exv10w1





Exhibit
10.1


14,378,698 Units




ARIAD PHARMACEUTICALS, INC.




PLACEMENT AGENT AGREEMENT




February 19, 2009




LAZARD CAPITAL MARKETS LLC

30 Rockefeller Plaza

New York, New York 10020




Dear Sirs:




     1. Introduction. ARIAD Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
proposes to issue and sell to the purchasers, pursuant to the terms and conditions of this
Placement Agent Agreement (this “Agreement”) and the Subscription Agreements in the form of
Exhibit A attached hereto (the “Subscription Agreements”) entered into with the purchasers
identified therein (each a “Purchaser” and collectively, the “Purchasers”), up to an aggregate of 14,378,698 units (the “Units”) with each Unit consisting of (i) one share of common stock, $0.001
par value per share (the “Common Stock”) of the Company and (ii) one warrant to purchase 0.75
shares of Common Stock (the “Warrants”). The terms and conditions of the Warrants are set forth in
the form of Exhibit B attached hereto. The Company hereby confirms that Lazard Capital
Markets LLC (the “Placement Agent”) acted as the Placement Agent in accordance with the terms and
conditions hereof.



     2. Agreement to Act as Placement Agent; Placement of Units. On the basis of the
representations, warranties and agreements of the Company herein contained, and subject to all the
terms and conditions of this Agreement:




     2.1 The Company has authorized and hereby acknowledges that the Placement Agent has
acted as its exclusive agent to solicit offers for the purchase of all or part of the Units
from the Company in connection with the proposed offering of the Units (the “Offering”).
Until the earlier of (i) the date this agreement is terminated and (ii) the Closing Date (as
defined in Section 4 hereof), the Company shall not, without the prior written
consent of the Placement Agent, solicit or accept offers to purchase Units otherwise than
through the Placement Agent. The Placement Agent may utilize the expertise of Lazard Frères
& Co. LLC in connection with the Placement Agent’s activities.




     2.2 The Company hereby acknowledges that the Placement Agent, as agent of the Company, used
its best efforts to solicit offers to purchase the Units from the Company on the terms and
subject to the conditions set forth in the Prospectus (as defined below). The Placement
Agent shall use its best efforts to assist the Company in obtaining performance by each
Purchaser whose offer to purchase Units was solicited by the Placement Agent and accepted by
the Company, but the Placement Agent shall not,



 









 







except as otherwise provided in this Agreement, be obligated to disclose the identity
of any potential purchaser or have any liability to the Company in the event any such
purchase is not consummated for any reason. Under no circumstances will the Placement Agent
be obligated to underwrite or purchase any Units for its own account and, in soliciting
purchases of Units, the Placement Agent acted solely as the Company’s agent and not as
principal. Notwithstanding the foregoing and except as otherwise provided in Section
2.3, it is understood and agreed that the Placement Agent (or its affiliates) may,
solely at its discretion and without any obligation to do so, purchase Units as principal.




     2.3 Subject to the provisions of this Section 2, offers for the purchase of
Units were solicited by the Placement Agent as agent for the Company at such times and in
such amounts as the Placement Agent deemed advisable. The Placement Agent communicated to
the Company, orally or in writing, each reasonable offer to purchase Units received by it as
agent of the Company. The Company shall have the sole right to accept offers to purchase the
Units and may reject any such offer, in whole or in part. The Placement Agent has the right,
in its discretion reasonably exercised, without notice to the Company, to reject any offer
to purchase Units received by it, in whole or in part, and any such rejection shall not be
deemed a breach of this Agreement.




     2.4 The Units are being sold to the Purchasers at a price of $1.69 per Unit. The
purchases of the Units by the Purchasers shall be evidenced by the execution of Subscription
Agreements by each of the Purchasers and the Company.




     2.5 As compensation for services rendered, on the Closing Date (as defined in
Section 4 hereof), the Company shall pay to the Placement Agent by wire transfer of
immediately available funds to an account or accounts designated by the Placement Agent, an
aggregate amount equal to five percent (5.0%) of the gross proceeds received by the Company
from the sale of the Units on such Closing Date (the “Placement Fee”).




     2.6 No Units which the Company has agreed to sell pursuant to this Agreement and the
Subscription Agreements shall be deemed to have been purchased and paid for, or sold by the
Company, until such Units shall have been delivered to the Purchaser thereof against payment
by such Purchaser. If the Company shall default in its obligations to deliver Units to a
Purchaser whose offer it has accepted, the Company shall indemnify and hold the Placement
Agent harmless against any loss, claim, damage or expense arising from or as a result of
such default by the Company in accordance with the procedures set forth in Section
8(c) herein.



     3. Representations and Warranties of the Company. The Company represents and warrants
to, and agrees with, the Placement Agent and the Purchasers that:




     (a) The Company has prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the “Securities Act”), and published rules and
regulations thereunder (the “Rules and Regulations”) adopted by the Securities and Exchange
Commission (the “Commission”) a “shelf” Registration Statement (as hereinafter defined) on
Form S-3 (File No. 333-140333), which became effective as of February 6, 2007 (the
“Effective Date”), including a base prospectus relating to the



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securities registered pursuant to such Registration Statement (the “Base Prospectus”),
and such amendments and supplements thereto as may have been required to the date of this
Agreement. The term “Registration Statement” as used in this Agreement means the
registration statement (including all exhibits, financial schedules and all documents and
information deemed to be a part of the Registration Statement pursuant to Rule 430A of the
Rules and Regulations), as amended and/or supplemented to the date of this Agreement,
including the Base Prospectus. The Registration Statement is effective under the Securities
Act and no stop order preventing or suspending the effectiveness of the Registration
Statement or suspending or preventing the use of the Prospectus has been issued by the
Commission and no proceedings for that purpose have been instituted or, to the knowledge of
the Company, are threatened by the Commission. The Company, if required by the Rules and
Regulations of the Commission, will file the Prospectus (as defined below), with the
Commission pursuant to Rule 424(b) of the Rules and Regulations. The term “Prospectus” as
used in this Agreement means the Prospectus, in the form in which it is to be filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations, or, if the Prospectus is
not to be filed with the Commission pursuant to Rule 424(b), the Prospectus in the form
included as part of the Registration Statement as of the Effective Date, except that if any
revised prospectus or prospectus supplement shall be provided to the Placement Agent by the
Company for use in connection with the offering and sale of the Units which differs from the
Prospectus (whether or not such revised prospectus or prospectus supplement is required to
be filed by the Company pursuant to Rule 424(b) of the Rules and Regulations), the term
“Prospectus” shall refer to such revised prospectus or prospectus supplement, as the case
may be, from and after the time it is first provided to the Placement Agent for such use.
Any preliminary prospectus or prospectus subject to completion included in the Registration
Statement or filed with the Commission pursuant to Rule 424 of the Rules and Regulations is
hereafter called a “Preliminary Prospectus.” Any reference herein to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
on or before the last to occur of the Effective Date, the date of the Preliminary
Prospectus, or the date of the Prospectus, and any reference herein to the terms “amend,”
“amendment,” or “supplement” with respect to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include (i) the filing of any
document under the Exchange Act after the Effective Date, the date of such Preliminary
Prospectus or the date of the Prospectus, as the case may be, which is incorporated by
reference and (ii) any such document so filed. If the Company has filed an abbreviated
registration statement to register additional securities pursuant to Rule 462(b) under the
Rules and Regulations (the “462(b) Registration Statement”), then any reference herein to
the Registration Statement shall also be deemed to include such 462(b) Registration
Statement.




     (b) As of the Applicable Time (as defined below) and as of the Closing Date, neither
(i) any General Use Free Writing Prospectus (as defined below) issued at or prior to the
Applicable Time, and the Pricing Prospectus (as defined below) and the information included
on Schedule A hereto, all considered together (collectively, the “General Disclosure
Package”), (ii) any individual Limited Use Free Writing



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Prospectus (as defined below) issued at or prior to the Applicable Time, nor (iii) the
bona fide electronic road show (as defined in Rule 433(h)(5) of the Rules and Regulations),
if any, that has been made available without restriction to any person, when considered
together with the General Disclosure Package, included or will include, any untrue statement
of a material fact or omitted or as of the Closing Date will omit, to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted from any Issuer Free
Writing Prospectus, in reliance upon, and in conformity with, written information furnished
to the Company by the Placement Agent specifically for inclusion therein, which information
the parties hereto agree is limited to the Placement Agent’s Information (as defined in
Section 16). As used in this paragraph (b) and elsewhere in this Agreement:




“Applicable Time” means 5:00 P.M., New York time, on the date of this Agreement.




“General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is
identified on Schedule A to this Agreement.




“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433 of the Rules and Regulations relating to the Units in the form filed or required to
be filed with the Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g) of the Rules and Regulations.




“Limited Use Free Writing Prospectuses” means any Issuer Free Writing Prospectus that is not
a General Use Free Writing Prospectus.




“Pricing Prospectus” means the Preliminary Prospectus, if any, and the Base Prospectus, each
as amended and supplemented immediately prior to the Applicable Time, including any document
incorporated by reference therein and any prospectus supplement deemed to be a part thereof.




     (c) No order preventing or suspending the use of any Preliminary Prospectus, any Issuer
Free Writing Prospectus or the Prospectus relating to the Offering has been issued by the
Commission, and no proceeding for that purpose or pursuant to Section 8A of the Securities
Act has been instituted or, to the knowledge of the Company, threatened by the Commission,
and each Preliminary Prospectus (if any), at the time of filing thereof, conformed in all
material respects to the requirements of the Securities Act and the Rules and Regulations,
and did not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to information contained in or omitted
from any Preliminary Prospectus, in reliance upon, and in conformity with, written
information furnished to the Company by the Placement Agent specifically for inclusion
therein, which information the parties hereto agree is limited to the Placement Agent’s
Information (as defined in Section 16).



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     (d) At the time the Registration Statement became effective, at the date of this
Agreement and at the Closing Date, the Registration Statement conformed and will conform in
all material respects to the requirements of the Securities Act and the Rules and
Regulations and did not and will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make the statements
therein not misleading; the Prospectus, at the time the Prospectus was issued and at the
Closing Date, conformed and will conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the foregoing representations and warranties in this
paragraph (d) shall not apply to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by the Placement Agent specifically for inclusion
therein, which information the parties hereto agree is limited to the Placement Agent’s
Information (as defined in Section 16).




     (e) Each Issuer Free Writing Prospectus, if any, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the Units or until
any earlier date that the Company notified or notifies the Placement Agent as described in
Section 5(e), did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in the Registration
Statement, Pricing Prospectus or the Prospectus, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part thereof that has not
been superseded or modified, or includes an untrue statement of a material fact or omitted
or would omit to state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing sentence does not apply to statements in or omissions
from any Issuer Free Writing Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by the Placement Agent specifically for inclusion
therein, which information the parties hereto agree is limited to the Placement Agent’s
Information (as defined in Section 16).




     (f) The documents incorporated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and none of such documents contained
any untrue statement of a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they were made not
misleading.



