exv10w1






Exhibit 10.1




1,149,374 Shares of Common Stock




Warrants to Purchase 574,687 shares of Common Stock




REGISTERED DIRECT PLACEMENT AGENCY AGREEMENT




February 13, 2009




Oppenheimer & Co. Inc.

Susquehanna Financial Group, LLLP

Philadelphia Brokerage Corporation

     as Placement Agents

c/o Oppenheimer & Co. Inc.

300 Madison Avenue

New York, New York 10017




Ladies and Gentlemen:




          BMP Sunstone Corporation, a Delaware corporation (the “Company”), proposes, subject to the
terms and conditions contained herein, to issue and sell 1,149,374 shares (the “Shares”) of common
stock, $0.001 par value per share (the “Common Stock”) and warrants to purchase 574,687 shares of
Common Stock (the “Warrants”, and together with the Shares, the “Securities”), directly to certain
investors (collectively, the “Investors”). The Company desires to engage you as its placement
agents (the “Placement Agents”) in connection with such issuance and sale. Oppenheimer & Co. Inc.
(“Oppenheimer”) is to act as lead placement agent and Susquehanna Financial Group, LLLP
(“Susquehanna”) and Philadelphia Brokerage Corporation (“Philadelphia”) are each to act as
co-placement agents. The Securities are more fully described in the Registration Statement (as
hereinafter defined).




          The offering and sale of the Securities, including the shares of Common Stock underlying the
Warrants (the “Warrant Shares”) (the “Offering”) are being made pursuant to (i) an effective
Registration Statement on Form S-3 (No. 333-156958) (including the Base Prospectus contained
therein dated February 13, 2009 (the “Base Prospectus”) that has been prepared and filed by the
Company with the Securities and Exchange Commission (the “Commission”) in conformity with the
requirements of the Securities Act of 1933, as amended (the “Securities Act”) and the published
rules and regulations thereunder (the “Rules”) adopted by the Commission relating to Common Stock
and Warrants of the Company that may be sold from time to time by the Company in accordance with
Rule 415 of the Securities Act, and such amendments thereof as may have been required to the date
of this Agreement, (ii) if applicable, certain “free writing prospectuses” (as that term is defined
in Rule 405 under the Securities Act), that have been or will be filed with the Commission and
delivered to the Investor on or prior to the date hereof, and (iii) a prospectus supplement to be
dated the date hereof, containing certain supplemental information regarding the Securities and the
Warrant Shares, the Company and the




 









 




terms of the offering that will be filed with the Commission (the “Prospectus Supplement”).
Copies of such Registration Statement, the related Base Prospectus, any free writing prospectus
have heretofore been delivered by the Company or are otherwise available to you.




          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 part of
the Registration Statement by incorporation by reference or otherwise, as amended from time to
time, including the information (if any) contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and deemed to be part thereof at the time of
effectiveness pursuant to Rule 430B of the Rules.




          If the Company has filed an abbreviated registration statement to register additional
Securities and the Warrant Shares pursuant to Rule 462(b) under the Rules (the “462(b) Registration
Statement”), then any reference herein to the Registration Statement shall also be deemed to
include such 462(b) Registration Statement. The term “Prospectus” means the Base Prospectus, and
any amendments or further supplements to such prospectus, and including, without limitation, the
Prospectus Supplement, filed pursuant to and within the time limits described in Rule 424(b) with
the Commission in connection with the proposed sale of the Securities and the Warrant Shares
contemplated by this Agreement through the date of the Prospectus Supplement. The term “Effective
Date” shall mean each date that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective. Unless otherwise stated herein, any reference herein
to the Registration Statement, the General Disclosure Package (as hereinafter defined) and the
Prospectus shall be deemed to refer to and include the documents incorporated by reference therein,
including pursuant to Item 12 of Form S-3 under the Securities Act, which were filed under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) on or before the date hereof or
are so filed hereafter. Any reference herein to the terms “amend,” “amendment” or “supplement” with
respect to the Registration Statement, the General Disclosure Package or the Prospectus shall be
deemed to refer to and include any such document filed or to be filed under the Exchange Act after
the date of the Registration Statement, the General Disclosure Package or Prospectus, as the case
may be, and deemed to be incorporated therein by reference. In addition, the Company on the date
hereof has prepared and filed with the Commission an issuer free writing prospectus dated February
13, 2009 in the form attached as Schedule 1 (the “Specified IFWP”).




          In connection with their duties as Placement Agents, the Company hereby confirms that the
Placement Agents have been authorized to distribute or cause to be distributed each Issuer Free
Writing Prospectus (as hereinafter defined) and are authorized to distribute the Prospectus (as
from time to time amended or supplemented if the Company furnishes amendments or supplements
thereto to the Placement Agents).




          1. Agreement to Act as Placement Agent; Delivery and Payment. On the basis of the
representations, warranties and agreements contained in, and subject to the terms and conditions
of, this Agreement:




               (a) The Placement Agents agree to act as the Company’s exclusive placement agents in
connection with the issuance and sale, on a reasonable efforts basis, by the



S-2









 




Company of the Securities to the Investors. Subject to the conditions contained herein, if
applicable and requested by the Company, the Placement Agents agree to: (i) assist in preparing a
prospectus supplement, issuer free writing prospectuses and investor roadshow presentations
describing the Company and the securities; (ii) assist in scheduling and hosting meetings with
investors; and (iii) assist and advise the Company with respect to the negotiation of the sale of
the Securities to the investors. The Placement Agents shall have no authority to bind the Company.
The Company acknowledges and agrees that the Placement Agents’ engagement hereunder is not an
agreement by the Placement Agents or any of their affiliates to underwrite or purchase any
securities or otherwise provide any financing. As compensation for their services hereunder, the
Company agrees to pay on the Closing Date (as defined below) the Placement Agents by wire transfer
of immediately available funds 7% of the proceeds received by the Company from the sale of the
Securities (allocated among the Placement Agents as follows: 60% to Oppenheimer, 25% to Susquehanna
and 15% to Philadelphia); provided, however, that in no event shall this amount plus the expense
reimbursement pursuant to Section 4(b)(x), (y) and (z) exceed 8% of the gross proceeds of the
Offering. It is expressly understood and acknowledged that Oppenheimer, Susquehanna and
Philadelphia are not and shall not be deemed for any purpose to be acting as an agent, joint
venturer or partner of one another and that none of Oppenheimer, Susquehanna nor Philadelphia
assumes responsibility, express or implied, for any actions or omissions of, or the performance of
services by, the other in connection with the transaction contemplated herein or otherwise.  The
obligations of Oppenheimer, Susquehanna and Philadelphia shall be several (and not joint and
several) in all respects.




               (b) Payment of the purchase price for, and delivery of the Securities shall be made at a
closing (the “Closing”) at the offices of Latham & Watkins LLP 12636 High Bluff Drive, Suite 400,
San Diego, California 92130 at 9:00 a.m., New York time, on the Closing Date to take place on the
fourth business day (as permitted under Rule 15c6-1 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) after the determination of the public offering price of the
Securities (such time and date of payment and delivery being herein called the “Closing Date”).
All actions taken at the Closing shall be deemed to have occurred simultaneously.



               (c) Payment of the purchase price by the Investors for the Securities shall be made to or upon
the order of the Company by wire transfer in Federal (same day) funds to the Company, upon delivery
of the Shares, through the facilities of The Depository Trust Company, to the Investors. Payment
of the purchase price for the Securities shall be made on the Closing Date by the Investors
directly to the Company or as the Placement Agents otherwise direct.



               (d) The purchases of the Securities by the Investors must be evidenced by the execution of a
purchase agreement substantially in the form attached hereto as Exhibit A.



               (e) Prior to the earlier of (i) the date on which this Agreement is terminated and (ii) the
Closing Date, the Company shall not, without the prior consent of the Placement Agents, solicit or
accept offers to purchase shares of its Common Stock (other than pursuant to the exercise of
options under existing employee benefit plans, purchases under the
Company’s employee stock purchase plan or warrants to purchase shares of Common Stock that are
outstanding at the date hereof) otherwise than through the Placement Agents.



S-3









 





          2. Representations and Warranties of the Company. The Company represents and warrants
to each Placement Agent as of the date hereof and as of the Closing Date, as follows:




               (a) The Company meets the requirements for use of Form S-3 under the Securities Act and has
filed with the Commission the Registration Statement on such Form, including the Base Prospectus,
for registration under the Securities Act of the offering and sale of the Securities and the
Warrant Shares, and the Company has not prepared or used any preliminary prospectus in connection
with the offering and sale of the Securities and the Warrant Shares. When the Registration
Statement or any amendment thereof or supplement thereto was or is declared effective and as of the
date of the most recent amendment to the Registration Statement, it (i) complied or will comply, in
all material respects, with the requirements of the Securities Act and the Rules and the Exchange
Act and the rules and regulations of the Commission thereunder, and (ii) did not or will not,
contain an untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. When the Prospectus was
or will be first filed with the Commission (whether filed as part of the Registration Statement or
any amendment thereto or filed or to be filed pursuant to Rule 424 of the Rules) and when any
amendment thereof or supplement thereto (including the Prospectus Supplement) was or will be first
filed with the Commission, the Prospectus, as amended or supplemented, will comply or complied in
all material respects with the applicable provisions of the Securities Act and the Rules and did
not as of the date thereof, does not as of the date hereof, or will not as of the Closing Date,
contain an untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not
misleading. If applicable, the Prospectus delivered to the Placement Agents for use in connection
with this placement was or will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
Notwithstanding the foregoing, none of the representations and warranties in this paragraph 2(a)
shall apply to statements in, or omissions from, the Registration Statement or the Prospectus made
in reliance upon, and in conformity with, information herein or otherwise furnished in writing by
the Placement Agents specifically for use in the Registration Statement or the Prospectus. With
respect to the preceding sentence, the Company acknowledges that the only information furnished in
writing by the Placement Agents for use in the Registration Statement or the Prospectus is the
statements contained in the seventh paragraph under the caption “Plan of Distribution” in the
Prospectus Supplement (the “Agents’ Information”).



               (b) As of the Applicable Time (as hereinafter defined), neither (i) the Registration
Statement, the Base Prospectus, any prospectus supplement deemed to be a part thereof (including,
without limitation, the Prospectus Supplement), the Specified IFWP and any information or documents
deemed to be incorporated by reference to the foregoing, (collectively, the “General Disclosure
Package”), nor (ii) any individual Issuer Free Writing Prospectus (as hereinafter defined) when
considered together with the General Disclosure Package, included any untrue statement of a
material fact or omitted to state any material fact



S-4









 




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; provided, however, that this
representation and warranty shall not apply to statements in or omissions in the General Disclosure
Package made in reliance upon and in conformity with the Agents’ Information.




     Each Issuer Free Writing Prospectus, including any electronic roadshow (including without
limitation any “bona fide electronic roadshow” as defined in Rule 433(h)(5) under the Securities
Act) (each, a “Roadshow”) (i) is identified in Schedule 2 hereto and (ii) complied when issued, and
complies, in all material respects with the requirements of the Securities Act and the Rules and
the Exchange Act and the rules and regulations of the Commission thereunder.




As used in this Section and elsewhere in this Agreement:




“Applicable Time” means 9:00 pm (Eastern time) on the date of this Agreement.




“Issuer Free Writing Prospectus” means each “free writing prospectus” (as defined in Rule
405 of the Rules) prepared by or on behalf of the Company or used or referred to by the
Company in connection with the offering of the Shares, including, without limitation, the
Specified IFWP and each Roadshow.



               (c) 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 or any “free writing prospectus” (as defined in Rule 405 under
the Rules) has been issued by the Commission and no proceedings for that purpose have been
instituted or are threatened under the Securities Act. Any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) of the Rules has been or will be made in the manner
and within the time period required by such Rule 424(b). Any material required to be filed by the
Company pursuant to Rule 433(d) of the Rules has been or will be made in the manner and within the
time period required by such Rules.



               (d) The documents incorporated by reference in the Registration Statement and the Prospectus
at the time they became effective or were filed with the Commission, as the case may be, complied
in all material respects with 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 an untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and any further documents so filed and
incorporated by reference in the Registration Statement and 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 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 light of the circumstances under which they are made, not misleading.



