for any
minimum period of time and reserves the right, subject to the provisions of this Agreement and the
Registration Rights Agreement, at all times to sell or otherwise dispose of all or any part of such
Securities pursuant to an effective registration statement under the Securities Act or under an
exemption from such registration and in compliance with applicable federal and state securities
laws. Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.
Such Purchaser does not have any agreement, plan or understanding, directly or indirectly, with any
Person to distribute or effect any distribution of any of the Securities (or any securities which
are derivatives thereof) to




-18-









 







or through any person or entity; such Purchaser is not a registered
broker-dealer under Section 15 of the Exchange Act or an entity engaged in a business that would
require it to be so registered as a broker-dealer.




          (d) Purchaser Status. At the time such Purchaser was offered the Shares and Warrants,
it was, and at the date hereof it is, and on each date on which it exercises the Warrants it will
be, an “accredited investor” as defined in Rule 501(a) under the Securities Act.




          (e) General Solicitation. Such Purchaser is not purchasing the Securities as a result
of any advertisement, article, notice or other communication regarding the Securities published in
any newspaper, magazine or similar media or broadcast over television, radio or presented at any
seminar or any other general advertisement.




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




          (g) Acknowledgement of Risks.




               (i) Such Purchaser acknowledges and understands that its investment in the Securities involves
a significant degree of risk, including, without limitation: (i) the Company remains a development
stage business with limited operating history and requires substantial funds in addition to the
proceeds from the sale of the Securities; (ii) an investment in the Company is speculative,
and only Purchasers who can afford the loss of their entire investment should consider investing in
the Company and the Securities; (iii) such Purchaser may not be able to liquidate its investment;
(iv) transferability of the Securities is extremely limited; (v) in the event of a disposition of
the Securities, such Purchaser could sustain the loss of its entire investment; and (vi) the
Company has not paid any dividends on its Common Stock since inception and does not anticipate the
payment of dividends in the foreseeable future. Such risks are more fully set forth in the public
filings made by the Company with the Commission;



               (ii) Such Purchaser is able to bear the economic risk of holding the Securities for an
indefinite period, and has knowledge and experience in financial and business matters such that it
is capable of evaluating the risks of the investment in the Securities; and



               (iii) Such Purchaser has, in connection with such Purchaser’s decision to purchase Securities,
not relied upon any representations or other information (whether oral or written) other than as
set forth in the representations and warranties of the Company contained herein, and such Purchaser
has, with respect to all matters relating to the Transaction Documents and the offer and sale of
the Securities, relied solely upon the advice of such Purchaser’s own counsel and has not relied
upon or consulted any counsel to the Placement Agents or counsel to the Company.



          (h) Access to Information. Such Purchaser acknowledges that it has had the
opportunity to review the Disclosure Materials and has been afforded (i) the opportunity to ask
such questions as it has deemed necessary of, and to receive answers from, representatives of the
Company concerning the terms and conditions of the offering of the Securities and the merits and
risks of investing in the Securities; (ii) access to information about the Company and the
Subsidiaries and their respective financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment decision with
respect to the investment. Neither such inquiries nor any other investigation





-19-









 







conducted by or on
behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such
Purchaser’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and
the Company’s representations and warranties contained in the Transaction Documents. Such
Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make
an informed decision with respect to its acquisition of the Securities.




          (i) Certain Trading Activities. Other than with respect to the transactions
contemplated herein, since the time that such Purchaser was first contacted by the Company, the
Placement Agents or any other Person regarding the transactions contemplated hereby, neither the
Purchaser nor any Affiliate of such Purchaser which (x) had knowledge of the transactions
contemplated hereby, (y) has or shares discretion relating to such Purchaser’s investments or
trading or information concerning such Purchaser’s investments, including in respect of the
Securities, and (z) is subject to such Purchaser’s review or input concerning such Affiliate’s
investments or trading (collectively, “Trading Affiliates”) has directly or indirectly, nor has any
Person acting on behalf of or pursuant to any understanding with such Purchaser or Trading
Affiliate, effected or agreed to effect any purchases or sales of the securities of the Company
(including, without limitation, any Short Sales involving the Company’s securities).
Notwithstanding the foregoing, in the case of a Purchaser and/or Trading Affiliate that is,
individually or collectively, a multi-managed investment bank or vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s or Trading Affiliate’s assets and the
portfolio managers have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s or Trading Affiliate’s assets, the
representation set forth above shall apply only with respect to the portion of assets managed by
the portfolio manager that have knowledge about the financing transaction contemplated by this
Agreement. Other than to other Persons party to this Agreement and to accountants, lawyers and
other agents and representatives of each Purchaser that are bound by a duty of confidentiality to
such
Purchaser and whom such Purchaser has taken reasonable actions to cause them to maintain the
confidentiality thereof, such Purchaser has maintained the confidentiality of all disclosures made
to it in connection with this transaction (including the existence and terms of this transaction).
Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a
representation or warranty, or preclude any actions, with respect to the identification of the
availability of, or securing of, available shares to borrow in order to effect short sales or
similar transactions in the future.




          (j) Brokers and Finders. No Person will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or upon the Company or
any Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of the Purchaser.




          (k) Independent Investment Decision. Such Purchaser has independently evaluated the
merits of its decision to purchase Securities pursuant to the Transaction Documents, and such
Purchaser confirms that it has not relied on the advice of any other Purchaser’s business and/or
legal counsel in making such decision. Such Purchaser understands that nothing in this Agreement
or any other materials presented by or on behalf of the Company to the Purchaser in connection with
the purchase of the Securities constitutes legal, tax or investment advice. Such Purchaser has
consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Securities. Such Purchaser
understands that the Placement Agents have acted solely as the agents of the Company in this
placement of the Shares and Warrants and such Purchaser has not relied on the business or legal
advice of the Placement Agents or any of their agents, counsel or Affiliates in making its
investment decision hereunder, and confirms that none of such Persons has made any representations
or warranties to such Purchaser in connection with the transactions contemplated by the Transaction
Documents.




          (l) Reliance on Exemptions. Such Purchaser understands that the Securities being
offered and sold to it in reliance on specific exemptions from the registration requirements of
United




-20-









 







States federal and state securities laws and that the Company is relying in part upon the
truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties,
agreements, acknowledgements and understandings of such Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility of such Purchaser to acquire the
Securities.




          (m) No Governmental Review. Such Purchaser understands that no United States federal
or state agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities or the fairness or suitability of the investment in
the Securities nor have such authorities passed upon or endorsed the merits of the offering of the
Securities.




          (n) [Intentionally Omitted].




          (o) Beneficial Ownership. The purchase by such Purchaser of the Shares and Warrants
issuable to it at the Closing will not (either with or without aggregating such Securities with the
Warrant Shares for which such Purchaser’s Warrants are exercisable) result in such Purchaser
(individually or together with any other Person with whom such Purchaser has identified, or will
have identified, itself as part of a “group” in a public filing made with the Commission involving
the Company’s securities) (when added to any other securities of the Company that it or they then
own or have the right to acquire) acquiring, or obtaining the right to acquire, in excess of
19.999% of the outstanding shares of Common Stock or the voting power of the Company on a post
transaction basis that assumes that such Closing shall have occurred. Such Purchaser does not
presently intend to, alone or together with others, make a public filing with the Commission to
disclose that it has (or that it together with such other Persons have) acquired, or obtained the
right to acquire, as a result of such Closing (when added to any other securities of the Company
that it or they then own or have the right to acquire), in excess of 19.999% of the outstanding
shares of Common
Stock or the voting power of the Company on a post transaction basis that assumes that each
Closing shall have occurred.




          (p) Residency. Such Purchaser’s residence (if an individual) or offices in which its
investment decision with respect to the Securities was made (if an entity) are located at the
address immediately below such Purchaser’s name on its signature page hereto.




          (q) Anti-Money Laundering Laws. Such Purchaser represents and warrants to, and
covenants with, the Company that: (i) such Purchaser is in compliance with Executive Order 13224
and the regulations administered by the U.S. Department of the Treasury (“Treasury”) Office of
Foreign Assets Control; (ii) such Purchaser, its parents, subsidiaries, affiliated companies,
officers, directors and partners, and to such Purchaser’s knowledge, its shareholders, owners,
employees, and agents, are not on the List of Specially Designated Nationals and Blocked Persons
maintained by Treasury and have not been designated by Treasury as a financial institution of
primary money laundering concern subject to special measures under Section 311 of the USA PATRIOT
Act, Pub. L. 107-56; (iii) to such Purchaser’s knowledge, the funds to be used to acquire the
Securities are not derived from activities that contravene applicable anti-money laundering laws
and regulations; (iv) such Purchaser is in compliance with all other applicable anti-money
laundering laws and regulations and has implemented anti-money laundering procedures that comply
with applicable anti-money laundering laws and regulations, including, as applicable, the
requirements of the Bank Secrecy Act, as amended by the USA PATRIOT Act, Pub. L. 107-56; and (v) to
the best of its knowledge (A) none of the funds to be provided by such Purchaser are being tendered
on behalf of a person or entity who has not been identified to such Purchaser, and (B) upon the
reasonable request of the Company, such Purchaser agrees to re-certify in writing the
representations, warranties and covenants provided in this paragraph.




-21-









 







The Company and each of the Purchasers acknowledge and agree that no party to this Agreement has
made or makes any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Article III and the Transaction
Documents.




ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES




     4.1 Transfer Restrictions.



          (a) Compliance with Laws. Notwithstanding any other provision of this Article
IV, each Purchaser covenants that the Securities may be disposed of only pursuant to an
effective registration statement under, and in compliance with the requirements of, the Securities
Act, or pursuant to an available exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, and in compliance with any applicable state and
federal securities laws. In connection with any transfer of the Securities other than (i) pursuant
to an effective registration statement, (ii) to the Company, (iii) pursuant to Rule 144 (provided
that the Purchaser provides the Company with reasonable assurances (in the form of seller and, if
applicable, broker representation letters) that the securities may be sold pursuant to such rule)
or (iv) in connection with a bona fide pledge (not including the transfer or foreclosure thereon)
as contemplated in Section 4.1(b), the Company may require the transferor thereof to
provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable
to the Company, the form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such transferred
Securities under the Securities Act or applicable state securities laws. As a condition of
transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and
the Registration Rights Agreement and shall have the rights and obligations of a Purchaser under
this Agreement and the Registration Rights Agreement with respect to such transferred Securities.




          (b) Legends. Certificates evidencing the Securities shall bear any legend as required
by the “blue sky” laws of any state and a restrictive legend in substantially the following form,
until such time as they are not required under Section 4.1(c):





THE OFFER AND SALE OF THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THESE SECURITIES HAVE NOT BEEN REGISTERED] [THE OFFER AND SALE
OF THESE SECURITIES HAVE NOT BEEN REGISTERED] UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH CASE
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY AND ITS TRANSFER AGENT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES; PROVIDED
THAT IN CONNECTION WITH ANY FORECLOSURE OR TRANSFER OF THE SECURITIES, THE



-22-









 







TRANSFEROR SHALL COMPLY WITH THE PROVISIONS [HEREIN], IN THE SECURITIES
PURCHASE AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT, AND UPON
FORECLOSURE OR TRANSFER OF THE SECURITIES, SUCH FORECLOSING PERSON OR
TRANSFEREE SHALL COMPLY WITH ALL PROVISIONS CONTAINED [HEREIN], IN THE
SECURITIES PURCHASE AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT.



          The Company acknowledges and agrees that a Purchaser may from time to time pledge, and/or
grant a security interest in, some or all of the legended Securities in connection with applicable
securities laws, pursuant to a bona fide margin agreement in compliance with a bona fide margin
loan. Such a pledge would not be subject to approval or consent of the Company and no legal
opinion of legal counsel to the pledgee, secured party or pledgor shall be required in connection
with the pledge, but such legal opinion shall be required in connection with a subsequent transfer
or foreclosure following default by the Purchaser transferee of the pledge. No notice shall be
required of such pledge, but Purchaser shall promptly notify the Company of any such subsequent
transfer or foreclosure. Each Purchaser acknowledges that the Company shall not be responsible for
any pledges relating to, or the grant of any security interest in, any of the Securities or for any
agreement, understanding or arrangement between any Purchaser and its pledgee or secured party. At
the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable
documentation as such Purchaser may reasonably request in connection with a pledge or transfer of
the Securities, including the preparation and filing of any required prospectus supplement under
Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of selling stockholders thereunder. Each Purchaser acknowledges and
agrees that, except as otherwise provided in Section 4.1(c), any Securities subject to a
pledge or security interest as contemplated by this Section 4.1(b) shall continue to bear
the legend set forth in this Section 4.1(b) and be subject to the restrictions on transfer
set forth in Section 4.1(a).