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     (g) The Company is not an “ineligible issuer” in connection with the offering pursuant
to Rules 164, 405 and 433 under the Securities Act. The Company has not, directly or
indirectly, distributed and will not distribute any offering material in connection with the
Offering other than any Preliminary Prospectus, the Prospectus and other materials, if any,
permitted under the Securities Act and consistent with Section 5(b) below. The
Company will file with the Commission all Issuer Free Writing Prospectuses (other than a
“road show,” as defined in Rule 433(d)(8) of the Rules and Regulations), if any, in the time
and manner required under Rules 163(b)(2) and 433(d) of the Rules and Regulations.




     (h) The Company and each of its subsidiaries (as defined in Section 14) has
been duly organized and is validly existing as corporations or other legal entities in good
standing (or the foreign equivalent thereof) under the laws of their respective
jurisdictions of organization. The Company and each of its subsidiaries is duly qualified
to do business and is in good standing as foreign corporations or other legal entities in
each jurisdiction in which their respective ownership or lease of property or the conduct of
their respective businesses require such qualification and have all power and authority
(corporate or other) necessary to own or hold their respective properties and to conduct the
businesses in which each is engaged, except where the failure to so qualify or have such
power or authority (i) would not have, singularly or in the aggregate, a material adverse
effect on the condition (financial or otherwise), results of operations, assets, business or
prospects of the Company and its subsidiaries taken as a whole, or (ii) impair in any
material respect the ability of the Company to perform its obligations under this Agreement
or to consummate any transactions contemplated by the Agreement, the General Disclosure
Package or the Prospectus (any such effect as described in clauses (i) or (ii), a “Material
Adverse Effect”). The Company owns or controls, directly or indirectly, only the following
corporations, partnerships, limited liability partnerships, limited liability companies,
associations or other entities: ARIAD Corporation, a Delaware corporation; (ii) ARIAD
Pharma, S.A., a Greece company; (iii) ARIAD Pharma, Ltd., a United Kingdom company.




     (i) The Company has the full right, power and authority to enter into this Agreement,
each of the Subscription Agreements and that certain Escrow Agreement (the “Escrow
Agreement”) dated as of the date hereof by and among the Company, the Placement Agent and
the escrow agent named therein, and to perform and to discharge its obligations hereunder
and thereunder; and each of this Agreement, the Escrow Agreement and each of the
Subscription Agreements has been duly authorized, executed and delivered by the Company, and
constitutes a valid and binding obligation of the Company enforceable in accordance with its
terms, except as rights to indemnity and contribution hereunder may be limited by federal or
state securities laws and except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.




     (j) The shares of Common Stock to be issued and sold by the Company to the Purchasers
hereunder and under the Subscription Agreements and the shares of Common Stock issuable upon
the exercise of the Warrants (the “Warrant Shares”) have been duly



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and validly authorized and the Common Stock, when issued and delivered against payment
therefor as provided herein and in the Subscription Agreements and the Warrant Shares, when
issued and delivered against payment therefore as provided in the Warrants, will be duly and
validly issued, fully paid and non-assessable and free of any preemptive or similar rights
and will conform to the description thereof contained in the General Disclosure Package and
the Prospectus.




     (k) The Company has an authorized capitalization as set forth in the Pricing
Prospectus, and all of the issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable, have been issued in
compliance with federal and state securities laws, and conform to the description thereof
contained in the General Disclosure Package and the Prospectus. As of December 31, 2008,
there were 71,365,339 shares of Common Stock issued and outstanding, no shares of Preferred
Stock, par value $0.001 of the Company issued and outstanding, and
7,895,428 shares of Common
Stock were issuable upon the exercise of all options, warrants and convertible securities
outstanding as of such date. Since such date, the Company has not issued any securities,
other than Common Stock of the Company issued pursuant to the exercise of stock options
previously outstanding under the Company’s stock plans or, the issuance of restricted Common
Stock under the Company’s stock plans, the issuance of Common Stock pursuant to employee
stock purchase plans and the issuance of Common Stock to certain shareholders of the
Company’s former majority-owned subsidiary, ARIAD Gene Therapeutics, Inc. (“AGTI”), in
connection with the merger of AGTI with and into the Company. All of the Company’s options,
warrants and other rights to purchase or exchange any securities for shares of the Company’s
capital stock have been duly authorized and validly issued and were issued in compliance
with US federal and state securities laws. None of the outstanding shares of Common Stock
was issued in violation of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company. There are no authorized or
outstanding shares of capital stock, options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries
other than those described above or accurately described in the General Disclosure Package.
The description of the Company’s stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, as described in the
General Disclosure Package and the Prospectus, accurately and fairly present the information
required to be shown with respect to such plans, arrangements, options and rights.




     (l) All the outstanding shares of capital stock of each subsidiary of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and, except to the
extent set forth in the General Disclosure Package or the Prospectus, are owned by the
Company directly or indirectly through one or more wholly-owned subsidiaries, free and clear
of any claim, lien, encumbrance, security interest, restriction upon voting or transfer or
any other claim of any third party, except as set forth in the security agreements, dated
March 12, 2003 by and between the Company and certain subsidiaries and Citizens Bank of
Massachusetts.



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     (m) The execution, delivery and performance of this Agreement, the Subscription
Agreements and the Escrow Agreement by the Company, the issue and sale of the Units by the
Company and the consummation of the transactions contemplated hereby and thereby will not
(with or without notice or lapse of time or both) conflict with or result in a breach or
violation of any of the terms or provisions of, constitute a default or Debt Repayment
Triggering Event (as defined below) under, give rise to any right of termination or other
right or the cancellation or acceleration of any right or obligation or loss of a benefit
under, or give rise to the creation or imposition of any lien, encumbrance, security
interest, claim or charge upon any property or assets of the Company or any subsidiary
pursuant to, any material 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, nor will such actions result in
any violation of the provisions of the charter or by-laws (or analogous governing
instruments, as applicable) of the Company or any of its subsidiaries or any law, statute,
rule, regulation, judgment, order or decree of any court or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or any
of their properties or assets. A “Debt Repayment Triggering Event” means any event or
condition that gives, or with the giving of notice or lapse of time would give the holder of
any note, debenture or other evidence of indebtedness (or any person acting on such holder’s
behalf) the right to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any of its subsidiaries.




     (n) Except for the registration of the Common Stock and Warrants under the Securities
Act and such consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state or foreign securities laws, the
Financial Industry Regulatory Authority (“FINRA”) and the Nasdaq Global Market (“Nasdaq GM”)
in connection with the offering and sale of the Units by the Company, no consent, approval,
authorization or order of, or filing, qualification or registration with, any court or
governmental agency or body, foreign or domestic, which has not been made, obtained or taken
and is not in full force and effect, is required for the execution, delivery and performance
of this Agreement, the Subscription Agreements and the Escrow Agreement by the Company, the
offer or sale of the Units or the consummation of the transactions contemplated hereby or
thereby.




     (o) Deloitte & Touche LLP, who have audited certain financial statements and related
schedules included or incorporated by reference in the Registration Statement, the General
Disclosure Package and the Prospectus, and have audited the Company’s internal control over
financial reporting, is an independent registered public accounting firm as required by the
Securities Act and the Rules and Regulations and the Public Company Accounting Oversight
Board (United States) (the “PCAOB”). Except as pre-approved in accordance with the
requirements set forth in Section 10A of the Exchange Act, Deloitte & Touche LLP has not
been engaged by the Company to perform any “prohibited activities” (as defined in Section
10A of the Exchange Act).



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     (p) The financial statements, together with the related notes and schedules, included
or incorporated by reference in the General Disclosure Package, the Prospectus and in the
Registration Statement fairly present the financial position and the results of operations,
changes in stockholders’ equity, and cash flows of the Company and its consolidated
subsidiaries and other consolidated entities at the respective dates or for the respective
periods therein specified. Such statements and related notes and schedules have been
prepared in accordance with the generally accepted accounting principles in the United
States (“GAAP”) applied on a consistent basis throughout the periods involved except as may
be set forth in the related notes included or incorporated by reference in the General
Disclosure Package and except that unaudited financial statements may not contain footnotes
as required by GAAP. The financial statements, together with the related notes and
schedules, included or incorporated by reference in the General Disclosure Package and the
Prospectus comply in all material respects with the Securities Act, the Exchange Act, and
the Rules and Regulations and the rules and regulations under the Exchange Act. No other
financial statements or supporting schedules or exhibits are required by the Securities Act
or the Rules and Regulations to be described, or included or incorporated by reference in
the Registration Statement, the General Disclosure Package or the Prospectus. There is no
pro forma or as adjusted financial information which is required to be included in the
Registration Statement, the General Disclosure Package, or and the Prospectus or a document
incorporated by reference therein in accordance with the Securities Act and the Rules and
Regulations which has not been included or incorporated as so required.




     (q) Neither the Company nor any of its subsidiaries has sustained, since the date of
the latest audited financial statements included or incorporated by reference in the General
Disclosure Package, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the General Disclosure Package; and, since such date, there has not been any
change in the capital stock (other than the issuance of Common Stock issued pursuant to the
exercise of stock options under the Company’s stock plans, the issuance of restricted Common
Stock under the Company’s stock plans, the issuance of Common Stock pursuant to employee
stock purchase plans and the issuance of Common Stock to certain shareholders of AGTI in
connection with the merger of AGTI with and into the Company) or long-term debt of the
Company or any of its subsidiaries, or any material adverse changes, or any development
involving a prospective material adverse change, in or affecting the business, assets,
general affairs, management, financial position, prospects, stockholders’ equity or results
of operations of the Company and its subsidiaries taken as a whole, otherwise than as set
forth or contemplated in the General Disclosure Package.




     (r) Except as set forth in the General Disclosure Package, there is no legal or
governmental action, suit, claim or proceeding pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the Company or any of its
subsidiaries is the subject which is required to be described in the Registration Statement,
the General Disclosure Package or the Prospectus or a document incorporated by reference
therein and is not described therein, or which, singularly or in the aggregate, if



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determined adversely to the Company or any of its subsidiaries, could have a Material
Adverse Effect or prevent the consummation of the transactions contemplated hereby; and to
the best of the Company’s knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.




     (s) Neither the Company nor any of its subsidiaries is in (i) violation of its charter
or by-laws (or analogous governing instrument, as applicable), (ii) default in any respect,
and no event has occurred which, 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, lease or other agreement or
instrument to which it is a party or by which it is bound or to which any of its property or
assets is subject or (iii) violation in any respect of any law, ordinance, governmental
rule, regulation or court order, decree or judgment to which it or its property or assets
may be subject except, in the case of clauses (ii) and (iii) of this paragraph (s), for any
violations or defaults which, singularly or in the aggregate, would not have a Material
Adverse Effect.




