Document:

exv4w2

Exhibit 4.2

REGISTRATION RIGHTS AGREEMENT

          This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of July 1, 2008, by
and among (i) MiddleBrook Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
(ii) the investor identified on Exhibit A attached hereto (the “Initial Investor”),
and (iii) each Person that subsequently becomes a party to this Agreement pursuant to, and in
accordance with, the provisions of Section 13 hereof (collectively, the “Investor Permitted
Transferees” and each individually an “Investor Permitted Transferee”).

          WHEREAS, the Company has agreed to issue and sell to the Initial Investor, and the Initial
Investor has agreed to purchase from the Company, an aggregate of 30,303,030 shares (the
“Purchased Shares”) of the Company’s common stock, $0.01 par value per share (the
“Common Stock”), and a warrant to purchase an aggregate of 12,121,212 shares of Common
Stock (the “Warrant”), all upon the terms and conditions set forth in that certain
Securities Purchase Agreement, dated of even date herewith, between the Company and the Initial
Investor (the “Purchase Agreement”); and

          WHEREAS, the terms of the Purchase Agreement provide that it shall be a condition precedent to
the closing of the transactions thereunder for the Company and the Initial Investor to execute and
deliver this Agreement.

          NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the
parties hereto hereby agree as follows:

     1. DEFINITIONS. As used in this Agreement, the following terms have the respective
meanings set forth below:

          “Additional Registrable Securities” shall have the meaning ascribed to such term in
Section 3(b) hereof.

          “Additional Shares” means any shares of Common Stock issued to or purchased by any
Investor other than (a) the Purchased Shares and the Underlying Shares and (b) any shares of Common
Stock issued or issuable to any Investor with respect to the shares referenced in clause (a),
including but not limited to, by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise
and any shares of Common Stock or voting common stock issuable upon conversion, exercise or
exchange thereof.

          “Agreement” shall have the meaning ascribed to such term in the preamble of this
Agreement.

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

          “Claims” shall have the meaning ascribed to such term in Section 10(a) hereof.

          “Closing”
and “Closing Date” shall have the meanings ascribed to such terms in the Purchase Agreement.

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          “Common Stock” shall have the meaning ascribed to such term in the recitals of this
Agreement.

          “Company” shall have the meaning ascribed to such term in the preamble of this
Agreement.

          “Company Indemnified Person” shall have the meaning ascribed to such term in Section
10(b) hereof.

          “Demand Notice” shall have the meaning ascribed to such term in Section 3(b) hereof.

          “Event” shall have the meaning ascribed to such term in Section 5(a) hereof.

          “Event Date” shall have the meaning ascribed to such term in Section 5(a) hereof.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and all of the
rules and regulations promulgated thereunder.

          “Effectiveness Date” means, with respect to the Initial Registration Statement, as
soon as practicable, but in no event later than the date that is ninety (90) calendar days after
the earlier of (i) the date the Initial Registration Statement is actually filed and (ii) thirty
(30) calendar days after the Closing and, with respect to any additional Registration Statements
which may be required to be filed hereunder pursuant to Section 3(b), the date that is sixty (60)
calendar days after the earlier of (i) the date such Registration Statement is actually filed and
(ii) 210 calendar days after the preceding Registration Statement is declared effective by the SEC;
provided, however, that in the event the Company is notified by the SEC that one of
the above Registration Statements will not be reviewed or is no longer subject to further review
and comments, the Effectiveness Date as to such Registration Statement shall be the fifth
(5th) Trading Day following the date on which the Company is so notified if such date
precedes the dates required above.

          “Event” shall have the meaning ascribed to such term in Section 5(a) hereof.

          “Event Date” shall have the meaning ascribed to such term in Section 5(a) hereof.

          “Filing Date” means within thirty (30) calendar days after the Closing with respect to
the Initial Registration Statement and as soon as reasonably practicable, but in no event greater
than thirty (30) calendar days, after an Investor’s request with respect to any other Registration
Statement required to be filed pursuant to Section 3(b) hereto.

          “Government Entity” means any supranational, national, state, municipal, local or
foreign government or regulatory body, any instrumentality, subdivision, court, tribunal,
administrative agency or commission or other governmental authority, board, legislature or
department, including any state attorney general, or instrumentality.

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          “Indemnified Person” shall have the meaning ascribed to such term in Section 10(b)
hereof.

          “Initial Investor” shall have the meaning ascribed to such term in the preamble of
this Agreement.

          “Initial Registration Statement” shall have the meaning ascribed to such term in
Section 3(a) hereof.

          “Inspector” shall have the meaning ascribed to such term in Section 6(k) hereof.

          “Investor Indemnified Person” shall have the meaning ascribed to such term in Section
10(a) hereof.

          “Investor Permitted Transferee(s)” shall have the meaning ascribed to such term in the
preamble of this Agreement.

          “Investors” means, collectively, the Initial Investor and the Investor Permitted
Transferees; provided, however, that the term “Investors” shall not include the
Initial Investor if it or any of the Investor Permitted Transferees does not own or hold any
Registrable Securities.

          “Issuer Filing” shall have the meaning ascribed to such term in Section 6(s) hereof.

          “Law” means any rule, regulation, statute, ordinance or code or charge, order, writ,
injunction, judgment, decree, ruling, determination, directive, award or settlement, whether civil,
criminal or administrative and whether formal or informal, promulgated by any Government Entity,
including any common law, state and federal law, securities law and law of any foreign
jurisdictions.

          “Majority Holders” means, at the relevant time of reference thereto, those Investors
holding more than fifty percent (50%) of the Registrable Securities held by all of the Investors.

          “Mandatory Registration Termination Date” shall have the meaning ascribed to such term
in Section 3(c) hereof.

          “NASD” means the National Association of Securities Dealers, Inc.

          “Person” means and includes natural persons, corporations, limited partnerships,
general partnerships, limited liability companies, limited liability partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and Government Entity.

          “Purchase Agreement” shall have the meaning ascribed to such term in the recitals of
this Agreement.

          “Purchased
Shares” shall have the meaning ascribed to such term in the recitals of this Agreement.

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          “Records” shall have the meaning ascribed to such term in Section 6(k) hereof.

          “Registrable Securities” means (a) all of the Purchased Shares and the Underlying
Shares, (b) any shares of Common Stock issued or issuable to any Investor with respect to the
shares referenced in clause (a) above, including but not limited to, by way of stock dividend or
stock split or in connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise and any shares of Common Stock or voting common stock issuable
upon conversion, exercise or exchange thereof, and (c) any Additional Shares; provided,
however, that Registrable Securities will cease to be Registrable Securities, when (i) a
Registration Statement covering such Registrable Securities has been declared effective under the
Securities Act by the SEC and such Registrable Securities have been disposed of pursuant to such
effective Registration Statement, (ii) all of the Registrable Securities held by the Investors may
be immediately sold to the public without registration or restriction (including without limitation
as to volume by each holder thereof) under the Securities Act (in the opinion of counsel to the
Majority Holder), (iii) the Registrable Securities cease to be outstanding or (iv) the Registrable
Securities have been sold pursuant to Rule 144.

          “Registration Statement” means any one or more registration statements filed with the
SEC by the Company on Form S-3, or in the event the Company is not eligible to use Form S-3, on
Form S-1, for the purpose of registering under the Securities Act all of the Registrable Securities
for resale by, and for the account of, the Investors, including the Initial Registration Statement
and any additional Registration Statements filed hereunder pursuant to Sections 3(d) or 4 or
otherwise, including (in each case) the prospectus, amendments and supplements to such registration
statement or prospectus, including pre- and post-effective amendments, all exhibits thereto, and
all material incorporated by reference or deemed to be incorporated by reference in such
Registration Statement.

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

          “Rule 415” means Rule 415 promulgated by the SEC pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the SEC having substantially the same purpose and effect as such Rule.

          “Rule 433” means Rule 433 promulgated by the SEC pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the SEC having substantially the same purpose and effect as such Rule.

          “Rule 461” means Rule 461 promulgated by the SEC pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the SEC having substantially the same purpose and effect as such Rule.

          “SEC” means the Securities and Exchange Commission.

          “SEC
Documents” shall have the meaning ascribed to such term in the Purchase Agreement.

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          “Securities” means the Purchased Shares, the Warrants and the Underlying Shares.

          “Securities Act” means the Securities Act of 1933, as amended, and all of the rules
and regulations promulgated thereunder.

          “Shares” means the aggregate number of shares of Common Stock issued to Purchaser on
the Closing Date.

          “Suspension Period” shall have the meaning ascribed to such term in Section 12 hereof.

          “Trading Day” means (a) if the Common Stock is listed or quoted on the NASDAQ Global
Market, then any day during which securities are generally eligible for trading on the NASDAQ
Global Market, or (b) if the Common Stock is not then listed or quoted and traded on the NASDAQ
Global Market, then any business day.

          “Underlying Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.

          “Violation” shall have the meaning ascribed to such term in Section 10(a) hereof.

          “Warrant” shall have the meaning ascribed to such term in the recitals of this
Agreement.

     2. EFFECTIVENESS; TERMINATION. This Agreement shall become effective and legally binding
only if the Closing occurs. This Agreement shall terminate and be of no further force or effect,
automatically and without any action being required of any party hereto, upon the termination of
the Purchase Agreement pursuant to Section 7 thereof.

     3. MANDATORY REGISTRATION.

                    (a) Following the Closing, the Company shall, as promptly as practicable but in any event
prior to the Filing Date, prepare and file with the SEC a Registration Statement (the “Initial
Registration Statement”) covering the resale of the Registrable Securities issued on the
Closing Date to be made on a delayed or continuous basis pursuant to Rule 415, which Registration
Statement, to the extent allowable under the Securities Act and the rules and regulations
promulgated thereunder (including Rule 416), shall state that such Registration Statement also
covers such indeterminate number of additional shares of Common Stock as may become issuable upon
exercise of or otherwise pursuant to the Warrant to prevent dilution resulting from stock splits,
stock dividends or similar transactions. The number of shares of Common Stock initially included in
such Registration Statement shall be no less than the aggregate number of Shares and of Underlying
Shares that are then issuable upon exercise of or otherwise pursuant to the Warrant issued on the
Closing Date, without regard to any limitation on the Investors’ ability to exercise the Warrant.
The Company acknowledges that the number of shares of Common Stock initially included in the
Initial Registration Statement represents a good faith estimate of the Shares plus the maximum
number of Underlying Shares issuable upon

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exercise of or otherwise pursuant to the Warrant issued on the Closing Date and shall be
amended if not sufficient. The Initial Registration Statement (and each amendment or supplement
thereto, and each request for acceleration of effectiveness thereof) shall be provided to (and
subject to the approval of) the Buyer and its counsel prior to its filing or other submission.

                    (b) Subject to Section 3(d), upon receiving a written demand notice from Investors (the
“Demand Notice”),the Company shall be required to file a Registration Statement to register
any Additional Shares that constitute Registrable Securities that are not then registered and held
by the Investors giving the Demand Notice (“Additional Registrable Securities”) on or prior
to the applicable Filing Date until all of the Additional Registrable Securities are registered
for resale by such Investors as selling stockholders thereunder, provided that such the Company
shall be obligated to file such Registration Statement only if the Demand Notice requests at least
1,000,000 (One Million) Additional Registrable Securities to be so registered Each such
Registration Statement shall contain (unless otherwise directed by the Majority Holders)
substantially the “Plan of Distribution” in the Investor Questionnaire the form of which is
attached to the Purchase Agreement as Appendix I. Subject to the terms of this Agreement, the
Company shall cause a Registration Statement filed pursuant to this Section 3 to be declared
effective under the Securities Act as promptly as possible after the filing thereof, but in any
event on or prior to the applicable Effectiveness Date.

                    (c) The Company shall be required to keep a Registration Statement filed pursuant to this
Section 3 current and effective pursuant to Rule 415 at all times until such date there are no
Registrable Securities (the “Mandatory Registration Termination Date”), which Registration
Statement (including any amendments or supplements thereto and prospectuses contained therein)
shall not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein, or necessary to make the statements therein not misleading. Thereafter, the
Company shall be entitled to withdraw such Registration Statement and the Investors shall have no
further right to offer or sell Common Stock pursuant to such Registration Statement (or any
prospectus relating thereto).

                    (d) The Company’s obligation under Section 3(b) to file an additional Registration Statement
for the purpose of registering Additional Registrable Securities shall be limited to two (2) such
additional filings in any twelve (12) month period and the Company shall not be required to file
any additional Registration Statement pursuant to Section 3(b) for the purpose of registering
Additional Registrable Securities within a period of one hundred and twenty (120) days immediately
after the effective date of any previous Registration Statement filed pursuant to Section 3(b). No
registration of Additional Registrable Securities pursuant to Section 3(b) will count for the
purposes of the limitations set forth in the proviso of the foregoing sentence if (A) the Investors
determine in good faith to withdraw the proposed registration prior to the effectiveness of the
Registration Statement relating to such registration due to marketing conditions or regulatory
reasons relating to the Company, (B) the Registration Statement relating to such registration is
not declared effective by the SEC and the Investors withdraw their request for such registration
prior to such Registration Statement being declared effective, (C) prior to the sale of at least
90% of the Registrable Securities included in the applicable Registration Statement relating to
such request, such Registration Statement is adversely affected by any stop order, injunction or
other order or requirement of the SEC or other Government Entity for any reason and the Company
fails to have such stop order, injunction or other or requirement

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removed, withdrawn or resolved to the Investors’ reasonable satisfaction within thirty (30)
days of the date of such order or (D) if any offering of Additional Registrable Securities pursuant
to such Registration Statement is an underwritten offering, then the conditions to closing
specified in the underwriting agreement entered into in connection with the registration relating
to such request, if applicable, are not satisfied (other than as a result of a material default or
breach thereunder by the Investors).

                    (e) The Company shall not include any securities other than Registrable Securities on any
Registration Statement filed pursuant to this Section 3 without the prior written consent of the
Majority Holders.

     4. PIGGY-BACK REGISTRATIONS.

                    (a) Subject to the last sentence of this Section 4(a), if at any time prior to the Mandatory
Registration Termination Date the Company shall determine to file with the SEC a Registration
Statement relating to an offering for its own account or the account of others under the Securities
Act of any of its equity securities (other than on Form S-4 or Form S-8 or their then equivalents
relating to equity securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with stock option or other employee benefit
plans), the Company shall send to the Investors written notice of such determination and, if within
fifteen (15) days after the effective date of such notice, the Investors shall so request in
writing, the Company shall include in such Registration Statement all or any part of the
Registrable Securities the Investors request to be registered, except that if, in connection with
any underwritten public offering for the account of the Company, the managing underwriter(s)
thereof (which shall be chosen exclusively by the Company) shall impose a limitation on the number
of Registrable Securities which may be included in the Registration Statement because, in such
underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to
facilitate public distribution, then the Company shall be obligated to include in such Registration
Statement only such limited portion of the Registrable Securities with respect to which the
Investors have requested inclusion hereunder as the underwriter shall permit; provided,
however, that the Company shall not exclude any Registrable Securities unless the Company
has first excluded all outstanding securities, the holders of which are not entitled by contract to
inclusion of such securities in such Registration Statement or are not entitled to pro rata
inclusion with the Registrable Securities; and provided, further, however,
that, after giving effect to the immediately preceding proviso, any exclusion of Registrable
Securities shall be made pro rata with holders of other securities having the contractual right to
include such securities in the Registration Statement other than holders of securities entitled to
inclusion of their securities in such Registration Statement by reason of demand registration
rights. No right to registration of Registrable Securities under this Section 4 shall be construed
to limit any registration required under Section 3 hereof. If an offering in connection with which
the Buyer is entitled to registration under this Section 4 is an underwritten offering, then the
Buyer shall, unless otherwise agreed by the Company, offer and sell such Registrable Securities in
an underwritten offering using the same underwriter or underwriters selected by the Company and,
subject to the provisions of this Agreement, on the same terms and conditions, including, without
limitation, the same underwriting terms and conditions, as other shares of Common Stock included in
such underwritten offering by the Company for its own account. Notwithstanding anything to the
contrary set forth herein, the registration rights of the Investors pursuant to this

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Section 4 shall only be available in the event the Company fails to timely file, obtain
effectiveness or maintain effectiveness of any Registration Statement to be filed pursuant to
Section 3 in accordance with the terms of this Agreement.

                    (b) In the event of an underwritten offering pursuant to Section 4(a) in which any Registrable
Securities are to be included, the selling Investors agree to enter into and perform the selling
Investors’ obligations under the underwriting agreement entered into by the Company, with customary
provisions (including customary indemnification and contribution provisions) relating to selling
stockholders, with the managing underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of the Registrable
Securities, unless the selling Investors have notified the Company in writing of the selling
Investors’ election to exclude all of the selling Investors’ Registrable Securities from such
Registration Statement.