          (c) Removal of Legends. The legend set forth in Section 4.1(b) above shall be
removed and the Company shall issue a certificate without such legend or any other legend to the
holder of the applicable Securities upon which it is stamped or issue to such holder by electronic
delivery at the applicable balance account at the Depository Trust Company (“DTC”), if (i) such
Securities are registered for resale under the Securities Act, (ii) such Securities are sold or
transferred pursuant to Rule 144 (if the transferor is not an Affiliate of the Company), or (iii)
such Securities are eligible for sale under Rule 144, without the requirement for the Company to be
in compliance with the current public information required under Rule 144 as to such Securities and
without volume or manner-of-sale restrictions. Following the earlier of (i) the Effective Date and
(ii) Rule 144 becoming available for the resale of Securities, without the requirement for the
Company to be in compliance with the current public information required under Rule 144 as to such
Securities and without volume or manner-of-sale restrictions, the Company shall issue to the
Transfer Agent the Irrevocable Transfer Agent Instructions. Any fees (with respect to the Transfer
Agent, Company Counsel or otherwise) associated with the issuance of such opinion or the removal of
such legend shall be borne by the Company. Following the Effective Date, or at such earlier time
as a legend is no longer required for certain Securities, the Company will promptly, following the
delivery by a Purchaser to the Company (with written notice to the Company) of (i) a legended
certificate representing Shares or Warrant Shares (endorsed or with stock powers attached,
signatures guaranteed, and otherwise in the form necessary to affect the reissuance and/or
transfer) and an opinion of counsel to the extent required by Section 4.1(a) or (ii) an
Exercise Notice (as defined in the Warrants) in the manner stated in the Warrants to effect the
exercise of such Warrant in accordance with its terms, deliver or cause to be delivered to such
Purchaser a certificate representing such Securities that is free from all restrictive legends.
The Company may not make any notation on its records or give instructions to the Transfer Agent
that enlarge the restrictions on transfer set forth in this Section 4.1(c). Certificates
for Shares or Warrant Shares subject to




-23-









 







legend removal hereunder may be transmitted by the Transfer
Agent to the Purchasers by crediting the account of the Purchaser’s prime broker with DTC as
directed by such Purchaser.




          (d) Irrevocable Transfer Agent Instructions. The Company shall issue irrevocable
instructions to its transfer agent, and any subsequent transfer agent, in the form of Exhibit
E attached hereto (the “Irrevocable Transfer Agent Instructions”) in accordance with
Section 4.1(c). The Company represents and warrants that no instruction other than the
Irrevocable Transfer Agent Instructions referred to in this Section 4.1(d) (or instructions
that are consistent therewith) will be given by the Company to the Transfer Agent in connection
with this Agreement (other than those instructions contemplated in Section 2.2(a)(vi)), and
that the Securities shall otherwise be freely transferable on the books and records of the Company
as and to the extent provided in this Agreement and the other Transaction Documents and applicable
law. The Company acknowledges that a breach by it of its obligations under this Section
4.1(d) will cause irreparable harm to a Purchaser. Accordingly, the Company acknowledges that
a remedy at law for a breach of its obligations under this Section 4.1(d) will be
inadequate and agrees, in the event of a breach by the Company of the provisions of this
Section 4.1(d), that a Purchaser shall be entitled, in addition to all other available
remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and
transfer, without the necessity of showing economic loss and without any bond or other security
being required.




          (e) [Intentionally Omitted]




          (f) Buy-In. If by the third (3rd) Trading Day after receipt of all
documents necessary for the removal of the legends set forth in Section 4.1(b) (pursuant to
Section 4.1(c)) (or the fourth (4th) Trading Day if any part of the necessary
documentation is delivered after 5:00 p.m. New York City time) (such date, the “Deadline Date”),
the Company has failed to issue to a Purchaser an unlegended certificate, then, in addition to all
other remedies available to such Purchaser, if on or after the Trading Day immediately following
the Deadline Date, such Purchaser purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the holder of shares of Common
Stock that such Purchaser anticipated receiving from the Company without any restrictive
legend (a “Buy-In”), then the Company shall, within three (3) Trading Days after the Company
receives such Purchaser’s written request and in such Purchaser’s sole discretion, either (i) pay
cash to the Purchaser in an amount equal to such Purchaser’s total purchase price (including
brokerage commissions, if any, that are reasonably documented in Purchaser’s written request) for
the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s
obligation to deliver such certificate (and to issue such shares of Common Stock) shall terminate,
or (ii) promptly honor its obligation to deliver to such Purchaser a certificate representing such
shares of Common Stock and pay cash to the Purchaser in an amount equal to the excess (if any) of
the Buy-In Price over the product of (a) such number of shares of Common Stock purchased in the
Buy-In, times (b) the Closing Bid Price of a share of Common Stock on the Deadline Date.




     4.2 Reservation of Common Stock. The Company shall take all action necessary to at
all times have authorized, and reserved for the purpose of issuance from and after the Closing
Date, the number of shares of Common Stock issuable upon exercise of the Warrants issued at the
Closing (without taking into account any limitations on exercise of the Warrants set forth in the
Warrants).



     4.3 Furnishing of Information. In order to enable the Purchasers to sell the
Securities under Rule 144, for a period of twelve (12) months from the Closing, the Company shall
use its commercially reasonable efforts to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the Company after the
date hereof pursuant to the Exchange Act. During such twelve (12) month period, if the Company is
not required to file reports pursuant to the Exchange Act, it will prepare and furnish to the
Purchasers and make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Securities under Rule 144.



-24-









 





     4.4 Integration. The Company shall not, and shall use its commercially reasonable
efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that will be integrated with the offer or sale of the Securities for purposes of the rules and
regulations of any Trading Market such that it would require stockholder approval prior to the
closing of such other transaction unless stockholder approval is obtained before the closing of
such subsequent transaction.



     4.5 Securities Laws Disclosure; Publicity. By 9:00 A.M., New York City time, on the
Trading Day immediately following the date hereof, the Company shall issue a press release (the
“Press Release”) reasonably acceptable to JMP Securities LLC disclosing all material terms of the
transactions contemplated hereby. On or before 9:00 A.M., New York City time, on the second
(2nd) Trading Day immediately following the date hereof, the Company will file a Current
Report on Form 8-K with the Commission describing the terms of the Transaction Documents (and
including as exhibits to such Current Report on Form 8-K the material Transaction Documents
(including, without limitation, this Agreement, the form of Warrant and the Registration Rights
Agreement)). Notwithstanding the foregoing, the Company shall not publicly disclose the name of
any Purchaser or an Affiliate of any Purchaser, or include the name of any Purchaser or an
Affiliate of any Purchaser in any press release or filing with the Commission (other than the
Registration Statement) or any regulatory agency or Trading Market, without the prior written
consent of such Purchaser, except (i) as required by federal securities law in connection with (A)
any registration statement contemplated by the Registration Rights Agreement and (B) the filing of
final Transaction Documents (including signature pages thereto) with the Commission and (ii) to the
extent such disclosure is required by law, request of the Staff of the Commission or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior notice of such
disclosure permitted under this subclause (ii). From and after the issuance of the Press Release,
no Purchaser shall be in possession of any material, non-public information regarding the Company
or its Subsidiaries received from the Company, any Subsidiary or any of their respective officers,
directors, employees or agents, that is not disclosed in the Press Release unless a Purchaser shall
have executed a written agreement regarding the confidentiality and use of such information.
Except as contemplated by the penultimate sentence of Section 3.2(i), each Purchaser,
severally and not jointly with the other Purchasers, covenants that until such time as the
transactions contemplated by this Agreement are required to be publicly disclosed by the Company as
described in this Section 4.5, such Purchaser will maintain the confidentiality of all
disclosures made to it in connection with this transaction (including the existence and terms of
this transaction).



     4.6 Stockholder Rights Plan. No claim will be made or enforced by the Company or,
with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person”
under any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter
adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such
plan or arrangement, in either case solely by virtue of receiving Securities under the Transaction
Documents or under any other written agreement between the Company and the Purchasers; provided,
however, that no such Purchaser, directly or indirectly, on its own behalf or as a member of a
“group” (as that term is defined in Section 13(d)(3) under the Exchange Act) beneficially owns any
equity in the Company prior to its purchase of the Securities hereunder or while it holds or
beneficially owns any Securities purchased hereunder.



     4.7 Non-Public Information. Except with respect to the material terms and conditions
of the transactions contemplated by the Transaction Documents, including this Agreement, or as
expressly required by any applicable securities law, the Company covenants and agrees that neither
it, nor any other Person acting on its behalf, will provide any Purchaser or its agents or counsel
with any information regarding the Company or its Subsidiaries that constitutes material,
non-public information regarding the Company or its Subsidiaries without the express written
consent of such Purchaser, unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information.



-25-









 







The Company understands and
confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions
in securities of the Company. To the extent that the Company delivers any material, non-public
information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and
agrees that such Purchaser shall not have any duty of confidentiality with respect to such
material, non-public information.



     4.8 Use of Proceeds. The Company shall use the net proceeds from the sale of the
Shares and Warrants hereunder for working capital and general corporate purposes.



     4.9 Form D; Blue Sky. The Company agrees to timely file a Form D with respect to the
Securities as required under Regulation D. The Company, on or before the Closing Date, shall take
such reasonable action as the Company shall determine is necessary in order to obtain an exemption
for or to qualify the Securities for sale to the Purchasers under applicable securities or “Blue
Sky” laws of the states of the United States (or to obtain an exemption from such qualification).



     4.10 Subsequent Equity Sales. From the date hereof until the later of (i) ninety (90)
days following the Closing Date and (ii) thirty (30) days after the Effective Date (such later
date, the “Trigger Date”), neither the Company nor any Subsidiary shall directly or indirectly,
offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale,
grant or any option to purchase or other disposition of) any of the Company’s or any Subsidiary’s
equity or equity equivalent securities, including without limitation any debt, preferred stock or
other instrument or security that is, at any time during its life and under any circumstances,
convertible into or exchangeable or exercisable for Common Stock or Common Stock Equivalents (any
such offer, sale, grant, disposition or announcement being referred to as a “Subsequent
Placement”); provided, however, the thirty (30) day period set forth in this Section 4.10
shall be extended for the number of Trading Days during such period in which (i) trading in the
Common Stock is suspended by any Trading Market, or (ii) following the Effective Date, the
Registration Statement is not effective or the prospectus included in the Registration Statement
may not be used by the Purchasers for the resale of the Shares and Warrant Shares. Notwithstanding
anything to the contrary contained herein, the foregoing restriction and the requirements of
Section 4.11 shall not apply to (a) securities required to be
issued pursuant to contractual obligations of the Company in effect as of the date of this
Agreement that are set forth on Schedule 4.10, (b) equity securities issued or issuable
pursuant to employee benefit or purchase plans in effect as of the date of this Agreement or
pursuant to bona fide employee benefit or purchase plans established during the period described in
the first sentence of this Section 4.10 or (c) equity securities issued as an “equity
kicker” in connection with any direct or indirect non-convertible debt financings, by the Company
to a bank or venture fund whose principal business is to lend money by way of non-convertible debt
financing (but not to a hedge fund or private equity fund) that is approved by the Board of
Directors; provided that the value of the “equity kicker” portion of any such non-convertible debt
financing, including warrants, options or other rights to purchase capital stock and other
interests convertible into capital stock of the Company, shall not exceed such amounts which are
customary in similar transactions and in no event (i) shall such value exceed ten percent (10%) of
the value of the non-convertible indebtedness being borrowed, or (ii) the number of shares of
Common Stock or securities convertible into or exchangeable for Common Stock issuable pursuant to
this clause (c) exceed, in the aggregate, two percent (2.0%) of the shares of Common Stock
outstanding as of the date of this Agreement.



     4.11 Additional Issuances of Securities.



          (a) For purposes of this Section 4.11, the following definitions shall apply.





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



-26-









 






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



          (b) Subject to the last sentence of this Section 4.11, from the Trigger Date until the
first anniversary date of the earlier of (a) the Effective Date whereby all Registrable Securities
(as defined in the Registration Rights Agreement) may be freely resold pursuant to a resale
registration statement, and (b) the date when all Registrable Securities (as defined in the
Registration Rights Agreement) can be sold under Rule 144 without any restriction or limitation and
without the requirement to be in compliance with Rule 144(c)(1), the Company will not, directly or
indirectly, effect any Subsequent Placement unless the Company shall have first complied with this
Section 4.11(b).





          (i) The Company shall deliver to each Purchaser an irrevocable written notice (the
“Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of
the securities being offered (the “Offered Securities”) in a Subsequent Placement, which
Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price
and other terms upon which they are to be issued, sold or exchanged, and the number or
amount of the Offered Securities to be issued, sold or exchanged, (y) identify the persons
or entities (if known) to which or with which the Offered Securities are to be offered,
issued, sold or exchanged and (z) offer to issue and sell to or exchange with such
Purchasers fifty percent (50%) of the Offered Securities, allocated among such Purchasers
(a) based on such Purchaser’s pro rata portion of the aggregate principal amount of
Securities purchased hereunder (the “Basic Amount”), and (b) with respect to each Purchaser
that elects to purchase its Basic Amount, any additional portion of the Offered Securities
attributable to the Basic Amounts of other Purchasers as such Purchaser shall indicate it
will purchase or acquire should the other Purchasers subscribe for less than their Basic
Amounts (the “Undersubscription Amount”), which process shall be repeated until the
Purchasers shall have an opportunity to subscribe for any remaining Undersubscription
Amount.




          (ii) To accept an Offer, in whole or in part, such Purchaser must deliver a written
notice to the Company prior to the end of the fifth (5th) Business Day after such
Purchaser’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion of such
Purchaser’s Basic Amount that such Purchaser elects to purchase and, if such Purchaser shall
elect to purchase all of its Basic Amount, the Undersubscription Amount, if any, that such
Purchaser elects to purchase (in either case, the “Notice of Acceptance”). If the Basic
Amounts subscribed for by all Purchasers are less than the total of all of the Basic
Amounts, then each Purchaser who has set forth an Undersubscription Amount in its Notice of
Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for,
the Undersubscription Amount it has subscribed for; provided, however, that
if the Undersubscription Amounts subscribed for exceed the difference between the total of
all the Basic Amounts and the Basic Amounts subscribed for (the “Available Undersubscription
Amount”), each Purchaser who has subscribed for any Undersubscription Amount shall be
entitled to purchase only that portion of the Available Undersubscription Amount as the
Basic Amount of such Purchaser bears to the total Basic Amounts of all Purchasers that have
subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent
its deems reasonably necessary. Notwithstanding anything to the contrary contained herein,
if the Company desires to modify or amend the terms and conditions of the Offer prior to the
expiration of the Offer Period, the Company may deliver to the Purchasers a new Offer Notice
and the Offer Period shall expire on the fifth (5th) Business Day after such
Purchaser’s receipt of such new Offer Notice.