     (t) The clinical trials conducted by or on behalf of or sponsored by the Company or in
which the Company or its product candidates have participated that are described in the
General Disclosure Package and Prospectus or the results of which are referred to in the
General Disclosure Package or Prospectus were and, if still pending, are being conducted
(and with respect to such clinical trials being conducted on behalf of the Company, are, to
the Company’s knowledge, being conducted) in all material respects in accordance with
medical and scientific research procedures that the Company reasonably believes are
appropriate. The descriptions in the General Disclosure Package and Prospectus of the
results of such clinical trials are accurate and fairly present the data derived from such
clinical trials, and the Company has no knowledge of any studies or tests performed by or on
behalf of the Company the results of which are materially inconsistent with or otherwise
materially call into question the results described or referred to in the General Disclosure
Package and Prospectus. Except to the extent disclosed in the General Disclosure Package
and the Prospectus, the Company has not received any notices or other correspondence from
the United States Food and Drug Administration (“FDA”) or any other governmental agency
requiring the termination, suspension or modification of any clinical trials that are
described in the General Disclosure Package or Prospectus or the results of which are
referred to in the General Disclosure Package or Prospectus.




     (u) The Company and each of its subsidiaries possesses all licenses, certificates,
authorizations and permits issued by, and have made all declarations and filings with, the
appropriate local, state, federal or foreign regulatory agencies or bodies which are
necessary or desirable for the ownership of their respective properties or the conduct of
their respective businesses as described in the General Disclosure Package and the
Prospectus (collectively, the “Governmental Permits”) except where any failures to possess
or make the same, singularly or in the aggregate, would not have a Material Adverse Effect.
The Company and its subsidiaries are in compliance with all such Governmental Permits; all
such Governmental Permits are valid and in full force and effect, except where the validity
or failure to be in full force and effect would not,



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singularly or in the aggregate, have a Material Adverse Effect. All such Governmental
Permits are free and clear of any restriction or condition that are in addition to, or
materially different from those normally applicable to similar licenses, certificates,
authorizations and permits. Neither the Company nor any subsidiary has received notification
of any revocation or modification (or proceedings related thereto) of any such Governmental
Permit and the Company has no reason to believe that any such Governmental Permit will not
be renewed.




     (v) Neither the Company nor any of its subsidiaries is or, after giving effect to the
offering of the Units and the application of the proceeds thereof as described in the
General Disclosure Package and the Prospectus, will become an “investment company” within
the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations
of the Commission thereunder.




     (w) Neither the Company, its subsidiaries nor any of the Company’s or its subsidiaries’
officers, directors or affiliates has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of any security of the Company, or
which caused or resulted in, or which might in the future reasonably be expected to cause or
result in, stabilization or manipulation of the price of any security of the Company.




     (x) The Company and its subsidiaries own or possess the right to use all material
patents, trademarks, trademark registrations, service marks, service mark registrations,
trade names, copyrights, licenses, inventions, software, databases, know-how, Internet
domain names, trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures, and other intellectual property
(collectively, “Intellectual Property”) necessary to carry on their respective businesses as
currently conducted, and as proposed to be conducted and described in the General Disclosure
Package and the Prospectus, and, except as described in the General Disclosure Package and
the Prospectus, the Company is not aware of any claim to the contrary or any challenge by
any other person to the rights of the Company and its subsidiaries with respect to the
foregoing except for those that could not have a Material Adverse Effect. The Intellectual
Property licenses described in the General Disclosure Package and the Prospectus are valid,
binding upon, and enforceable by or against the parties thereto in accordance to its terms.
The Company and each of its subsidiaries has complied in all material respects with, and is
not in breach nor has received any asserted or threatened claim of breach of, any
Intellectual Property license, except for any such breach that would not, singularly or in
the aggregate, have a Material Adverse Effect, and the Company has no knowledge of any
breach or anticipated breach by any other person to any Intellectual Property license. The
Company’s and each of its subsidiary’s businesses as now conducted and as proposed to be
conducted does not and will not infringe or conflict with any valid patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses or other Intellectual
Property or franchise right of any person. The Company has received no claim alleging the
infringement by the Company or any of its subsidiaries of any patent, trademark, service
mark, trade name, copyright, trade secret, license in or other intellectual property right
or franchise right of any person. The Company and each of its subsidiaries has taken all
reasonable steps to protect,



11









 







maintain and safeguard its rights in all Intellectual Property, including the execution
of appropriate nondisclosure and confidentiality agreements. The consummation of the
transactions contemplated by this Agreement will not result in the loss or impairment of or
payment of any additional amounts with respect to, nor require the consent of any other
person in respect of, the Company’s or any of its subsidiaries’ right to own, use, or hold
for use any of the Intellectual Property as owned, used or held for use in the conduct of
its business as currently conducted. The Company and each subsidiary has at all times
complied with all applicable laws relating to privacy, data protection, and the collection
and use of personal information collected, used, or held for use by the Company or any
subsidiary in the conduct of the Company’s or any subsidiary’s business. No claims have
been asserted or, to the Company’s knowledge, threatened against the Company or any
subsidiary alleging a violation of any person’s privacy or personal information or data
rights and the consummation of the transactions contemplated hereby will not breach or
otherwise cause any violation of any law related to privacy, data protection, or the
collection and use of personal information collected, used, or held for use by the Company
or any of its subsidiaries in the conduct of the Company’s or any of its subsidiaries’
businesses. The Company and each of its subsidiaries take reasonable measures to ensure
that such information is protected against unauthorized access, use, modification, or other
misuse.




     (y) The Company and each of its subsidiaries has good and marketable title in fee
simple to, or have valid rights to lease or otherwise use, all items of real or personal
property which are material to the business of the Company and its subsidiaries taken as a
whole, in each case free and clear of all liens, encumbrances, security interests, claims
and defects that do not, singularly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made of such property by
the Company or any of its subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise, and under which
the Company or any of its subsidiaries holds properties described in the General Disclosure
Package and the Prospectus, are in full force and effect, and neither the Company nor any
subsidiary has received any notice of any material claim of any sort that has been asserted
by anyone adverse to the rights of the Company or any subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the Company or such
subsidiary to the continued possession of the leased or subleased premises under any such
lease or sublease.




     (z) No labor disturbance by the employees of the Company or any of its subsidiaries
exists or, to the best of the Company’s knowledge, is imminent, and the Company is not aware
of any existing or imminent labor disturbance by the employees of any of its or its
subsidiaries’ principal suppliers, manufacturers, customers or contractors, that could
reasonably be expected, singularly or in the aggregate, to have a Material Adverse Effect.
The Company is not aware that any key employee or significant group of employees of the
Company or any subsidiary plans to terminate employment with the Company or any such
subsidiary.




     (aa) No “prohibited transaction” (as defined in Section 406 of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and



12









 







published interpretations thereunder (“ERISA”), or Section 4975 of the Internal Revenue
Code of 1986, as amended from time to time (the “Code”)) or “accumulated funding deficiency”
(as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of
ERISA (other than events with respect to which the thirty (30)-day notice requirement under
Section 4043 of ERISA has been waived) has occurred or could reasonably be expected to occur
with respect to any employee benefit plan of the Company or any of its subsidiaries which
could, singularly or in the aggregate, have a Material Adverse Effect. Each employee
benefit plan of the Company or any of its subsidiaries is in compliance in all material
respects with applicable law, including ERISA and the Code. The Company and its subsidiaries
have not incurred and could not reasonably be expected to incur liability under Title IV of
ERISA with respect to the termination of, or withdrawal from, any pension plan (as defined
in ERISA). Each pension plan for which the Company or any of its subsidiaries would have
any liability that is intended to be qualified under Section 401(a) of the Code is so
qualified, and nothing has occurred, whether by action or by failure to act, which could,
singularly or in the aggregate, cause the loss of such qualification.




     (bb) The Company and its subsidiaries are in compliance with all foreign, federal,
state and local rules, laws and regulations relating to the use, treatment, storage and
disposal of hazardous or toxic substances or waste and protection of health and safety or
the environment which are applicable to their businesses (“Environmental Laws”), except
where the failure to comply would not, singularly or in the aggregate, have a Material
Adverse Effect. There has been no storage, generation, transportation, handling, treatment,
disposal, discharge, emission, or other release of any kind of toxic or other wastes or
other hazardous substances by, due to, or caused by the Company or any of its subsidiaries
(or, to the Company’s knowledge, any other entity for whose acts or omissions the Company or
any of its subsidiaries is or may otherwise be liable) upon any of the property now or
previously owned or leased by the Company or any of its subsidiaries, or upon any other
property, in violation of any law, statute, ordinance, rule, regulation, order, judgment,
decree or permit or which would, under any law, statute, ordinance, rule (including rule of
common law), regulation, order, judgment, decree or permit, give rise to any liability,
except for any violation or liability which would not have, singularly or in the aggregate
with all such violations and liabilities, a Material Adverse Effect; and there has been no
disposal, discharge, emission or other release of any kind onto such property or into the
environment surrounding such property of any toxic or other wastes or other hazardous
substances with respect to which the Company has knowledge, except for any such disposal,
discharge, emission, or other release of any kind which would not have, singularly or in the
aggregate with all such discharges and other releases, a Material Adverse Effect. In the
ordinary course of business, the Company and its subsidiaries conducts periodic reviews of
the effect of Environmental Laws on their business and assets, in the course of which they
identify and evaluate associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or Governmental Permits issued thereunder, any related constraints
on operating activities and any potential liabilities to third parties). On the basis of
such reviews, the Company and its subsidiaries have reasonably concluded that such



13









 







associated costs and liabilities would not have, singularly or in the aggregate, a
Material Adverse Effect.




     (cc) The Company and its subsidiaries, each (i) has timely filed all necessary federal,
state, local and foreign tax returns, and all such returns were true, complete and correct,
(ii) has paid all federal, state, local and foreign taxes, assessments, governmental or
other charges due and payable for which it is liable, including, without limitation, all
sales and use taxes and all taxes which the Company or any of its subsidiaries is obligated
to withhold from amounts owing to employees, creditors and third parties, and (iii) does not
have any tax deficiency or claims outstanding or assessed or, to the best of its knowledge,
proposed against any of them, except those, in each of the cases described in clauses (i),
(ii) and (iii) of this paragraph (cc), that would not, singularly or in the aggregate, have
a Material Adverse Effect. The Company and its subsidiaries, each has not engaged in any
transaction which is a corporate tax shelter or which could be characterized as such by the
Internal Revenue Service or any other taxing authority. The accruals and reserves on the
books and records of the Company and its subsidiaries in respect of tax liabilities for any
taxable period not yet finally determined are adequate to meet any assessments and related
liabilities for any such period, and since December 31, 2008, the Company and its
subsidiaries each has not incurred any liability for taxes other than in the ordinary
course.




     (dd) The Company and each of its subsidiaries carries, or is covered by, insurance in
such amounts and covering such risks as is adequate for the conduct of their respective
businesses and the value of their respective properties and as is customary for companies
engaged in similar businesses in similar industries. The Company has no reason to believe
that it or any subsidiary will not be able (i) to renew its existing insurance coverage as
and when such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as now conducted and
at a cost that would not result in a Material Adverse Effect. Neither the Company nor any
of its subsidiaries has been denied any insurance coverage that they have sought or for
which they have applied.