S-5









 





               (e) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the placement and sale of the Securities or until any earlier date that
the Company notified or notifies the Placement Agents as described in the next sentence, did not,
does not and will not include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part thereof that has not been
superseded or modified, the General Disclosure Package or the Prospectus.



     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 would conflict with the information contained in the Registration Statement, the General
Disclosure Package or the Prospectus 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 Agents 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.



               (f) The financial statements of the Company (including all notes and schedules thereto)
included or incorporated by reference in the Registration Statement, the General Disclosure Package
and the Prospectus present fairly in all material respects the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statement of operations,
stockholders’ equity and cash flows of the Company and its consolidated subsidiaries for the
periods specified; and such financial statements and related schedules and notes thereto, and the
unaudited financial information filed with the Commission as part of the Registration Statement,
have been prepared in conformity with generally accepted accounting principles, consistently
applied throughout the periods involved. The summary and selected financial data included in the
Registration Statement, the General Disclosure Package and the Prospectus present fairly in all
material respects the information shown therein as at the respective dates and for the respective
periods specified and have been presented on a basis consistent with the consolidated financial
statements set forth in the Prospectus and other financial information. The pro forma financial
statements and the related notes thereto included or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus present fairly in all material
respects the information shown therein, have been prepared in accordance with the Securities Act
and the Rules with respect to pro forma financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions and circumstances
referred to therein.



               (g) Grant Thorton and KPMG (together, the “Auditors”) whose reports are filed with the
Commission as a part of the Registration Statement, are and, during the periods covered by their
reports, were independent public accountants as required by the Securities Act and the Rules.



S-6









 





               (h) Each of the Company and its subsidiaries (including each corporation, partnership, joint
venture, association or other business organization) controlled directly or indirectly by the
Company (each, a “subsidiary”), is duly organized, validly existing and in good standing under the
laws of their respective jurisdictions of incorporation or organization and each such entity has
all requisite power and authority to carry on its business as is currently being conducted as
described in the Registration Statement, the General Disclosure Package and the Prospectus, and to
own, lease and operate its properties. Each of the Company and its subsidiaries is duly qualified
to do business and is in good standing as a foreign corporation in each jurisdiction in which the
nature of the business conducted by it or location of the assets or properties owned, leased or
licensed by it requires such qualification, except for such jurisdictions where the failure to so
qualify individually or in the aggregate would not have a material adverse effect on the assets,
properties, financial condition, or in the results of operations or business affairs of the Company
and its subsidiaries considered as a whole (a “Material Adverse Effect”); and to the Company’s
knowledge, no proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification.



               (i) The Registration Statement initially became effective within three years of the date
hereof. If, immediately prior to the third anniversary of the initial effective date of the
Registration Statement, any of the Securities remain unsold, the Company will, prior to that third
anniversary file, if it has not already done so, a new shelf registration statement relating to the
Securities and the Warrant Shares, in a form satisfactory to the Placement Agents, will use its
best efforts to cause such registration statement to be declared effective within 180 days after
that third anniversary, and will take all other action necessary or appropriate to permit the
public offering and sale of the Securities and the Warrant Shares to continue as contemplated in
the expired Registration Statement. References herein to the registration statement relating to
the Securities and the Warrant Shares shall include such new shelf registration statement.



               (j) Each of the Company and its subsidiaries has all requisite corporate power and authority,
and all necessary authorizations, approvals, consents, orders, licenses, certificates and permits
of and from all governmental or regulatory bodies or any other person or entity (including those
that may be required by any state, federal or foreign agencies or bodies in the regulation of
clinical trials and pharmaceuticals, except for such as would not reasonably be expected to have a
Material Adverse Effect) (collectively, the “Permits”), to own, lease and license its assets and
properties and conduct its business, all of which are valid and in full force and effect. Each of
the Company and its subsidiaries has fulfilled and performed in all material respects all of its
obligations with respect to such Permits and no event has occurred that allows, or after notice or
lapse of time would allow, revocation or termination thereof or results in any other material
impairment of the rights of the Company thereunder. Except as may be required under the Securities
Act and state Blue Sky laws, no other Permits are required to enter into, deliver and perform this
Agreement and to issue and sell the Securities.



               (k) At the earliest time after the filing of the Registration Statement that the Company or
another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the
Rules) of the Securities and at the date hereof, the Company was not and is not an “ineligible
issuer,” as defined in Rule 405 of the Rules, including (but not limited to) the



S-7









 




Company or any other subsidiary in the preceding three years not having been convicted of a
felony or misdemeanor or having been made the subject of a judicial or administrative decree or
order as described in Rule 405 of the Rules.




               (l) Each of the Company and its subsidiaries owns, or possesses legally enforceable rights to
use, all patents, patent rights, inventions, trademarks, trademark registrations, trade names,
service marks, service mark registrations, copyrights, copyright applications, licenses, know-how,
trade secrets and other similar rights and proprietary knowledge (collectively, “Intellectual
Property”) used in the conduct of their respective businesses, as presently conducted
(collectively, “Company Intellectual Property”). Except as described in the Registration
Statement, the General Disclosure Package and the Prospectus, (i) the business of the Company and
its subsidiaries as now conducted and does not infringe or conflict with any Intellectual Property
or franchise right of any person, and (ii) no claim has been made against the Company or any of its
subsidiaries alleging the infringement by the Company, any of its subsidiaries, any of their
respective licensees or other third parties of any Intellectual Property or franchise right of any
person, except for such as would not reasonably be expected to have a Material Adverse Effect. Each
employee of and consultant to the Company and its subsidiaries has entered into a confidentiality
and invention assignment agreement in favor of the Company or its applicable subsidiary as a
condition of the employment or retention of services of such employee or consultant, except where
failure to enter into such an agreement would not reasonably be expected to have a Material Adverse
Effect. To the Company’s knowledge, (i) there is no third party with any right to any Company
Intellectual Property that conflict with the rights of the Company, its subsidiaries or their
respective licensees thereto, (ii) there is no infringement by any third parties of any Company
Intellectual Property, (iii) there is no pending or threatened action, suit, proceeding or other
claim by any third parties challenging the rights of the Company, any of its subsidiaries or their
respective licensees in or to, or the validity or scope of, any Company Intellectual Property, and
there are no facts that would form a reasonable basis for any such claim, (iv) there is no pending
or threatened action, suit, proceeding or other claim by any third party that the Company, any of
its subsidiaries or any of their respective licensees, infringes or otherwise violates, or would
infringe or otherwise violate upon commercialization of the Company’s products and product
candidates, any Intellectual Property of any third parties, and there are no facts that would form
a reasonable basis for any such claim, and (v) there is no patent or patent application that
contains claims that conflict with any Company Intellectual Property that would, in each case, have
a Material Adverse Effect.



               (m) The Company and its subsidiaries are the exclusive owners of all right, title and interest
in and to each of the patents and patent applications described as being owned by them in the
Registration Statement, the General Disclosure Package and the Prospectus (collectively, the
“Patents”); the Company and its subsidiaries have valid rights to use each of the Patents as
currently used by the Company or its subsidiaries, in each case, as described in the Registration
Statement, the General Disclosure Package and the Prospectus, if any; all such Patents have been
properly prepared as to form and have been assigned solely to the Company or its subsidiaries,
which assignments are either recorded in and proclaimed by the State Intellectual Property Office
of the People’s Republic of China (the “PRC”) and/or other relevant PRC intellectual property
administrative authority (the “PRC Intellectual Property Authority”) or other foreign patent
office, as applicable, or have been submitted for recording in



S-8









 




the PRC Intellectual Property Authority or other foreign patent office, as applicable; and
each such pending Patent is being diligently prosecuted by the Company or its subsidiaries; to the
extent that a Patent was acquired by the Company or its subsidiaries pursuant to an assignment,
such assignment is valid, binding and enforceable, and all PRC governmental approvals in respect of
such assignment have been validly obtained and are in full force and effect; the Patents have been
duly maintained and are in full force and in effect; no security interests or other liens have been
created on or with respect to any of the Patents.




               (n) Each of the Company and its subsidiaries has good and marketable title in fee simple to
all real property owned by it and good and marketable title to all other property owned by it, in
each case free and clear of all liens, encumbrances, claims, security interests and defects, except
such as do not materially affect the value of such property and do not materially interfere with
the use made of such property by the Company and its subsidiaries. All property held under lease
by the Company and its subsidiaries is held by them under valid, existing and enforceable leases,
free and clear of all liens, encumbrances, claims, security interests and defects, except such as
are not material and do not materially interfere with the use made or proposed to be made of such
property by the Company and its subsidiaries.



               (o) Subsequent to the respective dates as of which information is given in the Registration
Statement and the Prospectus, (i) there has not been any event which could have a Material Adverse
Effect; (ii) none of the Company nor any of its subsidiaries has sustained any loss or interference
with its assets, businesses or properties (whether owned or leased) from fire, explosion,
earthquake, flood or other calamity, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree which would have a
Material Adverse Effect; and (iii) since the date of the latest balance sheet included or
incorporated by reference in the Registration Statement, the General Disclosure Package and the
Prospectus, and except as disclosed in the Registration Statements, General Disclosure Package and
the Prospectus, neither the Company nor its subsidiaries has (A) issued any securities or incurred
any liability or obligation, direct or contingent, for borrowed money, except such liabilities or
obligations incurred in the ordinary course of business, (B) entered into any transaction not in
the ordinary course of business or (C) declared or paid any dividend or made any distribution on
any shares of its stock or redeemed, purchased or otherwise acquired or agreed to redeem, purchase
or otherwise acquire any shares of its capital stock.



               (p) There is no document, contract or other agreement required to be described in the
Registration Statement, the General Disclosure Package or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as required by the Securities
Act or Rules. Each description of a contract, document or other agreement in the Registration
Statement, the General Disclosure Package or the Prospectus accurately reflects in all respects the
material terms of the underlying contract, document or other agreement. Each contract, document or
other agreement described in the Registration Statement, the General Disclosure Package or the
Prospectus or listed in the Exhibits to the Registration Statement or incorporated by reference is
in full force and effect and is valid and enforceable by and against the Company or its subsidiary,
as the case may be, in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and by general



S-9









 




equitable principles. None of the Company nor any of its subsidiaries (if a subsidiary is a
party), nor to the Company’s knowledge, any other party is in default in the observance or
performance of any term or obligation to be performed by it under any such agreement, and no event
has occurred which with notice or lapse of time or both would constitute such a default, in any
such case which default or event, individually or in the aggregate, would have a Material Adverse
Effect. No default exists, and no event has occurred which with notice or lapse of time or both
would constitute a default, in the due performance and observance of any term, covenant or
condition, by the Company or any of its subsidiaries (if a subsidiary is a party thereto) of any
other agreement or instrument to which the Company or any of its subsidiaries is a party or by
which Company or its properties or business or a subsidiary or its properties or business may be
bound or affected which default or event, individually or in the aggregate, would have a Material
Adverse Effect.




               (q) The statistical, scientific and market-related data included in the Registration
Statement, the General Disclosure Package or the Prospectus are based on or derived from sources
that the Company believes to be reliable and accurate.



               (r) None of the Company nor any of its subsidiaries (i) is in violation of its certificate or
articles of incorporation, by-laws, certificate of formation, limited liability company agreement,
partnership agreement or other organizational documents, (ii) is in default under, and no event has
occurred which, with notice or lapse of time, or both, would constitute a default under, or result
in the creation or imposition of any lien, charge, mortgage, pledge, security interest, claim,
limitation on voting rights, equity, trust or other encumbrance, preferential arrangement, defect
or restriction of any kind whatsoever, upon, any property or assets of the Company or any
subsidiary pursuant to, any bond, debenture, note, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject, or (iii) is in violation of any statute, law,
rule, regulation, ordinance, directive, judgment, decree or order of any judicial, regulatory or
other legal or governmental agency or body, foreign or domestic, except (in the case of clauses
(ii) and (iii) above) for violations or defaults that could not (individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect.



               (s) The Company has full legal right, corporate power and authority to enter into this
Agreement and perform the transactions contemplated hereby. This Agreement has been duly and
validly authorized, executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company enforceable against the Company in accordance with its terms,
except as rights to indemnity under Section 5 of the Agreement may be limited by applicable law and
as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors’ rights generally and by general
equitable principles. The Warrants have been duly and validly authorized, executed and delivered by
the Company and constitute a legal, valid and binding obligation of the Company enforceable against
the Company in accordance with their terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement
of creditors’ rights generally and by general equitable principles. All necessary corporate action
has been duly and validly taken by the Company to authorize the execution, delivery and performance
of this
Agreement and the Warrants and the issuance and sale of the Securities and the Warrant Shares
by the Company.