     5. LIQUIDATED DAMAGES/SUSPENSION OF A REGISTRATION STATEMENT .

                    (a) If: (i) the Initial Registration Statement or any other Registration Statement filed
pursuant to Section 3 is not filed on or prior to its Filing Date or if the Company files the
Initial Registration Statement or any other Registration Statement filed pursuant to Section 3
without affording the Investors the opportunity to review and comment on the same, (ii) the Company
fails to file with the SEC a request for acceleration in accordance with Rule 461 promulgated under
the Securities Act, within five (5) Trading Days of the date that the Company is notified (orally
or in writing, whichever is earlier) by the SEC that the Initial Registration Statement or any
other Registration Statement filed pursuant to Section 3 will not be “reviewed” or not be subject
to further review, (iii) prior to the Effectiveness Date of the Initial Registration Statement or
any other Registration Statement filed pursuant to Section 3, the Company fails to file a
pre-effective amendment and otherwise respond in writing to comments made by the SEC in respect of
such Initial Registration Statement or other Registration Statement within ten (10) calendar days
after the receipt of comments by or notice from the SEC that such amendment is required in order
for such Initial Registration Statement or other Registration Statement to be declared effective,
(iv) the Initial Registration Statement or any other Registration Statement filed pursuant to
Section 3 is not declared effective by the SEC by its Effectiveness Date or (v) after the
Effectiveness Date of the Initial Registration Statement or any other Registration Statement filed
pursuant to Section 3, such Initial Registration Statement or other Registration Statement ceases
for any reason to remain continuously effective as to all Registrable Securities included in such
Initial Registration Statement or other Registration Statement, as applicable, or the Investors are
otherwise not permitted to utilize the prospectus therein to resell such Registrable Securities,
for more than ten (10) consecutive calendar days or more than an aggregate of fifteen (15) calendar
days during any twelve (12) month period (which need not be consecutive calendar days) (any such
failure or breach being referred to as an “Event”, and for purposes of clause (i) or (iv)
the date on which such Event occurs, or for purposes of clause (ii) the date on which such five (5)
Trading Day period is exceeded, or for purposes of clause (iii) the date which such ten (10)
calendar day period is exceeded, or for purposes of clause (v) the date on which such ten (10) or
fifteen (15) calendar day period, as applicable, is exceeded being referred to as “Event
Date”), then, in addition to any other rights the Investors may have hereunder or under
applicable Law, on each such Event Date and on each monthly anniversary of

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each such Event Date (if the applicable Event shall not have been cured by such date) until
the applicable Event is cured, the Company shall pay to each Investor on a monthly basis within
three (3) business days of the end of the month an amount in cash, as partial liquidated damages
and not as a penalty, equal to one percent (1%) of the aggregate purchase price paid by such
Investor pursuant to the Purchase Agreement for any Registrable Securities then held by such
Investor (as applicable under clause (iv)); provided, however, that no such
payments shall be required in connection with any Event that is caused by, related to or in
connection with, a Suspension Period. The parties agree that the maximum aggregate liquidated
damages payable to a Investor under this Agreement shall be twenty percent (20%) of the aggregate
amount paid by such Investor for its respective Securities pursuant to the Purchase Agreement. If
the Company fails to pay any partial liquidated damages pursuant to this Section in full within
seven (7) calendar days after the date payable, the Company will pay interest thereon at a rate of
eighteen percent (18%) per annum (or such lesser maximum amount that is required to be paid by
applicable law) to the Investor, accruing daily from the date such partial liquidated damages are
due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated
damages pursuant to the terms hereof shall apply on a daily pro-rata basis for any portion of a
month prior to the cure of an Event.

                    (b) The Company shall notify the Investors by facsimile or e-mail as promptly as practicable,
and in any event, within two (2) Trading Days, after a Registration Statement is declared effective
and shall simultaneously provide the Investors with copies of any related prospectus to be used in
connection with the sale or other disposition of the Securities covered thereby. Failure to notify
the Investors in accordance with this Section 5(b) shall be deemed an Event under Section 5(a).

                    (c) No Investor shall be entitled to a payment pursuant to this Section 5 if effectiveness of
a Registration Statement has been delayed or a prospectus has been unavailable as a result of (i) a
failure by such Investor to promptly provide on request by the Company the information required
under the Purchase Agreement or this Agreement or requested by the SEC as a condition to
effectiveness of a Registration Statement; (ii) the provision of inaccurate or incomplete
information by such Investor; or (iii) a statement or determination of the SEC that any provision
of the rights of the Investor under this Agreement are contrary to the provisions of the Securities
Act.

     6. OBLIGATIONS OF THE COMPANY. In connection with the Company’s obligations under Sections
3 and 4 hereof, the Company shall, as expeditiously as reasonably possible:

                    (a) in the case of a Registration Statement filed pursuant to Section 3, prepare and file with
the SEC such amendments (including post-effective amendments) and supplements to such Registration
Statement and any prospectus used in connection with such Registration Statement as may be
necessary to keep such Registration Statement current and effective at all times until the
Mandatory Registration Termination Date, and, during such period, to comply with the provisions of
the Securities Act with respect to the disposition of all Registrable Securities of the Company
covered by such Registration Statement until such time as there are no Registrable Securities;

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                    (b) (i) in the case of a Registration Statement filed pursuant to Section 3, provide the
selling Investors’ counsel (no more than one law firm representing such Investors) and
underwriters’ counsel, if applicable (no more than one law firm representing such underwriters),
with a reasonable opportunity to review and comment on any Registration Statement and each
prospectus included therein (and each amendment or supplement thereto) three (3) Business Days
prior to their filing with the SEC, subject to such documents being under the Company’s control,
and not request acceleration of such Registration Statement without prior notice to such counsel,
and (ii) in the case of a Registration Statement filed pursuant to Section 4, provide the selling
Investors’ counsel (no more than one law firm representing such Investors) and underwriters’
counsel, if applicable (no more than one law firm representing such underwriters), with a
reasonable opportunity to review and comment on any Registration Statement and each prospectus
included therein (and each amendment or supplement thereto), subject to such documents being under
the Company’s control;

                    (c) notify the Investors and the underwriters, if any, by facsimile or e-mail as promptly as
practicable after a Registration Statement is declared effective and furnish to the selling
Investors such number of copies of a prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents (including, without
limitation, prospectus amendments and supplements as are prepared by the Company in accordance with
Section 6(a) above) as the selling Investors or underwriters, if any, may reasonably request in
order to facilitate the disposition of such selling Investors’ Registrable Securities;

                    (d) as promptly as practicable after becoming aware of such event, notify the Buyer of the
happening of any event, of which the Company has knowledge, as a result of which the prospectus
included in the Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances under which they were made, and
use its best efforts promptly to prepare a supplement or amendment to the Registration Statement to
correct such untrue statement or omission, and deliver such number of copies of such supplement or
amendment to the selling Investors as the selling Investors may reasonably request;

                    (e) use best efforts to register and qualify the Registrable Securities covered by a
Registration Statement under such other securities or “blue sky” laws of such states as shall be
reasonably appropriate in the opinion of the Company, provided that the Company shall not
be required in connection therewith or as a condition thereto to qualify to do business or to file
a general consent to service of process in any such states or jurisdictions, and provided
further that (notwithstanding anything in this Agreement to the contrary with respect to
the bearing of expenses) if any jurisdiction in which any of such Registrable Securities shall be
qualified shall require that expenses incurred in connection with the qualification therein of any
such Registrable Securities be borne by the selling Investors, then the selling Investors shall, to
the extent required by such jurisdiction, pay their pro rata share of such qualification expenses;

                    (f) subject to the terms and conditions of this Agreement including Sections 3 and 4 hereof,
use its best efforts to (i) prevent the issuance of any stop order or other suspension of
effectiveness of a Registration Statement, or the suspension of the qualification of

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any of the Registrable Securities for sale in any jurisdiction in the United States and (ii)
if such an order or suspension is issued, obtain the withdrawal of such order or suspension at the
earliest practicable moment and notify each holder of Registrable Securities of the issuance of
such order and the resolution thereof or its receipt of notice of the initiation or threat of any
proceeding such purpose;

                    (g) (i) comply with all requirements of the NASD with regard to the issuance of the Shares and
Underlying Shares and the listing thereof on the NASDAQ Global Market and such other securities
exchange or automated quotation system, as applicable, and (ii) engage a transfer agent and
registrar to maintain the Company’s stock ledger for all Registrable Securities covered by a
Registration Statement not later than the effective date of a Registration Statement;

                    (h) use its best efforts to cause all the Registrable Securities covered by the Registration
Statement to be listed on each securities exchange on which securities of the same class or series
issued by the Company are then listed, if any, if the listing of such Registrable Securities is
then permitted under the rules of such exchange;

                    (i) reasonably cooperate with each selling Investor and the managing underwriter or
underwriters with respect to a Registration Statement, if any, to facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to such Registration Statement and enable such certificates to be
in such denominations or amounts, as the case may be, as the managing underwriter or underwriters,
if any, or the selling Investor may reasonably request and registered in such names as the managing
underwriter or underwriters, if any, or the selling Investor may request, and, within three (3)
business days after a Registration Statement which includes Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the
Company to deliver, to the transfer agent for the Registrable Securities (with copies to the
selling Investor) an appropriate instruction and an opinion of such counsel in the form required by
the transfer agent in order to issue the Registrable Securities free of restrictive legends;

                    (j) notify the Investors and underwriters, if any, of any pending proceeding against the
Company under Section 8A of the Securities Act in connection with the offering of the Registrable
Securities;

                    (k) make available at reasonable times for inspection by any selling Investor or underwriter,
if applicable, and any attorney, accountant or other agent retained by any such selling Investor or
underwriter (each, an “Inspector” and collectively, the “Inspectors”), all
pertinent financial and other records, pertinent corporate documents and properties of the Company
(collectively, the “Records”) as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company’s and its subsidiaries’ officers,
directors and employees, and the independent public accountants of the Company, to supply all
information reasonably requested by any such Inspector in connection with such Registration
Statement; provided that (i) prior to making any information available pursuant to this
Section 6(l), the Company shall be entitled to receive reasonably satisfactory confidentiality
agreements from each Investor (other than the Initial Investor) and underwriter and (ii) the
Company shall

11

 

not be obligated under this Section 6(k) with respect to a competitor of the Company or such
competitor’s Inspectors (provided that for purposes of this Agreement, the Initial Investor and its
Affiliates shall not be deemed to be competitors of the Company);

                    (l) at the reasonable request of a selling Investor, prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to a Registration Statement and
any prospectus used in connection with the Registration Statement as may be necessary in order to
change the plan of distribution set forth in such Registration Statement (including but not limited
to provide for an underwritten offering);

                    (m) not allow the holders of any securities of the Company to include any of their securities
in a Registration Statement under Section 3 hereof or any amendment or supplement thereto without
the consent of the selling Investors, except for such holders to whom the Company has previously
granted such participation rights. In addition, the Company shall not offer any securities for its
own account or the account of others in a Registration Statement under Section 3 hereof or any
amendment or supplement thereto without the consent of the majority of the selling Investors;

                    (n) furnish, at the request of any underwriter, if applicable, on the date the Registration
Statement with respect to such securities becomes effective, an opinion, dated such date, of
counsel representing the Company for the purposes of such registration, addressed to the
underwriter making such request, covering such legal matters with respect to the registration in
respect of which such opinion is being given as such selling Investor or underwriter may reasonably
request and are customarily included in such opinions;

                    (o) in the event the selling Investors decide to conduct an underwritten offering pursuant to
a Registration Statement filed pursuant to Section 3, enter into such customary agreements
(including underwriting agreements in customary form) and take all such other actions as the
Investors holding a majority of the number of shares of Registrable Securities being sold or the
underwriters (which shall be chosen exclusively by the Company and shall be reasonably acceptable
to the selling Investors) reasonably request in order to expedite or facilitate the disposition of
such Registrable Securities (including, without limitation, making members of senior management of
the Company reasonably available to participate in, and cause them to cooperate with the
underwriters in connection with, “road-show” and other customary marketing activities) and cause to
be delivered to the sellers of Registrable Securities and the underwriters, if any, opinions of
counsel to the Company and a “cold comfort” letter from the Company’s independent public
accountants who have certified the Company’s financial statements included or incorporated by
reference in such registration statement, in each case, in customary form, covering such matters as
are customarily covered by such opinions and “cold comfort” letters (including, in the case of such
“cold comfort” letter, events subsequent to the date of such financial statements to the extent
customarily covered) for an underwritten public offering as the underwriters may reasonably request
and addressed to the underwriters and the selling Investors, if applicable;

                    (p) hold in confidence and not make any disclosure of information concerning any Investor
provided to the Company unless (i) disclosure of such information is necessary to comply with
federal or state securities laws or (ii) the disclosure of such information

12

 

is necessary to avoid or correct a misstatement or omission in any Registration Statement;

                    (q) (i) if required by the NASD Corporate Financing Department, promptly effect a filing with
the NASD pursuant to NASD Rule 2710 with respect to the public offering contemplated by resales of
securities under the Registration Statement (an “Issuer Filing”), and pay the filing fee
required by such Issuer Filing and (ii) use commercially reasonable efforts to pursue the Issuer
Filing until the NASD issues a letter confirming that it does not object to the terms of the
offering contemplated by the Registration Statement; and

                    (r) enter into and perform customary agreements and take such other actions as are prudent and
reasonably required in order to expedite or facilitate the disposition of such Registrable
Securities.

     7. FURNISH INFORMATION. It shall be a condition precedent to the obligations of the Company
to take any action pursuant to this Agreement that the selling Investors shall furnish to the
Company such information regarding them and the Securities held by them as the Company shall
reasonably request and as shall be required in order to effect any registration by the Company
pursuant to this Agreement. Each Investor shall promptly notify the Company of any changes in the
information furnished to the Company.

     8. EXPENSES OF REGISTRATION. Except as set forth in Section 6(e), all expenses incurred in
connection with the registration of the Registrable Securities pursuant to this Agreement
(excluding underwriting, brokerage and other selling commissions and discounts) shall be borne by
the Company, including without limitation (i) SEC, stock exchange and NASD registration and filing
fees, (ii) all fees and expenses incurred in complying with securities or “blue sky” laws,
(iii) all printing, messenger and delivery expenses and (iv) the fees, charges and expenses of
counsel to the Company and of its independent public accountants and any other accounting fees,
charges and expenses incurred by the Company; provided, however, that the Investors
shall be required to pay the expenses of counsel and any other advisors for the Investors and any
underwriting fees or brokerage or other selling discounts or commissions and any other expenses
incurred by the Investors for their own account.

     9. DELAY OF REGISTRATION. The Investors shall not take any action to restrain, enjoin or
otherwise delay any registration as the result of any controversy which might arise with respect to
the interpretation or implementation of this Agreement.

     10. INDEMNIFICATION.

                    (a) To the extent permitted by Law, the Company will indemnify, hold harmless and defend (i)
each Investor, (ii) the directors, officers, partners, managers, members, employees, agents and
each person who controls any Investor within the meaning of the Securities Act or the Exchange Act,
if any, (iii) any underwriter (as defined in the Securities Act) for any Investor in connection
with an underwritten offering pursuant to Sections 3 and 4 hereof, and (iv) the directors,
officers, partners, employees and each person who controls any such underwriter within the meaning
of the Securities Act or the Exchange Act, if any (each, an “Investor Indemnified Person”),
against any joint or several losses, claims, damages, liabilities or expenses (collectively,
together with actions, proceedings or inquiries by any regulatory or self-

13

 

regulatory organization, whether commenced or threatened, in respect thereof,
“Claims”) to which any of them may become subject insofar as such Claims arise out of or
are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or the omission or alleged omission to state therein a material fact
required to be stated or necessary to make the statements therein not misleading; (ii) any untrue
statement or alleged untrue statement of a material fact contained in any preliminary prospectus if
used prior to the effective date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement
thereto with the SEC) or the omission or alleged omission to state therein any material fact
necessary to make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading; or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any other law, including, without limitation, any
state securities law, or any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities (the matters in the foregoing clauses (i) through (iii) being, collectively,
“Violations”). The Company shall reimburse the Investor Indemnified Person, promptly as
such expenses are incurred and are due and payable, for any reasonable legal fees or other
reasonable expenses incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification agreement contained
in this Section 10(a) shall not apply to (i) a Claim arising out of or based upon a Violation to
the extent that such Violation occurs in reliance upon and in conformity with information furnished
in writing to the Company by such Investor Indemnified Person expressly for use in connection with
the preparation of such Registration Statement or any such amendment thereof or supplement thereto
or (ii) any amounts paid in settlement of any such Claim if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld). Such indemnity shall
remain in full force and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable Securities by any Investor
pursuant to Section 13.

                    (b) To the extent permitted by law, each Investor will, severally and not jointly, indemnify,
hold harmless and defend (i) the Company, and (ii) the directors, officers, partners, managers,
members, employees, or agents of the Company, if any (each, a “Company Indemnified Person”
and, together with the Investor Indemnified Persons, the “Indemnified Persons”), against
any Claims to which the Company or any Company Indemnified Person may become subject to, under the
Securities Act or otherwise, insofar as such Claims arise out of or are based upon any untrue or
alleged untrue statement of any material fact contained in a Registration Statement or any
preliminary prospectus or final prospectus, relating thereto or in any amendments or supplements to
a Registration Statement or any such preliminary prospectus or final prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in each case to the
extent and only to the extent that such untrue statement or alleged untrue statement or omission or
alleged omission was made in a Registration Statement, in any preliminary prospectus or final
prospectus relating thereto or in any amendments or supplements to a Registration Statement or any
such preliminary prospectus or final prospectus, and was furnished by such Investor expressly for
use in connection with a Registration Statement, or any preliminary prospectus or final prospectus;
and the appropriate Investor will reimburse any legal or other expenses reasonably incurred by the
Company or any Company Indemnified Party in connection with investigating or defending any such
Claim. Notwithstanding anything to

14

 

the contrary contained herein, the indemnification agreement contained in this Section 10(b)
shall not apply to any amounts paid in settlement of any such Claim or action if such settlement is
effected without the consent of the Company (which consent shall not be unreasonably withheld).