     (ee) The Company and its subsidiaries each maintains a system of internal accounting
and other controls sufficient to provide reasonable assurances 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 accountability for assets; (iii) access to assets is
permitted only in accordance with management’s general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. Except as
described in the General Disclosure Package, since the end of the Company’s most recent
audited fiscal year, there has been (A) no material weakness in the Company’s internal
control over financial reporting (whether or not remediated) and (B) no change in the
Company’s internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over financial
reporting.



14









 






     (ff) The minute books of the Company and each of its subsidiaries that would be a
“significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X under the
Exchange Act (such a significant subsidiary of the Company, a “Significant Subsidiary”) have
been made available to the Placement Agent and counsel for the Placement Agent, and such
books (i) contain a complete summary of all meetings and actions of the board of directors
(including each board committee) and shareholders of the Company (or analogous governing
bodies and interest holders, as applicable), and each of its Significant Subsidiaries since
the time of its respective incorporation or organization through the date of the latest
meeting and action, and (ii) accurately in all material respects reflect all transactions
referred to in such minutes.




     (gg) There is no franchise, lease, contract, agreement or document required by the
Securities Act or by the Rules and Regulations to be described in the General Disclosure
Package and in the Prospectus or a document incorporated by reference therein or to be filed
as an exhibit to the Registration Statement or a document incorporated by reference therein
which is not described or filed therein as required; and all descriptions of any such
franchises, leases, contracts, agreements or documents contained in the Registration
Statement or in a document incorporated by reference therein are accurate and complete
descriptions of such documents in all material respects. Other than as described in the
General Disclosure Package, no such franchise, lease, contract or agreement has been
suspended or terminated for convenience or default by the Company or any of its subsidiaries
or any of the other parties thereto, and neither the Company nor any of its subsidiaries has
received notice nor does the Company have any other knowledge of any such pending or
threatened suspension or termination, except for such pending or threatened suspensions or
terminations that would not reasonably be expected to, singularly or in the aggregate, have
a Material Adverse Effect.




     (hh) No relationship, direct or indirect, exists between or among the Company and any
of its subsidiaries on the one hand, and the directors, officers, stockholders (or analogous
interest holders), customers or suppliers of the Company or any of its subsidiaries or any
of their affiliates on the other hand, which is required to be described in the General
Disclosure Package and the Prospectus or a document incorporated by reference therein and
which is not so described.




     (ii) No person or entity has the right to require registration of shares of Common
Stock or other securities of the Company or any of its subsidiaries because of the filing or
effectiveness of the Registration Statement or otherwise, except for persons and entities
who have expressly waived such right in writing or who have been given timely and proper
written notice and have failed to exercise such right within the time or times required
under the terms and conditions of such right. Except as described in the General Disclosure
Package, there are no persons with registration rights or similar rights to have any
securities registered or to include such securities with the shares of Common Stock
registered by the Company or any of its subsidiaries under the Securities Act.




     (jj) Neither the Company nor any of its subsidiaries owns any “margin securities” as
that term is defined in Regulation U of the Board of Governors of the Federal Reserve System
(the “Federal Reserve Board”), and none of the proceeds of the



15









 







sale of the Units will be used, directly or indirectly, for the purpose of purchasing
or carrying any margin security, for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase or carry any margin security or for any other
purpose which might cause any of the Units to be considered a “purpose credit” within the
meanings of Regulation T, U or X of the Federal Reserve Board.




     (kk) Neither the Company nor any of its subsidiaries is a party to any contract,
agreement or understanding with any person (other than this Agreement) that would give rise
to a valid claim against the Company or the Placement Agent for a brokerage commission,
finder’s fee or like payment in connection with the offering and sale of the Units or any
transaction contemplated by this Agreement, the Registration Statement, the General
Disclosure Package or the Prospectus.




     (ll) No forward-looking statement (within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act) contained in either the General Disclosure Package
or the Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.




     (mm) The Company is subject to and in compliance in all material respects with the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act. The Common Stock
is registered pursuant to Section 12(b) of the Exchange Act and is listed on the Nasdaq GM,
and the Company has taken no action designed to, or reasonably likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or delisting the
Common Stock from the Nasdaq GM, nor has the Company received any notification that the
Commission or the Nasdaq Stock Market LLC (“Nasdaq”) is contemplating terminating such
registration or listing. No consent, approval, authorization or order of, or filing,
notification or registration with, the Nasdaq GM is required for the listing and trading of
the shares of Common Stock on the Nasdaq GM, except for (i) a Notification Form: Listing of
Additional Shares and (ii) a Notification Form: Change in the Number of Shares Outstanding.




     (nn) The Company is in compliance in all material respects with all applicable
provisions of the Sarbanes-Oxley Act of 2002 and all applicable rules and regulations
promulgated thereunder or implementing the provisions thereof (the “Sarbanes-Oxley Act”).




     (oo) The Company is in compliance in all material respects with all applicable
corporate governance requirements set forth in the Nasdaq Marketplace Rules.




     (pp) Neither the Company nor any of its subsidiaries nor any employee or agent of the
Company or any subsidiary, has made any contribution or other payment to any official of, or
candidate for, any federal, state, local or foreign office in violation of any law
(including the Foreign Corrupt Practices Act of 1977, as amended) or of the character
required to be disclosed in the Registration Statement, the General Disclosure Package or
the Prospectus or a document incorporated by reference therein.



16









 






     (qq) There are no transactions, arrangements or other relationships between and/or
among the Company, any of its affiliates (as such term is defined in Rule 405 of the
Securities Act) and any unconsolidated entity, including, but not limited to, any structured
finance, special purpose or limited purpose entity that could reasonably be expected to
materially affect the Company’s or any of its subsidiaries’ liquidity or the availability of
or requirements for their capital resources required to be described in the General
Disclosure Package and the Prospectus or a document incorporated by reference therein which
have not been described as required.




     (rr) The statistical and market related data included in the Registration Statement,
the General Disclosure Package and the Prospectus are based on or derived from sources that
the Company believes to be reliable and accurate, and such data agree with the sources from
which they are derived.




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




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




     (uu) Neither the Company nor any subsidiary nor any of their affiliates (within the
meaning of FINRA Conduct Rule 2720(b)(1)(a)) directly or indirectly controls, are controlled
by, or is under common control with, or is an associated person (within the meaning of
Article I, Section 1(ee) of the By-laws of FINRA) of, any member firm of FINRA.




     (vv) The Company satisfies the pre-1992 eligibility requirements for the use of a
registration statement on Form S-3 in connection with the Offering contemplated thereby (the
pre-1992 eligibility requirements for the use of the registration statement on Form S-3
include (i) having a non-affiliate, public common equity float of at least $150 million or a
non-affiliate, public common equity float of at least $100 million and annual trading volume
of at least three million shares and (ii) having been subject to the Exchange Act reporting
requirements for a period of 36 months).



17









 






     (ww) No approval of the shareholders of the Company under the rules and regulations of
Nasdaq (including Rule 4350 of the Nasdaq Marketplace Rules) is required for the Company to
issue and deliver to the Purchasers the Units.




Any certificate signed by or on behalf of the Company and delivered to the Placement Agent
or to counsel for the Placement Agent shall be deemed to be a representation and warranty by
the Company to the Placement Agent and the Purchasers as to the matters covered thereby.



     4. The Closing. The time and date of closing and delivery of the documents required to be
delivered to the Placement Agent pursuant to Sections 5 and 7 hereof shall be at
10:00 A.M., New York time, on February 25, 2009 (the “Closing Date”) at the office of Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C., One Financial Center, Boston, MA 02111, Attention: Brian
Keane, Esq.



     5. Further Agreements of the Company. The Company agrees with the Placement Agent and
the Purchasers:




     (a) To prepare the Rule 462(b) Registration Statement, if necessary, in a form approved
by the Placement Agent and file such Rule 462(b) Registration Statement with the Commission
on the date hereof; to prepare the Prospectus in a form approved by the Placement Agent
containing information previously omitted at the time of effectiveness of the Registration
Statement in reliance on rules 430A, 430B and 430C and to file such Prospectus pursuant to
Rule 424(b) of the Rules and Regulations not later than the second business (2nd)
day following the execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 430A of the Rules and Regulations; to notify the Placement
Agent immediately of the Company’s intention to file or prepare any supplement or amendment
to any Registration Statement or to the Prospectus and to make no amendment or supplement to
the Registration Statement, the General Disclosure Package or to the Prospectus to which the
Placement Agent shall reasonably object by notice to the Company after a reasonable period
to review; to advise the Placement Agent, promptly after it receives notice thereof, of the
time when any amendment to any Registration Statement has been filed or becomes effective or
any supplement to the General Disclosure Package or the Prospectus or any amended Prospectus
has been filed and to furnish the Placement Agent with copies thereof; to file promptly all
material required to be filed by the Company with the Commission pursuant to Rule 433(d); to
file promptly all reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of
a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) of the Rules and
Regulations) is required in connection with the offering or sale of the Units; to advise the
Placement Agent, promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus, of the
suspension of the qualification of the Units for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the



18









 







Registration Statement, the General Disclosure Package or the Prospectus or for
additional information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus, any Issuer Free Writing
Prospectus or the Prospectus or suspending any such qualification, and promptly to use its
best efforts to obtain the withdrawal of such order.




     (b) The Company represents and agrees that, unless it obtains the prior consent of the
Placement Agent, it has not made and will not, make any offer relating to the Units that
would constitute a “free writing prospectus” as defined in Rule 405 of the Rules and
Regulations unless the prior written consent of the Placement Agent has been received (each,
a “Permitted Free Writing Prospectus”); provided that the prior written consent of the
Placement Agent hereto shall be deemed to have been given in respect of the Issuer Free
Writing Prospectus included in Schedule A hereto. The Company represents that it
has treated and agrees that it will treat each Permitted Free Writing Prospectus as an
Issuer Free Writing Prospectus, comply with the requirements of Rules 164 and 433 of the
Rules and Regulations applicable to any Issuer Free Writing Prospectus, including the
requirements relating to timely filing with the Commission, legending and record keeping and
will not take any action that would result in the Placement Agent or the Company being
required to file with the Commission pursuant to Rule 433(d) of the Rules and Regulations a
free writing prospectus prepared by or on behalf of the Placement Agent that the Placement
Agent otherwise would not have been required to file thereunder.




     (c) If at any time when a Prospectus relating to the Units is required to be delivered
under the Securities Act, any event occurs or condition exists as a result of which the
Prospectus, as then amended or supplemented, would include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading, or the
Registration Statement, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state a material fact necessary to make the statements therein
not misleading, or if for any other reason it is necessary at any time to amend or
supplement any Registration Statement or the Prospectus to comply with the Securities Act or
the Exchange Act, the Company will promptly notify the Placement Agent, and upon the
Placement Agent’s request, the Company will promptly prepare and file with the Commission,
at the Company’s expense, an amendment to the Registration Statement or an amendment or
supplement to the Prospectus that corrects such statement or omission or effects such
compliance and will deliver to the Placement Agent, without charge, such number of copies
thereof as the Placement Agent may reasonably request. The Company consents to the use of
the Prospectus or any amendment or supplement thereto by the Placement Agent.