S-10









 





               (t) Except as would not be reasonably expected to have a Material Adverse Effect, neither the
execution, delivery and performance of this Agreement and the Warrants by the Company nor the
consummation of any of the transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Securities and the Warrant Shares) will give rise to a
right to terminate or accelerate the due date of any payment due under, or conflict with or result
in the breach of any term or provision of, or constitute a default (or an event which with notice
or lapse of time or both would constitute a default) under, or require any consent or waiver under,
or result in the execution or imposition of any lien, charge or encumbrance upon any properties or
assets of the Company or its subsidiaries pursuant to the terms of, any indenture, mortgage, deed
of trust or other agreement or instrument to which the Company or any of its subsidiaries is a
party or by which either the Company or its subsidiaries or any of their respective properties or
businesses is bound, or any franchise, license, permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or any of its subsidiaries or violate any provision of the
charter or by-laws of the Company or any of its subsidiaries except for such consents or waivers
which have already been obtained and are in full force and effect.



               (u) The Company has authorized and outstanding capital stock at September 30, 2008 as set
forth under the caption “Capitalization” in the Registration Statement, the General Disclosure
Package and the Prospectus, and since such date there has been no change in the capital stock of
the Company except for issuances pursuant to employee benefit plans described in the Registration
Statement, the General Disclosure Package and the Prospectus or upon exercise of outstanding
warrants described in the Prospectus. The certificates evidencing the Securities are in due and
proper legal form and have been duly authorized for issuance by the Company. All of the issued and
outstanding shares of Common Stock have been duly and validly issued and are fully paid and
nonassessable. There are no statutory preemptive or other similar rights to subscribe for or to
purchase or acquire any shares of Common Stock of the Company or any of its subsidiaries or any
such rights pursuant to its Certificate of Incorporation or by-laws or any agreement or instrument
to or by which the Company or any of its subsidiaries is a party or bound. The Company has
reserved and kept available for the exercise of the Warrants such number of authorized but unissued
shares as are sufficient to permit the exercise in full of the Warrants. The Shares, when delivered
by the Company pursuant to this Agreement, and the Warrant Shares, when issued upon exercise of the
Warrants, will be duly and validly issued, fully paid and nonassessable and none of them will be
issued in violation of any preemptive or other similar right. Except as disclosed in the
Registration Statement, the General Disclosure Package and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and there is no commitment, plan or
arrangement to issue, any share of stock of the Company or any of its subsidiaries or any security
convertible into, or exercisable or exchangeable for, such stock. The exercise price of each
option to acquire Common Stock (each, a “Company Stock Option”) is no less than the fair market
value of a share of Common Stock as determined on the date of grant of such Company Stock Option.
All grants of Company Stock Options were duly approved by the Company’s board of directors, made in
accordance with the terms of the Company’s applicable employee benefit plan and all



S-11









 




applicable laws, recorded in the Company’s financial statements in accordance with generally
accepted accounting principles, and no such grants involved any “back dating”, “forward dating,”
“spring loading” or similar practices with respect to the effective date of grant. The Common
Stock and the Securities and the Warrant Shares conform in all material respects to all statements
in relation thereto contained in the Registration Statement, the General Disclosure Package and the
Prospectus. All outstanding shares of capital stock of each of the Company’s subsidiaries have
been duly authorized and validly issued, and are fully paid and nonassessable and are owned
directly by the Company or by another wholly-owned subsidiary of the Company free and clear of any
security interests, liens, encumbrances, equities or claims, other than those described in the
Registration Statement, the General Disclosure Package and the Prospectus.




               (v) No holder of any security of the Company has any right, which has not been waived, to have
any security owned by such holder included in the Registration Statement or to demand registration
of any security owned by such holder for a period of 90 days after the date of this Agreement.



               (w) There are no legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its subsidiaries could individually
or in the aggregate have a Material Adverse Effect; and, to the knowledge of the Company, no such
proceedings are threatened or contemplated by governmental authorities or threatened by others.



               (x) None of the Company nor any of its subsidiaries is involved in any labor dispute nor, to
the knowledge of the Company, is any such dispute threatened, which dispute would have a Material
Adverse Effect. The Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers or contractors which would have a Material Adverse
Effect. The Company is not aware of any threatened or pending litigation between the Company or its
subsidiaries and any of its executive officers which, if adversely determined, could have a
Material Adverse Effect and has no reason to believe that such officers will not remain in the
employment of the Company.



               (y) No transaction has occurred between or among the Company and any of its officers or
directors, shareholders or any affiliate or affiliates of any such officer or director or
shareholder that is required to be described in and is not described in the Registration Statement,
the General Disclosure Package and the Prospectus.



               (z) The Company has not taken, nor will it take, directly or indirectly, any action designed
to or which might reasonably be expected to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation (as such terms are
used in Regulation M promulgated under the Exchange Act) of the price of the Common Stock or any
security of the Company to facilitate the sale or resale of any of the Securities.



               (aa) The Company and each of its subsidiaries has filed all Federal, state, local and foreign
tax returns which are required to be filed through the date hereof, which



S-12









 




returns are true and correct in all material respects or has received timely extensions
thereof, and has paid all taxes shown on such returns and all assessments received by it to the
extent that the same are material and have become due. There are no tax audits or investigations
pending, which if adversely determined would have a Material Adverse Effect; nor are there any
material proposed additional tax assessments against the Company or any of its subsidiaries.




               (bb) The Shares and the Warrant Shares have been duly authorized for listing on the National
Association of Securities Dealers Automated Quotation (“Nasdaq”) Global Market System. The Company
has taken no action designed to, or likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act or the listing of the Common Stock on the Nasdaq Global
Market, nor has the Company received any notification that the Commission or the Nasdaq Global
Market is contemplating terminating such registration or listing.



               (cc) Other than as described in the Registration Statement, the General Disclosure Package and
the Prospectus, each subsidiary of the Company is not currently prohibited, directly or indirectly,
under any agreement or other instrument to which any such subsidiary is a party or is subject, from
paying any dividends to the Company, from making any other distribution on any subsidiary’s capital
stock, from repaying to the Company any loans or advances to any subsidiary from the Company or
from transferring any of such subsidiary’s properties or assets to the Company. Other than as
described in the Registration Statement, the General Disclosure Package and the Prospectus,
dividends declared with respect to after-tax retained earnings on the equity interests of any
subsidiary of the Company may, under the current laws and regulations of the PRC, be paid to the
Company in U.S. dollars, subject to the successful completion of PRC formalities required for such
remittances, and all such dividends and other distributions will not be subject to withholding or
other taxes under the laws and regulations of the PRC and are otherwise free and clear of any other
tax, withholding or deduction in the PRC, and without the necessity of obtaining any consents,
approvals, authorizations, orders, registrations, clearances, or qualifications with any
governmental agency in the PRC.



               (dd) The books, records and accounts of the Company and its subsidiaries accurately and fairly
reflect in all material respects, the transactions in, and dispositions of, the assets of, and the
results of operations of, the Company and its subsidiaries.



               (ee) Other than as described in the Registration Statement, the General Disclosure Package and
the Prospectus, the Company has established and maintains disclosure controls and procedures (as
such term is defined in Rule 13a-15 under the Exchange Act), which: (i) are designed to ensure that
material information relating to the Company is made known to the Company’s principal executive
officer and its principal financial officer by others within the Company, particularly during the
periods in which the periodic reports required under the Exchange Act are required to be prepared;
(ii) provide for the periodic evaluation of the effectiveness of such disclosure controls and
procedures at the end of the periods in which the periodic reports are required to be prepared; and
(iii) are effective in all material respects to perform the functions for which they were
established.



S-13









 





               (ff) Other than as described in the Registration Statement, the General Disclosure Package and
the Prospectus, based on the evaluation of its disclosure controls and procedures, the Company is
not aware of (i) any significant deficiency in the design or operation of internal controls which
could adversely affect the Company’s ability to record, process, summarize and report financial
data or any material weaknesses in internal controls; or (ii) any fraud, whether or not material,
that involves management or other employees who have a role in the Company’s internal controls.



               (gg) Other than as described in the Registration Statement, the General Disclosure Package and
the Prospectus, the Company and each of its subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to assets is permitted
only in accordance with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Other than as described in the
Registration Statement, the General Disclosure Package and the Prospectus, the Company and each of
its subsidiaries’ internal controls over financial reporting are effective.



               (hh) Except as described in the Registration Statement, the General Disclosure Package and the
Prospectus and as pre-approved in accordance with the requirements set forth in Section 10A of the
Exchange Act, the Auditors have not been engaged by the Company to perform any “prohibited
activities” (as defined in Section 10A of the Exchange Act).



               (ii) Except as described in the Registration Statement, the General Disclosure Package and the
Prospectus, there are no material off-balance sheet arrangements (as defined in Item 303 of
Regulation S-K) that have or are reasonably likely to have a material current or future effect on
the Company’s financial condition, revenues or expenses, changes in financial condition, results of
operations, liquidity, capital expenditures or capital resources.



               (jj) The Company’s board of directors has validly appointed an audit committee whose
composition satisfies the requirements of Rule 4350(d)(2) of the Rules of the Nasdaq Stock Market
(the “Nasdaq Rules”) and the Company’s board of directors and/or the audit committee has adopted a
charter that satisfies the requirements of Rule 4350(d)(1) of the Nasdaq Rules. The audit
committee has reviewed the adequacy of its charter within the past twelve months.



               (kk) There is and has been no failure on the part of the Company or any of its directors or
officers, in their capacities as such, to comply with any applicable provision of the
Sarbanes-Oxley Act of 2002, any related rules and regulations promulgated by the Commission and
corporate governance requirements under the Nasdaq Rules, including, without limitation, Section
402 related to loans and Sections 302 and 906 related to certifications.



S-14









 





               (ll) The Company and its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are customary in the businesses
in which they are engaged or propose to engage after giving effect to the transactions described in
the Registration Statement, the General Disclosure Package and the Prospectus; all policies of
insurance and fidelity or surety bonds insuring the Company or any of its subsidiaries or the
Company’s or its subsidiaries’ respective businesses, assets, employees, officers and directors are
in full force and effect; the Company and each of its subsidiaries are in compliance with the terms
of such policies and instruments in all material respects; and neither the Company nor any
subsidiary of the Company has any reason to believe that it will not be able to renew its existing
insurance policies and instruments as and when they expire or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that is materially greater
than the cost of its current insurance coverage. Neither the Company nor any of its subsidiaries
has been denied any insurance coverage which it has sought or for which it has applied.



               (mm) Each approval, consent, order, authorization, designation, declaration or filing of, by
or with any regulatory, administrative or other governmental body necessary in connection with the
execution and delivery by the Company of this Agreement and the consummation of the transactions
herein contemplated required to be obtained or performed by the Company (except such additional
steps as may be required by the Financial Industry Regulatory Authority (“FINRA”) or may be
necessary to qualify the Securities and the Warrant Shares under the state securities or Blue Sky
laws) has been obtained or made and is in full force and effect.



               (nn) There are no affiliations with FINRA among the Company’s officers, directors or, to the
knowledge of the Company, any five percent or greater stockholder of the Company, except as set
forth in the Registration Statement or otherwise disclosed in writing to the Placement Agents.



               (oo) (i) Each of the Company, its subsidiaries and its licensees is in compliance in all
material respects with all federal, state, local and foreign rules, laws and regulation relating to
the use, treatment, storage and disposal of toxic substances and protection of health or the
environment which are applicable to its business (“Environmental Laws”); (ii) neither the Company
nor its subsidiaries or licensees has received any notice from any governmental authority or third
party of an asserted claim under Environmental Laws; (iii) each of the Company, its subsidiaries
and licensees has received all permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and is in compliance with all terms and conditions of
any such permit, license or approval; (iv) to the Company’s knowledge, no facts currently exist
that will require the Company or any of its subsidiaries to make future material capital
expenditures to comply with Environmental Laws; (v) no property which is or has been owned, leased
or occupied by the Company or its subsidiaries has been designated as a Superfund site pursuant to
the Comprehensive Environmental Response, Compensation of Liability Act of 1980, as amended (42
U.S.C. Section 9601, et. seq.) (“CERCLA”) or otherwise designated as a contaminated site under
applicable foreign, state or local law. Neither the Company nor any of its subsidiaries has been
named as a “potentially responsible party” under the CERCLA.