                    (c) Promptly after receipt by an Indemnified Person under this Section 10 of notice of the
commencement of any action, such Indemnified Person will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 10, notify the indemnifying party in writing
of the commencement thereof and the indemnifying party shall have the right to participate in and,
to the extent the indemnifying party desires, jointly with any other indemnifying party similarly
noticed, to assume at its expense the defense thereof with counsel satisfactory to the indemnifying
party or indemnifying parties, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any Indemnified Person for contribution or
otherwise under the indemnity agreement contained in this Section 10 (except to the extent that
such omission materially and adversely affects the indemnifying person’s ability to defend such
action). In the event that the indemnifying party assumes any such defense, the Indemnified Person
may participate in such defense with its own counsel and at its own expense, provided,
however, if the defendants in any such action include both the Indemnified Person and the
indemnifying party and the Indemnified Person shall have reasonably concluded, based on an opinion
of counsel reasonably satisfactory to the indemnifying party, that there may be a conflict of
interest between the positions of the indemnifying party and the Indemnified Person in conducting
the defense of any such action or that there may be legal defenses available to it and/or other
Indemnified Persons which are different from or additional to those available to the indemnifying
party, the Indemnified Person or parties shall have the right to select separate counsel to assume
such legal defenses and to otherwise participate in the defense of such action on behalf of such
Indemnified Person or Persons. Upon receipt of notice from the indemnifying party to such
Indemnified Person of its election to assume the defense of such action and approval by the
Indemnified Person of counsel, the indemnifying party will not be liable to such Indemnified Person
under this Section 10 for any legal or other expenses subsequently incurred by such Indemnified
Person in connection with the defense thereof unless the Indemnified Person shall have employed
such counsel in connection with the assumption of legal defenses in accordance with the proviso to
the preceding sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel and one local counsel, reasonably
satisfactory to such indemnifying party, representing all of the Indemnified Persons who are
parties to such action in which case the reasonable fees and expenses of counsel shall be at the
expense of the indemnifying party).

                    (d) Notwithstanding anything to the contrary herein, the indemnifying party shall not be
entitled to settle any claim, suit or proceeding unless in connection with such settlement the
Indemnified Person receives an unconditional release with respect to the subject matter of such
claim, suit or proceeding and such settlement does not contain any admission of fault by the
Indemnified Person. No Indemnified Person shall settle any claim, suit or proceeding without the
consent of the indemnifying party, which consent shall not be unreasonably withheld.

                    (e) In the event the indemnification provided for in this Section 10 is

15

 

due in accordance with the terms hereof but is held by a court of competent jurisdiction to be
unavailable to an Indemnified Person or is insufficient to hold harmless an Indemnified Person
under subsection (a) or (b) above in respect of any Claims referred to therein, then each
indemnifying party shall, to the extent permitted by applicable Law, contribute to the amount paid
or payable by such Indemnified Person as a result of such Claims in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and the Investors on the
other in connection with the statements or omissions or other matters which resulted in such
Claims, as well as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, in the case of an untrue statement, whether the
untrue statement relates to information supplied by the Company on the one hand or an Investor on
the other and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement. The Company and the Investors agree that it would not be
just and equitable if contribution pursuant to this subsection (e) were determined by pro rata
allocation (even if the Investors were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable considerations referred to
above in this subsection (e). The amount paid or payable by an Indemnified Person as a result of
the Claims referred to above in this subsection (e) shall be deemed to include any legal or other
expenses reasonably incurred by such Indemnified Person in connection with investigating or
defending any such action or claim. 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. The Investors’ obligations in this
subsection to contribute are several in proportion to their sales of Registrable Securities to
which such loss relates and not joint. In no event shall the contribution obligation of an Investor
be greater in amount than the dollar amount of the net proceeds (net of all expenses paid by such
Investor in connection with any claim relating to this Section 10 and the amount of any damages
such Investor has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the sale of the Registrable
Securities giving rise to such contribution obligation.

                    (f) The indemnification provided for in this Section 10 shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person or any officer,
director or controlling Person of such Indemnified Person and shall survive the transfer of
Registrable Securities.

     11. REPORTS UNDER THE EXCHANGE ACT. With a view to making available to the Investors the
benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit the
Investors to sell the Purchased Shares to the public without registration, the Company agrees to
use reasonable best efforts: (a) to make and keep public information available as those terms are
understood in Rule 144, (b) to file with the SEC in a timely manner all reports and other documents
required to be filed by an issuer of securities registered under the Securities Act or the Exchange
Act pursuant to Rule 144, (c) as long as any Investor owns any Purchased Shares, to furnish in
writing upon such Investor’s request a written statement by the Company that it has complied with
the reporting requirements of Rule 144 and of the Securities Act and the Exchange Act, and to
furnish to such Investor a copy of the most recent annual or quarterly report of the Company, and
such other reports and documents so filed by the Company as may be reasonably requested in availing
such Investor of any rule or regulation of the SEC permitting the selling of any such Purchased
Shares without registration and (d) to undertake any

16

 

additional actions reasonably necessary to maintain the availability of a Registration Statement or
the use of Rule 144.

     12.  SUSPENSION. Notwithstanding anything in this Agreement to the contrary, in the event
(a) of any request by the SEC or any other federal or state governmental authority during the
period of effectiveness of a Registration Statement for amendments or supplements to a Registration
Statement or related prospectus or for additional information; (b) of the issuance by the SEC or
any other federal or state governmental authority of any stop order suspending the effectiveness of
a Registration Statement or the initiation of any proceedings for that purpose; (c) of the receipt
by the Company of any notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose; (d) of any event or circumstance which necessitates
the making of any changes in a Registration Statement or related prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the case of a
Registration Statement, it will not contain any untrue statement of a material fact or any omission
to state a material fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the prospectus, it will not contain any untrue statement of
a material fact or any omission to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were made, not
misleading; or (e) that the Board has made the good faith determination (i) that continued use by
the Investors of a Registration Statement for purposes of effecting offers or sales of Registrable
Securities pursuant thereto would require, under the Securities Act, premature disclosure in a
Registration Statement (or the prospectus relating thereto) of material, nonpublic information
concerning the Company, its business or prospects or any proposed material transaction involving
the Company, (ii) that such premature disclosure would be materially adverse to the Company, its
business or prospects or any such proposed material transaction or would make the successful
consummation by the Company of any such material transaction significantly less likely and (iii)
that it is therefore essential to suspend the use by the Investors of such Registration Statement
(and the prospectus relating thereto) for purposes of effecting offers or sales of Registrable
Securities pursuant thereto, then the Company shall furnish to the Investors a certificate signed
by the President or Chief Executive Officer of the Company setting forth one or more of the above
described circumstances, and the right of the Investors to use a Registration Statement (and the
prospectus relating thereto) shall be suspended for a period (the “Suspension Period”) of
not more than forty-five (45) days after delivery by the Company of the certificate referred to
above in this Section 12; provided, that the Company shall be entitled to no more than two
(2) Suspension Periods during any twelve (12) month period. During the Suspension Period, none of
the Investors shall offer or sell any Registrable Securities pursuant to or in reliance upon a
Registration Statement (or the prospectus relating thereto) and each of the Investors shall keep
the fact of the above described certificate and its contents confidential. The Company shall use
commercially reasonable efforts to terminate any Suspension Period as promptly as practicable.

     13. TRANSFER OF REGISTRATION RIGHTS. An Investor may transfer or assign, in whole or from
time to time in part, to one or more Persons its rights hereunder in connection with the transfer
of Registrable Securities by such Investor to such Person, provided that such Investor
complies with all Laws applicable thereto and provides written notice of assignment to the Company
promptly after such assignment is effected and, provided, further that such Person

17

 

agrees to become a party to, and bound by, all of the terms and conditions of, this Agreement by
duly executing and delivering to the Company an Instrument of Adherence in the form attached as
Exhibit B hereto. All of the obligations of the Company hereunder shall survive any such
transfer.

     14. RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this Agreement shall apply to the
full extent set forth herein with respect to (i) the Purchased Shares and the Underlying Shares,
(ii) any and all shares of voting common stock of the Company into which Purchased Shares and the
Underlying Shares are converted, exchanged or substituted in any recapitalization or other capital
reorganization by the Company and (iii) any and all equity securities of the Company or any
successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise)
which may be issued in respect of, in conversion of, in exchange for or in substitution of, the
Purchased Shares and the Underlying Shares and shall be appropriately adjusted for any stock
dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the
date hereof. The Company shall cause any successor or assign (whether by merger, consolidation,
sale of assets or otherwise) to enter into a new registration rights agreement with the Initial
Investor on terms substantially the same as this Agreement as a condition of any such transaction.

     15. ENTIRE AGREEMENT. This Agreement, the Warrant and the Purchase Agreement constitute and
contain the entire agreement and understanding of the parties with respect to the subject matter
hereof, and supersede any and all prior negotiations, correspondence, agreements or understandings
with respect to the subject matter hereof.

     16. NO INCONSISTENT AGREEMENTS. The Company represents and warrants that it has not granted
to any Person the right to request or require the Company to register any securities issued by the
Company, other than the rights granted to the Initial Investor herein and rights that are disclosed
in the SEC Documents. The Company shall not take any action or enter into any agreement limiting
its ability to fulfill its obligations under this Agreement.

     17. MISCELLANEOUS.

                    (a) This Agreement may not be amended, modified or terminated, and no rights or provisions may
be waived, except with the written consent of the Majority Holders and the Company.

                    (b) This Agreement shall be governed by and construed in accordance with the internal and
substantive laws of the State of Delaware without regard to any conflicts of laws concepts which
would apply the substantive law of some other jurisdiction, and shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, personal representatives, successors
or assigns, provided that, to the extent applicable, the terms and conditions of Section 13
hereof are satisfied. This Agreement shall also be binding upon and inure to the benefit of any
transferee of any of the Purchased Shares provided that the terms and conditions of Section
13 hereof are satisfied. Notwithstanding anything in this Agreement to the contrary, if at any time
any Investor shall cease to own any Registrable Securities, all of such Investor’s rights under
this Agreement shall immediately terminate.

18

 

                    (c) Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the Court
of Chancery in the State of Delaware and the Federal courts of the United States of America located
in the State of Delaware for the purpose of any suit, action, proceeding or judgment relating to or
arising out of this Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party hereto anywhere in
the world by the same methods as are specified for the giving of notices under this Agreement. Each
of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives
any objection to the laying of venue of any such suit, action or proceeding brought in such courts
and irrevocably waives any claim that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A
TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.

                    (d) All notices, requests, consents and other communications required or permitted hereunder
shall be in writing and shall be hand delivered or mailed postage prepaid by registered or
certified mail or transmitted by facsimile transmission (with immediate telephonic confirmation
thereafter):

     
             
            (i) if to the Company:

20425 Seneca Meadows Parkway

Germantown, Maryland 20878

Attention: Edward M. Rudnic, Ph.D.

     
           President and Chief Executive Officer

Facsimile: (301) 944-6700

with a copy to:

Dewey & LeBoeuf LLP

1301 Avenue of the Americas

New York, New York 10019

Attention: Frederick W. Kanner, Esq.

Facsimile: (212) 259-6333

                              (ii) and if to any Investor, to such Investor at the address set forth in
Exhibit A,

or at such other address as the parties each may specify by written notice to the others,
and each such notice, request, consent and other communication shall for all purposes of
the Warrant be treated as being effective or having been given when delivered if delivered
personally, upon receipt of facsimile confirmation if transmitted by facsimile, or, if sent
by mail, at the earlier of its receipt or seventy-two (72) hours after the same has been
deposited in a regularly maintained receptacle for the deposit of United States mail,
addressed and postage prepaid as aforesaid.

19

 

                    (e) The parties acknowledge and agree that in the event of any breach of this Agreement,
remedies at law may be inadequate, and each of the parties hereto shall be entitled to seek
specific performance of the obligations of the other parties hereto and such appropriate injunctive
relief as may be granted by a court of competent jurisdiction.

                    (f) Should any part or provision of this Agreement be held unenforceable or in conflict with
the applicable Laws of any jurisdiction, the invalid or unenforceable part or provisions shall be
replaced with a provision which accomplishes, to the extent possible, the original business purpose
of such part or provision in a valid and enforceable manner, and the remainder of this Agreement
shall remain binding upon the parties hereto.

                    (g) This Agreement may be executed in a number of counterparts, any of which together shall
for all purposes constitute one Agreement, binding on all the parties hereto notwithstanding that
all such parties have not signed the same counterpart.

                    (h) The headings in this Agreement are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof.

                    (i) Unless the context otherwise requires, references to sections or subsections refer to
sections or subsections of this Agreement.

                    (j) Each of the parties shall execute such documents and perform such further acts as may be
reasonably required or desirable to carry out or to perform the provisions of this Agreement.

                    (k) Nothing contained in this Agreement shall be deemed to be a waiver of, or release from,
any obligations any party hereto may have under, or any restrictions on the transfer of Registrable
Securities or other securities of the Company imposed by, any other agreement including, but not
limited to, the Purchase Agreement.

[Signature Page to Follow]

20

 

          IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of
the date and year first above written.

	 	 	 	 	 	 	 
	 	 	MIDDLEBROOK PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Edward M. Rudnic
 

Edward M. Rudnic, Ph.D.
	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	EGI-MBRK, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Philip G. Tinkler
 

Philip G. Tinkler
	 	 
	 

	 	Title:
	 	Vice President	 	 

[Signature
Page to Registration Rights Agreement]

 

EXHIBIT A

Investor Name and Address

A-1

 

EXHIBIT B

Instrument of Adherence

B-1exv10w1

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

          This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of the
1st day of July, 2008 (the “Effective Date”) by and between MiddleBrook
Pharmaceuticals, Inc., a Delaware corporation, with its principal office at 20425 Seneca Meadows
Parkway, Germantown, Maryland 20876 (the “Company”), and EGI-MBRK, L.L.C., a Delaware
limited liability company (the “Purchaser”).

          WHEREAS, the Company desires to issue and sell to the Purchaser, for an aggregate purchase
price of $99,999,999, (i) 30,303,030 shares (the “Shares”) of the authorized but unissued
shares of common stock, $0.01 par value per share, of the Company (the “Common Stock”) and
(ii) a warrant in the form attached as Exhibit A to purchase an aggregate of 12,121,212
shares of Common Stock (the “Warrant”); and

          WHEREAS, contemporaneously with and as a condition to the execution of this Agreement, the
parties hereto are entering into a Registration Rights Agreement under which the Company has agreed
to provide certain registration rights under the Securities Act, the Rules and Regulations
promulgated thereunder and applicable state securities laws; and

          WHEREAS, contemporaneously with and as a condition to the execution of this Agreement, the
Company is entering into employment agreements with John Thievon and David Becker (the
“Employment Agreements”), which shall be effective as of the Closing; and

          WHEREAS, contemporaneously with and as a condition to the execution of this Agreement, the
Purchaser and the Company are entering into voting agreements with certain significant stockholders
of the Company identified on Schedule I relating to the Company Stockholder Approval and
certain other matters (the “Voting Agreements”); and

          WHEREAS, contemporaneously with and as a condition to the execution of this Agreement, the
Company is entering into the Deerfield Agreement with the Deerfield Entities, Deerfield Management,
L.P., Kef Pharmaceuticals, Inc. and Lex Pharmaceuticals, Inc.; and

          WHEREAS, the Purchaser wishes to purchase the Shares and the Warrant on the terms and subject
to the conditions set forth in this Agreement.

          NOW, THEREFORE, in consideration of the mutual agreements, representations, warranties and
covenants herein contained, the parties hereto agree as follows:

     1. Definitions. As used in this Agreement, the following terms shall have the following respective meanings:

          “Affiliate” of a party means any corporation or other business entity controlled by,
controlling or under common control with such party. For this purpose “control” shall mean direct
or indirect beneficial ownership of fifty percent (50%) or more of the voting or income interest in
such corporation or other business entity.

          “Agreement” has the meaning set forth in the preamble above.

 

 

          “Aggregate Purchase Price” has the meaning set forth in Section 2.1 below.

          “Alternative Proposal” has the meaning set forth in Section 8.6 below.

          “Antitrust Laws” has the meaning set forth in Section 8.5(a) below.

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

          “Buy-In” has the meaning set forth in Section 6.2(b) below.

          “Bylaws” has the meaning set forth in Section 3.1 below.

          “Certificate of Incorporation” has the meaning set forth in Section 3.1 below.

          “Change in Recommendation” means if the Company Board (A) withdraws, modifies or
qualifies, or proposes publicly to withdraw, modify or qualify, in any manner adverse to the
Purchaser, the Company Recommendation, (B) takes any public action or make any public statement in
connection with the Stockholders Meeting inconsistent with such Company Recommendation or (C)
approves or recommends, publicly proposes to approve or recommend, or fails to recommend against,
any Alternative Proposal.

          “Closing” has the meaning set forth in Section 2.2 below.

          “Closing Date” means the date of the Closing.

          “Code” means the Internal Revenue Code of 1986, as amended, and the regulations and
interpretations published thereunder.

          “Common Stock” has the meaning set forth in the recitals above.

          “Company” has the meaning set forth in the preamble above.

          “Company Board” has the meaning set forth in section 3.5 below.

          “Company Intellectual Property” has the meaning set forth in Section 3.9(b) below.

          “Company Recommendation” has the meaning set forth in Section 8.4(a) below.

          “Company Stockholder Approval” means the approval by the affirmative vote of the
holders of a majority of shares of Common Stock present or represented by proxy at the Stockholders
Meeting of (a) the issuance of the Shares and the Warrant as required by NASDAQ Rules and (b) the
amendment to the Amended and Restated Advancis Pharmaceutical Corporation Stock Incentive Plan to
increase the number of shares of Common Stock available for grant by 7,000,000 shares.