     (d) If the General Disclosure Package is being used to solicit offers to buy the Units
at a time when the Prospectus is not yet available to prospective purchasers and any event
shall occur as a result of which, in the judgment of the Company or in the reasonable
opinion of the Placement Agent, it becomes necessary to amend or supplement the General
Disclosure Package in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, or to make the statements




19












 






therein not conflict with the information contained or incorporated by reference in the
Registration Statement then on file and not superseded or modified, or if it is necessary at
any time to amend or supplement the General Disclosure Package to comply with any law, the
Company promptly will either (i) prepare, file with the Commission (if required) and furnish
to the Placement Agent and any dealers an appropriate amendment or supplement to the General
Disclosure Package or (ii) prepare and file with the Commission an appropriate filing under
the Exchange Act which shall be incorporated by reference in the General Disclosure Package
so that the General Disclosure Package as so amended or supplemented will not, in the light
of the circumstances then prevailing, be misleading or conflict with the Registration
Statement then on file, or so that the General Disclosure Package will comply with law.




     (e) If at any time following issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or will conflict with the information contained in the Registration
Statement, Pricing Prospectus or Prospectus, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part thereof and not
superseded or modified or included or would include an untrue statement of a material fact
or omitted or would omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances prevailing at the
subsequent time, not misleading, the Company has promptly notified or will promptly notify
the Placement Agent so that any use of the Issuer Free Writing Prospectus may cease until it
is amended or supplemented and has promptly amended or will promptly amend or supplement, at
its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict,
untrue statement or omission. The foregoing sentence does not apply to statements in or
omissions from any Issuer Free Writing Prospectus in reliance upon, and in conformity with,
written information furnished to the Company by the Placement Agent specifically for
inclusion therein, which information the parties hereto agree is limited to the Placement
Agent’s Information (as defined in Section 16).




     (f) To the extent not available on the Commission’s EDGAR system or any successor
system, to furnish promptly to the Placement Agent and to counsel for the Placement Agent a
signed copy of the Registration Statement as originally filed with the Commission, and of
each amendment thereto filed with the Commission, including all consents and exhibits filed
therewith.




     (g) To the extent not available on the Commission’s EDGAR system or any successor
system, to deliver promptly to the Placement Agent in New York City such number of the
following documents as the Placement Agent shall reasonably request: (i) conformed copies
of the Registration Statement as originally filed with the Commission (in each case
excluding exhibits), (ii) each Preliminary Prospectus, (iii) any Issuer Free Writing
Prospectus, (iv) the Prospectus (the delivery of the documents referred to in clauses (i),
(ii), (iii) and (iv) of this paragraph (g) to be made not later than 10:00 A.M., New
York time, on the business day following the execution and delivery of this Agreement), (v)
conformed copies of any amendment to the Registration Statement (excluding exhibits), (vi)
any amendment or supplement to the General Disclosure



20









 







Package or the Prospectus (the delivery of the documents referred to in clauses (v) and
(vi) of this paragraph (g) to be made not later than 10:00 A.M., New York City time,
on the business day following the date of such amendment or supplement) and (vii) any
document incorporated by reference in the General Disclosure Package or the Prospectus
(excluding exhibits thereto) (the delivery of the documents referred to in clause (vi) of
this paragraph (g) to be made not later than 10:00 A.M., New York City time, on the
business day following the date of such document).




     (h) To make generally available to its shareholders as soon as practicable, but in any
event not later than eighteen (18) months after the effective date of each Registration
Statement (as defined in Rule 158(c) of the Rules and Regulations), an earnings statement of
the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of
the Securities Act and the Rules and Regulations (including, at the option of the Company,
Rule 158); and to furnish to its shareholders as soon as practicable after the end of each
fiscal year an annual report (including a balance sheet and statements of income,
shareholders’ equity and cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and as soon as possible after each of the first
three fiscal quarters of each fiscal year (beginning with the first fiscal quarter after the
effective date of such Registration Statement), consolidated summary financial information
of the Company and its subsidiaries for such quarter in reasonable detail.




     (i) To take promptly from time to time such actions as the Placement Agent may
reasonably request to qualify the Units for offering and sale under the securities or Blue
Sky laws of such jurisdictions (domestic or foreign) as the Placement Agent may designate
and to continue such qualifications in effect, and to comply with such laws, for so long as
required to permit the offer and sale of Units in such jurisdictions; provided that the
Company and its subsidiaries shall not be obligated to qualify as foreign corporations in
any jurisdiction in which they are not so qualified or to file a general consent to service
of process in any jurisdiction.




     (j) Upon request, during the period of five (5) years from the date hereof, to the
extent not available on the Commission’s EDGAR system or any successor system, to deliver to
the Placement Agent, (i) upon request, copies of all reports or other communications
furnished to shareholders, and (ii) upon request, copies of any reports and financial
statements furnished or filed with the Commission or any national securities exchange or
automatic quotation system on which the Company’s securities are listed or quoted.




     (k) That the Company will not, for a period of ninety (90) days from the date of the
Prospectus, (the “Lock-Up Period”) without the prior written consent of the Placement Agent,
directly or indirectly offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of, any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, other than (i) the Company’s sale of the Units hereunder,
(ii) the issuance of Common Stock, options to acquire Common Stock or other stock awards
pursuant to the Company’s employee benefit plans, deferred compensation plans, stock option
plans or other employee compensation plans as such



21









 







plans are in existence on the date hereof and described in the Prospectus, (iii) the
issuance of Common Stock pursuant to the valid exercises of options, warrants or rights
outstanding on the date hereof and (iv) shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock issued pursuant to strategic
collaborations, licensing transactions, business, product or technology acquisitions, or
bank or equipment financings, not to exceed, in the aggregate, five percent (5.0%) of the
Company’s outstanding common stock. The Company will cause each officer and director listed
in Schedule B to furnish to the Placement Agent, prior to the Closing Date, a
letter, substantially in the form of Exhibit C hereto. The Company also agrees that
during such period, the Company will not, without the prior written consent of the Placement
Agent, file any registration statement, preliminary prospectus or prospectus, or any
amendment or supplement thereto, under the Securities Act for any such transaction or which
registers, or offers for sale, Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, except for a registration statement on Form
S-8 relating to employee benefit plans. The Company hereby agrees that (i) if it issues an
earnings release or material news, or if a material event relating to the Company occurs,
during the last seventeen (17) days of the Lock-Up Period, or (ii) if prior to the
expiration of the Lock-Up Period, the Company announces that it will release earnings
results during the sixteen (16)-day period beginning on the last day of the Lock-Up Period,
the restrictions imposed by this paragraph (k) or the letter shall continue to apply
until the expiration of the eighteen (18)-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.




     (l) To supply the Placement Agent with copies of all correspondence to and from, and
all documents issued to and by, the Commission in connection with the registration of the
Units under the Securities Act or the Registration Statement, any Preliminary Prospectus or
the Prospectus, or any amendment or supplement thereto or document incorporated by reference
therein.




     (m) Prior to the Closing Date, to furnish to the Placement Agent, as soon as they have
been prepared, copies of any unaudited interim consolidated financial statements of the
Company for any periods subsequent to the periods covered by the financial statements
appearing in the Registration Statement and the Prospectus.




     (n) Prior to the Closing Date, not to issue any press release or other communication
directly or indirectly or hold any press conference with respect to the Company, its
condition, financial or otherwise, or earnings, business affairs or business prospects
(except for routine oral marketing communications in the ordinary course of business and
consistent with the past practices of the Company and of which the Placement Agent is
notified), without the prior written consent of the Placement Agent, unless in the judgment
of the Company and its counsel, and after notification to the Placement Agent, such press
release or communication is required by law.




     (o) Until the Placement Agent shall have notified the Company of the completion of the
offering of the Units, that the Company will not, and will cause its affiliated purchasers
(as defined in Regulation M under the Exchange Act) not to, either



22









 







alone or with one or more other persons, bid for or purchase, for any account in which
it or any of its affiliated purchasers has a beneficial interest, any Units, or attempt to
induce any person to purchase any Units; and not to, and to cause its affiliated purchasers
not to, make bids or purchase for the purpose of creating actual, or apparent, active
trading in or of raising the price of the Units.




     (p) Not to take any action prior to the Closing Date which would require the Prospectus
to be amended or supplemented pursuant to Section 5.




     (q) To at all times comply in all material respects with all applicable provisions of
the Sarbanes-Oxley Act in effect from time to time.




     (r) To apply the net proceeds from the sale of the Units as set forth in the
Registration Statement, the General Disclosure Package and the Prospectus under the heading
“Use of Proceeds.”




     (s) To use its best efforts to list, effect and maintain, subject to notice of
issuance, the Common Stock on the Nasdaq GM.




     (t) To use its best efforts to assist the Placement Agent with any filings with FINRA
and obtaining clearance from FINRA as to the amount of compensation allowable or payable to
the Placement Agent.




     (u) To use its best efforts to do and perform all things required to be done or
performed under this Agreement by the Company prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Units.



     6. Payment of Expenses. The Company agrees to pay, or reimburse if paid by the
Placement Agent, whether or not the transactions contemplated hereby are consummated or this
Agreement is terminated: (a) the costs incident to the authorization, issuance, sale, preparation
and delivery of the Units to the Purchasers and any taxes payable in that connection; (b) the costs
incident to the registration of the Units under the Securities Act; (c) the costs incident to the
preparation, printing and distribution of the Registration Statement, the Base Prospectus, any
Preliminary Prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package, the
Prospectus, any amendments, supplements and exhibits thereto or any document incorporated by
reference therein and the costs of printing, reproducing and distributing any transaction document
by mail, telex or other means of communications; (d) the fees and expenses (including reasonable
and documented fees and expenses of counsel for the Placement Agent related thereto) incurred in
connection with securing any required review by FINRA of the terms of the sale of the Units and any
filings made with FINRA; (e) any applicable listing, quotation or other fees; (f) the fees and
expenses (including reasonable and documented fees and expenses of counsel to the Placement Agent
related thereto) of qualifying the Units under the securities laws of the several jurisdictions as
provided in Section 5(i) and of preparing, printing and distributing wrappers, Blue Sky
Memoranda and Legal Investment Surveys (if any); (g) the cost of preparing and printing stock
certificates; (h) all fees and expenses of the registrar and transfer agent of the Units, (i) the
fees, disbursements and expenses of counsel to the Placement Agent, not to exceed $75,000
(inclusive of the fees, disbursements and expenses set forth in (d) and (f) above), and (j)



23









 







all other costs and expenses incident to the offering of the Units by, or the performance of
the obligations of, the Company under this Agreement (including, without limitation, the fees and
expenses of the Company’s counsel and the Company’s independent accountants and the travel and
other expenses incurred by Company and the Placement Agent’s personnel in connection with any “road
show” including, without limitation, any expenses advanced by the Placement Agent on the Company’s
behalf (which will be promptly reimbursed)).