S-15









 





               (pp) In the ordinary course of its business, the Company periodically reviews the effect of
Environmental Laws on the business, operations and properties of the Company and its subsidiaries,
in the course of which the Company identifies and evaluates 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 any permit, license or approval,
any related constraints on operating activities and any potential liabilities to third parties).
On the basis of such review, the Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a Material Adverse Effect.



               (qq) The Company and its subsidiaries hold and are operating in compliance in all material
respects with such exceptions, permits, licenses, franchises, authorizations and clearances of the
PRC State Food and Drug Administration (“SFDA”) and/or any committee thereof required, for the
conduct of its business as currently conducted (collectively, the “SFDA Permits”), and all such
SFDA Permits are in full force and effect. The Company has fulfilled and performed all of its
obligations in all material respects with respect to the SFDA Permits, and, no event has occurred
which allows, or after notice or lapse of time would allow, revocation or termination thereof or
results in any other impairment of the rights in any material respect of the holder of any SFDA
Permit.



               (rr) The Company and its subsidiaries: (i) are and at all times have been in compliance in all
material respects with all statutes, rules, regulations, or guidances applicable to the ownership,
testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling,
promotion, sale, offer for sale, storage, import, export or disposal of any product under
development, manufactured or distributed by the Company (“Applicable Laws”); (ii) has not received
any notice of adverse finding, warning letter, untitled letter or other correspondence or notice
from the SFDA or any other federal, state, local or foreign governmental or regulatory authority
alleging or asserting noncompliance in any material respect with any Applicable Laws or any
licenses, certificates, approvals, clearances, authorizations, permits and supplements or
amendments thereto required by any such Applicable Laws (“Authorizations”); (iii) has not received
notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or
other action from the SFDA or any other federal, state, local or foreign governmental or regulatory
authority or third party alleging that any product operation or activity is in violation in any
material respect of any Applicable Laws or Authorizations and has no knowledge that the SFDA or any
other federal, state, local or foreign governmental or regulatory authority or third party is
considering any such claim, litigation, arbitration, action, suit, investigation or proceeding;
(iv) has not received notice that the SFDA or any other federal, state, local or foreign
governmental or regulatory authority has taken, is taking or intends to take action to limit,
suspend, modify or revoke in any material respect any Authorizations and has no knowledge that the
SFDA or any other federal, state, local or foreign governmental or regulatory authority is
considering such action; (v) has filed, obtained, maintained or submitted all reports, documents,
forms, notices, applications, records, claims, submissions and supplements or amendments as
required by any Applicable Laws or Authorizations and that all such reports, documents, forms,
notices, applications, records, claims, submissions and supplements or amendments were complete and
correct in all material respects on the date filed (or were corrected or supplemented by a
subsequent submission); and (vi) has



S-16









 




not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be
initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, post
sale warning, “dear doctor” letter, or other notice or action relating to the alleged lack of
safety or efficacy of any product or any alleged product defect or violation and, to the Company’s
knowledge, no third party has initiated, conducted or intends to initiate any such notice or
action.




               (ss) The Company is not and, after giving effect to the offering and sale of the Securities
and the application of proceeds thereof as described in the Registration Statement, the General
Disclosure Package and the Prospectus, will not be an “investment company” within the meaning of
the Investment Company Act of 1940, as amended (the “Investment Company Act”).



               (tt) The Company or any other person associated with or acting on behalf of the Company
including, without limitation, any director, officer, agent or employee of the Company or its
subsidiaries, has not, directly or indirectly, while acting on behalf of the Company or its
subsidiaries (i) used any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political parties or campaigns
from corporate funds; (iii) violated in any material respect any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any other unlawful payment.



               (uu) The operations of the Company and its subsidiaries are and have been conducted at all
times in compliance in all material respects with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by any governmental
agency (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 it subsidiaries with respect to the Money Laundering Laws is pending, or to the knowledge of the
Company, threatened.



               (vv) 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.



               (ww) Except as described in the Registration Statement, the General Disclosure Package and the
Prospectus, the Company has not sold or issued any shares of Common Stock during the six-month
period preceding the date of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act, other than shares
issued pursuant to employee benefit plans, qualified stock options plans or other employee
compensation plans or pursuant to outstanding options, rights or warrants.



S-17









 





               (xx) The Company has fulfilled its obligations, if any, under the minimum funding standards of
Section 302 of the U.S. Employee Retirement Income Security Act of 1974 (“ERISA”) and the
regulations and published interpretations thereunder with respect to each “plan” as defined in
Section 3(3) of ERISA and such regulations and published interpretations in which its employees are
eligible to participate and each such plan is in compliance in all material respects with the
presently applicable provisions of ERISA and such regulations and published interpretations. No
“Reportable Event” (as defined in 12 ERISA) has occurred with respect to any “Pension Plan” (as
defined in ERISA) for which the Company could have any liability. Other than as described in the
Registration Statement, the Company has no obligation to provide retirement, death or disability
benefits to any of the present or past employees of the Company or any subsidiary, or to any other
person; the Company and its subsidiaries are in compliance in all material respects with all
applicable laws relating to employee benefits.



               (yy) None of the Company, its directors or officers has distributed or will distribute prior
to the later of (i) the Closing Date, and (ii) completion of the distribution of the Securities,
any offering material in connection with the offering and sale of the Securities and the Warrant
Shares other than the Prospectus, the Registration Statement and other materials, if any, permitted
by the Securities Act and consistent with Section 5(e) below.



               (zz) Other than as described in the Registration Statement, the General Disclosure Package and
the Prospectus, the Company is not a party to any contract, agreement or understanding with any
person that would give rise to a valid claim against the Company or the Placement Agents for a
brokerage commission, finder’s fee or like payment in connection with the offering and sale of the
Securities.



               (aaa) The Company was subject to the requirements of Section 12 or 15(d) of the Exchange Act
and filed all the material required to be filed pursuant to Sections 13, 14 or 15(d) for a period
of at least thirty-six calendar months immediately preceding the filing of the Registration
Statement. As of December 31, 2008, the aggregate market value of the Common Stock held by
non-affiliates of the Company was $100 million or more.



          3. Conditions of the Placement Agents’ Obligations. The obligations of the Placement
Agents under this Agreement are several and not joint. The respective obligations of the Placement
Agents are subject to each of the following terms and conditions:




               (a) Notification that the Registration Statement has become effective shall have been received
by the Placement Agents and the Prospectus shall have been timely filed with the Commission in
accordance with Section 4(a) of this Agreement and any material required to be filed by the Company
pursuant to Rule 433(d) of the Rules shall have been timely filed with the Commission in accordance
with such rule.



S-18









 





               (b) No order preventing or suspending the use of the Prospectus or any “free writing
prospectus” (as defined in Rule 405 of the Rules) shall have been or shall be in effect and no
order suspending the effectiveness of the Registration Statement shall be in effect and no
proceedings for such purpose shall be pending before or threatened by the Commission, and any
requests for additional information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied with to the
satisfaction of the Commission and the Placement Agents.



               (c) The representations and warranties of the Company contained in this Agreement and in the
certificates delivered pursuant to Section 3(d) shall be true and correct when made in all material
respects and on and as of the Closing Date as if made on such date; provided however, that such
materiality qualifier shall not be applicable to any representation or warranty that are already
qualified or modified by materiality in the text thereof. The Company shall have performed all
covenants and agreements and satisfied all the conditions contained in this Agreement required to
be performed or satisfied by it at or before the Closing Date.



               (d) The Placement Agents shall have received on the Closing Date a certificate, addressed to
the Placement Agents and dated the Closing Date, of the chief executive or chief operating officer
and the chief financial officer or chief accounting officer of the Company to the effect that: (i)
the representations, warranties and agreements of the Company in this Agreement were true and
correct in all material respects when made and are true and correct as of the Closing Date,
provided however, that such materiality qualifier shall not be applicable to any representation or
warranty that are already qualified or modified by materiality in the text thereof; (ii) the
Company has performed all covenants and agreements in all material respects and satisfied all
conditions contained herein in all material respects; (iii) they have carefully examined the
Registration Statement, the Prospectus, the General Disclosure Package, and any individual Issuer
Free Writing Prospectus and, in their opinion (A) as of the Effective Date, (1) the Registration
Statement and Base Prospectus did not include, (2) as of the Applicable Time, neither (x) the
General Disclosure Package, nor (y) any individual Issuer Free Writing Prospectus, when considered
together with the General Disclosure Package, included, and (3) as of its date and the Closing
Date, the Prospectus, including the Prospectus Supplement, 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, in light of the circumstances under which they were made,
not misleading, and (B) since the Applicable Time no event has occurred which should have been set
forth in a supplement or otherwise required an amendment to the Registration Statement, the General
Disclosure Package or the Prospectus; and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and, to their knowledge, no proceedings for that purpose
have been instituted or are pending under the Securities Act.



               (e) The Placement Agents shall have received: (i) simultaneously with the execution of this
Agreement signed letters from the Auditors addressed to the Placement Agents and dated the date of
this Agreement, in form and substance reasonably satisfactory to the Placement Agents, containing
statements and information of the type ordinarily included in accountants’ “comfort letters” to
underwriters with respect to the financial statements and certain financial information contained
in the Registration Statement and the General Disclosure



S-19









 




Package, and (ii) on the Closing Date, signed letters from the Auditors addressed to the
Placement Agents and dated the date of the Closing Date, in form and substance reasonably
satisfactory to the Placement Agents containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement and the Prospectus.




               (f) The Placement Agents shall have received on the Closing Date from Morgan, Lewis & Bockius
LLP, counsel for the Company, (i) an opinion, addressed to the Placement Agents and dated the
Closing Date, stating in effect the matters set forth on Exhibit C-1 attached hereto, and
(ii) a negative assurance letter addressed to the Placement Agents and dated the Closing Date,
stating in effect the matters set forth on Exhibit C-2 attached hereto.



               (g) The Placement Agents shall have received on the Closing Date from the Jun He Law Offices,
Chinese counsel for the Placement Agents, an opinion, addressed to the Placement Agents and dated
the Closing Date, stating in effect the matters set forth on Exhibit D attached hereto.



               (h) The Placement Agents shall have received on the Closing Date from X.J. Wang & Co., Hong
Kong counsel for the Placement Agents, an opinion, addressed to the Placement Agents and dated the
Closing Date, stating in effect the matters set forth on Exhibit E attached hereto.



               (i) All proceedings taken in connection with the sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Placement Agents, and their counsel
and the Placement Agents shall have received from Latham & Watkins LLP, a favorable opinion,
addressed to the Placement Agents and dated the Closing Date, covering such matters as are
customarily covered in transactions of this type, and the Company shall have furnished to Latham &
Watkins LLP such documents as they may reasonably request for the purpose of enabling them to pass
upon such matters.



               (j) Each director, executive officer and “key employee” (a list of which is contained in
Schedule 3 hereto) of the Company and each stockholder of the Company listed on Schedule 3 has
delivered to the Placement Agents his enforceable written lock-up agreement in the form attached to
this Agreement as Exhibit B hereto (the “Lock-Up Agreement”).



               (k) The Shares and the Warrant Shares shall have been approved for listing on the Nasdaq
Global Market.



               (l) The Placement Agents shall be reasonably satisfied that since the respective dates as of
which information is given in the Registration Statement, the General Disclosure Package and the
Prospectus, (i) there shall not have been any material change in the capital stock of the Company
or any material change in the indebtedness (other than in the ordinary course of business) of the
Company, (ii) except as set forth or contemplated by the Registration Statement, the General
Disclosure Package or the Prospectus, no material oral or written agreement or other transaction
shall have been entered into by the Company or any



S-20









 




subsidiary that is not in the ordinary course of business or that could reasonably be expected
to result in a material reduction in the future earnings of the Company, (iii) no loss or damage
(whether or not insured) to the property of the Company or any subsidiary shall have been sustained
that had or could reasonably be expected to have a Material Adverse Effect, (iv) no legal or
governmental action, suit or proceeding affecting the Company or any subsidiary or any of their
properties that is material to the Company or that affects or could reasonably be expected to
affect the transactions contemplated by this Agreement shall have been instituted or threatened and
(v) there shall not have been any material change in the assets, properties, financial condition or
in the results of operations, business affairs or business prospects of the Company or its
subsidiaries considered as a whole that makes it impractical or inadvisable in the Placement
Agents’ judgment to proceed with the purchase or offering of the Securities as contemplated hereby.