          (iii) The Company shall have five (5) Business Days from the expiration of the Offer
Period above to offer, issue, sell or exchange all or any part of such Offered Securities as
to which a Notice of Acceptance has not been given by the Purchasers (the “Refused
Securities”)



-27-









 







pursuant to a definitive agreement (the “Subsequent Placement Agreement”) but
only to the offerees described in the Offer Notice (if so described therein) and only upon
terms and conditions (including, without limitation, unit prices and interest rates) that
are not more favorable to the acquiring person or persons or less favorable to the Company
than those set forth in the Offer Notice and (ii) to publicly announce (a) the execution of
such Subsequent Placement Agreement, and (b) either (x) the consummation of the transactions
contemplated by such Subsequent Placement Agreement or (y) the termination of such
Subsequent Placement Agreement, which shall be filed with the Commission on a Current Report
on Form 8-K with such Subsequent Placement Agreement and any documents contemplated therein
filed as exhibits thereto.




          (iv) In the event the Company shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in Section
4.11(b)(3) above), then each Purchaser may, at its sole option and in its sole discretion,
reduce the number or amount of the Offered Securities specified in its Notice of Acceptance
to an amount that shall be not less than the number or amount of the Offered Securities that
such Purchaser elected to purchase pursuant to Section 4.11(b)(2) above multiplied by a
fraction, (i) the numerator of which shall be the number or amount of Offered Securities the
Company actually proposes to issue, sell or exchange (including Offered Securities to be
issued or sold to Purchasers pursuant to Section 4.11(b)(3) above prior to such reduction)
and (ii) the denominator of which shall be the original amount of the Offered Securities.
In the event that any Purchaser so elects to reduce the number or amount of Offered
Securities specified in its Notice of Acceptance, the Company may not issue, sell or
exchange more than the reduced number or amount of the Offered Securities unless and until
such securities have again been offered to the Purchasers in accordance with Section
4.11(b)(3) above.




          (v) Upon the closing of the issuance, sale or exchange of all or less than all of the
Refused Securities, the Purchasers shall acquire from the Company, and the Company shall
issue to the Purchasers, the number or amount of Offered Securities specified in the Notices
of Acceptance, as reduced pursuant to Section 4.11(b)(3) above if the Purchasers have so
elected, upon the terms and conditions specified in the Offer. The purchase by the
Purchasers of any Offered
Securities is subject in all cases to the preparation, execution and delivery by the
Company and the Purchasers of a purchase agreement relating to such Offered Securities
reasonably satisfactory in form and substance to the Purchasers and their respective
counsel.




          (vi) Any Offered Securities not acquired by the Purchasers or other persons in
accordance with Section 4.11(b)(3) above may not be issued, sold or exchanged until they are
again offered to the Purchasers under the procedures specified in this Agreement.




          (vii) The Company and the Purchasers agree that if any Purchaser elects to participate
in the Offer, (x) neither the Subsequent Placement Agreement with respect to such Offer nor
any other transaction documents related thereto (collectively, the “Subsequent Placement
Documents”) shall include any term or provisions whereby any Purchaser shall be required to
agree to any restrictions in trading as to any securities of the Company owned by such
Purchaser prior to such Subsequent Placement, and (y) any registration rights set forth in
such Subsequent Placement Documents shall be similar in all material respects to the
registration rights contained in the Registration Rights Agreement.




          (viii) Notwithstanding anything to the contrary in this Section 4.11 and unless
otherwise agreed to by the Purchasers, the Company shall either confirm in writing to the
Purchasers that the transaction with respect to the Subsequent Placement has been abandoned
or shall publicly disclose its intention to issue the Offered Securities, in either case in
such a manner such that the Purchasers will not be in possession of material non-public
information, by the tenth



-28-









 







(10th) Business Day following delivery of the Offer
Notice. If by the tenth (10th) Business Day following delivery of the Offer
Notice no public disclosure regarding a transaction with respect to the Offered Securities
has been made, and no notice regarding the abandonment of such transaction has been received
by the Purchasers, such transaction shall be deemed to have been abandoned and the
Purchasers shall not be deemed to be in possession of any material, non-public information
with respect to the Company. Should the Company decide to pursue such transaction with
respect to the Offered Securities, the Company shall provide each Purchaser with another
Offer Notice and each Purchaser will again have the right of participation set forth in this
Section 4.11(b). The Company shall not be permitted to deliver more than one such Offer
Notice to the Purchasers in any 60 day period.



     Notwithstanding anything to the contrary herein, the provisions of this Section 4.11
shall not apply to (a) shares of Common Stock sold pursuant to that Common Stock Purchase
Agreement, dated as of July 6, 2010, by and between the Company and Small Cap Biotech Value, Ltd.
or (b) any other transaction if compliance with this Section 4.11 would (i) violate any
applicable securities law or regulations or (ii) require the Company, as a condition to completing
such transaction, to obtain the approval of its stockholders pursuant to the rules of any
applicable Trading Market; provided that, in determining whether any such violation would occur or
stockholder consent requirement be triggered, counsel to one or more of the Purchasers shall be
entitled to consult with legal counsel to the Company and representatives of the Commission and/or
Trading Market, as appropriate.



     4.12 If the Company is unable to obtain, on or prior to Closing, executed Lock-Up Agreements
which include the bracketed language referred to in footnote 1 to the Form of Lock-Up Agreement
attached as Exhibit I, from the Persons set forth on Exhibit J, the Company shall
use reasonable best efforts to cause the parties to such Lock-Up Agreements to re-execute such
agreement with the inclusion of such language.



ARTICLE V.

CONDITIONS PRECEDENT TO CLOSING




     5.1 Conditions Precedent to the Obligations of the Purchasers to Purchase Securities.
The obligation of each Purchaser to acquire Shares and Warrants at the Closing is subject to the
fulfillment to such Purchaser’s satisfaction, on or prior to the Closing Date, of each of the
following conditions, any of which may be waived by such Purchaser (as to itself only):



          (a) Representations and Warranties. The representations and warranties of the Company
contained herein shall be true and correct in all material respects (except for those
representations and warranties which are qualified as to materiality or Material Adverse Effect, in
which case such representations and warranties shall be true and correct in all respects) as of the
date when made and as of the Closing Date, as though made on and as of such date, except for such
representations and warranties that speak as of a specific date.




          (b) Performance. The Company shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by it at or prior to the Closing.




          (c) 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


-29-









 







authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.




          (d) Consents. The Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary for consummation of the purchase
and sale of the Securities (including all Required Approvals), all of which shall be and remain so
long as necessary in full force and effect.




          (e) Adverse Changes. Since the date hereof, no event or series of events shall have
occurred that has had or would reasonably be expected to have a Material Adverse Effect.




          (f) Listing. The Nasdaq Global Market shall have approved the listing of additional
shares application for the Shares and Warrant Shares.




          (g) No Suspensions of Trading in Common Stock. The Common Stock shall not have been
suspended, as of the Closing Date, by the Commission or the Principal Trading Market from trading
on the Principal Trading Market nor shall suspension by the Commission or the Principal Trading
Market have been threatened, as of the Closing Date, either (A) in writing by the Commission or the
Principal Trading Market or (B) by falling below the minimum listing maintenance requirements of
the Principal Trading Market.




          (h) Company Deliverables. The Company shall have delivered the Company Deliverables
in accordance with Section 2.2(a).




          (i) Compliance Certificate. The Company shall have delivered to each Purchaser a
certificate, dated as of the Closing Date and signed by its Chief Executive Officer or its Chief
Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions
specified in Sections 5.1(a) and (b) in the form attached hereto as Exhibit
G.




          (j) Termination. This Agreement shall not have been terminated as to such Purchaser
in accordance with Section 6.18.




     5.2 Conditions Precedent to the Obligations of the Company to sell Securities. The
Company’s obligation to sell and issue the Shares and Warrants at the Closing to the Purchasers is
subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of
the following conditions, any of which may be waived by the Company:



          (a) Representations and Warranties. The representations and warranties made by the
Purchasers contained herein shall be true and correct in all material respects (except for those
representations and warranties which are qualified as to materiality or Material Adverse Effect, in
which case such representations and warranties shall be true and correct in all respects) as of the
date when made, and as of the Closing Date as though made on and as of such date, except for
representations and warranties that speak as of a specific date.




          (b) Performance. Such Purchaser shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such Purchaser at or prior to the Closing
Date.




          (c) 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


-30-









 







authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.




          (d) Purchasers Deliverables. Such Purchaser shall have delivered its Purchaser
Deliverables in accordance with Section 2.2(b).




          (e) Termination. This Agreement shall not have been terminated as to such Purchaser
in accordance with Section 6.18 herein.




ARTICLE VI.

MISCELLANEOUS




     6.1 Fees and Expenses. The Company shall reimburse Hudson Bay Master Fund Ltd. (a
Purchaser) or its designee(s) up to $20,000 in the aggregate for the reasonable costs and expenses
incurred in connection with the transactions contemplated by the Transaction Documents (including
all reasonable legal fees and disbursements in connection therewith, documentation and
implementation of the transactions contemplated by the Transaction Documents and due diligence in
connection therewith) which amount may be withheld by such Purchaser from its aggregate Purchase
Price at the Closing. The Company shall be responsible for the payment of any placement agent’s
fees, financial advisory fees, or broker’s commissions (other than for Persons engaged by any
Purchaser) relating to or arising out of the transactions contemplated hereby, including, without
limitation, any fees or commissions payable to JMP Securities LLC and ROTH Capital Partners, LLC.
The Company shall hold each Purchaser harmless against, any liability, loss or expense (including,
without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection
with any claim relating to any such payment contemplated by the immediately preceding sentence.
Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall pay
the fees and expenses of their respective advisers, counsel, accountants and other experts, if any,
and all other expenses incurred by such party in connection with the negotiation, preparation,
execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent
fees, stamp taxes and other taxes and duties levied in connection with the sale and issuance of the
Securities to the Purchasers; provided, that pursuant to Section 6 of the Warrants, the Company
shall not be required to pay any tax that may be payable in respect of any transfer involved in the
registration of Warrant Shares or the Warrants in a name other than that of the Purchaser or an
Affiliate thereof.



     6.2 Entire Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements, understandings, discussions and representations,
oral or written, with respect to such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules. At or after the Closing, and without further
consideration, the Company and the Purchasers will execute and deliver to the other such further
documents as may be reasonably requested in order to give practical effect to the intention of the
parties under the Transaction Documents.



     6.3 Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (a) the date of transmission, if such notice or communication is delivered via
facsimile (provided the sender receives a machine-generated confirmation of successful
transmission) at the facsimile number specified in this Section 6.3 prior to 5:00 P.M., New
York City time, on a Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number specified in this
Section 6.3 on a day that is not a Trading Day or later than 5:00 P.M., New York City time,
on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service with next day delivery specified, and (d) upon actual receipt
by the



-31-









 







party to whom such notice is required to be given. The address for such notices and
communications shall be as follows:



	 	 	 

	If to the Company:

	 	Oncothyreon Inc.
	 

	 	2601 Fourth Avenue, Suite 500
	 

	 	Seattle, WA 98121
	 

	 	Facsimile No.: 206-801-2101
	 

	 	Attention: Chief Executive Officer
	 
	 	 
	With a copy to:

	 	Wilson Sonsini Goodrich & Rosati, P.C.
	 

	 	701 Fifth Avenue, Suite 5100
	 

	 	Seattle, Washington 98104
	 

	 	Facsimile No.: 206-883-2500
	 

	 	Attention: Effie Toshav & Michael Nordtvedt
	 
	 	 
	If to a Purchaser:

	 	To the address set forth under such Purchaser’s name on the
signature page hereof;





or such other address as may be designated in writing hereafter, in the same manner, by such
Person.




     6.4 Amendments; Waivers; No Additional Consideration. No provision of this Agreement
may be waived, modified, supplemented or amended except in a written instrument signed, in the case
of an amendment, by the Company and the Purchasers of at least two-thirds of the Shares purchased
as of the Closing Date or, in the case of a waiver, by the party against whom enforcement of any
such waiver is sought. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right. No consideration shall be offered or paid to any Purchaser to
amend or consent to a waiver or modification of any provision of any Transaction Document unless
the same consideration is also offered to all Purchasers who then hold Securities.



     6.5 Construction. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
The language used in this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and
no rules of strict construction will be applied against any party. This Agreement shall be
construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement
or any of the Transaction Documents.



     6.6 Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of and be binding upon the parties and their successors and permitted assigns. Except in
the case of a Fundamental Transaction as contemplated in the Warrants, this Agreement, or any
rights or obligations hereunder, may not be assigned by the Company without the prior written
consent of each Purchaser. Any Purchaser may assign its rights hereunder in whole or in part to
any Person to whom such Purchaser assigns or transfers any Securities in compliance with the
Transaction Documents and applicable law, provided such transferee shall agree in writing to be
bound, with respect to the transferred Securities, by the terms and conditions of the Transaction
Documents that apply to the “Purchasers.”



     6.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not for the benefit of,
nor may any



-32-









 







provision hereof be enforced by, any other Person, except the Placement Agents are
intended third party beneficiaries of Section 3.1 hereof.