          “Contract” has the meaning set forth in Section 3.2 below.

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          “Covered Securities” has the meaning set forth in Section 3.26 below.

          “Deerfield Agreement” means that Agreement, dated July 1, 2008, by and among the
Company, the Deerfield Entities, Deerfield Management, L.P., Kef Pharmaceuticals, Inc. and Lex
Pharmaceuticals, Inc.

          “Deerfield Entities” means Deerfield Private Design Fund, L.P., a Delaware limited
partnership, Deerfield Private Design International, L.P., a British Virgin Islands limited
partnership, Deerfield Special Situations Fund, L.P., a Delaware limited partnership, and Deerfield
Special Situations Fund International Limited, a British Virgin Islands limited company

          “Deerfield Warrant” means the warrants to purchase Common Stock held by Deerfield
Entities.

          “Disposition” has the meaning set forth in Section 4.9 below.

          “Effective Date” has the meaning set forth in the preamble above.

          “EMEA” has the meaning set forth in Section 3.25(b) below.

          “Employment Agreements” has the meaning set forth in the recitals above.

          “Employee Benefit Plan” means each “employee benefit plan” as defined in Section 3(3)
of ERISA and all equity-based incentive, deferred compensation, retiree medical, severance or other
benefit plans, programs or arrangements, and all employment, termination, severance or other
contracts or agreements to which the Company or any Subsidiary is a party, with respect to which
the Company or any Subsidiary has any obligation or which are maintained, contributed to or
sponsored by the Company or any Subsidiary for the benefit of any current or former employee,
officer or director of the Company or any Subsidiary.

          “Environmental Laws” has the meaning set forth in Section 3.23 below.

          “Equity Securities” means any class of capital stock of, or other profit or voting
interests in, the Company and all securities convertible into or rights to purchase capital stock
of or such interests in the Company, if any, including any Equity Security Equivalent (as defined
below) and any and all other equity securities of the Company or securities convertible into or
exchangeable for such securities or issued as a distribution with respect to or in exchange for
such securities.

          “Equity Security Equivalent” means any option, warrant, right or similar security or
right exercisable into, exchangeable for, or convertible to Equity Securities.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and interpretations published thereunder.

          “ERISA Affiliate” means any trade or business (whether or not incorporated) under
common control with the Company or any Subsidiary and which, together with the

3

 

Company or any Subsidiary, is treated as a single employer within the meaning of Section
414(b), (c), (m) or (o) of the Code.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and all of the
rules and regulations promulgated thereunder.

          “Expenses” means the costs and expenses of a party in connection with this Agreement
and the transactions contemplated hereby, including all out-of-pocket expenses (including, all fees
and expenses of counsel, accountants, investment bankers, experts and consultants to a party hereto
and its Affiliates) incurred by a party or on its behalf in connection with or related to the
authorization, preparation, negotiation, execution and performance of this Agreement and the
transactions contemplated hereby.

          “FDA” has the meaning set forth in Section 3.25(a) below.

          “Financial Statements” has the meaning set forth in Section 3.7 below.

          “FTC” has the meaning set forth in Section 5.1(g) below.

          “GAAP” has the meaning set forth in Section 3.7 below.

          “Government Entity” has the meaning set forth in Section 3.2 below.

          “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

          “Irreparable Breach” has the meaning set forth in Section 9.8(c) below.

          “Issuance Closing” has the meaning set forth in Section 8.16(b) below.

          “Kef Stock Purchase Agreement” means that certain Stock Purchase Agreement, dated
November 7, 2007, by and among Deerfield Private Design International Fund, L.P., Deerfield Special
Situations Fund, L.P., Deerfield Special Situation International Limited, Deerfield Private Design
Fund, L.P., Deerfield Management, L.P., Kef Pharmaceuticals, Inc. and the Company.

          “Kef Stock Purchase Right” means the Company’s option to purchase all of the
outstanding capital stock of Kef Pharmaceuticals, Inc. pursuant to Section 2.1 of the Kef Stock
Purchase Agreement.

          “knowledge of the Company” or any other similar term or knowledge qualifier means the
knowledge of any of the senior executive officers of the Company, in each case including facts of
which such individual should be aware in the reasonably prudent exercise of his duties.

          “Law” has the meaning set forth in Section 3.2 below.

4

 

          “Lex Stock Purchase Agreement” means that certain Stock Purchase Agreement, dated
November 7, 2007, by and among Deerfield Private Design International Fund, L.P., Deerfield Special
Situations Fund, L.P., Deerfield Special Situation International Limited, Deerfield Private Design
Fund, L.P., Deerfield Management, L.P., Lex Pharmaceuticals, Inc. and the Company.

          “Lex Stock Purchase Right” means the Company’s option to purchase all of the
outstanding capital stock of Lex Pharmaceuticals, Inc. pursuant Section 2.1 of the Lex Stock
Purchase Agreement.

          “Lien” has the meaning set forth in Section 3.2 below.

          “Lock-up Agreements” has the meaning set forth in Section 3.26 below.

          “Lock-up Period” has the meaning set forth in Section 3.26 below.

          “Management Transition Committee” has the meaning set forth in Section 8.2 below.

          “Material Adverse Effect” has the meaning set forth in Section 3.1 below.

          “NASDAQ” has the meaning set forth in Section 3.2 below.

          “NASDAQ Rules” has the meaning set forth in Section 3.13 below.

          “New Securities” has the meaning set forth in Section 8.14(b) below.

          “Operative Agreements” means the Registration Rights Agreement, the Employment
Agreements, the Warrant, the Voting Agreements and the Deerfield Agreement together with this
Agreement.

          “Permitted Lien” has the meaning set forth in Section 3.9(a) below.

          “person” or “Person” means an individual, corporation, partnership, limited
partnership, limited liability company, syndicate, person (including a “person” as defined in
Section 13(d)(3) of the Exchange Act), trust, association or entity or Government Entity.

          “Placement Agent” has the meaning set forth in Section 4.8 below.

          “Proxy Statement” has the meaning set forth in Section 8.3(a) below.

          “Purchaser” has the meaning set forth in the preamble above.

          “Purchaser Party” has the meaning set forth in Section 8.13 below.

          “Registration Effective Date” has the meaning set forth in Section 8.7 below.

          “Registration Rights Agreement” means that certain Registration Rights Agreement,
dated as of the Effective Date, between the Company and the Purchaser.

5

 

          “Registration Statement” has the meaning set forth in Section 6.1(c) below.

          “Reserved Shares” has the meaning set forth in Section 3.4 below.

          “Rules and Regulations” means the rules and regulations of the SEC.

          “SEC” means the Securities and Exchange Commission.

          “SEC Documents” has the meaning set forth in Section 3.26 below.

          “Section 16” has the meaning set forth in Section 8.9 below.

          “Securities” means the Shares, the Warrant and the Underlying Shares.

          “Securities Act” means the Securities Act of 1933, as amended, and all of the rules
and regulations promulgated thereunder.

          “Shares” has the meaning set forth in the recitals above.

          “Significant Subsidiary” has the meaning set forth in Section 3.1 below.

          “Stockholders Meeting” has the meaning set forth in Section 8.4(a) below.

          “Subsidiary” of any entity means another entity, an amount of the voting securities,
other voting ownership or voting partnership interests of which is sufficient to elect at least a
majority of its board of directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly or indirectly by such
first entity.

          “Trading Day” means(a) if the Common Stock is listed or quoted on the Nasdaq Global
Market, then any day during which securities are generally eligible for trading on the Nasdaq
Global Market, or (b) if the Common Stock is not then listed or quoted and traded on the Nasdaq
Global Market, then any Business Day.

          “Transfer” has the meaning set forth in Section 3.26 below.

          “Transfer Agent” has the meaning set forth in Section 6.2(b) below.

          “Underlying Shares” means the shares of Common Stock issuable upon exercise of the
Warrant.

          “Voting Agreements” has the meaning set forth in the recitals above.

          “Warrant” has the meaning set forth in the recitals above.

     2. Purchase and Sale of Securities.

          2.1 Purchase and Sale. Subject to and upon the terms and conditions set forth in this
Agreement, the Company agrees to issue and sell to the Purchaser, and the Purchaser

6

 

hereby agrees to purchase from the Company, on the Closing Date, (a) 30,303,030 Shares and (b) a
Warrant to purchase 12,121,212 Underlying Shares (which number of Underlying Shares equals 0.40
share of Common Stock for every one Share purchased by the Purchaser) having an exercise price of
$3.90 per Underlying Share. The total purchase price payable by Purchaser for the Shares and the
Warrant that Purchaser is hereby agreeing to purchase is $99,999,999 (the “Aggregate Purchase
Price”).

          2.2 Closing. The closing of the transactions contemplated under this Agreement (the
“Closing”) shall take place at the offices of Dewey & LeBoeuf LLP, 1301 Avenue of the
Americas, New York, New York 10019, counsel to the Company, on the second business day after the
satisfaction or waiver of the conditions precedent set forth in Section 5.1 or at such other
location, date and time as may be agreed upon between the Purchaser and the Company. At the
Closing, the Company shall deliver to the Purchaser a single stock certificate representing the
number of Shares purchased by the Purchaser and a single Warrant, each to be registered in the name
of the Purchaser, or in such nominee’s or nominees’ name(s) as designated by the Purchaser in
writing in the form of the Investor Questionnaire attached hereto as Appendix I, against payment of
the Aggregate Purchase Price (less any amounts payable directly to the Deerfield Entities pursuant
to the terms of the Deerfield Agreement) by wire transfer of immediately available funds to such
account or accounts as the Company shall designate in writing.

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

          3.1 Incorporation. The Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of Delaware with full power and authority (corporate
and other) to own, lease and operate, as the case may be, its properties and conduct its business
as now conducted; and the Company is duly qualified to transact business and is in good standing in
each jurisdiction in which the nature of the business conducted by it, or its ownership or leasing
of property, or its employment of employees or consultants therein, makes such qualification
necessary, except where the failure to be so qualified or be in good standing would not reasonably
be expected to have, individually or in the aggregate, a material adverse effect on or change in
the condition (financial or otherwise), business, properties or results of operations of the
Company (a “Material Adverse Effect”). The Company has not received notification, written
or otherwise, that any 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,
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. The Company is in possession of and operating in material compliance with all
authorizations, licenses, certificates, consents, orders and permits from state, federal and other
regulatory authorities that are material to the conduct of its business, all of which are valid and
in full force and effect. The Company is not in violation of its charter or bylaws. Except as
disclosed in the SEC Documents the Company does not own or control, directly or indirectly, any
corporation, association or other entity. Complete and correct copies of the certificate of
incorporation (the “Certificate of Incorporation”) and bylaws (the “Bylaws”) of the
Company as in effect on the Effective Date have been filed by the Company with the SEC. The
business described in the SEC Documents is carried on primarily by the Company and the

7

 

Company does not have any Subsidiary that constitutes a “Significant Subsidiary” as such
term is defined in Item 1-02(w) of Regulation S-X.

          3.2 Authority. The Company has all requisite corporate power and authority to enter into
this Agreement and the other Operative Agreements and to perform the transactions contemplated
hereby and thereby. When executed and delivered, each of the Operative Agreements will constitute
the legal, 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 other similar laws affecting creditors’ rights generally
and by general equitable principles. The execution, delivery and performance of this Agreement and
the other Operative Agreements and the consummation of the transactions herein and therein
contemplated will not result in (a) any violation of the Certificate of Incorporation or Bylaws of
the Company or (b) the creation of any pledge, lien, encumbrance, mortgage, hypothecation, charge,
security interest, easement, title defect, conditional sale or other title retention agreement,
judgment, interest, equitable interest, setoff or claim of any kind or nature, whether arising by
agreement, Law or otherwise (“Lien”), other than a Permitted Lien, upon any assets or
property of the Company pursuant to the terms or provisions of, or will not, in any material
respect, conflict with, result in the breach or violation of, or constitute a breach or violation
of any of the terms and provisions of, or constitute a default under any contract, agreement,
license, understanding, indenture, mortgage, deed of trust, loan agreement, joint venture, lease
(including without limitation any sale and leaseback arrangement), franchise, permit or other
instrument or bond, debenture, note or other evidence of indebtedness, to which the Company is a
party or by or to which it or its properties (including without limitation all Company Intellectual
Property) or assets are or may be bound or subject (each, a “Contract”) or any law, order,
ruling, rule, regulation, writ, assessment, injunction, judgment or decree of any government or
governmental court, agency or body, domestic or foreign, having jurisdiction over the Company or
over any of its respective properties (including without limitation all Company Intellectual
Property) or Contracts (“Government Entity”) or by or to which they or such of its
properties or Contracts are or may be bound or subject (each, a “Law”). No consent,
approval, authorization or order of or qualification with any Government Entity is required for the
execution, delivery and performance of this Agreement or the other Operative Agreements and the
consummation by the Company of the transactions herein and therein contemplated, except such
consents as may be required by NASDAQ Rules or under the HSR Act

          3.3 Litigation; Contracts. Except as disclosed in the SEC Documents, there are no actions,
suits, claims, investigations or proceedings pending or, to the Company’s knowledge, threatened to
which the Company or, to the Company’s knowledge, to which any of its directors or officers is a
party, or to which any of its properties (including without limitation all Company Intellectual
Property) or any Contract may be subject, at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body, authority or agency which,
individually or in the aggregate, would reasonably be expected to prevent or to materially impede
or delay the consummation of the transactions contemplated by this Agreement or which would
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. There
are no Contracts of a character required to be described or referred to in the SEC Documents,
and/or filed as an exhibit to, by the Securities Act, the Exchange Act or the Rules and Regulations
which have not been accurately described in all

8

 

material respects in the SEC Documents, and/or filed as an exhibit to such SEC Documents. Except to
the extent disclosed in the SEC Documents, the Contracts described in the SEC Documents are in full
force and effect and are valid agreements, enforceable by the Company, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally and by general equitable principles, and except where the
enforceability and validity thereof would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect. No event has occurred, and no circumstances or condition
exists, that (with or without notice or lapse of time) (a) has resulted or is reasonably likely to
result in a breach, default, violation or waiver of any Contract or any provision thereof; (b)
gives or is reasonably likely to give any party to any Contract the right to declare a breach,
default or violation of or exercise any remedy under such Contract; (c) gives or is reasonably
likely to give any party to any Contract the right to cancel, terminate, modify or be excused from
performance of any obligations under such Contract; or (d) has resulted or is reasonably likely to
result in a violation of any Law or in imposition of any fines, penalties, damages, injunctions,
prohibitions or other sanctions, except in the cases of clauses (a), (b) and (c) where such
breaches, defaults, violations, waivers, remedies, cancellations, terminations, modifications
excuses or impositions would not reasonably by expected to have, individually or in the aggregate,
a Material Adverse Effect.

          3.4 Capitalization. All outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and have not been issued in violation of any preemptive
rights or other rights to subscribe for or purchase securities. The authorized capital stock of the
Company consists of (a) 225,000,000 shares of Common Stock, of which approximately 56,080,324
shares are outstanding on the date hereof and (b) 25,000,000 shares of preferred stock, of which no
shares are outstanding on the date hereof. Except for options to purchase Common Stock issued under
the Amended and Restated Advancis Pharmaceutical Corporation Stock Incentive Plan and the warrants
disclosed in the SEC Documents, there are no existing options, warrants, calls, preemptive (or
similar) rights, subscriptions or other rights, agreements, arrangements or commitments of any
character obligating the Company to issue, transfer or sell, or cause to be issued, transferred or
sold, any shares of the capital stock of the Company or other equity interests in the Company or
any securities convertible into or exchangeable for such shares of capital stock or other equity
interests, and there are no outstanding contractual obligations of the Company to repurchase,
redeem or otherwise acquire any shares of its capital stock or other equity interests. Set forth
on Schedule II is the number of shares of Common Stock reserved as of the date hereof for
issuance pursuant to the Amended and Restated Advancis Pharmaceutical Corporation Stock Incentive
Plan and the warrants disclosed in the SEC Documents (the “Reserved Shares”). There are no
voting agreements or other similar arrangements with respect to the Common Stock to which the
Company is a party. The description of the Company’s stock option plans, employee stock purchase
plans or similar arrangements, and the options or other rights granted and exercised thereunder,
set forth in the SEC Documents accurately and fairly presents, in all material respects, the
information required to be shown with respect to such plans, arrangements, options and rights .
Except as described in the SEC Documents or as have been waived, no person or entity has the right
to require the Company to register any securities of the Company under the Securities Act, whether
on a demand basis or in connection with the registration of securities of the Company for its own
account or for the account of any other person or entity. The issuance

9

 

and sale of the Shares and the Warrant hereunder will not obligate the Company to issue shares of
Common Stock or other securities to any other person or entity (other than the Purchaser) and,
other than with respect to the Deerfield Warrant, will not result in the adjustment of the
exercise, conversion, exchange or reset price of any outstanding security.