               (m) The Company shall have furnished or caused to be furnished to the Placement Agents such
further certificates or documents as the Placement Agents shall have reasonably requested.



          4. Covenants of the Company.




               (a) The Company covenants and agrees as follows:




     (i) The Company shall prepare the Prospectus Supplement in a form
approved by the Placement Agents and file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than the Commission’s close of
business on the second business day following the execution and delivery of
this Agreement, or, if applicable, such earlier time as may be required by
the Rules. The Company shall prepare the Specified IFWP in the form approved
by the Placement Agents and attached as Schedule 1 hereto and will file the
Specified IFWP pursuant to Rule 433(d) within the time require by such rule.
The Company will file with the Commission all Issuer Free Writing
Prospectuses in the time and manner required under Rules 433(d).




     (ii) The Company shall promptly advise the Placement Agents in writing
(A) when any post-effective amendment to the Registration Statement shall
have become effective or any supplement to the Prospectus shall have been
filed, (B) of any request by the Commission for any amendment of the
Registration Statement or the Prospectus or for any additional information,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any “free writing prospectus”, as defined in Rule 405
of the Rules, or the institution or threatening of any proceeding for that
purpose and (D) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities and the
Warrant Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such



S-21









 







purpose. The Company shall not file any amendment of the Registration
Statement or supplement to the Prospectus or any document incorporated by
reference in the Registration Statement or any Issuer Free Writing
Prospectus unless the Company has furnished each Placement Agent a copy for
its review prior to filing and shall not file any such proposed amendment or
supplement to which the Placement Agents reasonably object. The Company
shall use its best efforts to prevent the issuance of any such stop order
and, if issued, to obtain as soon as possible the withdrawal thereof.




     (iii) If, at any time when a prospectus relating to the Securities and
the Warrant Shares (or, in lieu thereof, the notice referred to Rule 173(a)
of the Rules) is required to be delivered under the Securities Act and the
Rules, any event occurs 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 any material fact necessary to make the statements therein in
the light of the circumstances under which they were made not misleading, or
if it shall be necessary to amend or supplement the Prospectus to comply
with the Securities Act or the Rules, the Company promptly shall prepare and
file with the Commission, subject to the second sentence of paragraph (ii)
of this Section 4(a), an amendment or supplement which shall correct such
statement or omission or an amendment which shall effect such compliance.




     (iv) If at any time following issuance of an Issuer Free Writing
Prospectus there occurs an event or development as a result of which such
Issuer Free Writing Prospectus would conflict with the information contained
in the Registration Statement or would include an untrue statement of a
material fact 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 will promptly notify the Placement Agents and will promptly amend or
supplement, at its own expense, such Issuer Free Writing Prospectus to
eliminate or correct such conflict, untrue statement or omission.




     (v) The Company shall make generally available to its security holders
and to the Placement Agents as soon as practicable, through EDGAR or
otherwise, but not later than 45 days after the end of the 12-month period
beginning at the end of the fiscal quarter of the Company during which the
most recent Effective Date occurs (or 90 days if such 12-month period
coincides with the Company’s fiscal year), an earning statement (which need
not be audited) of the Company, covering such 12-month period, which shall
satisfy the provisions of Section 11(a) of the Securities Act or Rule 158 of
the Rules.




S-22











 






     (vi) The Company shall furnish to the Placement Agents and counsel for
the Placement Agents, without charge, upon their written request, signed
copies of the Registration Statement (including all exhibits thereto and
amendments thereof) and, so long as delivery of a prospectus by a Placement
Agent or dealer may be required by the Securities Act or the Rules, as many
copies of any Issuer Free Writing Prospectus and the Prospectus and any
amendments thereof and supplements thereto as the Placement Agents may
reasonably request. If applicable, the copies of the Registration
Statement, Issuer Free Writing Prospectus and Prospectus and each amendment
and supplement thereto furnished to the Placement Agents will be identical
to the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.




     (vii) The Company shall cooperate with the Placement Agents and their
counsel in endeavoring to qualify the Securities and the Warrant Shares for
offer and sale in connection with the offering under the laws of such
jurisdictions in the United States as the Placement Agents may designate and
shall maintain such qualifications in effect so long as required for the
distribution of the Securities; provided, however, that the Company shall
not be required in connection therewith, as a condition thereof, to qualify
as a foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation as doing business
in any jurisdiction.




     (viii) The Company, during the period when the Prospectus (or, in lieu
thereof, the notice referred to in Rule 173(a) of the Rules) is required to
be delivered under the Securities Act and the Rules or the Exchange Act,
will file all reports and other documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the Exchange Act within the
time periods required by the Exchange Act and the regulations promulgated
thereunder.




     (ix) On or before completion of this offering, the Company shall make
all filings required under applicable securities laws and by the Nasdaq
Global Market (including any required registration under the Exchange Act).




     (x) Prior to the Closing Date, the Company will issue no press release
or other communications directly or indirectly and hold no press conference
with respect to the Company, the financial condition or the earnings,
business affairs or business prospects of any of them, or the offering of
the Securities and the Warrant Shares without the prior written consent of
the Placement Agents unless in the judgment of the Company and its counsel,
and after notification to the Placement Agents, such press release or
communication is required by law.



S-23









 






     (xi) The Company will apply the net proceeds from the offering of the
Securities in the manner set forth under “Use of Proceeds” in the
Prospectus.



               (b) The Company agrees to pay, or reimburse if paid by the Placement Agents, whether or
not the transactions contemplated hereby are consummated or this Agreement is terminated,
all costs and expenses incident to the placement of the Securities and the Warrant Shares
and the performance of the obligations of the Company under this Agreement including those
relating to: (i) the preparation, printing, reproduction, filing and distribution of the
Registration Statement (including all exhibits thereto), the Prospectus, any Issuer Free
Writing Prospectus, all amendments and supplements to any of the foregoing documents, and
any document incorporated by reference in the Registration Statement, and the printing,
filing and distribution of this Agreement; (ii) the preparation and delivery of certificates
for the Securities and the Warrant Shares; (iii) the registration or qualification of the
Securities and the Warrant Shares for offer and sale under the securities or Blue Sky laws
of the various jurisdictions referred to in Section 4(a)(vii), including the reasonable fees
and disbursements of counsel for the Placement Agents in connection with such registration
and qualification and the preparation, printing, distribution and shipment of preliminary
and supplementary Blue Sky memoranda; (iv) the furnishing (including costs of shipping and
mailing) to the Placement Agents of copies of the Prospectus, any Issuer Free Writing
Prospectus, and all amendments or supplements to any of the foregoing, and of the several
documents required by this Section to be so furnished, as may be reasonably requested for
use in connection with the offering and sale of the Shares; (v) the filing fees of FINRA in
connection with its review of the terms of the public offering and reasonable fees and
disbursements of counsel for the Placement Agents in connection with such review; (vi)
inclusion of the Shares and the Warrant Shares for listing on the Nasdaq Global Market;
(vii) the costs and expenses of the Company relating to investor presentations in connection
with the marketing of the offering of the Securities and the Warrant Shares, including,
without limitation, expenses associated with the production of slides and graphics, fees and
expenses of any consultants engaged in connection with the presentations, travel and lodging
expenses of the representatives and officers of the Company and any such consultants; (viii)
all transfer taxes, if any, with respect to the sale and delivery of the Securities and the
Warrant Shares by the Company; and (ix) all out-of-pocket expenses (including the fees and
disbursements of counsel to the Placement Agents) incurred by the Placement Agents in
connection with this Agreement and the proposed sale of the Securities and the Warrant
Shares or in contemplation of performing their obligations hereunder; provided, however,
that if this offering is successfully closed, and except as otherwise contemplated in
Section 5 hereof, that the Company shall only be liable for (x) $50,000 of the out-of-pocket
expenses of the Placement Agents (other than fees and expenses of legal counsel); (y)
$150,000 of the fees and disbursements of United Statues counsel for the Placement Agents
and (z) the full amount of the fees and disbursements invoiced to the Placement Agents by
the Jun He Law Offices and X.J. Wang & Co.



S-24









 





               (c) The Company acknowledges and agrees that each of the Placement Agents has acted and
is acting solely in the capacity of a principal in an arm’s length transaction between the
Company, on the one hand, and the Placement Agents, on the other hand, with respect to the
offering of Securities contemplated hereby (including in connection with determining the
terms of the offering) and not as a financial advisor, agent or fiduciary to the Company or
any other person. Additionally, the Company acknowledges and agrees that the Placement
Agents have not and will not advise the Company or any other person as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction. The Company has consulted
with its own advisors concerning such matters and shall be responsible for making its own
independent investigation and appraisal of the transactions contemplated hereby, and the
Placement Agents shall have no responsibility or liability to the Company or any other
person with respect thereto, whether arising prior to or after the date hereof. Any review
by the Placement Agents of the Company, the transactions contemplated hereby or other
matters relating to such transactions have been and will be performed solely for the benefit
of the Placement Agents and shall not be on behalf of the Company. Other than pursuant to
the letter agreement dated January 9, 2009 between the Company and Philadelphia Brokerage
Corporation, to which Oppenheimer and Susquehanna are not parties, the Company agrees that
it will not claim that the Placement Agents, or any of them, has rendered advisory services
of any nature or respect, or owes a fiduciary duty to the company or any other person in
connection with any such transaction or the process leading thereto.



               (d) The Company represents and agrees that, unless it obtains the prior consent of the
Placement Agents, and each Placement Agent represents and agrees that, unless it obtains the
prior consent of the Company, it has not made and will not make any offer relating to the
Securities and the Warrant Shares that would constitute an “issuer free writing prospectus,”
as defined in Rule 433, or that would otherwise constitute a “free writing prospectus,” as
defined in Rule 405, required to be filed with the Commission. The Company has complied and
will comply with the requirements of Rule 433 under the Securities Act applicable to any
Issuer Free Writing Prospectus, including timely filing with the Commission where required,
legending and record keeping. The Company represents that is has satisfied and agrees that
it will satisfy the conditions set forth in Rule 433 of the Rules to avoid a requirement to
file with the Commission any Roadshow. The Company consents to the use by any Placement
Agent of a free writing prospectus that (a) is not an “issuer free writing prospectus” as
defined in Rule 433, and (b) contains only information describing the preliminary terms of
the Securities and the Warrant Shares or their offering.



          5. Indemnification.



               (a) The Company agrees to indemnify and hold harmless each Placement Agent and its affiliates
and their respective present and former directors, officers, employees, agents and controlling
persons within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(each such person, including each Placement Agent, a “PA Indemnified Party”) to the extent fully
permitted by law from and against any losses, claims,



S-25









 







damages and liabilities, joint or several (collectively, the “Damages”), to which such PA
Indemnified Party may become subject in connection with or otherwise relating to or arising from
(i) any transaction contemplated by this Agreement or the engagement of or performance of services
by a PA Indemnified Party hereunder or (ii) an untrue statement or an alleged untrue statement of a
material fact in the Registration Statement, General Disclosure Package, the Prospectus and any
Roadshow or the omission or alleged omission in the Registration Statement, General Disclosure
Package, the Prospectus and any Roadshow to state a material fact necessary in order to make a
statement not misleading in light of the circumstances under which it was made, and will reimburse
each PA Indemnified Party for all reasonable fees and expenses (including the reasonable fees and
expenses of counsel) (collectively, “Expenses”) as incurred in connection with investigating,
preparing or defending any threatened or pending claim, action, proceeding or investigation
(collectively, the “Proceedings”) arising therefrom, whether or not such PA Indemnified Party is a
formal party to such Proceedings, and in enforcing this Agreement; provided, however, that such
indemnity shall not inure to the benefit of any Placement Agent (or any person controlling such
Placement Agent) on account of any losses, claims, damages or liabilities arising from the sale of
the Securities if such untrue statement or omission or alleged untrue statement or omission was
made in any preliminary prospectus, Registration Statement, the General Disclosure Package, the
Prospectus, any Issuer Free Writing Prospectus or such amendment or supplement thereto, or in any
Blue Sky Application in reliance upon and in conformity with any of the Agents’ Information. The
Placement Agents, severally and not jointly, will indemnify and hold harmless the Company and its
affiliates and their respective present and former directors, officers, employees, agents and
controlling persons within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (each such person, including the Company, a “Company Indemnified Party,” and together
with the PA Indemnified Parties, each an “Indemnified Party”) to the extent fully permitted by law
from and against any Damages to which such Company Indemnified Party may become subject in
connection with or otherwise relating to or arising from any of the Agents’ Information and will
reimburse each Company Indemnified Party for all Expenses as incurred in connection with
investigating, preparing or defending any Proceedings arising therefrom, whether or not such
Company Indemnified Party is a formal party to such Proceedings, and in enforcing this Agreement.