     6.8 Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the principles of conflicts of
law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Document
(whether brought against a party hereto or its respective Affiliates, employees or agents) shall be
commenced exclusively in the New York Courts. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and
agrees not to assert in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such Washington Court, or that such Proceeding has been commenced in an
improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.



     6.9 Survival. Subject to applicable statute of limitations, the representations,
warranties, agreements and covenants contained herein shall survive the Closing and the delivery of
the Securities.



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



     6.11 Severability. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this
Agreement shall not in any way be affected or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.



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



     6.13 Replacement of Securities. If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued
in exchange and



-33-









 







substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company and the Transfer Agent of such loss, theft or destruction and the
execution by the holder thereof of a customary lost certificate affidavit of that fact and an
agreement to indemnify and hold harmless the Company and the Transfer Agent for any losses in
connection therewith or, if required by the Transfer Agent, a bond in such form and amount as is
required by the Transfer Agent. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with the issuance of such
replacement Securities. If a replacement certificate or instrument evidencing any Securities is
requested due to a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a replacement.



     6.14 Remedies. In addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, each of the Purchasers and the Company will be
entitled to specific performance under the Transaction Documents. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agree to waive in any action for
specific performance of any such obligation (other than in connection with any action for a
temporary restraining order) the defense that a remedy at law would be adequate.



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



     6.16 Adjustments in Share Numbers and Prices. In the event of any stock split,
subdivision, dividend or distribution to all stockholders of the Company payable in shares of
Common Stock (or other securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly shares of Common Stock), combination or other similar
recapitalization or event occurring after the date hereof and prior to the Closing, each reference
in any Transaction Document to a number of shares or a price per share shall be deemed to be
amended to appropriately account for such event.



     6.17 Independent Nature of Purchasers’ Obligations and Rights. The obligations of
each Purchaser under any Transaction Document are several and not joint with the obligations of any
other
Purchaser, and no Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser
to purchase Securities pursuant to the Transaction Documents has been made by such Purchaser
independently of any other Purchaser and independently of any information, materials, statements or
opinions as to the business, affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary which
may have been made or given by any other Purchaser or by any agent or employee of any other
Purchaser, and no Purchaser and any of its agents or employees shall have any liability to any
other Purchaser (or any other Person) relating to or arising from any such information, materials,
statement or opinions. Nothing contained herein or in any Transaction Document, and no action
taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Purchasers are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by the Transaction Documents. Each Purchaser acknowledges that no
other Purchaser has acted as agent for such



-34-









 







Purchaser in connection with making its investment
hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with
monitoring its investment in the Securities or enforcing its rights under the Transaction
Documents. Each Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose. Each Purchaser has been represented by its
own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons
of administrative convenience only, Purchasers and their respective counsels have chosen to
communicate with the Company through Goodwin Procter LLP, counsel to JMP Securities LLC. Each
Purchaser acknowledges that Goodwin Procter LLP has rendered legal advice to JMP Securities LLC and
not to such Purchaser in connection with the transactions contemplated hereby, and that each such
Purchaser has relied for such matters on the advice of its own respective counsel. Each Purchaser
also acknowledges that Wilson Sonsini Goodrich & Rosati, P.C. has rendered legal advice to the
Company and not such Purchaser. The Company has elected to provide all Purchasers with the same
terms and Transaction Documents for the convenience of the Company and not because it was required
or requested to do so by any Purchaser.



     6.18 Termination. This Agreement may be terminated and the sale and purchase of the
Shares and the Warrants abandoned at any time prior to the Closing by either the Company or any
Purchaser (with respect to itself only) upon written notice to the other, if the Closing has not
been consummated on or prior to 5:00 P.M., New York City time, on the Outside Date; provided,
however, that the right to terminate this Agreement under this Section 6.18 shall not be
available to any Person whose failure to comply with its obligations under this Agreement has been
the cause of or resulted in the failure of the Closing to occur on or before such time. Nothing in
this Section 6.18 shall be deemed to release any party from any liability for any breach by
such party of the terms and provisions of this Agreement or the other Transaction Documents or to
impair the right of any party to compel specific performance by any other party of its obligations
under this Agreement or the other Transaction Documents. In the event of a termination pursuant to
this Section 6.18, the Company shall promptly notify all non-terminating Purchasers. Upon
a termination in accordance with this Section 6.18, the Company and the terminating
Purchaser(s) shall not have any further obligation or liability (including arising from such
termination) to the other, and no Purchaser will have any liability to any other Purchaser under
the Transaction Documents as a result therefrom.



     6.19 Indemnification.



          (a) In consideration of each Purchaser’s execution and delivery of the Transaction Documents
and acquiring the Securities thereunder and in addition to all of the Company’s other obligations
under the Transaction Documents, the Company shall indemnify and hold harmless each Purchaser and
all of its stockholders, partners, members, officers, directors, employees and direct or indirect
investors and any of the foregoing Persons’ agents or other representatives (including, without
limitation,
those retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Indemnitees”) from and against any and all losses, costs, fees, liabilities,
damages and expenses, and including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the Company in the
Transaction Documents or any certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction
Documents or any certificate, instrument or document contemplated hereby or thereby or (c) any
cause of action, suit or claim brought or made against such Indemnitee by a third party (including
for these purposes a derivative action brought on behalf of the Company, so long as any stockholder
bringing such suit is not an Affiliate of the Purchaser seeking indemnification) and arising out of
or resulting from (i) the execution, delivery, performance or enforcement of the Transaction
Documents or any other certificate, instrument or document contemplated hereby or thereby, (ii) any
transaction financed or to be financed in whole or in part, directly or indirectly, with the


-35-









 







proceeds of the issuance of the Securities, or (iii) the status of such Purchaser or holder of the
Securities as an investor in the Company (other than to the extent such action is based upon a
breach of such Indemnitee’s representations, warranties or covenants under this Agreement or any
agreements or understandings such Indemnitee may have with any such stockholder or any violations
by the Indemnitee of state or federal securities laws or any conduct by such Indemnitee which
constitutes fraud, gross negligence, willful misconduct or malfeasance). To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make
the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities
which is permissible under applicable law.




          (b) Promptly after receipt by an Indemnitee of notice of any demand, claim or circumstances
which could reasonably be expected to give rise to a claim or the commencement of any action,
proceeding (including any governmental action or proceeding) or investigation in respect of which
indemnity may be sought such Indemnitee shall deliver to the Company a written notice of the
commencement thereof, and the Company shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnitee, and the Company shall assume the payment of all
fees and expenses; provided, however, that an Indemnitee shall have the right to retain its own
counsel with fees and expenses of not more than one counsel for all Indemnitees to be paid by the
indemnifying party, if, in the reasonable judgment of counsel to such Indemnitee, representation of
both the Company and the Indemnitee by the same counsel would be inappropriate due to actual or
potential differing interests between them; provided, however, that the Company shall not be
responsible for the fees and expenses for more than one counsel for all Indemnitees. Legal counsel
referred to in the immediately preceding sentence shall be selected by the Purchasers holding at
least a majority of the Securities issued and issuable hereunder. The Indemnitee shall cooperate
fully with the Company in connection with any negotiation or defense of any such action or
Indemnified Liabilities by the Company and shall furnish to the Company all information reasonably
available to the Indemnitee that relates to such action or Indemnified Liabilities. The Company
shall keep the Indemnitee reasonably apprised as to the status of the defense or any settlement
negotiations with respect thereto. The Company shall not be liable for any settlement of any
action, claim or proceeding effected without its prior written consent, provided, however, that the
Company shall not unreasonably withhold or delay its consent. The Company shall not, without the
prior written consent of the Indemnitee, which consent shall not be unreasonably withheld or
delayed, consent to entry of any judgment or enter into any settlement or other compromise which
(i) does not include as an unconditional term thereof the giving by the claimant or plaintiff to
such Indemnitee of a release from all liability in respect to such Indemnified Liabilities or
litigation, (ii) requires any admission of wrongdoing by such Indemnitee, or (iii) obligates or
requires an Indemnitee to take, or refrain from taking, any action. Following indemnification as
provided for hereunder, the Company shall be subrogated to all rights of the Indemnitee with
respect to all third parties, firms or corporations relating to the matter for which
indemnification has been made. The failure to promptly deliver written notice to the Company of
any demand, claim or circumstances which could reasonably be expected to give rise to a claim or
the commencement of any action, proceeding or
investigation in respect of which indemnity may be sought shall not relieve the Company of
its obligations to the Indemnitee under this Section 6.19, except to the extent that the
Company is prejudiced in its ability to defend such action.




          (c) The indemnification required by this Section 6.19 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and when bills are
received or Indemnified Liabilities are incurred.




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




[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]





-36-











 





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



	 	 	 	 	 
	 	ONCOTHYREON INC.

 	 
	 	By:  	
/s/ Robert L. Kirkman, M.D.  	 
	 	 	Name:  	Robert L. Kirkman, M.D. 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]







 









 





	 	 	 

	NAME OF PURCHASER:

	 	Ayer Capital Partners Master Fund, L.P.
	 

	 	 





	 	 	 	 	 	 	 

	By:	 	/s/ Jay Venkatesan	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Jay Venkatesan	 	 
	 

	 	Title:
	 	Managing Member	 	 






	 	 	 

	Aggregate Purchase Price (Subscription Amount): $

	 	3,080,245.00 
	 
	 	 





	 	 	 

	Number of Shares to be Acquired:

	 	880,070 
	 
	 	 





	 	 	 

	Underlying Shares Subject to Warrant:

	 	660,052 
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 	 
	 
	 	 
	230 California St., suite 600
	 	 
	 
	San Francisco, CA 94111
	 	 
	 
	 
	 	 
	 





	 	 	 

	Telephone No.:

	 	415-874-4800 
	 
	 	 





	 	 	 

	Facsimile No.:

	 	415-520-6826 
	 
	 	 





	 	 	 

	E-mail Address:

	 	tmg@ayercapital.com 
	 
	 	 





	 	 	 

	Attention:

	 	Tom Glaser 
	 
	 	 





Delivery Instructions:

(if different than above)




	 	 	 

	c/o

	 	Morgan Stanley Custody 
	 
	 	 





	 	 	 

	Street:

	 	901 South Bond Street 
	 
	 	 





	 	 	 

	City/State/Zip:

	 	Baltimore, MD 21231 
	 
	 	 





	 	 	 

	Attention:

	 	Alicia Alvez/Deborah Mullin 
	 
	 	 





	 	 	 

	Telephone No.:

	 	410-534-1582 
	 
	 	 



















 





	 	 	 

	NAME OF PURCHASER:

	 	Ayer Capital Partners Kestral Fund, LP
	 

	 	 





	 	 	 	 	 	 	 

	By:	 	/s/ Jay Venkatesan	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Jay Venkatesan	 	 
	 

	 	Title:
	 	Managing Member	 	 






	 	 	 

	Aggregate Purchase Price (Subscription Amount): $

	 	112,343.00 
	 
	 	 





	 	 	 

	Number of Shares to be Acquired:

	 	32,098 
	 
	 	 





	 	 	 

	Underlying Shares Subject to Warrant:

	 	24,073 
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 	 
	 
	 	 
	230 California St., suite 600
	 	 
	 
	San Francisco, CA 94111
	 	 
	 
	 
	 	 
	 





	 	 	 

	Telephone No.:

	 	415-874-4800 
	 
	 	 





	 	 	 

	Facsimile No.:

	 	415-520-6826 
	 
	 	 





	 	 	 

	E-mail Address:

	 	tmg@ayercapital.com 
	 
	 	 





	 	 	 

	Attention:

	 	Tom Glaser 
	 
	 	 





Delivery Instructions:

(if different than above)




	 	 	 

	c/o

	 	Morgan Stanley Custody 
	 
	 	 





	 	 	 

	Street:

	 	901 South Bond Street 
	 
	 	 





	 	 	 

	City/State/Zip:

	 	Baltimore, MD 21231 
	 
	 	 





	 	 	 

	Attention:

	 	Alicia Alvez/Deborah Mullin 
	 
	 	 





	 	 	 

	Telephone No.:

	 	410-534-1582 
	 
	 	 





 









 





	 	 	 

	NAME OF PURCHASER:

	 	Capital Ventures International
	 
	 	 
	By: Heights Capital Management, Inc., its authorized agent






	 	 	 	 	 	 	 

	By:	 	/s/ Martin Kobinger	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Martin Kobinger	 	 
	 

	 	Title:
	 	Investment Manager	 	 






	 	 	 

	Aggregate Purchase Price (Subscription Amount): $

	 	1,800,050.00 
	 
	 	 





	 	 	 

	Number of Shares to be Acquired:

	 	514,300 
	 
	 	 





	 	 	 

	Underlying Shares Subject to Warrant:
	 	385,725 
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 	 
	 
	 	 
	c/o Heights Capital Management
	 	 
	 
	101 California Street, Suite 3250
	 	 
	 
	San Francisco, CA 94111
	 	 
	 





	 	 	 

	Telephone No.:
	 	415-403-6500 
	 
	 	 





	 	 	 

	Facsimile No.:
	 	415-403-6525 
	 
	 	 





	 	 	 

	E-mail Address:

	 	winer@sig.com and kobinger@sig.com 
	 
	 	 





	 	 	 

	Attention:

	 	Sam Winer 
	 
	 	 





Delivery Instructions:

(if different than above)




	 	 	 

	c/o

	 	 
	 
	 	 





	 	 	 

	Street:

	 	 
	 
	 	 





	 	 	 

	City/State/Zip:

	 	 
	 
	 	 





	 	 	 