     7. Conditions to the Obligations of the Placement Agent and the Purchasers, and the Sale of
the Units. The respective obligations of the Placement Agent hereunder and the Purchasers
under the Subscription Agreements, and the Closing of the sale of the Units, are subject to the
accuracy, when made and as of the Applicable Time and on the Closing Date, of the representations
and warranties of the Company contained herein, to the accuracy of the statements of the Company
made in any certificates pursuant to the provisions hereof, to the performance by the Company of
its obligations hereunder, and to each of the following additional terms and conditions:




     (a) No stop order suspending the effectiveness of the Registration Statement or any
part thereof, preventing or suspending the use of any Base Prospectus, any Preliminary
Prospectus, the Prospectus or any Permitted Free Writing Prospectus or any part thereof
shall have been issued and no proceedings for that purpose or pursuant to Section 8A under
the Securities Act shall have been initiated or threatened by the Commission, and all
requests for additional information on the part of the Commission (to be included or
incorporated by reference in the Registration Statement or the Prospectus or otherwise)
shall have been complied with to the reasonable satisfaction of the Placement Agent; the
Rule 462(b) Registration Statement, if any, each Issuer Free Writing Prospectus, if any, and
the Prospectus shall have been filed with the Commission within the applicable time period
prescribed for such filing by, and in compliance with, the Rules and Regulations and in
accordance with Section 5(a), and the Rule 462(b) Registration Statement, if any,
shall have become effective immediately upon its filing with the Commission; and FINRA shall
have raised no objection to the fairness and reasonableness of the terms of this Agreement
or the transactions contemplated hereby.




     (b) The Placement Agent shall not have discovered and disclosed to the Company on or
prior to the Closing Date that the Registration Statement or any amendment or supplement
thereto contains an untrue statement of a fact which, in the opinion of counsel for the
Placement Agent, is material or omits to state any fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary to make the
statements therein not misleading, or that the General Disclosure Package, any Issuer Free
Writing Prospectus or the Prospectus or any amendment or supplement thereto contains an
untrue statement of fact which, in the opinion of such counsel, is material or omits to
state any fact which, in the opinion of such counsel, is material and is necessary in order
to make the statements, in the light of the circumstances in which they were made, not
misleading.




     (c) All corporate proceedings and other legal matters incident to the authorization,
form and validity of each of this Agreement, the Subscription Agreements,



24









 







the Escrow Agreement, the Units, the Registration Statement, the General Disclosure
Package, each Issuer Free Writing Prospectus, if any, and the Prospectus and all other legal
matters relating to this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the Placement Agent, and the
Company shall have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.




     (d) Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. shall have furnished to the
Placement Agent, such counsel’s written opinion and negative assurances statement, as
counsel to the Company, addressed to the Placement Agent and dated the Closing Date, in the
form attached hereto as Exhibit D.




     (e) David L. Berstein, Esq., Senior Vice President and Chief Intellectual Property
Officer of the Company, shall have furnished to the Placement Agent, such counsel’s written
opinion, as intellectual property counsel to the Company, addressed to the Placement Agent
dated the Closing Date, in the form attached hereto as Exhibit E.




     (f) The Placement Agent shall have received from Proskauer Rose LLP, counsel for the
Placement Agent, such opinion or opinions, addressed to the Placement Agent dated the
Closing Date, with respect to such matters as the Placement Agent may reasonably require,
and the Company shall have furnished to such counsel such documents as they request for
enabling them to pass upon such matters.




     (g) At the time of the execution of this Agreement, the Placement Agent shall have
received from Deloitte & Touche LLP, a letter, addressed to the Placement Agent and the
Company, executed and dated such date, in form and substance satisfactory to the Placement
Agent (i) confirming that they are an independent registered accounting firm with respect to
the Company and its subsidiaries within the meaning of the Securities Act and the Rules and
Regulations and PCAOB and (ii) stating the conclusions and findings of such firm, of the
type ordinarily included in accountants’ “comfort letters” to underwriters, with respect to
the financial statements and certain financial information contained or incorporated by
reference in the Registration Statement, the General Disclosure Package and the Prospectus.




     (h) On the Closing Date, the Placement Agent shall have received a letter (the
“Bring-Down Letter”) from Deloitte & Touche LLP addressed to the Placement Agent and dated
the Closing Date confirming, as of the date of the Bring-Down Letter (or, with respect to
matters involving changes or developments since the respective dates as of which specified
financial information is given in the General Disclosure Package and the Prospectus, as the
case may be, as of a date not more than three (3) business days prior to the date of the
Bring-Down Letter), the conclusions and findings of such firm, of the type ordinarily
included in accountants’ “comfort letters” to underwriters, with respect to the financial
information and other matters covered by its letter delivered to the Placement Agent
concurrently with the execution of this Agreement pursuant to paragraph (g) of this
Section 7.



25









 






     (i) The Company shall have furnished to the Placement Agent and the Purchasers a
certificate, dated the Closing Date, of its Chairman and Chief Executive Officer and its
Chief Financial Officer stating that (i) such officers have carefully examined the
Registration Statement, the General Disclosure Package, any Permitted Free Writing
Prospectus and the Prospectus and, in their opinion, the Registration Statement and each
amendment thereto, at the Applicable Time and as of the date of this Agreement and as of the
Closing Date did not include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to make the statements
therein not misleading, and the General Disclosure Package, as of the Applicable Time and as
of the Closing Date, any Permitted Free Writing Prospectus as of its date and as of the
Closing Date, the Prospectus and each amendment or supplement thereto, as of the respective
date thereof and as of the Closing Date, did not include any untrue statement of a material
fact and did not omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances in which they were made, not misleading, (ii)
since the effective date of the Initial Registration Statement, no event has occurred which
should have been set forth in a supplement or amendment to the Registration Statement, the
General Disclosure Package or the Prospectus and is not, (iii) to the best of their
knowledge after reasonable investigation, as of the Closing Date, the representations and
warranties of the Company in this Agreement are true and correct and the Company has
complied in all material respects with all agreements and satisfied in all material respects
all conditions on its part to be performed or satisfied hereunder at or prior to the Closing
Date, and (iv) there has not been, subsequent to the date of the most recent audited
financial statements included or incorporated by reference in the General Disclosure
Package, any material adverse change in the financial position or results of operations of
the Company and its subsidiaries, or any change or development that, singularly or in the
aggregate, would involve a material adverse change or a prospective material adverse change,
in or affecting the condition (financial or otherwise), results of operations, business,
assets or prospects of the Company and its subsidiaries taken as a whole, except as set
forth in the Prospectus.




     (j) Since the date of the latest audited financial statements included in the General
Disclosure Package or incorporated by reference in the General Disclosure Package as of the
date hereof, (i) neither the Company nor any of its subsidiaries shall have sustained any
loss or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth in the General Disclosure Package, and
(ii) there shall not have been any change in the capital stock (other than the issuance of
Common Stock issued pursuant to the exercise of stock options under the Company’s stock
plans, the issuance of restricted Common Stock pursuant to the Company’s stock plans, the
issuance of Common Stock pursuant to employee stock purchase plans and the issuance of
Common Stock to certain shareholders of AGTI in connection with the merger of AGTI with and
into the Company) or long-term debt of the Company nor any of its subsidiaries, or any
change, or any development involving a prospective change, in or affecting the business,
general affairs, management, financial position, stockholders’ equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth in the General
Disclosure



26









 







Package, the effect of which, in any such case described in clause (i) or (ii) of this
paragraph (j), is, in the judgment of the Placement Agent, so material and adverse as to
make it impracticable or inadvisable to proceed with the sale or delivery of the Units on
the terms and in the manner contemplated in the General Disclosure Package.




     (k) No action shall have been taken and no law, statute, rule, regulation or order
shall have been enacted, adopted or issued by any governmental agency or body which would
prevent the issuance or sale of the Units or materially and adversely affect or potentially
materially and adversely affect the business or operations of the Company or its
subsidiaries; and no injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued which would prevent
the issuance or sale of the Units or materially and adversely affect or potentially
materially and adversely affect the business or operations of the Company or its
subsidiaries.




     (l) Subsequent to the execution and delivery of this Agreement there shall not have
occurred any of the following: (i) trading in securities generally on the New York Stock
Exchange, Nasdaq GM or the American Stock Exchange or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the over-the-counter market,
shall have been suspended or materially limited, or minimum or maximum prices or maximum
range for prices shall have been established on any such exchange or such market by the
Commission, by such exchange or market or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been declared by Federal
or state authorities or a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, (iii) the United States
shall have become engaged in hostilities, or the subject of an act of terrorism, or there
shall have been an outbreak of or escalation in hostilities involving the United States, or
there shall have been a declaration of a national emergency or war by the United States or
(iv) there shall have occurred such a material adverse change in general economic, political
or financial conditions (or the effect of international conditions on the financial markets
in the United States shall be such) as to make it, in the judgment of the Placement Agent,
impracticable or inadvisable to proceed with the sale or delivery of the Units on the terms
and in the manner contemplated in the General Disclosure Package and the Prospectus.




     (m) The Company shall have filed a Notification Form: Listing of Additional Shares with
the Nasdaq GM and shall have received no objection thereto from the Nasdaq GM.




     (n) The Placement Agent shall have received the written agreements, substantially in
the form of Exhibit C hereto, of the officers and directors of the Company listed in
Schedule B to this Agreement.




     (o) The Company shall have entered into Subscription Agreements with each of the
Purchasers and such agreements shall be in full force and effect.



27









 






     (p) The Company shall have entered into the Escrow Agreement and such agreement shall
be in full force and effect.




     (q) Prior to the Closing Date, the Company shall have furnished to the Placement Agent
such further information, opinions, certificates, letters or documents as the Placement
Agent shall have reasonably requested.



     All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Placement Agent.