               (b) The Company agrees not to enter into any waiver, release or settlement of any Proceeding
(whether or not any of the Placement Agents or any other Indemnified Party is a formal party to
such Proceeding) in respect of which indemnification may be sought hereunder without the prior
written consent of each Placement Agent (which consent will not be unreasonably withheld), unless
such waiver, release or settlement (i) includes an unconditional release of each Placement Agent
and each Indemnified Party from all liability arising out of such Proceeding and (ii) does not
contain any factual or legal admission by or with respect to any Indemnified Party or any adverse
statement with respect to the character, professionalism, expertise or reputation of any
Indemnified Party or any action or inaction of any Indemnified Party.



               (c) The indemnity, reimbursement and contribution obligations of the Company hereunder will be
in addition to any liability which the Company may have at common law or otherwise to any
Indemnified Party and will be binding upon and inure to the benefit of
any successors, assigns, heirs and personal representatives of the Company or an Indemnified
Party.



S-26









 





               (d) Any party that proposes to assert the right to be indemnified under this Section will,
promptly after receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such action, suit or
proceeding, enclosing a copy of all papers served. No indemnification provided for in Section 5(a)
shall be available to any party who shall fail to give notice as provided in this Section 5(d) if
the party to whom notice was not given was unaware of the proceeding to which such notice would
have related and was prejudiced by the failure to give such notice but the omission so to notify
such indemnifying party of any such action, suit or proceeding shall not relieve it from any
liability that it may have to any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and the approval by the
indemnified party of such counsel, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses, except as provided below and except for the reasonable costs
of investigation subsequently incurred by such indemnified party in connection with the defense
thereof. The indemnified party shall have the right to employ its counsel in any such action, but
the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i)
the employment of counsel by such indemnified party has been authorized in writing by the
indemnifying parties, (ii) the indemnified party shall have been advised by counsel that there may
be one or more legal defenses available to it which are different from or in addition to those
available to the indemnifying party (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party) or (iii) the
indemnifying parties shall not have employed counsel to assume the defense of such action within a
reasonable time after notice of the commencement thereof, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying parties. An indemnifying party
shall not be liable for any settlement of any action, suit, and proceeding or claim affected
without its written consent, which consent shall not be unreasonably withheld or delayed.



          6. Contribution. If, for any reason other than in accordance with this Agreement, the
indemnity provided for in Section 5(a) is unavailable to an Indemnified Party or insufficient to
hold an Indemnified Party harmless, then the Company will contribute to the amount paid or payable
by an Indemnified Party as a result of such Damages (including all Expenses incurred) in such
proportion as is appropriate to reflect the relative benefits to the Company and/or its
stockholders on the one hand, and each Placement Agent on the other hand, in connection with the
matters covered by this Agreement or, if the foregoing allocation is not permitted by applicable
law, not only such relative benefits but also the relative faults of such parties as well as any
relevant equitable considerations. The Company agrees that for purposes of this paragraph the
relative benefits to the Company and/or its stockholders and each Placement



S-27









 







Agent in connection with the matters covered by this Agreement will be deemed to be in the
same proportion that the total value paid or received or to be paid or received by the Company
and/or its stockholders in connection with the transactions contemplated by this Agreement, whether
or not consummated, bears to the fees paid to each Placement Agent under this Agreement; provided,
that in no event will the total contribution of all Indemnified Parties to all such Damages exceed
the amount of fees actually received and retained by each Placement Agent under this Agreement
(excluding any amounts received by each Placement Agent as reimbursement of expenses). Relative
fault shall be determined by reference to, among other things, whether any alleged untrue statement
or omission or any alleged conduct relates to information provided by the Company or other conduct
by the Company (or its employees or other agents) on the one hand, or by each Placement, on the
other hand. 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. For purposes of this Section 6, each person, if any, who controls a
Placement Agent within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Placement Agent, and each director
of the Company, each officer of the Company who signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of the Section 15 of the Securities Act or
Section 20 of the Exchange Act, shall have the same rights to contribution as the Company. Any
party entitled to contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for contribution may be
made against another party or parties under this Section 6, notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise than under this Section
7. No party shall be liable for contribution with respect to any action, suit, proceeding or claim
settled without its written consent. The Placement Agents’ obligations to contribute pursuant to
this Section 6 are several in proportion to their respective amounts of placement agent fees each
has actually received pursuant to this Agreement and not joint.



          7. Termination.



               (a) This Agreement may be terminated at any time prior to the Closing Date by Oppenheimer on
behalf of the Placement Agents by notifying the Company at any time at or before the Closing Date
in the absolute discretion of Oppenheimer if: (i) there has occurred any material adverse change in
the securities markets or any event, act or occurrence that has materially disrupted, or in the
opinion of Oppenheimer, will in the future materially disrupt, the securities markets or there
shall be such a material adverse change in general financial, political or economic conditions or
the effect of international conditions on the financial markets in the United States or the PRC is
such as to make it, in the judgment of Oppenheimer, inadvisable or impracticable to market the
Securities and the Warrant Shares or enforce contracts for the sale of the Securities and the
Warrant Shares; (ii) there has occurred any outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the United States or the PRC is
such as to make it, in the judgment of Oppenheimer, inadvisable or impracticable to market the
Securities and the Warrant Shares or enforce contracts for the sale of the Shares; (iii) trading in
the shares of Common Stock or any securities of the Company has



S-28









 







been suspended or materially limited by the Commission or trading generally on the Nasdaq
Global Market has been suspended or materially limited, or minimum or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for prices for securities have been required,
by any of said exchanges or by such system or by order of the Commission, FINRA, or any other
governmental or regulatory authority; (iv) a banking moratorium has been declared by any state or
Federal authority; or (v) in the judgment of Oppenheimer, there has been, since the time of
execution of this Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the assets, properties, financial condition, or in the
results of operations, business affairs or business prospects of the Company and its subsidiaries
considered as a whole, whether or not arising in the ordinary course of business.



               (b) If this Agreement is terminated pursuant to any of its provisions, the Company shall not
be under any liability to any Placement Agent, and no Placement Agent shall be under any liability
to the Company; provided, however, that if this Agreement is terminated by the Placement Agents
because of any failure, refusal or inability on the part of the Company to comply with the terms or
to fulfill any of the conditions of this Agreement, the Company will reimburse the Placement Agents
for all out-of-pocket expenses (including all fees and disbursements of their counsel) incurred by
them in connection with this Agreement and the proposed sale of the Securities and the Warrant
Shares or in contemplation of performing their obligations hereunder.



          8. Miscellaneous. The respective agreements, representations, warranties, indemnities
and other statements of the Company and the Placement Agents, as set forth in this Agreement or
made by or on behalf of them pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof) made by or on behalf
of any Placement Agent or the Company or any of their respective officers, directors or controlling
persons referred to in Sections 5 and 6 hereof, and shall survive delivery of and payment for the
Shares. In addition, the provisions of Sections 4(b), 5, 6 and 7 shall survive the termination or
cancellation of this Agreement.



          This Agreement has been and is made for the benefit of the Placement Agents, the Company and
their respective successors and assigns, and, to the extent expressed herein, for the benefit of
persons controlling any of the Placement Agents, or the Company, and directors and officers of the
Company, and their respective successors and assigns, and no other person shall acquire or have any
right under or by virtue of this Agreement. The term “successors and assigns” shall not include
any Investor merely because of such purchase.



          All notices and communications hereunder shall be in writing and mailed or delivered or by
telephone or telegraph if subsequently confirmed in writing, (a) if to the Placement Agents, to (1)
Oppenheimer & Co. Inc., 300 Madison Avenue, 4th Floor, New York, New York 10017
Attention: Andrew MacInnes, (2) Susquehanna Financial Group, LLLP 401 City Ave, Suite 220, Bala
Cynwyd, Pennsylvania 19004 and (3) Philadelphia Brokerage Corporation, 2 Radnor Corporate Center,
Suite 111, 100 Matsonford Road, Radnor, Pennsylvania 19087 and (b) if to the Company, to Chief
Financial Officer at BMP Sunstone Corporation, 600 W. Germantown Pike, Suite 400, Plymouth Meeting,
Pennsylvania, 19462.



S-29









 





          This Agreement shall be governed by and construed in accordance with the laws of the State of
New York.



          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.



          This Agreement shall have no effect on that certain letter agreement, dated January 13, 2009,
between the Company and Oppenheimer, which shall remain in full force and effect in accordance with
its terms, except that to the extent that any provision in this Agreement is inconsistent with or
supersedes a provision of the letter agreement, then the provision of this Agreement shall govern.



[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK – SIGNATURE

PAGE FOLLOWS]




S-30









 








          Please confirm that the foregoing correctly sets forth the agreement among us.



	 	 	 	 	 
	 	Very truly yours,




BMP SUNSTONE CORPORATION

 	 
	 	By  	/s/ Fred M. Powell
 	 
	 	 	Name:  	Fred M. Powell 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



	 	 	 	 	 
	Confirmed:	 	 
	 
	 	 	 	 
	OPPENHEIMER & CO. INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Andrew MacInnes
 

Name: Andrew MacInnes
	 	 
	 

	 	Title: Managing Director	 	 
	 
	 	 	 	 
	SUSQUEHANNA FINANCIAL GROUP, LLLP	 	 
	 
	 	 	 	 
	By:

	 	/s/ Peter Kuo
 

Name: Peter Kuo
	 	 
	 

	 	Title: Managing Director	 	 
	 
	 	 	 	 
	PHILADELPHIA BROKERAGE CORPORATION	 	 
	 
	 	 	 	 
	By:

	 	/s/ Robert Fisk
 

Name: Robert Fisk
	 	 
	 

	 	Title: Senior Partner	 	 







 









 








SCHEDULE 1




Form of Specified IFWP


Filed pursuant to Rule 433

Issuer Free Writing Prospectus dated February 13, 2009

Relating to Prospectus dated February 13, 2009

Registration No. 333-156958




Term Sheet




for




Financing




of




BMP Sunstone Corporation




     BMP Sunstone Corporation (We, us or the “Company”) has filed a registration statement
(Registration No. 333-156958, including a prospectus) with the SEC for the offering to which this
communication relates. Before you invest, you should read the prospectus in that registration
statement and other documents we have filed with the SEC for more complete information about us and
this offering. You may get these documents for free by visiting EDGAR on the SEC website at
www.sec.gov. Alternatively, we or the placement agents will arrange to send you the base prospectus
and any other offering documents if you request them by contacting Oppenheimer & Co., Attn:
Syndicate Prospectus Department, 300 Madison Ave., 5th Floor, New York, New York 10017, Phone (212)
667-8563, Fax (212) 667-6141, or EquityProspectus@opco.com. You may also access the
prospectus by clicking on the following link:
http://www.sec.gov/Archives/edgar/data/1281696/000089322009000286/w72717e424b3.htm



     This Term Sheet is not intended to be contractually binding, and is subject in all respects
(other than with respect to the confidential information section) to the execution of the Purchase
Agreement.



	 	 	 
	Issuer:

	 	BMP Sunstone Corporation, a Delaware corporation.
	 
	 	 
	Securities Offered:

	 	Up to 1,562,500 units (the “Units”), for a
maximum aggregate purchase price of $10,000,000,
each consisting of an aggregate of (i) two
shares (the “Shares”) of the Company’s common
stock, $0.001 par value per share (the “Common
Stock”), and (ii) one warrant to purchase one
share of Common Stock (the “Warrants”, and
together with the Shares, the “Securities”) (the
“Offering”).
	 