          3.5 Authorization. The Shares and the Warrant have been duly and validly authorized for
issuance and sale to the Purchaser pursuant to this Agreement and, when issued and delivered by the
Company against payment therefor in accordance with the terms of this Agreement, will be duly and
validly issued and fully paid and nonassessable, and will be sold free and clear of any Lien. The
Underlying Shares have been duly and validly authorized and reserved for issuance and, upon
exercise of the Warrant in accordance with their terms, including payment of the exercise price
therefore, the Underlying Shares will be validly issued, fully paid and nonassessable and will be
sold free and clear of any Lien. No preemptive right, co-sale right, registration right, right of
first refusal or other similar right of stockholders exists with respect to any of the Securities
or the issuance and sale thereof, other than those that have been expressly waived prior to the
date hereof, those that will have been expressly waived prior to the Closing Dates, and those that
will automatically expire upon or will not apply to the consummation of the transactions
contemplated on the Closing Dates. No further approval or authorization of any stockholder, the
board of directors of the Company (the “Company Board”) or others is required for the
issuance and sale or transfer of the Securities, except for the Company Stockholder Approval and as
may be required under the HSR Act. The Company and the Company Board have taken all necessary
action, if any, in order to render inapplicable any control share acquisition, business combination
or other similar anti-takeover provision under the laws of the state of its incorporation, the
Company’s organizational documents and any other agreement to which the Company is bound, which is
or could become applicable to the Purchaser as a result of the transactions contemplated by this
Agreement, including, without limitation, the Company’s issuance of the Securities and the
Purchaser’s ownership of the Securities. The Company does not have a stockholder rights plan or
other “poison pill” arrangement.

          3.6 Accountants. PricewaterhouseCoopers LLP, whose report on the financial statements of
the Company is filed with the SEC in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2007, are independent registered public accountants as required by the Securities Act
and the Rules and Regulations. Except as described in the SEC Documents and as preapproved in
accordance with the requirements set forth in Section 10A of the Exchange Act, to the Company’s
knowledge, PricewaterhouseCoopers LLP has not engaged in any “prohibited activities” (as defined in
Section 10A of the Exchange Act) on behalf of the Company.

          3.7 Financial Statements. The financial statements of the Company contained in the SEC
Documents, together with the related schedules and notes (the “Financial Statements”): (a)
present fairly, in all material respects, the financial position of the Company as of the dates
indicated and the results of operations and cash flows of the Company for the periods specified;
(b) have been prepared in compliance with requirements of the Securities Act and the Rules and
Regulations and in conformity with generally accepted accounting principles in the United States
(“GAAP”) applied on a consistent basis during the periods presented and present fairly, in
all material respects, the information required to be stated therein (provided, however, that the
statements that are unaudited are subject to normal year-end adjustments and

10

 

do not contain certain footnotes required by generally accepted accounting principles); (c) comply
with the antifraud provisions of the federal securities laws; and (d) describe accurately, in all
material respects, the controlling principles used to form the basis for their presentation. There
are no financial statements (historical or pro forma) and/or related schedules and notes that are
required to be included in the SEC Documents that are not included as required by the Securities
Act, the Exchange Act and/or the Rules and Regulations. Except as set forth in the Financial
Statements, to the Company’s knowledge the Company has no material liabilities, contingent or
otherwise, other than liabilities incurred in the ordinary course of business subsequent to
December 31, 2007, and liabilities of the type not required under GAAP to be reflected in the
Financial Statements.

          3.8 No Changes. Subsequent to December 31, 2007, except as otherwise described in the SEC
Documents, there has not been (a) any change, development or event that would reasonably be
expected to result, individually or in the aggregate, in a Material Adverse Effect, (b) any
transaction that is material to the Company, (c) any obligation, direct or contingent, that is
material to the Company, incurred by the Company, (d) any change in the capital stock or
outstanding indebtedness of the Company that is material to the Company, (e) any dividend or
distribution of any kind declared, paid or made on the capital stock of the Company, (f) any loss
or damage (whether or not insured) that has been sustained or will have been sustained that would
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (g)
any waiver by the Company of a material right or of a material debt owed to it, (h) any sale,
assignment or transfer of any Company Intellectual Property or (i) any arrangement or commitment by
the Company to do any of the acts described in subjections (a) through (h) above.

          3.9 Property.

               (a) Except as set forth in the SEC Documents: (i) the Company has good and marketable title to
all properties and assets required for the continued conduct of its business as described in the
SEC Documents as owned by it free and clear of any Lien, whether imposed by agreement, contract,
understanding, Law, equity or otherwise, except for Permitted Liens (as defined below) or where any
failure to have good and marketable title to such properties and assets, individually or in the
aggregate, would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect; and (ii) the Company has valid and enforceable leases, including without limitation
any leases that are the subject of any sale and leaseback arrangement, for all properties required
for the continued conduct of its business as described in the SEC Documents as leased by it, except
as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors’ rights generally and by general equitable principles.
Except as set forth in the SEC Documents, the Company owns or leases all such properties as are
necessary to its operations as now conducted or as proposed to be conducted. A “Permitted
Lien” shall mean (i) Liens for taxes not yet due, (ii) mechanics Liens and similar Liens for
labor, materials or supplies incurred in the ordinary course of business for amounts that are not
delinquent and (iii) any Liens that individually or in the aggregate are not material.

               (b) Except as described in the SEC Documents, to the Company’s knowledge the Company owns or
has valid, binding and enforceable licenses or other rights to

11

 

use the patents and patent applications, inventions, copyrights, trademarks, service marks,
trade names, service names, technology or know-how (including trade secrets and other unpatented
and/or unpatentable proprietary rights and excluding generally commercially available “off the
shelf” software programs licensed pursuant to shrink wrap or “click and accept” licenses) necessary
to conduct its business in the manner described in the SEC Documents (collectively, the
“Company Intellectual Property”), except for any Company Intellectual Property the absence
of which would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. The Company Intellectual Property is free and clear of any Lien, whether imposed by
agreement, contract, understanding, law, equity or otherwise, except for Permitted Liens or except
as described in the SEC Documents. The Company is not obligated to pay a royalty, grant a license
or provide other consideration to any third party in connection with the Company Intellectual
Property other than as disclosed in the SEC Documents. Except as disclosed in the SEC Documents (i)
the Company has not received any notice claiming infringement, misappropriation, or other conflict
with asserted intellectual property rights of others resulting from the conduct of the business of
the Company, (ii) the conduct of the business of the Company in the manner described in the SEC
Documents does not and will not infringe, misappropriate, interfere or otherwise conflict with any
valid issued patent claim or other intellectual property right of any third party known to the
Company and (iii) no third party, including any academic or governmental organization, possesses
rights to the Company Intellectual Property which, if exercised, would enable such party to develop
products competitive to those of the Company. Except as disclosed in the SEC Documents, the Company
has not received any notice and has no knowledge of (i) any actual or potential infringement,
misappropriation or other violation by others of the Company Intellectual Property or (ii) any
intellectual property of others that potentially conflicts or interferes with the Company
Intellectual Property that would reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect. To the Company’s knowledge, no claim of any patent or patent application
(assuming the claims of patent applications issue as currently pending) included in the Company
Intellectual Property is unenforceable or invalid except as described in the SEC Documents. Each
former and current employee and independent contractor of the Company has signed and delivered one
or more written contracts with the Company pursuant to which such employee or independent
contractor assigns to the Company all of his, her or its rights in and to any inventions,
discoveries, improvements, works of authorship, know-how or information made, conceived, reduced to
practice, authored or discovered in the course of employment by or performance of services for the
Company and any and all patent rights, copyrights, trademark and other intellectual property rights
therein or thereto. Except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, the Company takes reasonable measures to protect the
confidentiality of trade secrets and other confidential and proprietary information, including
requiring all persons having access thereto to execute written non-disclosure agreements. Except
as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect (i) the Company has at all times complied with all applicable Laws, as well as its own
rules, policies, and procedures, relating to privacy, data protection, and the collection and use
of personal information collected, used, or held for use by the Company, (ii) no claims have been
asserted
or, to the Company’s knowledge, threatened against the Company alleging a violation of any
privacy or personal information or data rights, and (iii) the Company takes reasonable measures to
ensure that such information is protected against unauthorized access, use, modification, or other
misuse.

12

 

          3.10 Tax Returns. The Company has timely filed all federal, state, local and foreign income
and franchise tax returns required to be filed by the Company on or prior to the date hereof, and
has paid all taxes shown thereon as due, and there is no tax deficiency that has been or, to the
Company’s knowledge, might be asserted against the Company that could reasonably be expected to
have a Material Adverse Effect. All tax liabilities are adequately provided for on the books of the
Company.

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

          3.12 Internal Controls. The Company has established and maintains a system of internal
accounting controls sufficient to provide reasonable assurances that: (a) transactions are executed
in accordance with management’s general or specific authorization; (b) transactions are recorded as
necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles in the United States and to maintain accountability for assets; (c) access to
assets is permitted only in accordance with management’s general or specific authorization; (d) the
recorded accountability for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences; and (e) financial reporting and the
preparation of financial statements for external purposes in accordance with GAAP are reliable.

          3.13 Audit Committee. The Company Board has validly appointed an audit committee whose
composition satisfies the requirements of Rule 4350(d)(2) of the Rules of the NASDAQ (the
“NASDAQ Rules”) and the Company Board and/or such audit committee has adopted a charter
that satisfies the requirements of Rule 4350(d)(1) of the NASDAQ Rules. Such audit committee has
reviewed the adequacy of its charter within the past 12 months.

          3.14 Disclosure Controls. The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act). Since the
date of the most recent evaluation by the Company’s certifying officers of such disclosure controls
and procedures, there have been no significant changes in internal controls or in other factors
that could significantly affect internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses. The Company is in compliance in all material
respects with all provisions currently in effect and applicable to the Company of the
Sarbanes-Oxley Act of 2002, and all rules and regulations promulgated thereunder or implementing
the provisions thereof.

          3.15 Insurance. The Company maintains insurance with insurers of recognized financial
responsibility of the types and in the amounts it reasonably believes to be adequate for its
business and consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering the acts and omissions of directors
and officers, real and personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect; and the Company has no reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires or to obtain

13

 

similar coverage from similar insurers as may be necessary to continue its business at a cost that
would not reasonably be expected to have a Material Adverse Effect.

          3.16 Losses. The Company has not sustained since December 31, 2007 any losses or
interferences with its business from fire, explosion, flood or other calamity or natural disaster,
whether or not covered by insurance, or from any labor dispute or court or governmental action,
order or decree, other than any losses or interferences which would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

          3.17 Labor Disputes. No material labor dispute with employees of the Company exists or, to
the Company’s knowledge, is imminent. No collective bargaining agreement exists with any of the
Company’s employees and, to the Company’s knowledge, no such agreement is imminent.

          3.18 Nasdaq Global Market. The Common Stock is registered pursuant to Section 12(b) of the
Exchange Act and is listed on the Nasdaq Global Market, and 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 delisting the Common Stock from the Nasdaq Global Market. Except as
disclosed in the Company’s Form 8-K filed on May 10, 2005, the Company has not received any
notification that the SEC or the Nasdaq Stock Market LLC is contemplating terminating such
registration or listing. The Company has taken all actions necessary to list the Shares and the
Underlying Shares for quotation on the Nasdaq Global Market. The Company is in compliance with all
corporate governance requirements of the Nasdaq Global Market except for such non-compliance as
would not, individually or in the aggregate, have a Material Adverse Effect. The Company shall
comply with all requirements of the NASDAQ with respect to the issuance of the Shares and the
Underlying Shares and the listing of the Shares and the Underlying Shares on the Nasdaq Global
Market and such other securities exchange or automated quotation system, as applicable. The Company
Stockholder Approval is the only stockholder approval required in connection with the transactions
contemplated by this Agreement.

          3.19 Investment Company. The Company is not and, after giving effect to the offering and
sale of the Securities, will not be an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.

          3.20 Offering Materials. Other than the SEC Documents and the Operative Agreements, the
Company has not distributed and, prior to the Closing Date, will not distribute, any offering
materials in connection with the offering and sale of the Securities. The Company has not in the
past nor will it hereafter take any action to sell, offer for sale or solicit offers to buy any
securities of the Company which would bring the offer, issuance or sale of the Securities, as
contemplated by this Agreement, within the provisions of Section 5 of the Securities Act (other
than pursuant to the Registration Rights Agreement).

          3.21 No Manipulation of Stock. Neither the Company nor, to its knowledge, any of its
Affiliates has taken, directly or indirectly, any action designed to or which has constituted or
which would reasonably be expected to cause or result, under the Exchange Act or

14

 

otherwise, in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.

          3.22 Employment Matters. The Company is in compliance in all material respects with the
terms of each Employee Benefit Plan, and with ERISA, the Code and all applicable Laws; to the
Company’s knowledge, no unwaivable “reportable event” (as defined in ERISA) has occurred with
respect to any “pension plan” (as defined in ERISA) for which the Company would have any liability;
no Employee Benefit Plan is subject to Title IV of ERISA; neither the Company nor any ERISA
Affiliate made, or was required to make, contributions to any plan subject to Title IV of ERISA
during the five (5) year period ending on the last day of the most recent plan year ended prior to
the Closing Dates; no Employee Benefit Plan is a “multiemployer plan” (as such term is defined in
Section 3(37) of ERISA); and each Employee Benefit Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified, the trust thereunder is exempt from taxation, and
nothing has occurred, whether by action or by failure to act, which would cause the loss of such
qualification or tax exempt status.

          3.23 Environmental. Except as set forth in the SEC Documents: (a) the Company is in
compliance in all material respects with all rules, Laws and regulations relating to the use,
treatment, storage and disposal of toxic substances and protection of health or the environment
(“Environmental Laws”) which are applicable to its business; (b) the Company has not
received any notice from any governmental authority or third party of an asserted claim under
Environmental Laws; (c), to the Company’s knowledge, the Company is not currently required to make
future material capital expenditures to comply with Environmental Laws; and (d) to the Company’s
knowledge, no property that is owned, leased or occupied by the Company has been designated a
Superfund site pursuant to the Comprehensive Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C. Section 9601, et seq.), or otherwise designated as a contaminated site under
applicable state or local law.

          3.24 Outstanding Loans to Officers or Directors; Related Party Transactions. There are no
outstanding loans, advances (except normal advances for business expenses in the ordinary course of
business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers
or directors of the Company or any of the members of the families of any of them. No transaction
has occurred between or among the Company and its Affiliates, officers or directors or any
Affiliate or Affiliates of any such officer or director that is required to be described in the SEC
Documents that is not so described.

          3.25 Compliance.

               (a) The Company possess all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct its business as currently
conducted, including without limitation all such certificates, authorizations and permits required
by the United States Food and Drug Administration (the “FDA”) or any other federal, state
or foreign agencies or bodies engaged in the regulation of pharmaceuticals or biohazardous
materials, except where the failure to so possess such certificates, authorizations and permits,
individually or in the aggregate, would not result in a Material Adverse Effect or except as
disclosed in the SEC Documents. The Company has not received any notice of proceedings relating to
the revocation or modification of any such certificate, authorization or

15

 

permit which, individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect.

               (b) Except to the extent disclosed in the SEC Documents, the Company has not received any
written notices or statements from the FDA, the European Medicines Agency (the “EMEA”) or
any other governmental agency, and otherwise has no knowledge or reason to believe, that (i) any
new drug application or marketing authorization application for any product or potential product of
the Company is or has been rejected or determined to be non-approvable or conditionally approvable;
and (ii) any license, approval, permit or authorization to conduct any clinical trial of or market
any product or potential product of the Company has been, will be or may be suspended or revoked,
except in the cases of clauses (i) and (ii) where such rejections, determinations, delays,
requests, suspensions, revocations, modifications or limitations would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.

               (c) To the Company’s knowledge, the preclinical and clinical testing, application for
marketing approval of, manufacture, distribution, promotion and sale of the products and potential
products of the Company is in compliance, in all material respects, with all Laws applicable to
such activities, including without limitation applicable good laboratory practices, good clinical
practices and good manufacturing practices, except for such non-compliance as would not reasonably
be expected to have, individually or in the aggregate, have a Material Adverse Effect. The
descriptions of the results of such tests and trials contained in the SEC Documents are accurate in
all material respects. Except to the extent disclosed in the SEC Documents, the Company has not
received any rapid alert notice or notification of failure to comply from the Medicines and
Healthcare products Regulatory Agency, EMEA or any associated regulatory agencies, any notice of
adverse finding, warning letter or clinical hold notice from the FDA or any non-U.S. counterpart of
any of the foregoing, or any untitled letter or other correspondence or notice from the FDA or any
other governmental authority or agency or any institutional or ethical review board alleging or
asserting noncompliance with any Law applicable in any jurisdiction, except notices, letters and
correspondence and non-U.S. counterparts thereof alleging or asserting such noncompliance as would
not reasonably be expected to have, individually or in the aggregate, have a Material Adverse
Effect. The Company has not, either voluntarily or involuntarily, initiated, conducted or issued,
or caused to be initiated, conducted or issued, any recall, field correction, market withdrawal or
replacement, safety alert, warning, “dear doctor” letter, investigator notice, or other notice or
action relating to an alleged or potential lack of safety or efficacy of any product or potential
product of the Company, or any violation of any material applicable Law or any clinical trial or
marketing license, approval, permit or authorization for any product or potential product of the
Company, except such notices or actions as would not reasonably be expected to have, individually
or in the aggregate, have a Material Adverse Effect.

               (d) The Company is conducting its business in compliance with all other Laws, except where the
failure to so comply would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

          3.26 SEC Documents. The Company has made available to Purchaser a true and complete copy of
the Company’s Annual Report on Form 10-K for the year ended December

16

 

31, 2007, its Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 and each current
report on Form 8-K (except for the information deemed to be furnished and not filed therewith) and
the definitive proxy statement filed by the Company with the SEC during the period commencing on
January 1, 2008 and ending on the date hereof. The Company will, promptly upon the filing thereof,
also make available to the Purchaser all Quarterly Reports on Form 10-Q and Current Reports on Form
8-K and definitive proxy statements filed by the Company with the SEC during the period commencing
on the date hereof and ending on the Closing Date (all such materials required to be furnished to
the Purchaser pursuant to this sentence or pursuant to the immediately preceding sentence of this
Section 3.26 being called, collectively, the “SEC Documents”). The Company has filed in a
timely manner all documents that the Company was required to file under the Exchange Act during the
12 months preceding the date of this Agreement. As of their respective filing dates, the SEC
Documents complied or, when filed, will comply in all material respects with the requirements of
the Exchange Act or the Securities Act, as applicable, and none of the SEC Documents contained or,
when filed, will contain any untrue statement of a material fact or omitted or, when filed, will
omit to state a material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were or will be made, not
misleading.

          3.27 Brokers, Finders, and Placement Agents. Except for Morgan Stanley & Co. Incorporated,
the Company has not dealt with any broker, finder or placement agent in connection with the
transactions contemplated by this Agreement, and, except for certain fees and expenses payable by
the Company to Morgan Stanley & Co. Incorporated, the Company has not incurred, and shall not
incur, directly or indirectly, any liability for any brokerage or finders’ fees or agents’
commissions or any similar charges in connection with this Agreement or any transaction
contemplated hereby.

          3.28 No Integrated Offering. Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf, has directly or indirectly made any offers or sales of any security
or solicited any offers to buy any security under circumstances within the prior six months that
would require registration under the Securities Act of the issuance of the Securities to the
Purchaser.

          3.29 No General Solicitation. Neither the Company nor, to the knowledge of the Company, any
person acting for the Company, has conducted any “general solicitation” (as such term is defined in
Regulation D) with respect to any of the Securities being offered hereby. The Company will not
distribute any offering material in connection with the sale of the Securities prior to the Closing
Dates, other than the Operative Agreements and the SEC Documents.

          3.30 Private Placement. The offer, sale and issuance of the Securities to the Purchaser as
contemplated hereby is exempt from the registration requirements of the Securities Act.

          3.31 S-3 Eligibility. The Company is eligible to use Form S-3 to register the Registrable
Securities (as such term is defined in the Registration Rights Agreement) for sale by the Purchaser
as contemplated by the Registration Rights Agreement.

17

 

          3.32 Disclosures. Neither the Company nor any person or entity acting on its behalf has
provided the Purchaser or their agents or counsel with any information that constitutes or might
constitute material, non-public information, other than the terms of the transactions contemplated
hereby, except as has been provided pursuant to that certain confidentiality agreement dated April
21, 2008 between the Purchaser and the Company.

          3.33 Amendments to Certificate of Incorporation and Bylaws. The Company Board has resolved
to solicit the requisite stockholder approval at the first annual meeting of the Company’s
stockholders following Closing for the adoption of amendments to the Certificate of Incorporation
and the Bylaws providing for the declassification of the Company Board and the annual election of
all directors.

     4. Representations and Warranties of the Purchaser. The Purchaser represents and warrants
to the Company as follows:

          4.1 Authorization. The Purchaser has all requisite limited liability company power and
authority to enter into this Agreement and the other Operative Agreements and to perform the
transactions contemplated hereby and thereby. When executed and delivered, each of the Operative
Agreements will constitute the legal, valid and binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting
creditors’ rights generally and by general equitable principles.

          4.2 Purchase Entirely for Own Account. The Purchaser is acquiring the Securities being
purchased by it hereunder for its own account, and not for resale or with a view to distribution
thereof in violation of the Securities Act. The Purchaser has not entered into an agreement or
understanding with any other party to resell or distribute such Securities without prejudice,
however, to the Purchaser’s right, subject to the provisions of this Agreement, at all times to
sell or otherwise dispose of all or any part of such Securities pursuant to an effective
registration statement under the Securities Act or under an exemption from such registration and in
compliance with applicable federal and state securities laws. Nothing contained herein shall be
deemed a representation or warranty by the Purchaser to hold Securities for any period of time.

          4.3 Investor Status; Etc. The Purchaser certifies and represents to the Company that it is
now, and at the time the Purchaser acquires any of the Securities, the Purchaser will be, an
“Accredited Investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act.
The Purchaser’s financial condition is such that it is able to bear the risk of holding the
Securities for an indefinite period of time and the risk of loss of its entire investment. The
Purchaser has received, reviewed and considered all information it deems necessary in making an
informed decision to make an investment in the Securities and has been afforded the opportunity to
ask questions of and receive answers from the management of the Company concerning this investment
and has sufficient knowledge and experience in investing in companies similar to the Company in
terms of the Company’s stage of development so as to be able to evaluate the risks and merits of
its investment in the Company. Such due diligence investigation conducted by the Purchaser or any
of its advisors or representatives does not modify, amend or affect the Purchaser’s right to rely
on the Company’s representations and warranties contained in Section 3 of this Agreement.

18

 

          4.4 Shares Not Registered. The Purchaser understands that the Securities have not been
registered under the Securities Act, by reason of their issuance by the Company in a transaction
exempt from the registration requirements of the Securities Act, and that the Securities must
continue to be held by the Purchaser unless a subsequent disposition thereof is registered under
the Securities Act or is exempt from such registration.

          4.5 No Conflict. The execution, delivery and performance of this Agreement and the other
Operative Agreements by the Purchaser and the consummation of the transactions contemplated hereby
and thereby will not conflict with or result in any violation of or default by the Purchaser (with
or without notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to a loss of a material benefit under (a) any
provision of the organizational documents of the Purchaser, (b) any material agreement or
instrument, permit, franchise, or license or (c) any Law applicable to the Purchaser or its
respective properties or assets except, in the case of the foregoing clauses (b) and (c), such
conflicts, violations or defaults which would not materially impede or delay or would not
reasonably be expected to have, individually or in the aggregate, a material adverse effect on the
Purchaser’s ability to consummate the transactions contemplated by this Agreement.

          4.6 Brokers. The Purchaser has not retained, utilized or been represented by any broker or
finder in connection with the transactions contemplated by this Agreement.

          4.7 Consents. All consents, approvals, orders and authorizations required on the part of
the Purchaser in connection with the execution, delivery or performance of this Agreement and the
consummation of the transactions contemplated herein have been obtained and are effective as of the
Closing, except where the failure to obtain such consents, approvals, orders or authorizations
would not materially impede or delay or would not reasonably be expected to have, individually or
in the aggregate, a material adverse effect on the Purchaser’s ability to consummate the
transactions contemplated by this Agreement.

          4.8 No Public Offering. The Purchaser has not received any information relating to the
Securities or the Company, and is not purchasing the Securities as a result of, any form of general
solicitation or general advertising, including but not limited to, any advertisement, article,
notice or other communication published in any newspaper, magazine or similar media or broadcast
over television or radio or pursuant to any seminar or meeting whose attendees were invited by any
general solicitation or general advertising.

          4.9 Short Positions; Certain Trading Limitations. The Purchaser will not, at any time, use
any of the Securities acquired pursuant to this Agreement to cover any short position in the Common
Stock if doing so would be in violation of applicable securities laws. The Purchaser (a) represents
that on and from the time the Purchaser first became aware of the offering of the Shares until the
date and time hereof neither it nor anyone acting on its behalf has engaged in and (b) covenants
that for the period commencing on the date and time hereof and ending on the earlier to occur of
(i) the Company’s issuance of a press release disclosing the transactions contemplated hereby and
(ii) the Company’s filing of a Current Report on Form 8-K disclosing the transactions contemplated
hereby, neither it nor anyone acting on its behalf will, engage in any hedging or other transaction
which is designed to or could reasonably be expected to lead to or result in, or be characterized
as, a sale, an offer to sell, a solicitation of offers to buy,

19

 

disposition of, loan, pledge or grant of any right with respect to (collectively, a
“Disposition”) the Common Stock of the Company by the Purchaser or any person or entity.
Such prohibited hedging or other transaction would include without limitation effecting any short
sale (whether or not such sale or position is “against the box”) or any purchase, sale or grant of
any right (including without limitation any put or call option) with respect to the Common Stock of
the Company or with respect to any security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value from the Common Stock of the
Company. Notwithstanding the foregoing, nothing set forth above would prohibit the location and/or
reservation of borrowable shares of Common Stock.

          4.10 Broker-dealer. The Purchaser is not a broker-dealer.

          4.11 Affiliates. To the knowledge of the Purchaser, the Purchaser is not an Affiliate of
the Company.

     5. Conditions Precedent.

          5.1 Conditions to the Obligation of the Purchaser to Consummate the Closing. The obligation
of the Purchaser to consummate the Closing and to purchase and pay for the Securities being
purchased by it pursuant to this Agreement is subject to the satisfaction or waiver of the
following conditions precedent:

               (a) The Company shall have obtained the Company Stockholder Approval.

               (b) The representations and warranties of the Company contained herein shall be true and
correct on and as of the Closing Date with the same force and effect as though made on and as of
the Closing Date.

               (c) The Registration Rights Agreement shall be in full force and effect.

               (d) The Employment Agreements shall not have been breached in any material respect by the
Company.

               (e) The Voting Agreements shall be in full force and effect.

               (f) The Deerfield Agreement shall be in full force and effect and shall not have been amended
or breached by any party thereto.

               (g) The Company shall have performed in all material respects all covenants herein required to
be performed or observed by the Company on or prior to the Closing Date.

               (h) The Company shall have filed with NASDAQ a true and complete Notification Form: Listing of
Additional Shares covering the Shares and the Underlying Shares.

20

 

               (i) No proceeding challenging this Agreement or the transactions contemplated hereby, or
seeking to prohibit, alter, prevent or materially delay the Closing, shall have been instituted
before any Government Entity and shall be pending.

               (j) The purchase of and payment for the Securities by the Purchaser shall not be prohibited by
any Law. The waiting period (and any extension thereof) applicable to the transactions contemplated
hereby under the HSR Act shall have been terminated or shall have expired, any investigation opened
by means of a request for additional information or otherwise shall have been terminated or closed
and no action shall have been instituted by the United States Department of Justice or the United
States Federal Trade Commission (the “FTC”) challenging or seeking to enjoin the
consummation of this transaction, which action shall not have been withdrawn, terminated or finally
resolved. All other necessary consents, approvals, licenses, permits, orders and authorizations of,
or registrations, declarations and filings with, any Government Entity or of any other person with
respect to any of the transactions contemplated hereby shall have been duly obtained or made and
shall be in full force and effect.

               (k) The Company shall have exercised the Kef Stock Purchase Right and the Lex Stock Purchase
Right in accordance with the terms of the Kef Stock Purchase Agreement and the Lex Stock Purchase
Agreement.

               (l) All instruments and corporate proceedings in connection with the transactions contemplated
by this Agreement to be consummated at the Closing shall be reasonably satisfactory in form and
substance to the Purchaser, the Purchaser shall have received an opinion of legal counsel to the
Company substantially in the form of Exhibit B attached hereto, and the Purchaser shall
have received such certificates of the Company’s officers as the Purchaser may have reasonably
requested in connection with such transactions.

               (m) No stop order or suspension of trading shall have been imposed by NASDAQ, the SEC or any
other Government Entity with respect to public trading in the Common Stock.

          5.2 Conditions to the Obligation of the Company to Consummate the Closing. The obligation
of the Company to consummate the Closing and to issue and sell to the Purchaser the Securities to
be purchased by it at the Closing is subject to the satisfaction or waiver of the following
conditions precedent:

               (a) The Company shall have obtained the Company Stockholder Approval.

               (b) The representations and warranties contained herein of the Purchaser shall be true and
correct on and as of the Closing Date with the same force and effect as though made on and as of
the Closing Date.

               (c) The Registration Rights Agreement shall be in full force and effect.

               (d) The Purchaser shall have performed in all material respects all covenants herein required
to be performed or observed by the Purchaser on or prior to the Closing Date.

21

 

               (e) No proceeding challenging this Agreement or the transactions contemplated hereby, or
seeking to prohibit, alter, prevent or materially delay the Closing, shall have been instituted
before any Government Entity and shall be pending.

               (f) The sale of the Securities by the Company shall not be prohibited by any Law. The waiting
period (and any extension thereof) applicable to the transactions contemplated hereby under the HSR
Act shall have been terminated or shall have expired, any investigation opened by means of a
request for additional information or otherwise shall have been terminated or closed and no action
shall have been instituted by the United States Department of Justice or the FTC challenging or
seeking to enjoin the consummation of this transaction, which action shall not have been withdrawn,
terminated or finally resolved. All necessary consents, approvals, licenses, permits, orders and
authorizations of, or registrations, declarations and filings with, any Government Entity or of any
other person with respect to any of the transactions contemplated hereby shall have been duly
obtained or made and shall be in full force and effect.

               (g) The Purchaser shall have executed and delivered to the Company an Investor Questionnaire,
in the form attached hereto as Appendix I, pursuant to which the Purchaser shall provide
information necessary to confirm the Purchaser’s status as an “accredited investor” (as such term
is defined in Rule 501 promulgated under the Securities Act) and to enable the Company to comply
with the Registration Rights Agreement.

     6. Transfer, Legends.

          6.1 Securities Law Transfer Restrictions.

               (a) The Purchaser understands that the Securities have not been registered under the
Securities Act or any state securities laws, and the Purchaser agrees that it will not dispose of
the Securities unless (a) the resale of the Securities is registered under the Securities Act, or
(b) such registration is not required under the Securities Act or any applicable state securities
law due to the applicability of an exemption therefrom. In that connection, the Purchaser is aware
of Rule 144 under the Securities Act and the restrictions imposed thereby.

               (b) The Purchaser acknowledges that no action has been or will be taken in any jurisdiction
outside the United States by the Company or the Placement Agent that would permit an offering of
the Securities, or possession or distribution of offering materials in connection with the issue of
Securities, in any jurisdiction outside of the United States where action for that purpose is
required. The Placement Agent is not authorized to make any representation or use any information
in connection with the issue, placement, purchase and sale of the Securities.

               (c) The Purchaser hereby covenants with the Company not to make any sale of the Securities
without complying with the provisions of the Operative Agreements and the Purchaser acknowledges
that the certificates evidencing the Shares and each Warrant will be imprinted with a legend that
prohibits their transference except in accordance therewith. The Purchaser acknowledges that there
may occasionally be times when the Company, based on the advice of its counsel, determines that it
must suspend a registration statement (a “Registration 

22

 

Statement”) registering the Shares and Underlying Shares, until such time as an
amendment to a Registration Statement has been filed by the Company and declared effective by the
SEC or until the Company has amended or supplemented such Prospectus.

          6.2 Legends.

               (a) Each certificate representing any of the Shares or the Underlying Shares shall be endorsed
with the legends set forth below, and the Purchaser covenants that, except to the extent such
restrictions are waived by the Company, it shall not transfer the shares represented by any such
certificate without complying with the restrictions on transfer described in this Agreement and the
legends endorsed on such certificate:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION
UNDER SAID ACT AND, IF REQUESTED BY THE COMPANY IN CONNECTION WITH SUCH A
DISPOSITION PURSUANT TO AN EXEMPTION, UPON DELIVERY OF AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS EXEMPT FROM
SAID ACT. THE SECURITIES REPRESENTED HEREBY MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE
SECURITIES ACT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.”

               (b) Upon the earlier of (i) registration for resale pursuant to the Registration Rights
Agreement or (ii) the date that the Purchaser may resell a Security pursuant to Rule 144 without
volume or manner restrictions, the Company shall (A) deliver to the transfer agent for the Common
Stock (the “Transfer Agent”) irrevocable instructions that the Transfer Agent shall reissue
a certificate representing shares of Common Stock without legends upon receipt by such Transfer
Agent of the legended certificates for such shares, together with, if the sale is being made
pursuant to Rule 144, a customary representation by the Purchaser that Rule 144 applies to the
shares of Common Stock represented thereby, and (B) cause its counsel to deliver to the Transfer
Agent one or more blanket opinions to the effect that the removal of such legends in such
circumstances may be effected under the Securities Act. From and after the earlier of such dates,
upon the Purchaser’s written request, the Company shall promptly, and in any event within 3
business days of receipt of such certificates, cause certificates evidencing the Purchaser’s
Securities to be replaced with certificates which do not bear such restrictive legends, and
Underlying Shares subsequently issued upon due exercise of the Warrant shall not bear such
restrictive legends provided, if applicable, the Rule 144 certificate is provided. When the Company
is required to cause an unlegended certificate to replace a previously issued legended certificate,
if: (1) the unlegended certificate is not delivered to the Purchaser within three (3)

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Business Days of submission by the Purchaser of a legended certificate and supporting
documentation to the Transfer Agent as provided above and (2) prior to the time such unlegended
certificate is received by the Purchaser, the Purchaser, or any third party on behalf of the
Purchaser or for the Purchaser’s account, purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Purchaser of shares represented
by such certificate (a “Buy-In”), then the Company shall pay in cash to the Purchaser (for
costs incurred either directly by the Purchaser or on behalf of a third party) the amount by which
the total purchase price paid for Common Stock as a result of the Buy-In (including brokerage
commissions, if any) exceeds the proceeds received by the Purchaser as a result of the sale to
which such Buy-In relates. The Purchaser shall provide the Company written notice indicating the
amounts payable to the Purchaser in respect of the Buy-In. The Company shall pay all transfer agent
fees, stamp taxes and other taxes and duties levied in connection with the delivery of any
Securities to the Purchaser.

               (c) The Company acknowledges and agrees that the Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security
interest in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the
provisions of this Agreement and the Registration Rights Agreement and, if required under the terms
of such arrangement, the Purchaser may transfer pledged or secured Securities to the pledgees or
secured parties. Such a pledge or transfer would not be subject to approval of the Company and no
legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in
connection therewith. Further, no notice shall be required of such pledge. At the Purchaser’s
expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured
party of Securities may reasonably request in connection with a pledge or transfer of the
Securities, including, if the Securities are subject to registration pursuant to the Registration
Rights Agreement, the preparation and filing of any required prospectus supplement under Rule
424(b)(3) under the Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of Selling Stockholders thereunder.