	Attention:

	 	 
	 
	 	 





	 	 	 

	Telephone No.:

	 	 
	 
	 	 






 












 





	 	 	 

	NAME OF PURCHASER:

	 	Cowen Overseas Investment LP
	 

	 	 





	 	 	 	 	 	 	 

	By:	 	/s/ Jeffrey C. Smith	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Jeffrey C. Smith	 	 
	 

	 	Title:	 	Authorized Signatory	 	 






	 	 	 

	Aggregate Purchase Price (Subscription Amount): $

	 	999,999.00
	 
	 	 





	 	 	 

	Number of Shares to be Acquired:

	 	285,714
	 
	 	 





	 	 	 

	Underlying Shares Subject to Warrant:

	 	214,285
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 	 
	 
	 	 
	Ramius — c/o Andrew Cohen
	 	 
	 
	599 Lexington Ave
	 	 
	 
	New York, NY 10022
	 	 
	 
	 
	 	 





	 	 	 

	Telephone No.:

	 	212-201-4860
	 
	 	 





	 	 	 

	Facsimile No.:

	 	212-845-7995
	 
	 	 





	 	 	 

	E-mail Address:

	 	acohen@ramius.com
	 
	 	 





	 	 	 

	Attention:

	 	Andrew Cohen
	 
	 	 





Delivery Instructions:

(if different than above)



	 	 	 

	c/o


	 	BNP Paribas Prime Brokerage
	 
	 	 





	 	 	 

	
Street:

	 	787 Seventh Avenue, 8th Floor
	 
	 	 





	 	 	 

	City/State/Zip:

	 	New York, NY 10019
	 
	 	 





	 	 	 

	Attention:

	 	Tom Fitzgerald
	 
	 	 





	 	 	 

	Telephone No.:

	 	212-471-6931
	 
	 	 






 









 






	 	 	 

	NAME OF PURCHASER:

	 	Cranshire Capital LP
	 

	 	 





	 	 	 	 	 	 	 

	By:	 	/s/ Keith A. Goodman	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Keith A. Goodman	 	 
	 

	 	Title:
	 	COO — Downsview Capital, Inc., The General Partner	 	 






	 	 	 

	Aggregate Purchase Price (Subscription Amount): $

	 	1,439,994.50 
	 
	 	 





	 	 	 

	Number of Shares to be Acquired:

	 	411,427 
	 
	 	 





	 	 	 

	Underlying Shares Subject to Warrant:

	 	308,570 
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 	 
	 
	 	 
	Cranshire Capital, L.P.

	 	 
	 
	3100 Dundee Road, Ste. 703

	 	 
	 
	Northbrook, IL 60062
 
	 	 
	 





	 	 	 

	Telephone No.:

	 	847-562-9030 
	 
	 	 





	 	 	 

	Facsimile No.:

	 	847-562-9031 
	 
	 	 





	 	 	 

	E-mail Address:

	 	kgoodman@cranshirecapital.com and
	 
	 	 
	mkopin@cranshirecapital.com
	 





	 	 	 

	Attention:

	 	Keith Goodman / Mitchell Kopin
	 
	 	 





Delivery Instructions:

(if different than above)




	 	 	 

	c/o

	 	 
	 
	 	 





	 	 	 

	Street:

	 	 
	 
	 	 





	 	 	 

	City/State/Zip:

	 	 
	 
	 	 





	 	 	 

	Attention:

	 	 
	 
	 	 





	 	 	 

	Telephone No.:

	 	 
	 
	 	 










































 





	 	 	 

	NAME OF PURCHASER:


	 	DAFNA LifeSciente Ltd
	 

	 	 






	 	 	 	 	 	 	 

	By:
	 	/s/ Fariba Ghodsian	 	 
	 	 	 	 	 
	 

	 	Name:

	 	Fariba Ghodsian	 	 
	 

	 	Title:

	 	Managing Member	 	 






	 	 	 

	Aggregate
Purchase Price (Subscription Amount): $


	 	124,999.00 
	 
	 	 






	 	 	 

	Number of Shares to be Acquired:


	 	35,714 
	 
	 	 






	 	 	 

	Underlying Shares Subject to Warrant:


	 	26,785 
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 	 
	 
	 	 
	10990 Wilshire Boulevard, Suite 1400
	 	 
	 
	Los Angeles, CA 90024
	 	 
	 
	 
	 	 
	 






	 	 	 

	Telephone No.:


	 	310-954-3200 
	 
	 	 






	 	 	 

	Facsimile No.:


	 	310-445-6594 
	 
	 	 






	 	 	 

	E-mail Address:


	 	fghodsian@dafnacapital.com
	 
	 	 






	 	 	 

	Attention:


	 	Fariba Ghodsian
	 
	 	 





Delivery Instructions:

(if different than above)




	 	 	 

	c/o

	 	 
	 
	 	 






	 	 	 

	Street:

	 	 
	 
	 	 






	 	 	 

	City/State/Zip:

	 	 
	 
	 	 






	 	 	 

	Attention:

	 	 
	 
	 	 






	 	 	 

	Telephone No.:

	 	 
	 
	 	 





 









 





	 	 	 

	NAME OF PURCHASER:

	 	DAFNA LifeScience Market Neutral Ltd
	 

	 	 






	 	 	 	 	 	 	 

	By:
	 	/s/ Fariba Ghodsian	 	 
	 	 	 	 	 
	 

	 	Name:

	 	Fariba Ghodsian	 	 
	 

	 	Title:

	 	Managing Member	 	 






	 	 	 

	Aggregate Purchase Price (Subscription Amount): $


	 	95,000.50 
	 
	 	 






	 	 	 

	Number of Shares to be Acquired:


	 	27,143 
	 
	 	 






	 	 	 

	Underlying Shares Subject to Warrant:


	 	20,357 
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 	 
	 
	 	 
	10990 Wilshire Boulevard, Suite 1400
	 	 
	 
	Los Angeles, CA 90024
	 	 
	 
	 
	 	 
	 






	 	 	 

	Telephone No.:


	 	310-954-3200 
	 
	 	 






	 	 	 

	Facsimile No.:


	 	310-445-6594 
	 
	 	 






	 	 	 

	E-mail Address:


	 	fghodsian@dafnacapital.com
	 
	 	 






	 	 	 

	Attention:


	 	Fariba Ghodsian
	 
	 	 





Delivery Instructions:

(if different than above)





	 	 	 

	c/o

	 	 
	 
	 	 






	 	 	 

	Street:

	 	 
	 
	 	 






	 	 	 

	City/State/Zip:

	 	 
	 
	 	 






	 	 	 

	Attention:

	 	 
	 
	 	 






	 	 	 

	Telephone No.:

	 	 
	 
	 	 





 









 






	 	 	 

	NAME OF PURCHASER:
	 	DAFNA LifeScience Select Ltd
	 

	 	 








	 	 	 	 	 	 	 

	By:	 	/s/ Fariba Ghodsian	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Fariba Ghodsian	 	 
	 

	 	Title:	 	Managing Member	 	 








	 	 	 

	
Aggregate Purchase Price (Subscription Amount): $

	 	280,000.00
	 
	 	 








	 	 	 

	
Number of Shares to be Acquired:

	 	80,000
	 
	 	 








	 	 	 

	
Underlying Shares Subject to Warrant:

	 	60,000
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 	 
	 
	 	 
	10990 Wilshire Boulevard, Suite 1400
	 	 
	 
	Los Angeles, CA 90024
	 	 
	 
	 
	 	 
	 







	 	 	 

	
Telephone No.:

	 	310-954-3200
	 
	 	 







	 	 	 

	
Facsimile No.:

	 	310-445-6594
	 
	 	 







	 	 	 

	
E-mail Address:

	 	fghodsian@dafnacapital.com
	 
	 	 







	 	 	 

	
Attention:

	 	Fariba Ghodsian
	 
	 	 








Delivery Instructions:

(if different than above)




	 	 	 

	c/o

	 	 
	 
	 	 





	 	 	 

	Street:

	 	 
	 
	 	 





	 	 	 

	City/State/Zip:

	 	 
	 
	 	 





	 	 	 

	Attention:

	 	 
	 
	 	 





	 	 	 

	Telephone No.:

	 	 
	 
	 	 






 









 





	 	 	 

	NAME OF PURCHASER:

	 	Empery Asset Master, LTD
	 

	 	 
	By: Empery Asset Management, LP, its authorized agent






	 	 	 	 	 	 	 

	By:	 	/s/ Ryan M. Lane	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Ryan M. Lane	 	 
	 

	 	Title:
	 	Managing Member of the GP	 	 






	 	 	 

	Aggregate
Purchase Price (Subscription Amount): $

	 	499,999.50
	 
	 	 





	 	 	 

	Number of Shares to be Acquired:

	 	142,857
	 
	 	 





	 	 	 

	Underlying Shares Subject to Warrant:

	 	107,142
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 	 
	 
	 	 
	120 Broadway, Suite 1019
	 	 
	 
	New York, NY 10271
	 	 
	 
	 
	 	 
	 





	 	 	 

	Telephone No.:

	 	212-608-3300
	 
	 	 





	 	 	 

	Facsimile No.:

	 	212-608-3307
	 
	 	 





	 	 	 

	E-mail Address:

	 	notices@emperyam.com
	 
	 	 





	 	 	 

	Attention:

	 	Ryan Lane
	 
	 	 





Delivery Instructions:

(if different than above)




	 	 	 

	c/o

	 	 
	 
	 	 





	 	 	 

	Street:

	 	 
	 
	 	 





	 	 	 

	City/State/Zip:

	 	 
	 
	 	 





	 	 	 

	Attention:

	 	 
	 
	 	 





	 	 	 

	Telephone No.:

	 	 
	 
	 	 





 









 





	 	 	 

	NAME OF PURCHASER:

	 	Epworth — Ayer Capital
	 

	 	 





	 	 	 	 	 	 	 

	By:	 	/s/ Jay Venkatsan	 	 
	 	 	 	 	 
	 

	 	Name:	 	Jay Venkatsan	 	 
	 

	 	Title:
	 	Managing Member of Investment Advisor	 	 






	 	 	 


	Aggregate Purchase Price (Subscription Amount):

	 	$307,412.00 
	 
	 	 






	 	 	 

	Number of Shares to be Acquired:

	 	87,832 
	 
	 	 







	 	 	 

	Underlying Shares Subject to Warrant:

	 	65,874 
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 	 
	 
	 	 
	230 California St., suite 600
	 	 
	 
	San Francisco, CA 94111
	 	 
	 
	 
	 	 
	 






	 	 	 

	Telephone No.:

	 	415-874-4800 
	 
	 	 






	 	 	 

	Facsimile No.:

	 	415-520-6826 
	 
	 	 






	 	 	 

	E-mail Address:

	 	tmg@ayercapital.com
	 






	 	 	 

	Attention:

	 	Tom Glaser
	 
	 	 




















Delivery Instructions:

(if different than above)




	 	 	 

	c/o

	 	Morgan Stanley Custody
	 
	 	 









	 	 	 

	Street:

	 	901 South Bond Street
	 
	 	 











	 	 	 

	City/State/Zip:

	 	Baltimore, MD 21231
	 
	 	 








	 	 	 

	Attention:

	 	Alicia Alvez/Deborah Mullin
	 
	 	 







	 	 	 

	Telephone No.:

	 	410-534-1582
	 
	 	 







 









 





	 	 	 

	NAME OF PURCHASER:

	 	Freestone Advantage Partners, LP
	 

	 	 





	 	 	 	 	 	 	 

	By:	 	/s/ Keith Goodman	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Keith Goodman	 	 
	 

	 	Title:
	 	Manager	 	 






	 	 	 

	Aggregate Purchase Price (Subscription Amount): $

	 	60,004.00 
	 
	 	 





	 	 	 

	Number of Shares to be Acquired:

	 	17,144 
	 
	 	 





	 	 	 

	Underlying Shares Subject to Warrant:

	 	12,858 
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 	 
	 
	 	 
	3100 Dundee #703
	 	 
	 
	Northbrook, IL 60062
	 	 
	 
	 
	 	 
	 





	 	 	 

	Telephone No.:

	 	847-562-9030 
	 
	 	 





	 	 	 

	Facsimile No.:

	 	847-562-9031 
	 
	 	 





	 	 	 

	E-mail Address:

	 	kgoodman@cranshirecapital.com and
	 
	 	 
	mkopin@cranshirecapital.com
	 





	 	 	 

	Attention:

	 	Keith Goodman and Mitchell Kopin
	 
	 	 





Delivery Instructions:

(if different than above)




	 	 	 

	c/o

	 	 
	 
	 	 





	 	 	 

	Street:

	 	 
	 
	 	 





	 	 	 

	City/State/Zip:

	 	 
	 
	 	 





	 	 	 

	Attention:

	 	 
	 
	 	 





	 	 	 

	Telephone No.:

	 	 
	 
	 	 



















 





	 	 	 

	NAME OF PURCHASER:

	 	Hartz Capital Investments, LLC
	 
	 	 
	By: Empery Asset Management, LP, its authorized agent






	 	 	 	 	 	 	 

	By:	 	/s/ Ryan M. Lane	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Ryan M. Lane	 	 
	 

	 	Title:
	 	Managing Member of the GP	 	 






	 	 	 

	Aggregate Purchase Price (Subscription Amount): $

	 	499,999.50 
	 
	 	 





	 	 	 

	Number of Shares to be Acquired:

	 	142,857 
	 
	 	 





	 	 	 

	Underlying Shares Subject to Warrant:

	 	107,142 
	 
	 	 
	(75  % of the number of Shares to be acquired)
	Address for Notice:
	 