     8. Indemnification and Contribution.




     (a) The Company shall indemnify and hold harmless the Placement Agent, its affiliates
and each of its and their respective directors, officers, members, employees,
representatives and agents (including, without limitation Lazard Frères & Co. LLC, which
will provide services to the Placement Agent, and its affiliates, and each of its and their
respective directors, officers, members, employees, representatives and agents and each
person, if any, who controls Lazard Frères & Co. LLC within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and each person, if any, who controls the
Placement Agent within the meaning of Section 15 of the Securities Act of or Section 20 of
the Exchange Act (collectively the “Placement Agent Indemnified Parties,” and each a
“Placement Agent Indemnified Party”) against any loss, claim, damage, expense or liability
whatsoever (or any action, investigation or proceeding in respect thereof), joint or
several, to which the Placement Agent Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, expense, liability,
action, investigation or proceeding arises out of or is based upon (A) any untrue statement
or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any
Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed
pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto or document incorporated by reference
therein, (B) the omission or alleged omission to state in any Preliminary Prospectus, any
Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed
pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto or document incorporated by reference
therein, a material fact required to be stated therein or necessary to make the statements
therein (with respect to any Preliminary Prospectus, any Issuer Free Writing Prospectus, any
“issuer information” or the Prospectus, in light of the circumstances under which they were
made) not misleading, or (C) any breach of the representations and warranties of the Company
contained herein or failure of the Company to perform its obligations hereunder or pursuant
to any law, any act or failure to act, or any alleged act or failure to act, by the
Placement Agent in connection with, or relating in any manner to, the Units, the Escrow
Agreement or the Offering, and which is included as part of or referred to in any loss,
claim, damage, expense, liability, action, investigation or proceeding arising out of or
based upon matters covered by subclause (A), (B) or (C) above of this Section 8(a)
(provided that the Company shall not be liable in the case of any matter covered by this



28









 







subclause (C) to the extent that it is determined in a final judgment by a court of
competent jurisdiction that such loss, claim, damage, expense or liability resulted
directly from any such act, or failure to act, undertaken or omitted to be taken by the
Placement Agent through its gross negligence or willful misconduct), and shall reimburse the
Placement Agent Indemnified Party promptly upon demand for any legal fees or other expenses
reasonably incurred by that Placement Agent Indemnified Party in connection with
investigating, or preparing to defend, or defending against, or appearing as a third party
witness in respect of, or otherwise incurred in connection with, any such loss, claim,
damage, expense, liability, action, investigation or proceeding, as such fees and expenses
are incurred; provided, however, that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage, expense or liability arises out of or is based
upon an untrue statement or alleged untrue statement in, or omission or alleged omission
from any Preliminary Prospectus, any Registration Statement or the Prospectus, or any such
amendment or supplement thereto, or any Issuer Free Writing Prospectus made in reliance upon
and in conformity with written information furnished to the Company by the Placement Agent
specifically for use therein, which information the parties hereto agree is limited to the
Placement Agent’s Information (as defined in Section 16). This indemnity agreement
is not exclusive and will be in addition to any liability, which the Company might otherwise
have and shall not limit any rights or remedies which may otherwise be available at law or
in equity to the Placement Agent Indemnified Party.




     (b) The Placement Agent shall indemnify and hold harmless the Company and its
directors, its officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act (collectively the “Company Indemnified Parties” and each a “Company
Indemnified Party”) against any loss, claim, damage, expense or liability whatsoever (or any
action, investigation or proceeding in respect thereof), joint or several, to which such
Company Indemnified Party may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, expense, liability, action, investigation or proceeding arises
out of or is based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any Issuer Free Writing Prospectus, any
“issuer information” filed or required to be filed pursuant to Rule 433(d) of the Rules and
Regulations, any Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any Preliminary Prospectus,
any Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed
pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto, a material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each case only to
the extent that the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information furnished to
the Company by the Placement Agent specifically for use therein, which information the
parties hereto agree is limited to the Placement Agent’s Information (as defined in
Section 16), and shall reimburse the Company for any legal or other expenses
reasonably incurred by such party in connection with investigating or preparing to defend or
defending against or appearing as third party witness in connection with any such loss,
claim, damage,



29









 







liability, action, investigation or proceeding, as such fees and expenses are incurred.
Notwithstanding the provisions of this Section 8(b), in no event shall any
indemnity by the Placement Agent under this Section 8(b) exceed the total
compensation received by the Placement Agent in accordance with Section 2.5.




     (c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, the indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
such indemnifying party in writing of the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from any liability
which it may have under this Section 8 except to the extent it has been materially
prejudiced by such failure; and, provided, further, that the failure to notify an
indemnifying party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 8. If any such action shall be
brought against an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume the defense
of such action with counsel reasonably satisfactory to the indemnified party (which counsel
shall not, except with the written consent of the indemnified party, be counsel to the
indemnifying party). After notice from the indemnifying party to the indemnified party of
its election to assume the defense of such action, except as provided herein, the
indemnifying party shall not be liable to the indemnified party under Section 8 for
any legal or other expenses subsequently incurred by the indemnified party in connection
with the defense of such action other than reasonable costs of investigation; provided,
however, that any indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense of such action but the fees and expenses of
such counsel (other than reasonable costs of investigation) shall be at the expense of such
indemnified party unless (i) the employment thereof has been specifically authorized in
writing by the Company in the case of a claim for indemnification under Section 8(a)
or Section 2.6 or the Placement Agent in the case of a claim for indemnification
under Section 8(b), (ii) such indemnified party shall have been advised by its
counsel that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party, or (iii) the indemnifying
party has failed to assume the defense of such action and employ counsel reasonably
satisfactory to the indemnified party within a reasonable period of time after notice of the
commencement of the action or the indemnifying party does not diligently defend the action
after assumption of the defense, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the expense of
the indemnifying party, the indemnifying party shall not have the right to assume the
defense of (or, in the case of a failure to diligently defend the action after assumption of
the defense, to continue to defend) such action on behalf of such indemnified party and the
indemnifying party shall be responsible for legal or other expenses subsequently incurred by
such indemnified party in connection with the defense of such action; provided, however,
that the indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any



30









 







time for all such indemnified parties (in addition to any local counsel), which firm
shall be designated in writing by the Placement Agent if the indemnified parties under this
Section 8 consist of a Placement Agent Indemnified Party or by the Company if the
indemnified parties under this Section 8 consist of any Company Indemnified Parties.
Subject to this Section 8(c), the amount payable by an indemnifying party under
Section 8 shall include, but not be limited to, (x) reasonable legal fees and
expenses of counsel to the indemnified party and any other expenses in investigating, or
preparing to defend or defending against, or appearing as a third party witness in respect
of, or otherwise incurred in connection with, any action, investigation, proceeding or
claim, and (y) all amounts paid in settlement of any of the foregoing. No indemnifying
party shall, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of judgment with respect to any pending or threatened
action or any claim whatsoever, in respect of which indemnification or contribution could be
sought under this Section 8 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party in form and substance reasonably
satisfactory to such indemnified party from all liability arising out of such action or
claim and (ii) does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party. Subject to the provisions of the
following sentence, no indemnifying party shall be liable for settlement of any pending or
threatened action or any claim whatsoever that is effected without its written consent
(which consent shall not be unreasonably withheld or delayed), but if settled with its
written consent, if its consent has been unreasonably withheld or delayed or if there be a
judgment for the plaintiff in any such matter, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or liability by reason of
such settlement or judgment. In addition, if at any time an indemnified party shall have
requested that an indemnifying party reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated herein effected without its written consent if (i) such settlement is
entered into more than forty-five (45) days after receipt by such indemnifying party of the
request for reimbursement, (ii) such indemnifying party shall have received notice of the
terms of such settlement at least thirty (30) days prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.




     (d) If the indemnification provided for in this Section 8 is unavailable or
insufficient to hold harmless an indemnified party under Section 8(a) or Section
8(b), then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid, payable or otherwise incurred by such indemnified
party as a result of such loss, claim, damage, expense or liability (or any action,
investigation or proceeding in respect thereof), as incurred, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the Company on the one
hand and the Placement Agent on the other hand from the offering of the Units, or (ii) if
the allocation provided by clause (i) of this Section 8(d) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) of this Section 8(d) but also the relative fault
of the Company on the one hand and the Placement Agent on the other with respect to the
statements, omissions, acts or failures to



31









 







act which resulted in such loss, claim, damage, expense or liability (or any action,
investigation or proceeding in respect thereof) as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand and the
Placement Agent on the other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Units purchased under this
Agreement (before deducting expenses) received by the Company bear to the total Placement
Fee received by the Placement Agent in connection with the Offering, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault of the Company
on the one hand and the Placement Agent on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the
Company on the one hand or the Placement Agent on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or prevent such
untrue statement, omission, act or failure to act; provided that the parties hereto agree
that the written information furnished to the Company by the Placement Agent for use in any
Preliminary Prospectus, any Registration Statement or the Prospectus, or in any amendment or
supplement thereto, consists solely of the Placement Agent’s Information as defined in
Section 16. The Company and the Placement Agent agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were to be determined by
pro rata allocation or by any other method of allocation that does not take into account the
equitable considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage, expense, liability, action, investigation or
proceeding referred to above in this Section 8(d) shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating, preparing to defend or defending
against or appearing as a third party witness in respect of, or otherwise incurred in
connection with, any such loss, claim, damage, expense, liability, action, investigation or
proceeding. Notwithstanding the provisions of this Section 8(d), no Placement Agent
shall be required to contribute any amount in excess of the total compensation received by
the Placement Agent in accordance with Section 2.5 less the amount of any damages
which the Placement Agent has otherwise paid or become liable to pay by reason of any untrue
or alleged untrue statement, omission or alleged omission, act or alleged act or failure to
act or alleged failure to act. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.



     9. Termination. The obligations of the Placement Agent and the Purchasers hereunder and
under the Subscription Agreements may be terminated by the Placement Agent, in its absolute
discretion by notice given to the Company prior to delivery of and payment for the Units if, prior
to that time, any of the events described in Section 7(j), Section 7(k) or
Section 7(l) have occurred or if the Purchasers shall decline to purchase the Units for any
reason permitted under this Agreement or the Subscription Agreements. Any such termination shall be
without liability of any party to any other party except as provided in Section 6,
Section 8 or Section 10 of this Agreement.



32









 





     10. Reimbursement of Placement Agent’s Expenses. Notwithstanding anything to the
contrary in this Agreement, if (a) this Agreement shall have been terminated pursuant to
Section 9, (b) the Company shall fail to tender the Units for delivery to the Purchasers
for any reason not permitted under this Agreement, (c) the Purchasers shall decline to purchase the
Units for any reason permitted under this Agreement or (d) the sale of the Units is not consummated
because any condition to the obligations of the Purchasers or the Placement Agent set forth herein
is not satisfied or because of the refusal, inability or failure on the part of the Company to
perform any agreement herein or to satisfy any condition or to comply with the provisions hereof,
then in addition to the payment of amounts in accordance with Section 6, the Company shall
reimburse the Placement Agent for the fees and expenses of the Placement Agent’s counsel and for
such other out-of-pocket expenses as shall have been reasonably incurred by them in connection with
this Agreement and the proposed purchase of the Units, and upon demand the Company shall pay the
full amount thereof to the Placement Agent.



Absence of Fiduciary Relationship. The Company acknowledges and agrees that:





     (a) the Placement Agent’s responsibility to the Company is solely contractual in
nature, the Placement Agent have been retained solely to act as Placement Agent in
connection with the Offering and no fiduciary, advisory or agency relationship between the
Company and the Placement Agent has been created in respect of any of the transactions
contemplated by this Agreement, irrespective of whether the Placement Agent or Lazard Frères
& Co. LLC has advised or is advising the Company on other matters;




     (b) the price of the Units set forth in this Agreement was established by the Company
following discussions and arms-length negotiations with the Placement Agent, and the Company
is capable of evaluating and understanding, and understands and accepts, the terms, risks
and conditions of the transactions contemplated by this Agreement;




     (c) it has been advised that the Placement Agent and Lazard Frères & Co. LLC and their
affiliates are engaged in a broad range of transactions which may involve interests that
differ from those of the Company and that the Placement Agent have no obligation to disclose
such interests and transactions to the Company by virtue of any fiduciary, advisory or
agency relationship; and




     (d) it waives, to the fullest extent permitted by law, any claims it may have against
the Placement Agent for breach of fiduciary duty or alleged breach of fiduciary duty and
agrees that the Placement Agent shall have no liability (whether direct or indirect) to the
Company in respect of such a fiduciary duty claim or to any person asserting a fiduciary
duty claim on behalf of or in right of the Company, including stockholders, employees or
creditors of the Company.