     7. Termination.

          7.1 Termination. This Agreement may be terminated and the transactions contemplated
hereunder abandoned at any time prior to the Closing only as follows:

               (a) by the Purchaser or the Company if the Closing shall not have been consummated by November
30, 2008, whether such date is before or after the date of the Company Stockholder Approval;
provided, that the right to terminate the Agreement pursuant to this Section 7.1(a) shall not be
available to any party whose failure to perform any of its obligations under this Agreement is the
primary cause of the failure of the Closing to be consummated by such time; or

               (b) by the Purchaser or the Company if the Company Stockholder Approval shall not have been
obtained at the Stockholders Meeting or any adjournment or postponement thereof; or

24

 

               (c) by the Purchaser if the Company Board shall (A) fail to authorize, approve or recommend
the transactions contemplated by this Agreement or (B) effect a Change in Recommendation;
or

               (d) by the Purchaser if the Company shall breach its covenant in Section 8.6 hereof (no
solicitation); or

               (e) at any time by mutual agreement of the Company and the Purchaser; or

               (f) by the Purchaser, if there has been any breach of any representation or warranty or any
material breach of any covenant of the Company contained herein and the same has not been cured
within 15 days after notice thereof (it being understood and agreed by the Purchaser that, in the
case of any representation or warranty of the Company contained herein which is not hereinabove
qualified by application thereto of a materiality standard, such representation or warranty will be
deemed to have been breached for purposes of this Section 7(f) only if such representation or
warranty was not true and correct in all material respects at the time such representation or
warranty was made by the Company); or

               (g) by the Company, if there has been any breach of any representation, warranty or any
material breach of any covenant of any Purchaser contained herein and the same has not been cured
within 15 days after notice thereof (it being understood and agreed by the Company that, in the
case of any representation and warranty of the Purchaser contained herein which is not hereinabove
qualified by application thereto of a materiality standard, such representation or warranty will be
deemed to have been breached for purposes of this Section 7(g) only if such representation or
warranty was not true and correct in all material respects at the time such representation or
warranty was made by the Purchaser).

          7.2 Effect of Termination; Termination Fee.

               (a) Except as set forth in Section 7.2(b), any termination pursuant to this Section 7 shall be
without liability on the part of any party, unless such termination is the result of a material
breach of this Agreement by a party to this Agreement in which case such breaching party shall
remain liable for such breach notwithstanding any termination of this Agreement.

               (b) In the event this Agreement is terminated pursuant to Section 7.1(c) above (failure of
Company Board to recommend or Change in Recommendation) or Section 7.1(d) above (breach of no
solicitation covenant), the Company shall pay to the Purchaser, by wire transfer of immediately
available funds, the sum of (i) the Purchaser’s Expenses and (ii) $4,000,000. In the event this
Agreement is terminated pursuant to Section 7.1(b) above (failure to obtain Company Stockholder
Approval) and the Company enters into an agreement with respect to any Alternative Proposal within
six (6) months following the termination of this Agreement, the Company shall, within three (3)
Business Days after the consummation of the transactions contemplated by such an agreement, pay to
the Purchaser, by wire transfer of immediately available funds, the sum of the Purchaser’s Expenses
and $4,000,000.

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     8. Covenants.

          8.1 Conduct of Business. The Company agrees that, except as expressly approved by the
Purchaser in writing (which approval shall not be unreasonably withheld or delayed), between the
Effective Date and the Closing Date, the Company (i) shall operate its business only in the
ordinary course of business, shall not introduce any new method of management or operation and
shall use reasonable best efforts to preserve its business intact, (ii) shall use its best efforts
to keep available the services of its current officers, employees and consultants (other than
Edward M. Rudnic and Robert C. Low) and (iii) shall use its best efforts to preserve the goodwill
and present relationships with customers, vendors, distributors, licensors, licensees, creditors,
business partners and others with which the Company has business relations. Without limiting the
generality of the first sentence of this Section 8.1, between the Effective Date through the
Closing Date, the Company shall not, except as expressly required or permitted by the terms of this
Agreement, do or propose or agree to do any of the following without the prior written consent or
direction of the Purchaser:

               (a) amend the Company’s Bylaws or Certificate of Incorporation, except as contemplated by this
Agreement;

               (b) merge with or into or consolidate with any other Person;

               (c) issue or sell equity interests in the Company or any securities, option, warrants, calls
or other rights to acquire such equity interests other than (i) the issuance of Reserved Shares and
(ii) the grant of options or other rights in the ordinary course of business pursuant to the
Amended and Restated Advancis Pharmaceutical Corporation Stock Incentive Plan, provided
that such grants shall not exceed 500,000 shares of Common Stock (on an as exercised basis) except
as contemplated by the Employment Agreements;

               (d) enter into any material Contract;

               (e) abandon any rights under any material Contract, terminate, amend, modify or supplement the
terms of any material Contract, or fail to honor or perform under any material Contract;

               (f) other than sales of inventory in the ordinary course of business or the disposition of
obsolete or unutilized equipment, sell, lease, license, surrender, relinquish, transfer, convey,
assign or otherwise dispose of any Company Intellectual Property or any other assets or property of
the Company with an aggregate value in excess of $25,000;

               (g) create, permit, allow or suffer to exist any Lien, other than Permitted Liens, on any
Company Intellectual Property or any other asset or property of the Company with an aggregate value
in excess of $25,000;

               (h) borrow funds from any Person or make an advance to any Person, except for granting or
obtaining trade credit terms in the ordinary course of business;

               (i) fail to maintain the properties and assets owned or leased by the Company in good repair
and condition, reasonable wear and tear excepted;

26

 

               (j) institute, settle or agree to settle any litigation, action or proceeding before any court
or Government Entity relating to the Company’s assets or properties, or modify in any manner that
is adverse to the Company’s business, assets or property, rescind or terminate a material permit,
allowance, or credit (or application therefor) relating to the Company’s business, assets or
property;

               (k) permit any registration of any Company Intellectual Property to lapse or disclose to any
person any trade secret included in the Company Intellectual Property unless the person to whom
such disclosure is made has executed a written non-disclosure agreement that protects and prohibits
further disclosure of the trade secret;

               (l) delay paying any account payable of the Company beyond the date on which it is due and
payable except to the extent being contested in good faith;

               (m) increase the compensation payable or to become payable to any employee or consultant of
the Company or, except as presently bound to do, grant or pay any bonus, severance or termination
pay to, or enter into any bonus, employment, change of control or severance agreement with, any
employee of the Company, or establish, adopt, enter into or amend or take any action to accelerate
any rights or benefits with respect to any bonus, profit sharing trust, compensation, profit
sharing, stock option, restricted stock pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit
of any employee of the Company;

               (n) hire any new employee other than new hires who are taken on in the ordinary course of
business, consistent with past practice;

               (o) conduct any operations or adopt any policies other than in the ordinary course of business
consistent with past practice; or

               (p) agree, in writing or otherwise, to take or authorize any of the foregoing actions or any
action which would make any representation or warranty in Section 3 hereof untrue or incorrect in
any respect.

          8.2 Management Transition Committee. The parties shall establish, as soon as practicable
after the execution of this Agreement, a committee (the “Management Transition Committee”)
comprised of four (4) persons, two (2) of whom shall be designated by the Purchaser and two (2) of
whom shall be designated by the Company. The Management Transition Committee shall remain in
existence until the earlier of the Closing Date and the Termination Date and shall oversee and
manage the transition process through the earlier of the Closing Date and the Termination Date. The
Management Transition Committee will be kept apprised of all developments relating to the operation
and management of the Company and the transition process. The Company will, and will cause its
management to, (i) cooperate fully with the Management Transition Committee and consult with the
Management Transition Committee on all matters affecting the transition process, (ii) arrange for
the Purchaser’s representatives on the Management Transition Committee to have reasonable access to
the management of the Company in the presence of one or more individuals designated by the Company,
(iii) consider in good faith all advice offered by the Management Transition Committee with respect
to such

27

 

matters and (iv) provide to the Purchaser’s designees to the Management Transition Committee
interim furnished office space at the Company’s headquarters reasonably necessary to allow the
Management Transition Committee to conduct its transition efforts until the earlier of the Closing
Date and the Termination Date. Notwithstanding the foregoing, the Management Transition Committee
shall have no authority to bind or make agreements on behalf of the Company or the Purchaser or to
issue instructions to or direct or exercise authority over the Company or the Purchaser or any of
their respective officers, employees, advisors or agents or to waive or modify any provision of
this Agreement.

          8.3 Preparation and Mailing of Proxy Statement.

               (a) As promptly as reasonably practicable following the Effective Date but in no event later
than ten (10) business days thereafter, the Company shall prepare and file with the SEC proxy
materials that shall constitute the proxy statement relating to the Company Stockholder Approval to
be sought at the Stockholders Meeting (such proxy statement, and any amendments or supplements
thereto, the “Proxy Statement”); provided, that prior to filing the Proxy
Statement, the Company will provide drafts thereof to the Purchaser, will give the Purchaser a
reasonable time to review and comment thereon and will consider in good faith any comments made by
the Purchaser. The Proxy Statement shall comply as to form in all material respects with the
applicable provisions of the Securities Act and the Exchange Act and the rules and regulations
thereunder. The parties shall cooperate with each other and provide to each other all information
necessary in order to prepare the Proxy Statement, and shall provide promptly to the other party
any information such party may obtain that could necessitate amending such document.

               (b) The Company shall, as promptly as practicable after receipt thereof, provide the Purchaser
copies of any written comments and advise the Purchaser of any oral comments with respect to the
Proxy Statement received from the SEC.

               (c) The Company shall cause the Proxy Statement to be mailed to its stockholders at the
earliest practicable time after the SEC informs the Company that it will not review, or completes
its review, thereof. The Company shall take any action (other than qualifying to do business in
any jurisdiction in which it is not now so qualified or to file a general consent to service of
process) required to be taken under any applicable state securities laws in connection with the
transactions contemplated hereby and the Company shall furnish all information concerning it and
the holders of its capital stock as may be reasonably requested in connection with any such action.

               (d) If at any time prior to the Closing Date, (i) any event or change occurs with respect to
the parties or any of their respective Affiliates, officers or directors, which is required, in
either party’s reasonable judgment, to be set forth in an amendment of, or supplement to, the Proxy
Statement or (ii) any information relating to the parties, or any of their respective Affiliates,
officers or directors, should be discovered by the parties which should be set forth in an
amendment of, or supplement to, the Proxy Statement so that such document would not include any
misstatement of a material fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, the Company
shall file as promptly as practicable with the SEC an amendment of or

28

 

supplement to the Proxy Statement and, as required by Law, disseminate the information
contained in such amendment or supplement to the stockholders of the Company; provided,
that prior to filing any such amendment or supplement, the Company will provide drafts thereof to
the Purchaser, will give the Purchaser a reasonable time to review and comment thereon and will
consider in good faith any comments made by the Purchaser.

          8.4 Stockholder Meeting; Recommendation. The Company shall duly take all lawful action to
call, give notice of, convene and hold a meeting of the stockholders of the Company (the
“Stockholders Meeting”) on a date as promptly as practicable after the SEC informs the
Company that it will not review, or completes its review, of the Proxy Statement for the purpose of
obtaining the Company Stockholder Approval and shall take all lawful action to solicit the Company
Stockholder Approval. The Company shall use all reasonable efforts to satisfy its obligations in
the preceding sentence within forty-five (45) days after the SEC informs the Company that it will
not review, or completes its review, of the Proxy Statement. The Company Board shall recommend the
issuance of Shares and the Warrant as contemplated by this Agreement to the effect as set forth in
Section 3.5 (the “Company Recommendation”).

          8.5 Consents and Approvals.

               (a) Subject to the terms and conditions of this Agreement, each of the parties will use all
reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable Law to consummate the transactions
contemplated by this Agreement, including preparing and filing as promptly as practicable all
documentation to effect all necessary filings, notices, petitions, statements, registrations,
submissions of information, applications and other documents necessary to consummate the
transactions contemplated by this Agreement, including, without limitation, (i) filings with the
FTC and the Antitrust Division of the United States Department of Justice as required by the HSR
Act, (ii) filings, if any, required under any other comparable antitrust Laws of any applicable
jurisdiction, as agreed by the parties hereto, and (iii) any filings required under the Securities
Act, the Exchange Act, any applicable state or securities or “blue sky” laws and the securities
laws of any foreign country, or under any other Law relating to the transactions contemplated by
this Agreement. Each party will cause all documents that it is responsible for filing with any
Government Entity under this Section 8.5 to comply in all material respects with all applicable
Laws. Each party shall promptly supply the other with any information which may be required in
order to effectuate any filings or application pursuant to this Section 8.5.

               (b) Upon the terms and subject to the conditions set forth herein, each of the parties agrees
to use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement, including using all reasonable efforts to accomplish
the following: (i) the taking of all reasonable acts necessary to cause the conditions precedent
set forth in Section 5 to be satisfied, (ii) the obtaining of all necessary actions or nonactions,
waivers, consents, approvals, orders and authorizations from Government Entities and the making of
all necessary registrations, declarations and filings (including registrations, declarations and
filings with Government Entities, if any) and the taking of all reasonable steps as may be
necessary to avoid any suit, claim, action, investigation or

29

 

proceeding by any Government Entity, (iii) the obtaining of all necessary consents, approvals
or waivers from third parties, and (iv) the execution or delivery of any additional instruments
necessary to consummate the transactions and to fully carry out the purposes of, this Agreement.
In connection with and without limiting the foregoing, the Company and the Company Board shall, if
any takeover statute or similar Law is or becomes applicable to this Agreement or any of the
transactions contemplated by this Agreement, use all reasonable efforts to ensure that the
transactions contemplated by this Agreement may be consummated as promptly as practicable on the
terms contemplated by this Agreement and otherwise to minimize the effect of such Law on this
Agreement and the transactions contemplated hereby.

          8.6 No Solicitation. At all times during the period commencing with the execution and
delivery of this Agreement and continuing until the earlier to occur of the termination of this
Agreement and the Closing Date, without the express written consent of the Purchaser, the Company
shall not, and the Company shall use its commercially reasonable efforts to cause its officers,
directors, employees, accountants, counsel, financial advisors, consultants, financing sources and
other advisors or representatives not to, directly or indirectly, (a) initiate or solicit or
knowingly facilitate or encourage any inquiry or the making of any proposal that constitutes an
Alternative Proposal, (b) enter into any letter of intent, memorandum of understanding or other
agreement, arrangement or understanding relating to any Alternative Proposal, (c) continue or
otherwise participate in any discussions or negotiations regarding, furnish to any Person any
information or data with respect to, or otherwise cooperate with or take any other action to
facilitate any proposal that (i) constitutes any Alternative Proposal or (ii) requires the Company
to abandon, terminate or fail to consummate the transactions contemplated by this Agreement or (d)
submit to the stockholders of the Company for their approval or adoption any Alternative Proposal
or any amendment to the Certificate of Incorporation or Bylaws, or agree or publicly announce an
intention to take any of the foregoing actions. For purposes of this Agreement, “Alternative
Proposal” means any proposal or offer relating to any (A) direct or indirect acquisition of the
Company, (B) merger or consolidation with or involving the Company, (C) acquisition of any portion
of the stock or assets of the Company outside the ordinary course of business, (D) direct or
indirect acquisition by the Company of any business, (E) joint venture involving the Company, (F)
business or strategic investment by the Company in any business or (G) financing to be provided to
or by the Company, which, in the case of clauses (D)-(G) of this sentence, would reasonably be
expected to prevent or to materially impede or delay the consummation of the transactions
contemplated by this Agreement.

          8.7 Lock-Up. The Company agrees that it will not, until 90 days after the effective date of
the Registration Statement (the “Registration Effective Date”), offer to sell, solicit
offers to purchase or sell any of its capital stock or securities convertible into or exchangeable
or exercisable for its capital stock, including without limitation any debt, preferred stock or
other instrument or security that is, at any time during its life and under any circumstances,
convertible into or exchangeable or exercisable for its capital stock, without the prior written
consent of the Purchaser; provided, however, that the foregoing shall not preclude
the Company from issuing (i) Reserved Shares or (ii) stock options or Common Stock pursuant to the
Amended and Restated Advancis Pharmaceutical Corporation Stock Incentive Plan, provided
that issuances under such plan shall not exceed 500,000 shares of Common Stock (on an as exercised
basis) except as contemplated by the Employment Agreements. The Company has not offered to sell,
solicited offers to purchase or sold any securities during the six months

30

 

preceding the Effective Date, and the Company will not offer to sell, solicit offers to purchase or
sell, any securities during the six months following the Effective Date, that would be required to
be integrated with the offer and sale of the Securities so as to require registration of the offer
and sale of the Securities under the Securities Act of 1933, as amended.

          8.8 Board Representation. Promptly after the date of this Agreement, the Company shall
take all necessary corporate action, effective as of the Closing Date, to increase the size of the
Company Board by two directors, which directorships shall be added to the class of directors with
terms that expire the furthest from the Effective Date, and to fill such newly created
directorships, effective as of the Closing Date, with directors designated by the Purchaser as set
forth on Schedule III. For so long as the Purchaser and its Affiliates do not sell or
otherwise dispose of fifty percent (50%) of the Shares and the Underlying Shares (on an as
exercised basis) other than to Affiliates of the Purchaser, (i) the Purchaser shall be entitled to
designate two directors to the Company Board and (ii) the Company shall take all necessary or
appropriate action to assist in the nomination and election of the Purchaser’s designees as
directors of the Company.