	 	 
	120 Broadway, Suite 1019
	 
	New York, NY 10271
	 
	 
	 	 
	 





	 	 	 

	Telephone No.:

	 	212-608-3300
	 
	 	 





	 	 	 

	Facsimile No.:

	 	212-608-3307
	 
	 	 





	 	 	 

	E-mail Address:

	 	notices@emperyam.com
	 
	 	 





	 	 	 

	Attention:

	 	Ryan Lane
	 
	 	 





Delivery Instructions:

(if different than above)




	 	 	 

	c/o

	 	 
	 

	 	 





	 	 	 

	Street:

	 	 
	 

	 	 





	 	 	 

	City/State/Zip:

	 	 
	 

	 	 





	 	 	 

	Attention:

	 	 
	 

	 	 





	 	 	 

	Telephone No.:

	 	 
	 

	 	 



















 





	 	 	 

	NAME OF PURCHASER:

	 	Hudson Bay Master Fund
	 
	 	 





	 	 	 	 	 	 	 

	By:	 	/s/ Yoav Roth	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Yoav Roth	 	 
	 

	 	Title:
	 	Authorized signatory	 	 






	 	 	 

	Aggregate Purchase Price (Subscription Amount): $

	 	2,000,001.50 
	 
	 	 





	 	 	 

	Number of Shares to be Acquired:

	 	571,429 
	 
	 	 





	 	 	 

	Underlying Shares Subject to Warrant:

	 	428,571 
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 
	 	 
	Hudson Bay Capital
	 	 
	 
	120 Broadway 40th Floor
	 	 
	 
	New York, NY 10271
	 	 
	 





	 	 	 

	Telephone No.:

	 	212-571-1244
	 
	 	 





	 	 	 

	Facsimile No.:

	 	212-571-1279
	 
	 	 





	 	 	 

	E-mail Address:

	 	investments@hudsonbaycapital.com
	 
	 	 





	 	 	 

	Attention:

	 	Yoav Roth
	 
	 	 





Delivery Instructions:

(if different than above)




	 	 	 

	c/o

	 	 
	 

	 	 





	 	 	 

	Street:

	 	 
	 

	 	 





	 	 	 

	City/State/Zip:

	 	 
	 

	 	 





	 	 	 

	Attention:

	 	 
	 

	 	 





	 	 	 

	Telephone No.:

	 	 
	 

	 	 



















 





	 	 	 

	NAME OF PURCHASER:

	 	Iroquois Master Fund Ltd
	 
	 	 





	 	 	 	 	 	 	 

	By:	 	/s/ Joshua Silverman	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Joshua Silverman	 	 
	 

	 	Title:
	 	Authorized signatory	 	 






	 	 	 

	Aggregate Purchase Price (Subscription Amount):$

	 	1,499,998.50 
	 
	 	 





	 	 	 

	Number of Shares to be Acquired:

	 	428,571 
	 
	 	 





	 	 	 

	Underlying Shares Subject to Warrant:

	 	321,428 
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 
	 	 
	641 Lexington Ave, 26th Floor
	 
	New York, NY 10022
	 
	 
	 





	 	 	 

	Telephone No.:

	 	212-974-3070
	 
	 	 





	 	 	 

	Facsimile No.:

	 	212-207-3452
	 
	 	 





	 	 	 

	E-mail Address:

	 	jsilverman@icfund.com
	 
	 	 





	 	 	 

	Attention:

	 	Josh Silverman
	 
	 	 





Delivery Instructions:

(if different than above)




	 	 	 

	c/o

	 	 
	 

	 	 





	 	 	 

	Street:

	 	 
	 

	 	 





	 	 	 

	City/State/Zip:

	 	 
	 

	 	 





	 	 	 

	Attention:

	 	 
	 

	 	 





	 	 	 

	Telephone No.:

	 	 
	 

	 	 



















 





	 	 	 

	NAME OF PURCHASER:


	 	Kingsbrook Opportunities Master Fund LP
	 

	 	 






	 	 	 	 	 	 	 

	By:
	 	/s/ Scott M. Wallace	 	 
	 	 	 	 	 
	 

	 	Name:

	 	Scott M. Wallace	 	 
	 

	 	Title:

	 	Managing Member	 	 






	 	 	 

	Aggregate Purchase Price (Subscription Amount): $


	 	999,999.00 
	 
	 	 






	 	 	 

	Number of Shares to be Acquired:


	 	285,714 
	 
	 	 






	 	 	 

	Underlying Shares Subject to Warrant:


	 	214,285 
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 	 
	 
	 	 
	c/o Kingsbrook Partners LP
	 	 
	 
	590 Madison Avenue, 27th Floor
	 	 
	 
	New York, NY 10022
	 	 
	 
	 
	 	 






	 	 	 

	Telephone No.:


	 	212-600-8240 
	 
	 	 






	 	 	 

	Facsimile No.:


	 	212-600-8290 
	 
	 	 






	 	 	 

	E-mail Address:


	 	investments@kingsbrookpartners.com and

	 
	 	 
	operations@kingsbrookpartners.com
	 






	 	 	 

	Attention:


	 	Ari J. Storch / Adam J. Chill
	 
	 	 





Delivery Instructions:

(if different than above)





	 	 	 

	c/o

	 	 
	 
	 	 





	 	 	 

	Street:

	 	 
	 
	 	 






	 	 	 

	City/State/Zip:

	 	 
	 
	 	 






	 	 	 

	Attention:

	 	 
	 
	 	 






	 	 	 

	Telephone No.:

	 	 
	 
	 	 





 









 





	 	 	 

	NAME OF PURCHASER:


	 	Straus Partners, L.P.
	 

	 	 






	 	 	 	 	 	 	 

	By:
	 	/s/ Ravinder Holder	 	 
	 	 	 	 	 
	 

	 	Name:

	 	Ravinder Holder	 	 
	 

	 	Title:

	 	Partner	 	 






	 	 	 

	Aggregate Purchase Price (Subscription Amount): $


	 	525,000.00 
	 
	 	 






	 	 	 

	Number of Shares to be Acquired:


	 	150,000 
	 
	 	 






	 	 	 

	Underlying Shares Subject to Warrant:


	 	112,500 
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 	 
	 
	 	 
	767 Third Avenue
	 	 
	 
	21st Floor
	 	 
	 
	New York, NY 10017
	 	 
	 
	 
	 	 






	 	 	 

	Telephone No.:


	 	212-676-5640 
	 
	 	 






	 	 	 

	Facsimile No.:


	 	212-676-5649 
	 
	 	 






	 	 	 

	E-mail Address:


	 	amarks@strauspartners.com
	 
	 	 






	 	 	 

	Attention:


	 	Andrew Marks
	 
	 	 





Delivery Instructions:

(if different than above)





	 	 	 

	c/o

	 	 
	 
	 	 






	 	 	 

	Street:

	 	 
	 
	 	 






	 	 	 

	City/State/Zip:

	 	 
	 
	 	 






	 	 	 

	Attention:

	 	 
	 
	 	 






	 	 	 

	Telephone No.:

	 	 
	 
	 	 





 









 







	 	 	 

	NAME OF PURCHASER:

	 	Straus Healthcare Partners, L.P.
	 

	 	 





	 	 	 	 	 	 	 

	By:	 	/s/ Ravinder Holder	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Ravinder Holder	 	 
	 

	 	Title:
	 	Partner	 	 






	 	 	 

	Aggregate Purchase Price (Subscription Amount): $

	 	525,000.00 
	 
	 	 





	 	 	 

	Number of Shares to be Acquired:

	 	150,000 
	 
	 	 





	 	 	 

	Underlying Shares Subject to Warrant:

	 	112,500 
	 
	 	 
	(75  % of the number of Shares to be acquired)
	 
	 	 
	Address for Notice:
	 	 
	 
	 	 
	767 Third Avenue

	 	 
	 
	21st Floor

	 	 
	 
	New York, NY 10017
 
	 	 
	 





	 	 	 

	Telephone No.:

	 	212-676-5640 
	 
	 	 





	 	 	 

	Facsimile No.:

	 	212-676-5649 
	 
	 	 





	 	 	 

	E-mail Address:

	 	amarks@strauspartners.com
	 
	 	 





	 	 	 

	Attention:

	 	Andrew Marks
	 
	 	 





Delivery Instructions:

(if different than above)




	 	 	 

	c/o

	 	 
	 
	 	 





	 	 	 

	Street:

	 	 
	 
	 	 





	 	 	 

	City/State/Zip:

	 	 
	 
	 	 





	 	 	 

	Attention:

	 	 
	 
	 	 





	 	 	 

	Telephone No.:

	 	 
	 
	 	 



























 






EXHIBITS:




	 	 	 

	A:

	 	Form of Warrant
	 
	 	 
	B:

	 	Form of Registration Rights Agreement
	 
	 	 
	C-1:

	 	Accredited Investor Questionnaire
	 
	 	 
	C-2:

	 	Stock Certificate Questionnaire
	 
	 	 
	D:

	 	Form of Opinion of Company Counsel
	 
	 	 
	E:

	 	Form of Irrevocable Transfer Agent Instructions
	 
	 	 
	F:

	 	Form of Secretary’s Certificate
	 
	 	 
	G:

	 	Form of Officer’s Certificate
	 
	 	 
	H:

	 	Wire Instructions
	 
	 	 
	I:

	 	Form of Lock-Up Agreement
	 
	 	 
	J:

	 	List of Directors and Executive Officers Executing Lock-Up Agreements











 









 








EXHIBIT A




FORM OF WARRANT



[See Exhibit 4.2]







 









 








EXHIBIT B




FORM OF REGISTRATION RIGHTS AGREEMENT




[See Exhibit 4.1]





 









 








INSTRUCTION SHEET



(to be read in conjunction with the entire Securities Purchase Agreement and Registration Rights
Agreement)





	A.	 	Complete the following items in the Securities Purchase Agreement and/or Registration Rights
Agreement:






	 	1.	 	Provide the information regarding the Purchaser requested on the signature
page. The Securities Purchase Agreement and the Registration Rights Agreement must be
executed by an individual authorized to bind the Purchaser.
	 
	 	2.	 	Exhibit C-1 — Accredited Investor Questionnaire:
	 
	 	 	 	Provide the information requested by the Accredited Investor Questionnaire
	 
	 	3.	 	Exhibit C-2 Stock Certificate Questionnaire:
	 
	 	 	 	Provide the information requested by the Stock Certificate Questionnaire
	 
	 	4.	 	Annex B to the Registration Rights Agreement — Selling Securityholder
Notice and Questionnaire
	 
	 	 	 	Provide the information requested by the Selling Securityholder Notice and
Questionnaire
	 
	 	5.	 	Return the signed Securities Purchase Agreement and Registration Rights
Agreement to:




Denny Chu

JMP Securities LLC

600 Montgomery Street

Suite 1100

San Francisco, California 94111

Tel: 415-835-8908

Fax: 415-835-8920

Email: dchu@jmpsecurities.com





	B.	 	Instructions regarding the transfer of funds for the purchase of Shares and Warrants are set
forth on Exhibit H to the Securities Purchase Agreement.




 









 











EXHIBIT C-1




ACCREDITED INVESTOR QUESTIONNAIRE



(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)


To: Oncothyreon Inc.



This Investor Questionnaire (“Questionnaire”) must be completed by each potential investor in
connection with the offer and sale of the shares of the common stock, par value $0.0001 per share,
and shares of common stock that may be issued upon exercise of certain warrants (collectively, the
“Securities”), of Oncothyreon Inc., a Delaware corporation (the “Corporation”). The Securities are
being offered and sold by the Corporation without registration under the Securities Act of 1933, as
amended (the “Act”), and the securities laws of certain states, in reliance on the exemptions
contained in Section 4(2) of the Act and on Regulation D promulgated thereunder and in reliance on
similar exemptions under applicable state laws. The Corporation must determine that a potential
investor meets certain suitability requirements before offering or selling Securities to such
investor. The purpose of this Questionnaire is to assure the Corporation that each investor will
meet the applicable suitability requirements. The information supplied by you will be used in
determining whether you meet such criteria, and reliance upon the private offering exemptions from
registration is based in part on the information herein supplied.



This Questionnaire does not constitute an offer to sell or a solicitation of an offer to buy any
security. Your answers will be kept strictly confidential. However, by signing this
Questionnaire, you will be authorizing the Corporation to provide a completed copy of this
Questionnaire to such parties as the Corporation deems appropriate in order to ensure that the
offer and sale of the Securities will not result in a violation of the Act or the securities laws
of any state and that you otherwise satisfy the suitability standards applicable to purchasers of
the Securities. All potential investors must answer all applicable questions and complete, date
and sign this Questionnaire. Please print or type your responses and attach additional sheets of
paper if necessary to complete your answers to any item.



PART A. BACKGROUND INFORMATION



Name of
Beneficial Owner of the Securities:






	 	 	 	 	 

	Business
Address:




	 

	 	(Number and Street)
	 	 
	 
	 
	(City)

	 	(State)
	 	(Zip Code)





Telephone
Number: (___)





If a corporation, partnership, limited liability company, trust or other entity:



Type of entity: 








	 	 	 

	State
of formation:



	 	Approximate Date of formation:







Were you formed for the purpose of investing in the securities being offered?




     Yes o          No o



 









 




If an individual:




	 	 	 	 	 

	Residence
Address: 



	 

	 	(Number and Street)	 	 
	 
	 
	(City)

	 	(State)
	 	(Zip Code)





Telephone Number: (___) 





	 	 	 	 	 

	Age:



	 	Citizenship: 

	 	Where registered to vote:








Set forth in the space provided below the state(s), if any, in the United States in which you
maintained your residence during the past two years and the dates during which you resided in each
state:



Are you a director or executive officer of the Corporation?



     Yes
 o               No
o



Social Security or Taxpayer Identification No. 





PART B. ACCREDITED INVESTOR QUESTIONNAIRE




     In order for the Company to offer and sell the Securities in conformance with state and
federal securities laws, the following information must be obtained regarding your investor status.
Please initial each category applicable to you as a Purchaser of Securities of the Company.




		__ (1)	 	A bank as defined in Section 3(a)(2) of the Securities Act,
or any savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity;
	 
	 	__ (2) 	 	A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, as amended;
	 
	 	__ (3)	 	An insurance company as defined in Section 2(13) of the
Securities Act;
	 
	 	__ (4)	 	An investment company registered under the Investment Company
Act of 1940, as amended (the “Investment Company Act”), or a business
development company as defined in Section 2(a)(48) of the Investment Company
Act;
	 
	 	__ (5)	 	A Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958, as amended;
	 
		__ (6)	 	A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000;
	 
	 	__ (7)	 	An employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, as amended, if the investment decision
is made by a plan




 









 






	 	 	 	fiduciary, as defined in Section 3(21) of such act, which is either a bank,
savings and loan association, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in excess of
$5,000,000 or, if a self-directed plan, with investment decisions made
solely by persons that are accredited investors;
	 
	 	__ (8)	 	A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940, as amended;
	 
	 	__ (9)	 	An organization described in Section 501(c)(3) of the
Internal Revenue Code, as amended, a corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of acquiring
the Securities, with total assets in excess of $5,000,000;
	 
	 	__ (10)	 	A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Securities, whose purchase is
directed by a sophisticated person who has such knowledge and experience in
financial and business matters that such person is capable of evaluating the
merits and risks of investing in the Company;
	 
	 	__ (11)	 	A natural person whose individual net worth, or joint net
worth with that person’s spouse (in each case, excluding the value of such
person’s primary residence), at the time of his purchase exceeds $1,000,000;
	 
	 	__ (12)	 	A natural person who had an individual income in excess of
$200,000 in each of the two most recent years, or joint income with that
person’s spouse in excess of $300,000, in each of those years, and has a
reasonable expectation of reaching the same income level in the current year;
	 
	 	__ (13)	 	An executive officer or director of the Company;
	 
	 	__ (14)	 	An entity in which all of the equity owners qualify under
any of the above subparagraphs. If the undersigned belongs to this investor
category only, list the equity owners of the undersigned, and the investor
category which each such equity owner satisfies.




A. FOR EXECUTION BY AN INDIVIDUAL:




	 	 	 	 	 
	 	 	 
	___________________________________	By  	
 	 
	Date 	 	Print Name:  	 	 
	 	 	 	 
	 


B. FOR EXECUTION BY AN ENTITY:




	 	 	 	 	 
	Entity Name:
 

	 
	___________________________________	By  	
 	 
	Date 	 	Print Name:  	     	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 


C. ADDITIONAL SIGNATURES (if required by partnership, corporation or trust document):




	 	 	 	 	 
	 	Entity Name: 

	 	 
	 
	___________________________________	By  	
 	 
	Date 	 	Print Name:  	     	 
	 	 	Title:  	 	 




	 	 	 	 	 
	 	Entity Name: 

	 	 
	 
	___________________________________	By  	
 	 
	Date 	 	Print Name:  	     	 
	 	 	Title:  	 	 





 











 





EXHIBIT C-2




STOCK CERTIFICATE QUESTIONNAIRE



     Pursuant to Section 2.2(b) of the Agreement, please provide us with the following
information:



	 	 	 	 	 

	1.	 	The exact name that the Securities are to be registered in (this
is the name that will appear on the stock certificate(s)). You may
use a nominee name if appropriate:
	 	 
	2.	 	The relationship between the Purchaser of the Securities and the
Registered Holder listed in response to Item 1 above:
	 	 
	3.	 	The mailing address, telephone and telecopy number of the
Registered Holder listed in response to Item 1 above:
	 	 
	4.	 	The Tax Identification Number (or, if an individual, the Social
Security Number) of the Registered Holder listed in response to Item
1 above:
	 	 






 









 






EXHIBIT D




FORM OF OPINION OF COMPANY COUNSEL



SUBJECT TO SUCH ASSUMPTIONS AND QUALIFICATIONS AS ARE CUSTOMARY FOR

OPINIONS OF THIS TYPE




	1.	 	The Company is a corporation duly incorporated and validly existing as a corporation under
the laws of the State of Delaware and is in good standing under such laws. The Company has
requisite corporate power to own, lease and operate its properties and assets, and to conduct
its business as described in the Disclosure Materials and to carry out and perform its
obligations pursuant to the Transaction Documents. The Company is qualified to do business as
a foreign corporation in the State of Washington.






	2.	 	The authorized capital stock of the Company consists of ______________ shares of common
stock, par value $0.0001 per share, ___________ shares of preferred stock, par value $0.0001
per share, and ______________ shares of Class UA preferred stock, no par value per share.






	3.	 	The Shares delivered on the date hereof have been duly authorized and are validly issued,
fully paid and non-assessable. The Warrant Shares issuable upon exercise of the Warrants
based on the exercise price in effect on the date hereof have been duly authorized and
reserved for issuance and, when issued and delivered upon exercise by a holder in accordance
with the provisions of the Warrants, will be duly authorized, validly issued, fully paid and
non-assessable.






	4.	 	Each of the Transaction Documents has been duly authorized, executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.






	5.	 	The execution and delivery by the Company of the Transaction Documents, the performance by
the Company of its obligations pursuant thereto, and the issuance and sale of the Securities
being delivered on the date hereof pursuant to the Transaction Documents do not violate any
provision of (i) the Certificate of Incorporation or the bylaws of the Company; (ii) any U.S.
federal or Washington state law known to us to be customarily applicable to transactions of
the nature contemplated in the Transaction Documents; or (iii) the General Corporation Law of
the State of Delaware.






	6.	 	The execution and delivery by the Company of the Transaction Documents, the performance by
the Company of its obligations pursuant thereto, and the issuance and sale of the Securities
being delivered on the date hereof pursuant to the Transaction Documents do not breach or
constitute a default under any Reviewed Agreement or violate any Reviewed Judgment. [Exhibits
to opinion to set forth Reviewed Judgments and Reviewed Agreements]






	7.	 	No consent, approval, authorization of, or designation, declaration or filing with any
governmental authority on the part of the Company is required for the valid execution and
delivery of the Transaction Documents or the issuance and sale of the Securities, except (i)
such as may have been obtained or made under the Securities Act or the Exchange Act, (ii)
those that have been made under the rules of The NASDAQ Stock Market LLC, (iii) such consents,
approvals, authorizations, orders, registrations or qualifications as may be required under
applicable state securities or Blue Sky laws in connection with the purchase and distribution
of the Securities, and (iv) as may be expressly contemplated by the Transaction Documents.




 









 












	8.	 	No registration of the Securities under the Securities Act is required for the offer and sale
of the Securities to the Purchasers in the manner contemplated by the Agreement, it being
understood that no opinion is expressed as to any subsequent resale of the Securities.






	9.	 	Except as disclosed in the SEC Reports or otherwise expressly waived in writing, there are no
contracts, agreements or understandings known to us between the Company and any person
granting such person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the securities registered
pursuant to the Registration Statement.




 









 











EXHIBIT E




FORM OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS



As of _________, ____




Computershare Trust Company, N.A.

350 Indiana St., Suite 750

Golden, Colorado 80401

Attn: _________________



Ladies and Gentlemen:




     Reference is made to that certain Securities Purchase Agreement, dated as of _____________,
___ (the “Agreement”), by and among Oncothyreon Inc., a Delaware corporation (the “Company”), and
the purchasers named on the signature pages thereto (collectively, and including permitted
transferees, the “Holders”), pursuant to which the Company is issuing to the Holders shares (the
"Shares”) of Common Stock of the Company, par value $0.0001 per share (the “Common Stock”), and
warrants (the “Warrants”), which are exercisable into shares of Common Stock.



     This letter shall serve as our irrevocable authorization and direction to you (provided that
you are the transfer agent of the Company at such time and the conditions set forth in this letter
are satisfied), subject to any stop transfer instructions that we may issue to you from time to
time, if any:



          (i) to issue, from the share reserve established for the Warrants pursuant to the instruction
letter of the Company dated September [     ], 2010, certificates representing shares of Common Stock
at any time after a registration statement covering resales of the Shares and the Warrant Shares
has been declared effective by the Securities and Exchange Commission (the “Commission”) under the
Securities Act of 1933, as amended (the “Securities Act”) or upon transfer or resale of the Shares;
and




          (ii) to issue shares of Common Stock upon the exercise of the Warrants (the “Warrant Shares”)
to or upon the order of a Holder from time to time upon delivery to you of a properly completed and
duly executed Exercise Notice, in the form attached hereto as Annex I, which has been
acknowledged by the Company as indicated by the signature of a duly authorized officer of the
Company thereon together with indication of receipt of the exercise price therefor.




     You acknowledge and agree that so long as you have received (a) written confirmation from the
Company with respect to clause (1) below or the Company’s legal counsel with respect to clause (2)
below that either (1) a registration statement covering resales of the Shares and the Warrant
Shares has been declared and remains effective by the Commission under the Securities, or (2) the
Shares and the Warrant Shares have been sold in conformity with Rule 144 under the Securities Act
(“Rule 144”) or are eligible for sale under Rule 144, without the requirement for the Company to be
in compliance with the current public information required under Rule 144 as to such securities and
without volume or manner-of-sale restrictions and (b) if applicable, a copy of such registration
statement, then, unless otherwise required by law, promptly upon your receipt of (i) original
certificates representing the Shares (endorsed or with stock powers attached, signatures
guaranteed) or (ii) a notice of transfer of Shares (along with the applicable Shares, endorsed or
with stock powers attached, signatures guaranteed) or the Exercise Notice, you shall issue the
certificates representing or issue to such Holder or transferee by electronic delivery at the
applicable balance account at the Depository Trust Company the Shares and/or the Warrant Shares, as
the case may be, registered in the names of such Holders or transferees, as the case may be, and
such certificates shall not bear any legend restricting transfer of the Shares or the Warrant
Shares thereby and should not be subject to any stop-transfer restriction; provided, however, that
if such Shares and Warrant Shares are not registered for resale under the Securities Act or able to
be sold under Rule 144 without the requirement for the Company to be in compliance with the current
public information required under Rule 144 as to such securities and without



 









 




volume or manner-of-sale restrictions, then the certificates for such Shares and/or Warrant
Shares shall bear the following legend:





THE OFFER AND SALE OF THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN EACH CASE IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY
LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES; PROVIDED
THAT IN CONNECTION WITH ANY FORECLOSURE OR TRANSFER OF THE
SECURITIES, THE TRANSFERORS SHALL COMPLY WITH THE PROVISIONS
IN THE SECURITIES PURCHASE AGREEMENT AND THE REGISTRATION
RIGHTS AGREEMENT, AND UPON FORECLOSURE OR TRANSFER OF THE
SECURITIES, SUCH FORECLOSING PERSON OR TRANSFEREE SHALL
COMPLY WITH ALL PROVISIONS CONTAINED IN THE SECURITIES
PURCHASE AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT.



     A form of written confirmation from the Company that a registration statement covering resales
of the Shares and the Warrant Shares has been declared effective by the Commission under the
Securities Act is attached hereto as Annex II.



     Please execute this letter in the space indicated to acknowledge your agreement to act in
accordance with these instructions.



	 	 	 	 	 
	 	Very truly yours,


ONCOTHYREON INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	Acknowledged and Agreed:



COMPUTERSHARE TRUST COMPANY, N.A.

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 


Date: _________________, ______






 









 








Annex I




FORM OF EXERCISE NOTICE



[To be executed by the Holder to purchase shares of Common Stock under the Warrant]


Ladies and Gentlemen:



(1) The undersigned is the Holder of Warrant No. __________ (the “Warrant”) issued by Oncothyreon
Inc., a Delaware corporation (the “Company”). Capitalized terms used herein and not otherwise
defined herein have the respective meanings set forth in the Warrant.



(2) The undersigned hereby exercises its right to purchase __________ Warrant Shares pursuant to
the Warrant.



(3) The Holder intends that payment of the Exercise Price shall be made as (check one):






o     Cash Exercise




o     “Cashless Exercise” under Section 10 of the Warrant


(4) If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $___________ in
immediately available funds to the Company in accordance with the terms of the Warrant.



(5) Pursuant to this Exercise Notice, the Company shall deliver to the Holder Warrant Shares
determined in accordance with the terms of the Warrant.



(6) By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company
that in giving effect to the exercise evidenced hereby the Holder will not beneficially own in
excess of the number of shares of Common Stock (as determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934) permitted to be owned under Section 11 of the Warrant
to which this notice relates.



Dated:
             
                                                     
                      



	 	 	 	 	 
	Name of Holder:  	 	 	 



	 	 	 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 



(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)







 









 








ACKNOWLEDGEMENT





     The Company hereby acknowledges this Exercise Notice and receipt of the appropriate exercise
price and hereby directs Computershare Trust Company, N.A. to issue the above indicated number of
shares of Common Stock in accordance with the Irrevocable Transfer Agent Instructions dated
__________, ____, from the Company and acknowledged and agreed to by Computershare Trust Company,
N.A.



	 	 	 	 	 
	 	ONCOTHYREON INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



Annex II




FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT



Computershare Trust Company, N.A.

350 Indiana St., Suite 750

Golden, Colorado 80401

Attn: _________________





     Re: Oncothyreon Inc.


Ladies and Gentlemen:




     Reference is hereby made to that certain Securities Purchase Agreement, dated as of September
__, 2010, entered into by and among Oncothyreon Inc., a Delaware corporation (the “Company”), and
the purchasers named therein (collectively, the “Purchasers”) pursuant to which the Company issued
to the Purchasers shares of the Company’s common stock, $0.0001 par value per share (the “Common
Stock”), and warrants exercisable for shares of Common Stock (the “Warrants”). Pursuant to that
certain Registration Rights Agreement of even date, the Company agreed to register the resale of
the Common Stock, including the shares of Common Stock issuable upon exercise of the Warrants
(collectively, the “Registrable Securities”), under the Securities Act of 1933, as amended (the
"Securities Act”). In connection with the Company’s obligations under the Registration Rights
Agreement, on __________, ____, the Company filed a Registration Statement on Form S-1 (File No.
333-________) (the “Registration Statement”) with the Securities and Exchange Commission (the
"Commission”) relating to the Registrable Securities which names each of the Purchasers as a
selling stockholder thereunder.



     In connection with the foregoing, we advise you that the Commission has entered an order
declaring the Registration Statement effective under the Securities Act at ____ [a.m.][p.m.] on
__________, ____, and we have no knowledge, after telephonic inquiry of a member of the staff, that
any stop order suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the Commission and the Registrable Securities are
available for resale under the Securities Act pursuant to the Registration Statement.



     This letter shall serve as our standing notice to you that the Common Stock may be freely
transferred by the Purchasers pursuant to the Registration Statement. You need not require further
letters from us to effect any future legend-free issuance or reissuance of shares of Common Stock
to the Purchasers or the transferees of the Purchasers, as the case may be, as contemplated by the
Company’s Irrevocable Transfer Agent Instructions dated __________, ____, provided at the time of
such reissuance, the Company has not otherwise notified you that the Registration Statement is
unavailable for the resale of the Registrable Securities. This letter shall serve as our standing
instructions with regard to this matter.



	 	 	 	 	 
	 	Very truly yours,



Oncothyreon Inc.

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 



 









 






	 	 	 	 	 



EXHIBIT F




FORM OF SECRETARY’S CERTIFICATE



September [__], 2010




     The undersigned hereby certifies that he is the duly elected, qualified and acting Secretary
of Oncothyreon Inc., a Delaware corporation (the “Company”), and that as such he is authorized to
execute and deliver this certificate in the name and on behalf of the Company and in connection
with the Securities Purchase Agreement, dated as of September [__], 2010, by and among the Company
and the investors party thereto (the “Securities Purchase Agreement”), and further certifies in his
official capacity, in the name and on behalf of the Company, the items set forth below.
Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the
Securities Purchase Agreement.



     1. Attached hereto as Exhibit A are true, correct and complete copies of the resolutions duly
adopted by the Board of Directors of the Company at a meeting held on [___________] and the
resolutions duly adopted by the duly authorized Committee of the Board of Directors of the Company
at a meeting held on [___________]. Such resolutions have not in any way been amended, modified,
revoked or rescinded, have been in full force and effect since their adoption to and including the
date hereof and are now in full force and effect.



     2. Attached hereto as Exhibit B is a true, correct and complete copy of the Certificate of
Incorporation of the Company, together with any and all amendments thereto currently in effect, and
no action has been taken to further amend, modify or repeal such Certificate of Incorporation, the
same being in full force and effect in the attached form as of the date hereof.



     3. Attached hereto as Exhibit C is a true, correct and complete copy of the Bylaws of the
Company and any and all amendments thereto currently in effect, and no action has been taken to
further amend, modify or repeal such Bylaws, the same being in full force and effect in the
attached form as of the date hereof.



     4. Each person listed on Exhibit D has been duly elected or appointed to the position(s)
indicated opposite his name and is duly authorized to sign the Securities Purchase Agreement and
each of the Transaction Documents on behalf of the Company, and the signature appearing opposite
such person’s name on Exhibit D is such person’s genuine signature.



[Signature Page Follows]








 









 








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



	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Shashi Karan 	 
	 	 	Title:  	Secretary 	 
	 




     I, Robert L. Kirkman, President and Chief Executive Officer, hereby certify that Shashi Karan
is the duly elected, qualified and acting Secretary of the Company and that the signature set forth
above is his true signature.



	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Robert L. Kirkman 	 
	 	 	Title:  	President and Chief Executive Officer 	 




Signature Page to Secretary’s Certificate



 









 






	 	 	 	 	 



EXHIBIT A




Resolutions






 









 








EXHIBIT B




Certificate of Incorporation





 









 








EXHIBIT C




Bylaws





 











 





EXHIBIT D




Officer Signatures




	 	 	 	 	 
	Name	 	Position	 	Signature
	 
	 	 	 	 
	Robert L. Kirkman

	 	President and Chief Executive Officer	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Julie M. Eastland

	 	Chief Financial Officer	 	 
	 

	 	 	 	 





 









 






EXHIBIT G




FORM OF OFFICER’S CERTIFICATE



September [__], 2010



     The undersigned, the President and Chief Executive Officer of Oncothyreon Inc., a Delaware
corporation (the “Company”), pursuant to Section 5.1(i) of the Securities Purchase
Agreement, dated as of September [__], 2010 by and among the Company and the investors signatory
thereto (the “Securities Purchase Agreement”), hereby represents, warrants and certifies as follows
(capitalized terms used but not otherwise defined herein shall have the meaning set forth in the
Securities Purchase Agreement):




	 	1.	 	The representations and warranties of the Company contained in the Securities
Purchase Agreement are true and correct in all material respects (except for those
representations and warranties which are qualified as to materiality, in which case,
such representations and warranties shall be true and correct in all respects) as of
the date when made and as of the date hereof, as though made on and as of such date,
except for such representations and warranties that speak as of a specific date.
	 
	 	2.	 	The Company has performed, satisfied and complied in all material respects with
all covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by it at or prior to the date hereof.





[Signature Page Follows]








 









 








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



	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Robert L. Kirkman 	 
	 	 	Title:  	President and Chief Executive
Officer 	 
	 



Signature Page to Officer’s Certificate







 









 








EXHIBIT H




WIRE INSTRUCTIONS



JPMorgan Chase Bank

ABA #021000021





Account Name: Oncothyreon Inc. Subscription Escrow




 









 





EXHIBIT I




FORM OF LOCK-UP AGREEMENT



_____________, _____


JMP Securities LLC

ROTH Capital Partners, LLC

c/o JMP Securities LLC

600 Montgomery Street

Suite 100

San Francisco, California 94111





	Re:  	 	Private Placement of Securities




Ladies and Gentlemen:




     The undersigned understands that JMP Securities LLC and ROTH Capital Partners, LLC propose to
act as the exclusive placement agents (the “Placement Agents”), for Oncothyreon Inc., a Delaware
corporation (the “Company”), in connection with a proposed private placement (the “Offering”) of
shares (the “Shares”) of common stock, par value $0.0001 per share (the “Common Stock”) and
warrants to purchase Common Stock (the “Warrants” and together with the Shares, the “Securities”),
of the Company.



     In order to induce the Placement Agents to continue their efforts in connection with the
Offering, the undersigned hereby agrees that for a period (the “Lock-Up Period”) from the date
hereof until the later of (i) ninety (90) days following the closing date of the Offering and (ii)
thirty (30) days following the date of effectiveness of the registration statement registering the
resale of the Shares and shares of Common Stock issuable upon exercise of the Warrants filed by the
Company with the Securities and Exchange Commission in connection with such Offering, the
undersigned will not, without the prior written consent of JMP Securities LLC, directly or
indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or enter into any transaction
or device which is designed to, or could be expected to, result in the disposition by any person at
any time in the future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock, or sell or grant options, rights or warrants with respect to any
shares of Common Stock or securities convertible into or exchangeable for Common Stock (such
securities, “Convertible Securities”), (2) enter into any swap or other derivative transaction that
transfers to another, in whole or in part, any of the economic benefits or risks of ownership of
such shares of Common Stock, whether any such transaction described in clause (1) or (2) above is
to be settled by delivery of common stock or other securities, in cash or otherwise; provided,
however, that the obligations under this letter agreement (the “Lock-Up Agreement”) shall not apply
to any Securities acquired in connection with the Offering.



     Notwithstanding the foregoing, the restrictions set forth in clause (1) and (2) above shall
not apply to (a) transfers (i) as a bona fide gift or gifts, provided that the donee or donees
thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for
the direct or indirect benefit of the undersigned or the immediate family of the undersigned,
provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth
herein, and provided further that any such transfer shall not involve a disposition for value,
(iii) with the prior written consent of the Placement Agents, (iv) effected pursuant to any
exchange of “underwater” options with the Company, (v) to any beneficiary of the undersigned
pursuant to a will or other testamentary document or applicable laws of descent or (vi) to a
spouse, former spouse, child or other dependent pursuant to a domestic relations order or pursuant
to a settlement agreement in connection with a domestic relations matter, [provided that, other
than with respect to such a transfer done pursuant to a court order, the assignee or transferee
thereof agrees to be bound in writing by the restrictions



 









 




set forth herein,]1 (b) the acquisition or exercise of an option or warrant to
purchase shares of Common Stock (or any Convertible Securities), including the sale of a portion of
stock to be issued in connection with such exercise to finance a “cashless” exercise, provided that
any such shares issued upon exercise of such option or warrant (or any Convertible Securities)
shall continue to be subject to the applicable provisions of this Lock-Up Agreement, (c) the
purchase or sale of the Company’s securities pursuant to a plan, contract or instruction that
satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) (a “10b5-1 Plan”) that was in effect
prior to the date hereof, (d) the entry into a 10b5-1 Plan, provided that no sales of the Company’s
securities may be effected until after the expiration of the Lock-Up Period, or (e) the disposition
of shares of Common Stock (or Convertible Securities) to satisfy any tax withholding obligations
upon the vesting of shares of restricted Common Stock (or any Convertible Securities) held by the
undersigned. For purposes of this Lock-Up Agreement, “immediate family” shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin. None of the
restrictions set forth in this Lock-Up Agreement shall apply to Common Stock or Convertible
Securities acquired in open market transactions. In addition, if the undersigned is a partnership,
limited liability company, trust, corporation or similar entity, it may distribute the Common Stock
or Convertible Securities to its partners, members or stockholders; provided, however, that in each
such case, prior to any such transfer, each transferee shall execute a duplicate form of this
Lock-Up Agreement or execute an agreement, reasonably satisfactory to JMP Securities LLC, pursuant
to which each transferee shall agree to receive and hold such Common Stock or Convertible
Securities subject to the provisions hereof, and there shall be no further transfer except in
accordance with the provisions hereof.




     The undersigned hereby agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent against the transfer of securities of the Company held by the undersigned
during the Lock-Up Period (as may have been extended pursuant hereto), except in compliance with
this Lock-Up Agreement.



     This Lock-Up Agreement shall automatically terminate and the undersigned shall be released
from all obligations under this Lock-Up Agreement upon the earliest of (i) the date that is thirty
(30) days after the date hereof, if the Offering is not consummated by such date, and (ii) the
termination of the Securities Purchase Agreement (the “Purchase Agreement”) prior to payment for
and delivery of the Securities to be sold thereunder.



     The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Lock-Up Agreement. This Lock-Up Agreement is irrevocable. The
undersigned agrees that Purchasers of the Securities in the Offering shall be intended third-party
beneficiaries of the undersigned’s obligations under this Lock-Up Agreement.



     This Lock-Up Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the conflict of laws principles thereof.



	 	 	 	 	 
	 	Very truly yours,

 	 
	 	Print Name: 	 	 
	 
	 	Print Title:  	 	 
	 	 	 
	 	Signature:  	 	 
	 	 	 	 
	 





 




			
	1	 	The Company shall use reasonable best efforts
to cause the parties to this agreement to re-execute this agreement with the
inclusion of the bracketed language set forth above either on or prior to
Closing or as soon as practicable post-Closing.




 









 






	 	 	 	 	 



EXHIBIT J




LIST OF DIRECTORS AND EXECUTIVE OFFICERS

EXECUTING LOCK-UP AGREEMENTS



Richard Jackson

W. Vickery Stoughton




Daniel Spiegelman




Douglas Williams




Robert Kirkman




Julia Eastland




Gary Christianson




Shashi Karan




Diana Hausman




Scott Peterson




 









 





SCHEDULE 4.10





	•	 	337,024 shares of the Company’s common stock are issuable upon the exercise of warrants
issued in December 2006
	 
	•	 	2,817,744 shares of the Company’s common stock are issuable upon the exercise of
warrants issued in May 2009 (the number of shares issuable upon exercise is subject to
adjustment upon the occurrence of certain Dilutive Issuances (as defined in the warrants))
	 
	•	 	684,150 shares of the Company’s common stock are issuable upon the exercise of warrants
issued in August 2009
	 
	•	 	1,876,766 shares of the Company’s common stock are issuable upon the exercise of
outstanding options issued pursuant to the Company’s Amended and Restated Share Option Plan
	 
	•	 	226,696 shares of the Company’s common stock are issuable upon vesting of outstanding
restricted share units issued pursuant to the Company’s Amended and Restated Restricted
Share Unit Plan
	 
	•	 	An indeterminable number of shares of the Company’s common stock are issuable to
participants in the Company’s 2010 Employee Stock Purchase Plan, subject to an aggregate
cap of 900,000 shares