	 	 
	Warrants:

	 	The exercise price of the Warrants shall be
$4.00 per share. If on the 90th day after the
Closing Date (the “Reprice Date”), the volume
weighted average trading price calculated over
the 20 trading days prior to the Reprice Date
(the “VWAP”) of the Common Stock is less than
$4.00 per share, the exercise price of the
Warrants will be reset to the greater of (i)
$1.80 or (ii) the VWAP. The Warrants are
exercisable beginning any time on or after the
Reprice Date and expiring on the fifth
anniversary of the Closing Date. In no event,
shall the number of shares of Common Stock and
shares of Common Stock underlying the Warrants
exceed 19.99% of the Company’s outstanding
Common Stock on the date hereof.
	 
	 	 
	Purchase Price:

	 	$6.40 per Unit.
	 
	 	 
	Use of Proceeds to
Company:

	 	We intend to use the net proceeds from this
Offering to repay a portion of the $12.65
million outstanding of 10.0% senior secured
promissory notes due May 1, 2009 and for general
corporate purposes.
	 
	 	 
	Subscription and Closing
Date:

	 	We and each investor participating in the
Offering (each an “Investor” and collectively
the “Investors”) shall execute a Purchase
Agreement.
	 
	 

	 	It is expected that the closing of the Offering
shall occur, and the Securities shall be issued
to the Investors and funds paid to us therefor,
on or about February 20, 2009 (the “Closing
Date”).
	 
	 	 
	Risk Factors:

	 	The Securities offered involve a high degree of
risk. See the disclosure relating to the risks








A-1









 






	 	 	 
	 

	 	affecting us set forth in the base prospectus
included in the registration statement relating
to this Offering and the documents filed by the
Company with the SEC under the Securities
Exchange Act of 1934, as amended.
	 
	Abacus Distribution:

	 	On January 27, 2009, Abacus Investments Limited
filed a Schedule 13D/A, indicating that its
board of directors had approved a plan of
complete liquidation and it was planning on
making a pro rata distribution of all 7,907,484
shares of our common stock that it held to its
shareholders in February 2009. If these
shareholders are not affiliates of the Company,
they may sell all of their shares of our common
stock at any time.
	 
	 	 
	Nasdaq Global Market 

Symbol:

	 	BJGP
	 
	 	 
	Confidential Information:

	 	The recipient of this Term Sheet and the
materials attached hereto agrees with the
Company, Oppenheimer & Co. Inc., Susquehanna
Financial Group, LLLP and Philadelphia Brokerage
Corporation to maintain in confidence this
disclosed information, together with any other
non-public information regarding the Company
obtained from the Company, Oppenheimer & Co.
Inc., Susquehanna Financial Group, LLLP and
Philadelphia Brokerage Corporation or their
agents during the course of the proposed
Offering, and to comply with the recipient’s
obligations under U.S. and state securities
laws.
	 
	 	 
	Placement Agent:

	 	The Company has engaged Oppenheimer & Co. Inc.
to act as lead placement agent and Susquehanna
Financial Group, LLLP and Philadelphia Brokerage
Corporation to act as co-placement agents in
connection with the Offering. The placement
agents will receive commissions, fees and expense reimbursement not to exceed 8% of the aggregate proceeds in the Offering. Philadelphia Brokerage
Corporation also will be paid $301,000 pursuant
to a financial advisory agreement with the
Company for services rendered, and to be
rendered, to the Company not in connection with
this Offering.







 











 





SCHEDULE 2




Specified IFWP




Roadshows




A-2









 





SCHEDULE 3




Directors, Officers, Key Employees and Stockholders Executing Lock-ups




Jack M. Ferraro

Martyn D. Greenacre

David Gao

Zhiqiang Han

Frank J. Hollendoner

Zhijun Tong

Albert Yeung

George Bickerstaff

Fred M. Powell

John W. Stakes III, M.D.

Yanping Zhao




A-3









 





EXHIBIT A




FORM OF PURCHASE AGREEMENT




BMP Sunstone Corporation

600 W. Germantown Pike, Suite 400

Plymouth Meeting, PA 19462

Attention: Chief Executive Officer




     Ladies and Gentlemen:



          The undersigned (the “Investor”), hereby confirms its agreement with you as follows:



          1. This Purchase Agreement (the “Agreement”) is made as of the date set forth below between
BMP Sunstone Corporation, a Delaware corporation (the “Company”), and the Investor.



          2. The Company has authorized the sale and issuance of up to 1,149,374 shares (the “Shares”)
of common stock, par value $0.001 per share of the Company (the “Common Stock”) and warrants to
purchase 574,687 shares of Common Stock (the “Warrants” and together with the Shares, the
“Securities”) for a purchase price of $3.20 per Security (the “Purchase Price”)



          3. The offering and sale of the Securities, including the shares of Common Stock underlying
the Warrants (the “Warrant Shares”) (the “Offering”) are being made pursuant to (i) an effective
Registration Statement on Form S-3 (No. 333-143789) (including the Prospectus contained therein
(the “Base Prospectus”), the “Registration Statement”) filed by the Company with the Securities and
Exchange Commission (the “Commission”), (ii) if applicable, certain “free writing prospectuses” (as
that term is defined in Rule 405 under the Securities Act of 1933, as amended (the “Act”)), that
have been or will be filed with the Commission and delivered to the Investor on or prior to the
date hereof, and (iii) a Prospectus Supplement (the “Prospectus Supplement”), containing certain
supplemental information regarding the Securities and the Warrant Shares, the Company and the terms
of the Offering that will be filed with the Commission and delivered to the Investor along with the
Company’s counterpart to this Agreement (or made available to the Investor by the filing by the
Company of an electronic version thereof with the Commission).



          4. The Company and the Investor agree that the Investor will purchase from the Company and the
Company will issue and sell to the Investor the Securities set forth below for the aggregate
purchase price set forth below. The Securities shall be purchased pursuant to the Terms and
Conditions for Purchase of Securities attached hereto as Annex I and incorporated herein by
reference as if fully set forth herein. The Investor acknowledges that the offering is not



A-4









 







being underwritten by the placement agents and that there is no minimum offering amount.
Certificates representing the Shares purchased by the Investor will not be issued to the Investor;
instead, such Shares will be credited to the Investor using customary book-entry procedures.
Certificates representing the Warrants purchased by the Investor will be issued to the Investor
promptly after the Closing Date.


The manner of settlement of the Shares purchased by the Investor shall be determined by such
Investor as follows (check one):




	 	 	 	 	 
	[___]

	 	A.
	 	Delivery versus payment (“DVP”) through the Depository
Trust Company (“DTC”) via Oppenheimer & Co. Inc.
(“Oppenheimer”) (i.e., the Company shall deliver Shares
registered in the Investor’s name and address as set forth
below and released by the Transfer Agent to the Investor
through DTC at the Closing (as defined in Annex I)
directly to the account(s) at Oppenheimer identified by
the Investor and simultaneously therewith payment shall be
made by Oppenheimer by wire transfer to the Company).
	 
	 	 	 	 
	[___]

	 	B.
	 	DVP through DTC via Susquehanna Financial Group, LLLP
(“Susquehanna”) (i.e., the Company shall deliver Shares
registered in the Investor’s name and address as set forth
below and released by the Transfer Agent to the Investor
through DTC at the Closing (as defined in Annex I)
directly to the account(s) at Susquehanna identified by
the Investor and simultaneously therewith payment shall be
made by Susquehanna by wire transfer to the Company).
	 
	 	 	 	 
	[___]

	 	C.
	 	DVP through DTC via Philadelphia Brokerage Corporation
(“Philadelphia”, and together with Oppenheimer and
Susquehanna, the “Placement Agents”) (i.e., the Company
shall deliver Shares registered in the Investor’s name and
address as set forth below and released by the Transfer
Agent to the Investor through DTC at the Closing (as
defined in Annex I) directly to the account(s) at
Philadelphia identified by the Investor and simultaneously
therewith payment shall be made by Philadelphia by wire
transfer to the Company).





NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR
AND THE COMPANY, THE INVESTOR SHALL:





	 	(I)	 	NOTIFY THE APPROPRIATE PLACEMENT AGENT OF THE ACCOUNT OR ACCOUNTS AT
SUCH PLACEMENT AGENT TO BE CREDITED WITH THE SHARES BEING PURCHASED BY SUCH
INVESTOR, AND
	 
	 	(II)	 	CONFIRM THAT THE ACCOUNT OR ACCOUNTS AT SUCH PLACEMENT AGENT TO BE
CREDITED WITH THE SHARES BEING PURCHASED BY THE INVESTOR HAVE A MINIMUM BALANCE
EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE SECURITIES BEING PURCHASED BY THE
INVESTOR.





A-5









 




IT IS THE INVESTOR’S RESPONSIBILITY TO ARRANGE FOR SETTLEMENT BY WAY OF DVP IN A TIMELY MANNER.
IF THE INVESTOR DOES NOT DELIVER THE AGGREGATE PURCHASE PRICE FOR THE SECURITIES OR DOES NOT MAKE
PROPER ARRANGEMENTS FOR SETTLEMENT IN A TIMELY MANNER, THE SECURITIES MAY NOT BE DELIVERED AT
CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING ALTOGETHER.




          5. The Investor represents that, except as set forth below, (a) it has had no position, office
or other material relationship within the past three years with the Company or persons known to it
to be affiliates of the Company, (b) neither it, nor any group of which it is a member or to which
it is related, beneficially owns (including the right to acquire or vote) any securities of the
Company, nor did the Investor acquire, or obtain the right to acquire, 20% or more of the Common
Stock (or securities convertible into or exercisable for Common Stock) or the voting power of the
Company on a post-transaction basis and (c) it has no direct or indirect affiliation or association
with any member of the National Association of Securities Dealers, Inc. as of the date hereof.
Exceptions:



 





(If no exceptions, write “none.” If left blank, response will be deemed to be “none.”)




          6. The Investor hereby confirms receipt of the Issuer Free Writing Prospectus, dated February
13, 2009, and the Base Prospectus, dated February 13, 2009, (collectively, the “Prospectus”), of
the Company distributed by email to the Investor with this Agreement or otherwise has been made
available to the Investor. The Investor confirms that it had full access to the Prospectus and was
fully able to read, review, download and print it. Investor acknowledges that the Investor will be
required to bear the cost, if any, of printing the Prospectus.



          7. No offer by the Investor to buy any Securities will be accepted and no part of the purchase
price therefor will be delivered to the Company until the Company has accepted such offer by
countersigning a copy of this Agreement, and any such offer may be withdrawn or revoked by the
Investor, without obligation or commitment of any kind, at any time prior to the Company (or the
Placement Agents on behalf of the Company) sending (orally, in writing, or by electronic mail)
notice of its acceptance of such offer. An indication of interest will involve no obligation or
commitment of any kind until this Agreement is accepted and countersigned by or on behalf of the
Company.



A-6









 





          Please confirm that the foregoing correctly sets forth the agreement between us by signing in
the space provided below for that purpose.





      






	 	 	 
	Name of Investor:
	 	 
	 

	 	 





	 	 	 
	By:
	 	 
	 

	 	 





	 	 	 
	Title:
	 	 
	 

	 	 





	 	 	 
	Address:
	 	 
	 

	 	 
	 
	 
	 

	 	 





	 	 	 
	Tax ID No:
	 	 
	 

	 	 





	 	 	 
	Contact Name:
	 	 
	 

	 	 





	 	 	 
	Telephone:
	 	 
	 

	 	 





	 	 	 
	Name in which 

book-entry 

should be made

(if different):
	 	 
	 

	 	 





	 	 	 
	Name of Broker:
	 	 
	 

	 	 





	 	 	 
	Broker’s DTC No.:
	 	 
	 

	 	 





	 	 	 
	Aggregate Purchase Price:
	 	 
	 

	 	 





	 	 	 
	Number of Shares:
	 	 
	 

	 	 





	 	 	 
	Number of Warrants.:
	 	 
	 

	 	 










AGREED AND ACCEPTED:




BMP SUNSTONE CORPORATION




	 	 	 	 	 
	By:

	 	 
 

Name:
	 	 
	 

	 	Title:	 	 







A-7









 








Annex I




TERMS AND CONDITIONS FOR PURCHASE OF SECURITIES




          1. Authorization and Sale of Securities. The Company has authorized the sale of up
1,149,374 Shares and Warrants to purchase 574,687 shares of Common Stock. The Company reserves the
right to increase or decrease this number.



          2. Agreement to Sell and Purchase the Securities; Subscription Date.



          2.1 Upon the terms and subject to the conditions hereinafter set forth, at the Closing (as
defined in Section 3), the Company will sell to the Investor, and the Investor will purchase from
the Company, the number of Shares and Warrants set forth on the signature page hereto at the
purchase price set forth on such signature page.



          2.2 The Company may enter into agreements similar to this Agreement with certain other
investors (the “Other Investors”) and expects to complete sales of Securities to them. (The
Investor and the Other Investors are hereinafter sometimes collectively referred to as the
“Investors”, and this Agreement and the purchase agreements executed by the Other Investors are
hereinafter sometimes collectively referred to as the “Agreements.”) The Company may accept or
reject Agreements in its discretion.



          3. Delivery of the Securities at Closing. The completion of the purchase and sale of
the Securities (the “Closing”) shall occur on Friday, February 20, 2009 (the “Closing Date”), at
the offices of the Company’s counsel. No later than one (1) business day after the execution of
this Agreement by the Investor and the Company, the Investor shall notify the appropriate Placement
Agent of the account or accounts at such Placement Agent to be credited with the Shares being
purchased by such Investor and confirm that the account or accounts at such Placement Agent to be
credited with the Shares being purchased by the Investor have a minimum balance equal to the
aggregate purchase price for the Securities being purchased by the Investor. On the Closing Date,
the Company shall deliver the Shares to the Investor directly to the account(s) at such Placement
Agent, as applicable, identified by Investor and simultaneously therewith payment shall be made
from such account(s) to the Company through DTC. Certificates representing the Warrants purchased
by the Investor will be issued to the Investor promptly after the Closing Date in physical form.



          The Company’s obligation to issue and sell the Securities to the Investor shall be subject to
the following conditions, any one or more of which may be waived by the Company: (a) completion of
the purchases and sales of Securities under the Agreements that may be executed with the Other
Investors; and (b) the accuracy of the representations and warranties made by the Investors and the
fulfillment of those undertakings of the Investors to be fulfilled prior to the Closing.



          The Investor’s obligation to purchase the Securities shall be subject to the condition that
the Placement Agents shall not have (a) terminated the Placement Agency



A-8









 







Agreement dated February 13, 2009, between the Company and the Placement Agents (the
“Placement Agency Agreement”) pursuant to the terms thereof or (b) determined that the conditions
to closing in the Placement Agency Agreement have not been satisfied.



          4. Representations, Warranties and Covenants of the Company. The Company hereby
represents and warrants to, and covenants with, the Investor, as follows:



          4.1 The Company has full right, power, authority and capacity to enter into this Agreement and
to consummate the transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement.



          4.2 This Agreement constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’
and contracting parties’ rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law).



          5. Representations, Warranties and Covenants of the Investor.



          5.1 The Investor represents and warrants that it has access to the Company’s base prospectus
dated February 13, 2009 and the Issuer Free Writing Prospectus dated February 13, 2009, relating to
the Offering, (collectively, the “Prospectus”).



          5.2 The Investor, if outside the United States, will comply with all applicable laws and
regulations in each foreign jurisdiction in which it purchases, offers, sells or delivers
Securities or has in its possession or distributes any offering material, in all cases at its own
expense.



          5.3 The Investor further represents and warrants to, and covenants with, the Company that
(i) the Investor has full right, power, authority and capacity to enter into this Agreement and to
consummate the transactions contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (ii) this Agreement constitutes a valid
and binding obligation of the Investor enforceable against the Investor in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights
generally and except as enforceability may be subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law).



          5.4 The Investor understands that nothing in the Prospectus, this Agreement or any other
materials presented to the Investor in connection with the purchase and sale of the Securities
constitutes legal, tax or investment advice. The Investor has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of Securities.



A-9









 





          5.5 From and after obtaining the knowledge of the sale of the Securities contemplated hereby,
such Investor has not taken, and prior to the public announcement of the transaction such Investor
shall not take, any action that has caused or will cause such Investor to have, directly or
indirectly, sold or agreed to sell any Common Stock, effected any short sale, whether or not
against the box, established any “put equivalent position” (as defined in Rule 16a-1(h) under the
Securities Exchange Act) with respect to the Common Stock, granted any other right (including,
without limitation, any put or call option) with respect to the Common Stock or with respect to any
security that includes, relates to or derived any significant part of its value from the Common
Stock, whether or not, directly or indirectly, in order to hedge it position on the Shares.



          6. Survival of Representations, Warranties and Agreements. Notwithstanding any
investigation made by any party to this Agreement, all covenants, agreements, representations and
warranties made by the Company and the Investor herein shall survive the execution of this
Agreement, the delivery to the Investor of the Securities being purchased and the payment therefor.



          7. Notices. All notices, requests, consents and other communications hereunder shall
be in writing, shall be mailed (A) if within domestic United States by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage prepaid, or by
facsimile, or (B) if delivered from outside the United States, by International Federal Express or
facsimile, and shall be deemed given (i) if delivered by first-class registered or certified mail
domestic, three business days after so mailed, (ii) if delivered by a nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by International Federal
Express, two business days after so mailed, or (iv) if delivered by facsimile, upon electronic
confirmation of receipt and shall be delivered as addressed as follows:



          (a) if to the Company, to:


BMP Sunstone Corporation

600 W. Germantown Pike, Suite 400

Plymouth Meeting, PA 19462

Fax: (610) 940-1676

Attention: Chief Financial Officer



With a copy to:



Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103-2921

Fax: (215) 963-5001

Attention: Joanne R. Soslow




          (b) if to the Investor, at its address on the signature page hereto, or at such other address
or addresses as may have been furnished to the Company in writing.



A-10









 





          8. Changes. This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Investor.



          9. Headings. The headings of the various sections of this Agreement have been
inserted for convenience or reference only and shall not be deemed to be part of this Agreement.



          10. Severability. In case any provision contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or impaired thereby.



          11. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of New York, without giving effect to the principles of
conflicts of law.



          12. Counterparts. This Agreement may be executed in two or more counterparts
(delivery of which occur facsimile or as PDF or similar attachment to an electronic communication),
each of which shall constitute an original, but all of which, when taken together, shall constitute
but one instrument, and shall become effective when one or more counterparts have been signed by
each party hereto and delivered to the other parties.



A-11









 





INSTRUCTION SHEET FOR INVESTOR




(to be read in conjunction with the entire Purchase Agreement)




A. Please complete the following:




          1. Provide the information regarding the Investor requested on the signature page (page 1) of
the Purchase Agreement. The Purchase Agreement must be executed by an individual authorized to bind
the Investor.



          2. By 6 p.m. Eastern time on February 13, 2009, return via facsimile signed copies of the
enclosed Purchase Agreement and Authorization to Disburse Funds to each of the following persons:


Oppenheimer & Co. Inc.

300 Madison Avenue

New York, New York 10017

Attn: Jessica Cracolici

Phone: (212) 667-7307

Telecopy: (212) 667-6141



Latham & Watkins LLP

12636 High Bluff Drive, Suite 400

San Diego, California 92130

Attn: Kendra L. Archer

Phone: (858) 523-5429

Fax: (858) 523-5450



Please complete all of the information on the signature page of the Purchase Agreement to
facilitate the Closing and the electronic delivery of the Shares. Please also deliver the
originally signed documents to Kendra Archer at the address above via overnight delivery.




               If the Purchase Agreement is agreed and accepted by the Company, a copy of the Purchase
Agreement signed by the Company will be delivered to the Investor at a later date.



          3. No later than one (1) business day after the execution of this Agreement by the Investor and the
Company, the Investor shall notify the appropriate Placement Agent of the account or accounts at
such Placement Agent to be credited with the Shares being purchased by such Investor and confirm
that the account or accounts at such Placement Agent to be credited with the Shares being purchased
by the Investor have a minimum balance equal to the aggregate purchase price for the Securities
being purchased by the Investor.



A-12









 





EXHIBIT B




FORM OF LOCK-UP AGREEMENT




                          , 2009




Oppenheimer & Co. Inc.

Susquehanna Financial Group, LLLP

Philadelphia Brokerage Corporation

c/o Oppenheimer & Co. Inc.

300 Madison Avenue

New York, New York 10017




Re: Public Offering of Common Stock and Warrants of BMP Sunstone Corporation




Ladies and Gentlemen:



     The undersigned, a holder of shares of common stock (“Common Stock”) or rights to acquire
shares of common stock, par value $0.001 per share (the “Common Stock”), of BMP Sunstone
Corporation (the “Company”) and/or a director or employee of the Company, understands that the
Company intends to file a prospectus supplement (the “Prospectus Supplement”) with respect to the
Company’s Registration Statement on Form S-3 (No. 333-156958) pursuant to and in accordance with
Rule 424(b) under the Securities Act of 1933, as amended (the “Act”), with the Securities and
Exchange Commission for the public offering of shares of Common Stock and/or warrants to purchase
Common Stock (the “Offering”). The undersigned further understands that you, as placement agents,
are contemplating entering into a placement agency agreement with the Company in connection with
the Offering (the “Placement Agency Agreement”).



     In order to induce the Company and you to enter into the Placement Agency Agreement and to
induce you to act as the placement agents in the Offering (together, the “Placement Agents”), the
undersigned hereby agrees for the benefit of the Company and the Placement Agents that, without the
prior written consent of Oppenheimer & Co. Inc., the undersigned will not, during the period ending
90 days, subject to extension as provided below (the “Lock-Up Period”), after the date of the
Prospectus Supplement , directly or indirectly (1) offer, pledge, assign, encumber, sell, contract
to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or dispose of, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for Common Stock owned
either of record or beneficially (as defined in the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) by the undersigned on the date hereof or hereafter acquired or (2) enter into
any swap or other agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise, or publicly announce an intention to
do any of the foregoing.



B-1









 





     In addition, the undersigned agrees that, without the prior written consent of the Placement
Agents, it will not, during the period ending 90 days after the date of the Prospectus Supplement,
make any demand for or exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for Common Stock.



     The foregoing shall not apply to (x) Common Stock to be transferred as (i) a gift or gifts;
(ii) by will or intestacy; (iii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that any such transfer shall not involve a
disposition for value; or (iv) with the prior written consent of Oppenheimer & Co. Inc. on behalf
of the placement agents; provided that, in the case of (i) through (iii), the transferee agrees in
writing to be bound by the terms hereof) or (y) sales under any plan adopted under Rule 10b5-1
under the Exchange Act.



     Notwithstanding the foregoing, if (x) during the last 17 days of the Lock-Up Period the
Company issues an earnings release or material news or a material event relating to the Company
occurs; or (y) prior to the expiration of the Lock-Up Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of the Lock-Up Period;
the restrictions imposed in this Letter Agreement shall continue to apply until the expiration of
the 18-day period beginning on the issuance of the earnings release or the occurrence of the
material news or material event; provided, however, that this sentence shall not apply if the
research published or distributed on the Company is compliant under Rule 139 under the Securities
Act and the Company’s securities are actively traded as defined in Rule 101(c)(1) of Regulation M
under the Exchange Act.



     In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the
registration or transfer of the securities described herein are hereby authorized to decline to
make any transfer of securities if such transfer would constitute a violation or breach of this
Letter Agreement.



     The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Letter Agreement. All authority herein conferred or agreed to be
conferred and any obligations of the undersigned shall be binding upon the successors, assigns,
heirs or personal representatives of the undersigned.



     The undersigned, whether or not participating in the Offering, understands that the Placement
Agents are entering into the Placement Agency Agreement and proceeding with the Offering in
reliance upon this Letter Agreement.



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



Very truly yours,




B-2









 





EXHIBIT C-1




OPINION OF COMPANY COUNSEL




C-1









 








EXHIBIT C-2




NEGATIVE ASSURANCES LETTER OF COMPANY COUNSEL




C-2









 








EXHIBIT D




OPINION OF CHINESE COUNSEL OF THE PLACEMENT AGENTS




D-1









 








EXHIBIT E




OPINION OF HONG KONG COUNSEL OF THE PLACEMENT AGENTS





E-1