          8.9 Mergers. The Company agrees that it will not, prior to the date that is six (6) months
from the Closing Date, consummate a merger or other consolidation that could result in short swing
liability under Section 16 of the Securities Exchange Act of 1934 (“Section 16”) for the
Purchaser; provided, however, that the foregoing shall not preclude the Company from entering into
a definitive agreement with respect to such merger or other business combination.

          8.10 Corporate Existence. The Company shall, so long as the Purchaser beneficially owns any
Securities, maintain its corporate existence in good standing and shall pay all its material taxes
when due except for taxes which the Company reasonably disputes.

          8.11 Reservation of Common Stock. As of the Effective Date, the Company has reserved and
the Company shall continue to reserve and keep available at all times, free of preemptive rights, a
sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares
pursuant to this Agreement and Underlying Shares pursuant to any exercise of the Warrant.

          8.12 Reporting Status; Listing of Common Stock. The Company’s Common Stock is registered
under Section 12 of the Exchange Act. Throughout the period during which the Registration
Statement (as defined in the Registration Rights Agreement) is effective, the Company will use its
best efforts to timely file all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC under the reporting requirements of the Exchange Act, and the
Company will not terminate its status as an issuer required to file reports under the Exchange Act
even if the Exchange Act or the rules and regulations thereunder would permit such termination. The
Company hereby agrees to use best efforts to maintain the listing of the Common Stock on the Nasdaq
Global Market, and as soon as reasonably practicable following the Closing (but not later than the
earlier of the Effective Date and the first anniversary of the Closing Date) to list all of the
Shares and Underlying Shares on the Nasdaq Global Market. The Company further agrees, if the
Company applies to have the Common Stock traded on any national securities exchange other than the
Nasdaq Global Market it will include in such application all of the Shares and Underlying Shares,
and will take such other action as is

31

 

necessary to cause all of the Shares and Underlying Shares to be listed on such other national
securities exchange as promptly as possible. The Company will use best efforts to continue the
listing and trading of its Common Stock on the Nasdaq Global Market and will comply in all respects
with the Company’s reporting, filing and other obligations under the bylaws or rules of the Nasdaq
Global Market.

          8.13 Indemnification of Purchaser. Subject to the provisions of this Section 8.13, the
Company will indemnify and hold the Purchaser and its directors, officers, shareholders, members,
partners, employees and agents (and any other persons with a functionally equivalent role of a
person holding such titles notwithstanding a lack of such title or any other title), each person
who controls the Purchaser (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or
employees (and any other persons with a functionally equivalent role of a person holding such
titles notwithstanding a lack of such title or any other title) of such controlling persons (each,
a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements,
court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party
may suffer or incur as a result of or relating to any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in the other Operative
Documents. If any action shall be brought against any Purchaser Party in respect of which indemnity
may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in
writing, and the Company shall have the right to assume the defense thereof with counsel of its own
choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to
employ separate counsel in any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that
(i) the employment thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and to employ counsel
or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material
conflict on any material issue between the position of the Company and the position of such
Purchaser Party, in which case the Company shall be responsible for the reasonable fees and
expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser
Party under this Agreement (i) for any settlement by a Purchaser Party effected without the
Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (ii) to
the extent, but only to the extent, that a loss, claim, damage or liability is attributable to any
Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by
such Purchaser Party in this Agreement or in the other Operative Documents.

          8.14 Participation Rights.

               (a) For so long as the Purchaser and its Affiliates do not sell or otherwise dispose of fifty
percent (50%) of the Shares and the Underlying Shares (on an as exercised basis) other than to
Affiliates of the Purchaser, the Company grants the Purchaser a participation right to purchase the
Purchaser’s pro rata share of New Securities that the Company may, from time to time, propose to
sell and issue after the Closing Date. The Purchaser’s pro rata share, for purposes of this
participation right, is the ratio of the number of shares of fully-diluted Common Stock owned by
the Purchaser immediately before the issuance of New Securities,

32

 

assuming full exercise of the Warrant held by the Purchaser, to the total number of fully
diluted shares of Common Stock outstanding immediately before the issuance of New Securities,
assuming full conversion, exchange and/or exercise of all outstanding Equity Security Equivalents.

               (b) As used in this Agreement, the term “New Securities” means any of the Company’s
capital stock, whether or not now authorized, and rights, options, or warrants to purchase such
capital stock, and securities of any type whatsoever that are, or may become, convertible into
capital stock; provided that the term “New Securities” expressly does not include:

                    (i) shares of capital stock issuable or issued to the Company’s officers,
directors, employees, consultants, or advisors pursuant to the Amended and Restated
Advancis Pharmaceutical Corporation Stock Incentive Plan, or other employee stock
incentive programs, or other arrangements approved by the Company Board for the
primary purpose of soliciting or retaining such parties’ services, or upon exercise
or conversion of options, warrants, or convertible securities granted to such
parties pursuant to any such plan or arrangement;

                    (ii) shares of capital stock issuable or issued upon the exercise, exchange,
adjustment, or conversion of any outstanding Equity Security Equivalents that are
disclosed in the SEC Documents;

                    (iii) shares of capital stock issuable or issued as a dividend or distribution
on capital stock or otherwise issuable or issued pursuant to any other event for
which proportional adjustment is made under the Company’s then effective Certificate
of Incorporation;

                    (iv) shares of capital stock issuable or issued pursuant to the acquisition of
another corporation or other business entity by the Company by merger, stock
purchase, purchase of all or substantially all of such entity’s assets, or other
reorganization, or pursuant to a joint venture agreement or strategic partnership;

                    (v) shares of capital stock issuable or issued in connection with any public
offering;

                    (vi) shares of capital stock issuable or issued pursuant to any stock dividend,
stock split, share combination, reverse stock split, reorganization,
recapitalization, or other reclassification affecting the Company’s equity
securities for which a proportional adjustment has been made under the Company’s
then-effective Certificate of Incorporation; or

                    (vii) any right, option, or warrant to acquire any security exercisable for or
convertible into the securities excluded from the definition of New Securities
pursuant to Section 8.14(b)(i) through Section 8.14(b)(vi).

33

 

               (c) If the Company proposes to issue New Securities, then the Company will give the Purchaser
written notice of the Company’s intention, describing the type of New Securities, their price, and
the general terms upon which the Company proposes to issue the New Securities. The Purchaser will
have seven (7) business days after any such notice is mailed or delivered to agree to purchase its
pro rata share of such New Securities for the price and upon the terms specified in the notice by
giving written notice to the Company and stating in such notice the quantity of New Securities to
be purchased.

               (d) If the Purchaser fails to exercise fully the participation right within seven (7) business
days, then the Company will have 150 days thereafter to sell or enter into an agreement (pursuant
to which the sale of New Securities covered thereby will be closed, if at all, within 150 days from
the date of such agreement) to sell the New Securities with respect to which the Purchaser’s
participation right specified in this Section 8.14 was not exercised, at a price and upon terms no
more favorable to the purchasers thereof than specified in the Company’s notice to the Purchaser
pursuant to Section 8.14(c). If the Company has not sold such New Securities within such 150-day
period or if the Company has not entered into an agreement to sell the New Securities in accordance
with the foregoing within 150 days from the date of such agreement, then the Company will not
thereafter issue or sell any New Securities, without first again offering such securities to the
Purchaser in the manner provided in this Section 8.14.

          8.15 Exercise of Kef and Lex Stock Purchase Rights. The Company shall, prior to Closing,
exercise the Kef Stock Purchase Right and the Lex Stock Purchase Right pursuant to the terms and
conditions of the Kef Stock Purchase Agreement and the Lex Stock Purchase Agreement, respectively.

          8.16 Amendments to Certificate of Incorporation and Bylaws. At the first annual meeting of
the Company’s stockholders following Closing, the Company shall duly take all lawful action to
solicit the requisite stockholder approval to adopt amendments to the Certificate of Incorporation
and Bylaws providing for the declassification of the Company Board and the annual election of all
directors.

     9. Miscellaneous Provisions.

          9.1 Public Statements or Releases. The Company shall, by 8:30 a.m. Eastern time on the
business day following the date hereof, issue a press release and file a Current Report on Form
8-K, copies of each of which shall be provided to the Purchaser for review, disclosing the
transactions contemplated hereby and shall make such other filings and notices in the manner and
time required by the SEC. The Company and the Purchaser shall consult with each other in issuing
any press releases and/or filing any Current Reports on Form 8-K or other such SEC Documents with
respect to the transactions contemplated hereby, and none of the parties to this Agreement shall
make, issue, or release any announcement, whether to the public generally, or to any of its
suppliers or customers, with respect to this Agreement or the transactions provided for herein, or
make any statement or acknowledgment of the existence of, or reveal the status of, this Agreement
or the transactions provided for herein, without the prior consent of the other parties, which
shall not be unreasonably withheld or delayed, provided, that nothing in this Section 9.1
shall prevent any of the parties hereto from making such public announcements as may be required by
applicable Law or NASDAQ Rule or listing standard, but to the extent not

34

 

inconsistent with such requirements, it shall provide the other parties with an opportunity to
review and comment on any proposed public announcement before it is made.

          9.2 Further Assurances. Each party agrees to cooperate fully with the other party and to
execute such further instruments, documents and agreements and to give such further written
assurances, as may be reasonably requested by the other party to better evidence and reflect the
transactions described herein and contemplated hereby, and to carry into effect the intents and
purposes of this Agreement.

          9.3 Rights Cumulative. Each and all of the various rights, powers and remedies of the
parties shall be considered to be cumulative with and in addition to any other rights, powers and
remedies which such parties may have at law or in equity in the event of the breach of any of the
terms of this Agreement. The exercise or partial exercise of any right, power or remedy shall
neither constitute the exclusive election thereof nor the waiver of any other right, power or
remedy available to such party.

          9.4 Pronouns. All pronouns or any variation thereof shall be deemed to refer to the
masculine, feminine or neuter, singular or plural, as the identity of the person, persons, entity
or entities may require.

          9.5 Notices. Any notices, reports or other correspondence (hereinafter collectively
referred to as “correspondence”) required or permitted to be given hereunder shall be in writing
and shall be sent by postage prepaid first class mail, courier or telecopy or delivered by hand to
the party to whom such correspondence is required or permitted to be given hereunder, and shall be
deemed sufficient upon receipt when delivered personally or by courier, overnight delivery service
or confirmed facsimile, or three (3) business days after being deposited in the regular mail as
certified or registered mail (airmail if sent internationally) with postage prepaid, if such notice
is addressed to the party to be notified at such party’s address or facsimile number as set forth
below:

	 	(a)	 	All correspondence to the Company shall be addressed as follows:

20425 Seneca Meadows Parkway

Germantown, Maryland 20876

Attention:      Edward M. Rudnic, Ph.D.

                      President and Chief Executive Officer

Facsimile:      (301) 944-6700

with a copy to

Dewey & LeBoeuf LLP

1301 Avenue of the Americas

New York, New York

Attention:       Frederick W. Kanner, Esq.

Facsimile:       (212) 259-6333

35

 

	 	(b)	 	All correspondence to the Purchaser shall be addressed as follows:

c/o Equity Group Investments, L.L.C.

Two North Riverside Plaza

Chicago, IL 60606

Attention: General Counsel and William Pate

Telephone: (312) 454-0100

Facsimile: (312) 454-0335

with a copy to

Skadden, Arps, Slate, Meagher & Flom LLP

333 West Wacker Drive

Suite 2100

Chicago, IL 60606

Attention:      Peter C. Krupp

                      Susan S. Hassan

Facsimile:      312-407-0411

               (c) Either party may change the address to which correspondence to it is to be addressed by
written notification as provided for herein.

          9.6 Captions. The captions and paragraph headings of this Agreement are solely for the
convenience of reference and shall not affect its interpretation.

          9.7 Severability. Should any part or provision of this Agreement be held unenforceable or
in conflict with the applicable Laws of any jurisdiction, the invalid or unenforceable part or
provisions shall be replaced with a provision which accomplishes, to the extent possible, the
original business purpose of such part or provision in a valid and enforceable manner, and the
remainder of this Agreement shall remain binding upon the parties hereto.

          9.8 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial; Injunctive Relief.

               (a) This Agreement shall be governed by and construed in accordance with the internal and
substantive laws of the State of Delaware without regard to any conflicts of laws concepts which
would apply the substantive law of some other jurisdiction.

               (b) Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the Court
of Chancery in the State of Delaware and the Federal courts of the United States of America located
in the State of Delaware for the purpose of any suit, action, proceeding or judgment relating to or
arising out of this Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party hereto anywhere in
the world by the same methods as are specified for the giving of notices under this Agreement. Each
of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives
any objection to the laying of venue of any such suit, action or proceeding brought in such courts
and irrevocably waives any claim that any such suit, action or proceeding brought in any such court
has been brought in an

36

 

inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN
ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.

               (c) Each of the parties hereto acknowledges and agrees that damages will not be an adequate
remedy for any material breach or violation of this Agreement if such material breach or violation
would cause immediate and irreparable harm (an “Irreparable Breach”). Accordingly, in the
event of a threatened or ongoing Irreparable Breach, each party hereto shall be entitled to seek
equitable relief of a kind appropriate in light of the nature of the ongoing or threatened
Irreparable Breach, which relief may include, without limitation, specific performance or
injunctive relief; provided, however, that if the party bringing such action is
unsuccessful in obtaining the relief sought, the moving party shall pay the non-moving party’s
reasonable costs, including attorney’s fees, incurred in connection with defending such action.
Such remedies shall not be the parties’ exclusive remedies, but shall be in addition to all other
remedies provided in this Agreement.

          9.9 Amendments. This Agreement may not be amended or modified except pursuant to an
instrument in writing signed by the Company the Purchaser.

          9.10 Waiver. No waiver of any term, provision or condition of this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or be construed as, a
further or continuing waiver of any such term, provision or condition or as a waiver of any other
term, provision or condition of this Agreement.

          9.11 Expenses. Except as otherwise provided in Section 7.2(b), each party will bear its own
Expenses in connection with this Agreement; provided, that the Company will reimburse the Purchaser
at Closing for all of the Purchaser’s Expenses in connection with this Agreement.

          9.12 Assignment. The rights and obligations of the parties hereto shall inure to the
benefit of and shall be binding upon the authorized successors and permitted assigns of each party.
No party may assign its rights or obligations under this Agreement or designate another person (i)
to perform all or part of its obligations under this Agreement or (ii) to have all or part of its
rights and benefits under this Agreement, in each case without the prior written consent of the
other party, provided, however, that the Purchaser may assign its rights and
delegate its duties hereunder in whole or in part to an Affiliate or to a third party acquiring
some or all of its Securities in a transaction complying with applicable securities laws without
the prior written consent of the Company; provided, that no such assignment shall
affect the obligations of the Purchaser hereunder. In the event of any assignment in accordance
with the terms of this Agreement, the assignee shall specifically assume and be bound by the
provisions of the Agreement by executing and agreeing to an assumption agreement reasonably
acceptable to the other party.

          9.13 Survival. The respective representations and warranties given by the parties hereto
shall survive the Closing Date and the consummation of the transactions contemplated herein.

37

 

          9.14 Counterpart. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one instrument.

          9.15 Entire Agreement. This Agreement and the other Operative Agreements constitute the
entire agreement between the parties hereto respecting the subject matter hereof and supersede all
prior agreements, negotiations, understandings, representations and statements respecting the
subject matter hereof, whether written or oral. No modification, alteration, waiver or change in
any of the terms of this Agreement shall be valid or binding upon the parties hereto unless made in
writing and duly executed by the Company and the Purchaser.

          9.16 Costs of Enforcement. In the event that legal proceedings are commenced by any party
to this Agreement against another party to this Agreement in connection with this Agreement or the
other Operative Agreements, the non-prevailing party in such proceedings shall pay the reasonable
attorneys’ fees and other reasonable out-of-pocket costs and expenses incurred by the prevailing
party in such proceedings.

[Signature Page to Follow]

38

 

          IN WITNESS WHEREOF, the parties hereto have executed this Securities Purchase Agreement as of
the day and year first above written.

	 	 	 	 	 
	 	 	MIDDLEBROOK PHARMACEUTICALS, INC.
	 
	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Edward M. Rudnic
 
 Edward
M. Rudnic, Ph.D.
	 

	 	Title:
	 	President and Chief Executive Officer
	 
	 	 	 	 
	 	 	EGI-MBRK, L.L.C.
	 
	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Philip G. Tinkler
 
 Philip
G. Tinkler
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Solely for purposes of guarantying the obligations of
EGI-MBRK, L.L.C. under Section 2 of this
Securities Purchase Agreement:
	 
	 	 	 	 
	 	 	EGI-FUND (08-10) INVESTORS, L.L.C.

a Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:

Name:
	 	/s/ William C. Pate
 
 William
C. Pate
	 

	 	Title:
	 	Vice President

[Signature Page to Securities Purchase Agreement]

 

 

Exhibit A

FORM OF WARRANT

Attached.

Exhibit A-1

 

 

Exhibit B

LEGAL OPINION

Exhibit B-1

 

 

Schedule I

STOCKHOLDERS ENTERING INTO VOTING AGREEMENTS

Schedule I-1

 

 

Schedule II

RESERVED SHARES

Schedule II-1

 

 

Schedule III

DIRECTORS DESIGNATED BY THE PURCHASER

Schedule III-1

 

 

Appendix I

FORM OF INVESTOR QUESTIONNAIRE

Appendix I-1

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