     12. Successors; Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the Placement Agent, the Company, and their respective
successors and assigns. This Agreement shall also inure to the benefit of Lazard
Frères & Co. LLC, the Purchasers, and each of their respective successors and assigns, which



33









 




shall be third party beneficiaries hereof. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, other than the persons mentioned in the
preceding sentences, any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such persons and for
the benefit of no other person; except that the representations, warranties, covenants, agreements
and indemnities of the Company contained in this Agreement shall also be for the benefit of the
Placement Agent Indemnified Parties and the indemnities of the Placement Agent shall be for the
benefit of the Company Indemnified Parties. It is understood that the Placement Agent’s
responsibility to the Company is solely contractual in nature and the Placement Agent does not owe
the Company, or any other party, any fiduciary duty as a result of this Agreement.




     13. Survival of Indemnities, Representations, Warranties, etc. The respective
indemnities, covenants, agreements, representations, warranties and other statements of the Company
and the Placement Agent, as set forth in this Agreement or made by them respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any investigation made by or
on behalf of the Placement Agent, the Company, the Purchasers or any person controlling any of them
and shall survive delivery of and payment for the Units. Notwithstanding any termination of this
Agreement, including without limitation any termination pursuant to Sections 9 or
10, the indemnity and contribution agreements contained in Section 8 and the
covenants, representations, warranties set forth in this Agreement shall not terminate and shall
remain in full force and effect at all times.



     Notices. All statements, requests, notices and agreements hereunder shall be in writing, and:




     (a) if to the Placement Agent, shall be delivered or sent by mail, telex, facsimile
transmission or email to Lazard Capital Markets LLC, 30 Rockefeller Plaza, New York, NY
10020, Attention: General Counsel, Fax: 212-830-3615; and




     (b) if to the Company, shall be delivered or sent by mail, telex, facsimile
transmission or overnight courier to ARIAD Pharmaceuticals, Inc., 26 Landsdowne Street,
Cambridge, MA 02139, Attention: Raymond T. Keane, Esq., Senior Vice President, General
Counsel, Fax: (617) 557-9048; with a copy to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C., One Financial Center, Boston, MA 02111, Attention: Jonathan L. Kravetz, Esq., Fax:
(617) 542-2241;


provided, however, that any notice to the Placement Agent pursuant to Section 8 shall be
delivered or sent by mail, telex or facsimile transmission to the Placement Agent at its address
set forth in its acceptance telex to the Placement Agent, which address will be supplied to any
other party hereto by the Placement Agent upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof, except that any such statement,
request, notice or agreement delivered or sent by email shall take effect at the time of
confirmation of receipt thereof by the recipient thereof.




34









 








     14. Definition of Certain Terms. For purposes of this Agreement, (a) “business day”
means any day on which the New York Stock Exchange, Inc. is open for trading and (b) "subsidiary”
has the meaning set forth in Rule 405 of the Rules and Regulations.



     15. Governing Law, Agent for Service and Jurisdiction. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York, including without limitation
Section 5-1401 of the New York General Obligations Law. No legal proceeding may be commenced,
prosecuted or continued in any court other than the courts of the State of New York located in the
City and County of New York or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such matters, and the Company
and the Placement Agent each hereby consent to the jurisdiction of such courts and personal service
with respect thereto. The Company and the Placement Agent each hereby consent to personal
jurisdiction, service and venue in any court in which any legal proceeding arising out of or in any
way relating to this Agreement is brought by any third party against the Company or the Placement
Agent. The Company and the Placement Agent each hereby waive all right to trial by jury in any
legal proceeding (whether based upon contract, tort or otherwise) in any way arising out of or
relating to this Agreement. The Company agrees that a final judgment in any such legal proceeding
brought in any such court shall be conclusive and binding upon the Company and the Placement Agent
and may be enforced in any other courts in the jurisdiction of which the Company is or may be
subject, by suit upon such judgment.



     16. Placement Agent’s Information. The parties hereto acknowledge and agree that, for
all purposes of this Agreement, the Placement Agent’s Information consists solely of the following
information in the Prospectus: (i) the last paragraph on the front cover page concerning the terms
of the offering by the Placement Agent; and (ii) the statements concerning the Placement Agent
contained in the first and sixth paragraphs (regarding the referral by Lazard Frères & Co. LLC of
this transaction to LCM) under the heading “Plan of Distribution.”



     17. Partial Unenforceability. The invalidity or unenforceability of any section,
paragraph, clause or provision of this Agreement shall not affect the validity or enforceability of
any other section, paragraph, clause or provision hereof. If any section, paragraph, clause or
provision of this Agreement is for any reason determined to be invalid or unenforceable, there
shall be deemed to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.



     18. General. This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof. In this Agreement, the
masculine, feminine and neuter genders and the singular and the plural include one another. The
section headings in this Agreement are for the convenience of the parties only and will not affect
the construction or interpretation of this Agreement. This Agreement may be amended or modified,
and the observance of any term of this Agreement may be waived, only by a writing signed by the
Company and the Placement Agent.



35









 





     19. Counterparts. This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto and hereto were upon
the same instrument and such signatures may be delivered by facsimile.



36









 





     If the foregoing is in accordance with your understanding of the agreement between the Company
and the Placement Agent, kindly indicate your acceptance in the space provided for that purpose
below.



	 	 	 	 	 
	 	Very truly yours,





ARIAD PHARMACEUTICALS, INC.

 	 
	 	By:  	/s/ Harvey J. Berger, M.D.	 
	 	 	Name:  	Harvey J. Berger, M.D. 	 
	 	 	Title:  	Chairman and Chief Executive Officer 	 
	 



Accepted
as of the date
first above written:




	 	 	 	 	 
	 	LAZARD CAPITAL MARKETS LLC

 	 
	 	By:  	/s/ David G. McMillan, Jr. 	 
	 	 	Name:  	David G. McMillan, Jr. 	 
	 	 	Title:  	Managing Director 	 



37









 






	 	 	 	 	 



SCHEDULE A




General Use Free Writing Prospectuses




Issuer Free Writing Prospectus, dated February 19, 2009





 









 








SCHEDULE B




List of officers, directors, shareholders, optionholders and

warrantholders subject to Section 5




Harvey J. Berger, M.D.

David L. Berstein, Esq.

Timothy P. Clackson, Ph.D.

Pierre F. Dodion, M.D.

Edward M. Fitzgerald

Raymond T. Keane, Esq.

Jay R. LaMarche

Athanase Lavidas

Massimo Radaelli, Ph.D.

Wayne Wilson

John Iuliucci





 









 








EXHIBIT A




Form of Subscription Agreement




 









 





EXHIBIT B




Form of Warrant





 









 








EXHIBIT C




Form of Lock Up Agreement




February __, 2009




LAZARD CAPITAL MARKETS LLC

30 Rockefeller Plaza

New York, New York 10020





			
	Re:	 	ARIAD Pharmaceuticals, Inc. — Public Offering of Units





Dear Sirs:





     In order to induce Lazard Capital Markets LLC (“LCM”), to enter in to a certain placement
agent agreement with ARIAD Pharmaceuticals, Inc., a Delaware corporation (the “Company”), with
respect to the public offering of units consisting of the Company’s Common Stock, par value $0.001
per share (“Common Stock”) and warrants to purchase the Common Stock (the “Offering”), the
undersigned hereby agrees that for a period (the “Lock-up Period”) of ninety (90) days following
the date of the final prospectus filed by the Company with the Securities and Exchange Commission
in connection with such public offering, the undersigned will not, without the prior written
consent of LCM, directly or indirectly, (i) offer, sell, assign, transfer, pledge, contract to
sell, or otherwise dispose of, any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock (including, without limitation, shares of Common Stock
or any such securities which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations promulgated under the Securities Act of 1933, as the same
may be amended or supplemented from time to time (such shares or securities, the “Beneficially
Owned Shares”)), (ii) enter into any swap, hedge or other agreement or arrangement that transfers
in whole or in part, the economic risk of ownership of any Beneficially Owned Shares, Common Stock
or securities convertible into or exercisable or exchangeable for Common Stock, or (iii) engage in
any short selling of any Beneficially Owned Shares, Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock.



     If (i) the Company issues an earnings release or material news or a material event relating to
the Company occurs during the last seventeen (17) days of the Lock-up Period, or (ii) prior to the
expiration of the Lock-up Period, the Company announces that it will release earnings results
during the sixteen (16)-day period beginning on the last day of the Lock-up Period, the
restrictions imposed by this Agreement shall continue to apply until the expiration of the eighteen
(18)-day period beginning on the issuance of the earnings release or the occurrence of the material
news or material event.



     Notwithstanding the foregoing, the undersigned may transfer Beneficially Owned Shares (i) as a
bona fide gift or gifts, (ii) to any trust for the direct or indirect benefit of the undersigned or
the immediate family of the undersigned, or (iii) by will or intestate succession; provided, that
(A) each donee, transferee or distributee shall execute and deliver a letter substantially in the
form hereof agreeing to be bound by the terms hereof and (B) neither the undersigned nor any other
party to the applicable transaction shall be required to file, or voluntarily file, a report



 









 







under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
other than a filing on Form 5 made after the expiration of the Lock-up Period. For purposes of
this agreement, the term “immediate family” shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin.



In addition, notwithstanding the foregoing, the restrictions set forth herein shall not apply to
the establishment of a trading plan that complies with Rule 10b5-1 under the Exchange Act; provided
however, that the restrictions shall apply in full force to sales pursuant to the trading plan
during the Lock-up Period. Furthermore, notwithstanding anything herein to the contrary, this lock
up will not apply to the sale of shares of Common Stock pursuant to a trading plan that complies
with Rule 10b5-1 and existing on the date of this Agreement, but only to the extent that such sale
is in connection with options that are set to expire during the Lock-up Period.



     Anything contained herein to the contrary notwithstanding, any person to whom shares of Common
Stock, securities convertible into or exercisable or exchangeable for Common Stock or Beneficially
Owned Shares are transferred from the undersigned shall be bound by the terms of this Agreement.



     In addition, the undersigned hereby waives, from the date hereof until the expiration of the
ninetieth (90th) day period following the date of the Company’s final prospectus, any
and all rights, if any, to request or demand registration pursuant to the Securities Act of 1933,
as amended, of any shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock that are registered in the name of the undersigned or that are
Beneficially Owned Shares. In order to enable the aforesaid covenants to be enforced, the
undersigned hereby consents to the placing of legends and/or stop transfer orders with the transfer
agent of the Common Stock with respect to any shares of Common Stock, securities convertible into
or exercisable or exchangeable for Common Stock or Beneficially Owned Shares.



     It is understood that, if the Company notifies LCM that it does not intend to proceed with the
Offering or if the Offering is not consummated by March 15, 2009, this Agreement shall terminate
and the undersigned will be released from their obligations hereunder.



	 	 	 	 	 
	 	[Signatory]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title: