Document:

mm08-1010_8ke102.htm

     

    EXHIBIT
10.2

     

     

    Execution
Version

     

    
      

       

      

       

      

       

      

       

      

    

    

     

    GUARANTY
AGREEMENT

     

    dated as
of

     

    August 9,
2010

     

    among

     

    WILLIS
NORTH AMERICA INC.,

     

    WILLIS
GROUP HOLDINGS PUBLIC LIMITED COMPANY,

     

    THE OTHER
GUARANTORS

     

    IDENTIFIED
HEREIN

     

    and

     

    BANK OF
AMERICA, N.A.,

     

    as
Administrative Agent

     

    

     

    

     

    

     

    

     

    
      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

     

    

     

    
      	
              ARTICLE
      I

            	
              Definitions

            	
              1

            
	
              SECTION
      1.01.

            	
              Credit
      Agreement

            	
              1

            
	
              SECTION
      1.02.

            	
              Other
      Defined Terms

            	
              1

            
	
              ARTICLE
      II

            	
              The
      Guaranty

            	
              2

            
	
              SECTION
      2.01.

            	
              Guaranty

            	
              2

            
	
              SECTION
      2.02.

            	
              Guarantee
      of Payment

            	
              2

            
	
              SECTION
      2.03.

            	
              No
      Limitations

            	
              2

            
	
              SECTION
      2.04.

            	
              Reinstatement

            	
              3

            
	
              SECTION
      2.05.

            	
              Agreement
      To Pay; Subrogation

            	
              3

            
	
              SECTION
      2.06.

            	
              Information

            	
              4

            
	
              ARTICLE
      III

            	
              Indemnity,
      Subrogation and Subordination

            	
              4

            
	
              SECTION
      3.01.

            	
              Indemnity
      and Subrogation

            	
              4

            
	
              SECTION
      3.02.

            	
              Contribution
      and Subrogation

            	
              4

            
	
              SECTION
      3.03

            	
              Subordination

            	
              5

            
	
              ARTICLE
      IV

            	
              Miscellaneous

            	
              5

            
	
              SECTION
      4.01.

            	
              Notices

            	
              5

            
	
              SECTION
      4.02.

            	
              Waivers;
      Amendment

            	
              5

            
	
              SECTION
      4.03.

            	
              Administrative
      Agent’s Fees and Expenses; Indemnification

            	
              5

            
	
              SECTION
      4.04.

            	
              Successors
      and Assigns

            	
              6

            
	
              SECTION
      4.05.

            	
              Survival
      of Agreement

            	
              6

            
	
              SECTION
      4.06.

            	
              Counterparts;
      Effectiveness; Several Agreement

            	
              6

            
	
              SECTION
      4.07.

            	
              Severability

            	
              7

            
	
              SECTION
      4.08.

            	
              Right
      of Set-Off

            	
              7

            
	
              SECTION
      4.09.

            	
              Governing
      Law; Jurisdiction; Consent to Service of Process

            	
              7

            
	
              SECTION
      4.10.

            	
              WAIVER
      OF JURY TRIAL

            	
              8

            
	
              SECTION
      4.11.

            	
              Headings

            	
              9

            
	
              SECTION
      4.12.

            	
              Termination

            	
              9

            
	
              SECTION
      4.13.

            	
              Additional
      Guarantors

            	 9
      

    

    

    

    

    Exhibits

    Exhibit
A                     Form
of Supplement

     

    
      Pursuant to Item 601(b) of
Regulation S-K the exhibit has been omitted and will be supplied to the
Commission upon request.

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    GUARANTY
AGREEMENT (this “Guaranty Agreement”)
dated as of August 9, 2010, among WILLIS NORTH AMERICA INC. (the “Borrower”), WILLIS
GROUP HOLDINGS PUBLIC LIMITED COMPANY (the “Parent”), the other
Guarantors (as defined below) and BANK OF AMERICA, N.A., as Administrative Agent
(the “Administrative
Agent”).

     

    Reference
is made to the Credit Agreement dated as of the date hereof (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, the Parent, the Lenders party thereto and the Administrative
Agent.  The Lenders have agreed to extend credit to the Borrower
subject to the terms and conditions set forth in the Credit
Agreement.  The obligations of the Lenders to extend such credit are
conditioned upon, among other things, the execution and delivery of this
Guaranty Agreement.  The Parent and the other Guarantors are
affiliates of the Borrower, will derive substantial benefits from the extension
of credit to the Borrower pursuant to the Credit Agreement and are willing to
execute and deliver this Guaranty Agreement in order to induce the Lenders to
extend such credit.  Accordingly, the parties hereto agree as
follows:

     

    ARTICLE
I

     

    Definitions

     

    SECTION
1.01. Credit
Agreement.  (a) Capitalized terms used in this Guaranty
Agreement and not otherwise defined herein have the meanings specified in the
Credit Agreement.

     

    (b) The rules
of construction specified in Section 1.02 of the Credit Agreement also apply to
this Guaranty Agreement.

     

    SECTION
1.02. Other Defined
Terms.  As used in this Guaranty Agreement, the following terms
have the meanings specified below:

     

    “Administrative Agent”
has the meaning assigned to such term in the preliminary statement of this
Guaranty Agreement.

     

    “Borrower” has the
meaning assigned to such term in the preliminary statement of this Guaranty
Agreement.

     

    “Credit Agreement” has
the meaning assigned to such term in the preliminary statement of this Guaranty
Agreement.

     

    “Guaranty Agreement”
has the meaning assigned to such term in the preliminary statement of this
Guaranty Agreement.

     

    “Guaranteed Parties”
means (a) the Lenders, (b) the Administrative Agent, (c) the L/C Issuer, (d) the
beneficiaries of each indemnification obligation undertaken by any Loan Party
under any Loan Document and (e) the successors and assigns of each of the
foregoing.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    “Guarantors” means the
Parent, each of its Subsidiaries identified on Schedule 1.01(b) of the Credit
Agreement and each Subsidiary that, at the Parent’s election, becomes a party to
this Guaranty Agreement as a Guarantor after the Closing Date.

     

     “Obligations” means
(a) the due and punctual payment by the Borrower of (i) the principal of and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans and Letters of Credit,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, and (ii) all other monetary obligations of the
Borrower to any of the Guaranteed Parties under the Credit Agreement and each of
the other Loan Documents, including obligations to pay fees, expense
reimbursement obligations and indemnification obligations, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), and (b) the due and punctual payment of all the
obligations of each other Loan Party under or pursuant to this Guaranty
Agreement and each of the other Loan Documents.

     

    “Non-Parent
Guarantors” means each Guarantor that does not wholly-own (directly or
indirectly) the Borrower.

     

    “Parent” has the
meaning assigned to such term in the preliminary statement of this Guaranty
Agreement.

     

    “Parent Guarantors”
means each Guarantor that wholly-owns (directly or indirectly) the
Borrower.

     

    ARTICLE
II

     

    The
Guaranty

     

    SECTION
2.01. Guaranty.  Each
Guarantor unconditionally guarantees, jointly with the other Guarantors and
severally, as a primary obligor and not merely as a surety, the due and punctual
payment and performance of the Obligations.  Each of the Guarantors
further agrees that the Obligations may be extended or renewed, in whole or in
part, without notice to or further assent from it, and that it will remain bound
upon its guarantee notwithstanding any extension or renewal of any
Obligation.  Each of the Guarantors waives presentment to, demand of
payment from and protest to the Borrower or any other Loan Party of any of the
Obligations, and also waives notice of acceptance of its guarantee and notice of
protest for nonpayment.

     

    SECTION
2.02. Guarantee of
Payment.  Each of the Guarantors further agrees that its
guarantee hereunder constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Guaranteed Parties to any balance of any deposit account or credit on the books
of any Guaranteed Party in favor of the Borrower or any other
Person.

     

    SECTION
2.03. No
Limitations.  (a) Except for termination of a Guarantor’s
obligations hereunder as expressly provided in Section 4.12, the obligations of
each

     

    
      
         

      

      
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    Guarantor
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense or set-off,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Obligations or
otherwise.  Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by (i) the failure of any Guaranteed Party to assert any
claim or demand or to enforce any right or remedy under the provisions of any
Loan Document or otherwise; (ii) any rescission, waiver, amendment or
modification of, or any release from any of the terms or provisions of, any Loan
Document or any other agreement, including with respect to any other Guarantor
under this Guaranty Agreement; (iii) the release of any security held by any
Guaranteed Party for any of the Obligations; (iv) any default, failure or delay,
willful or otherwise, in the performance of the Obligations; or (v) any other
act or omission that may or might in any manner or to any extent vary the risk
of any Guarantor or otherwise operate as a discharge of any Guarantor as a
matter of law or equity (other than the indefeasible payment in full in cash of
all the Obligations).  Each Guarantor expressly authorizes the
Guaranteed Parties to take and hold security for the payment and performance of
the Obligations, to exchange, waive or release any or all such security (with or
without consideration), to enforce or apply such security and direct the order
and manner of any sale thereof in their sole discretion or to release or
substitute any one or more other guarantors or obligors upon or in respect of
the Obligations, all without affecting the obligations of any Guarantor
hereunder.

     

    (b) To the
fullest extent permitted by applicable law, each Guarantor waives any defense
based on or arising out of any defense of the Borrower or any other Loan Party
or the unenforceability of the Obligations or any part thereof from any cause,
or the cessation from any cause of the liability of the Borrower or any other
Loan Party, other than the indefeasible payment in full in cash of all the
Obligations.  The Guaranteed Parties may, at their election, foreclose
on any security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with the Parent, the Borrower or any other Loan Party or exercise
any other right or remedy available to them against the Parent, the Borrower or
any other Loan Party, without affecting or impairing in any way the liability of
any Guarantor hereunder except to the extent the Obligations have been fully and
indefeasibly paid in full in cash.  To the fullest extent permitted by
applicable law, each Guarantor waives any defense arising out of any such
election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Guarantor against the Parent, the Borrower or any other Loan
Party, as the case may be, or any security.

     

    SECTION
2.04. Reinstatement.  Each
of the Guarantors agrees that its guarantee hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any Obligation is rescinded or must otherwise be restored by
any Guaranteed Party upon the bankruptcy or reorganization of the Borrower, any
other Loan Party or otherwise.

     

    SECTION
2.05. Agreement To Pay;
Subrogation.  In furtherance of the foregoing and not in
limitation of any other right that the Administrative Agent or any
other

     

    
      
         

      

      
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    Guaranteed
Party has at law or in equity against any Guarantor by virtue hereof, upon the
failure of the Borrower or any other Loan Party to pay any Obligation when and
as the same shall become due, whether at maturity, by acceleration, after notice
of prepayment or otherwise, each Guarantor hereby promises to and will forthwith
pay, or cause to be paid, to the Administrative Agent for distribution to the
applicable Guaranteed Parties in cash the amount of such unpaid
Obligation.  Upon payment by any Guarantor of any sums to the
Administrative Agent as provided above, all rights of such Guarantor against the
Borrower or any other Loan Party arising as a result thereof by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subject to Article III.

     

    SECTION
2.06. Information.  Each
Guarantor assumes all responsibility for being and keeping itself informed of
the Borrower’s and each other Loan Party’s financial condition and assets, and
of all other circumstances bearing upon the risk of nonpayment of the
Obligations and the nature, scope and extent of the risks that such Guarantor
assumes and incurs hereunder, and agrees that none of the Guaranteed Parties
will have any duty to advise such Guarantor of information known to it or any of
them regarding such circumstances or risks.

     

    ARTICLE
III

     

    Indemnity,
Subrogation and Subordination

     

    SECTION
3.01. Indemnity and
Subrogation.  In addition to all such rights of indemnity and
subrogation as the Guarantors may have under applicable law (but subject to
Section 3.03), the Borrower agrees that in the event a payment of an Obligation
shall be made by any Guarantor under this Guaranty Agreement, the Borrower shall
indemnify such Guarantor for the full amount of such payment and such Guarantor
shall be subrogated to the rights of the Person to whom such payment shall have
been made to the extent of such payment.

     

    SECTION
3.02. Contribution and
Subrogation.  (a) Each Non-Parent Guarantor (a “Contributing Party”)
agrees (subject to Section 3.03) that, in the event a payment shall be made by
any other Non-Parent Guarantor hereunder in respect of any Obligation and such
other Guarantor (the “Claiming Party”)
shall not have been fully indemnified by the Borrower as provided in Section
3.01, the Contributing Party shall indemnify the Claiming Party in an amount
equal to the amount of such payment, multiplied by a fraction of which the
numerator shall be the net worth of the Contributing Party on the date hereof
and the denominator shall be the aggregate net worth of all the Non-Parent
Guarantors on the date hereof (or, in the case of any Non-Parent Guarantor
becoming a party hereto pursuant to Section 4.13, the date of the supplement
hereto executed and delivered by such Non-Parent Guarantor).  Any
Contributing Party making any payment to a Claiming Party pursuant to this
Section 3.02 shall be subrogated to the rights of such Claiming Party under
Section 3.01 to the extent of such payment.

     

    (b)           Notwithstanding
anything to the contrary contained herein, the parties hereto acknowledge and
agree that each Non-Parent Guarantor shall have a right of reimbursement and
indemnity from each Parent Guarantor (to the extent such Non-Parent Guarantor is
a wholly-owned Subsidiary of such Parent Guarantor) for any amount paid by such
Non-Parent Guarantor in lieu of a right of contribution between such Non-Parent
Guarantor and such Parent Guarantor.

     

    
      
         

      

      
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    SECTION
3.03. Subordination.  (a)
Notwithstanding any provision of this Guaranty Agreement to the contrary, all
rights of the Guarantors under Sections 3.01 and 3.02 and all other rights of
indemnity, contribution or subrogation under applicable law or otherwise shall
be fully subordinated to the indefeasible payment in full in cash of the
Obligations.  No failure on the part of the Borrower or any Guarantor
to make the payments required by Sections 3.01 and 3.02 (or any other payments
required under applicable law or otherwise) shall in any respect limit the
obligations and liabilities of any Guarantor with respect to its obligations
hereunder, and each Guarantor shall remain liable for the full amount of the
obligations of such Guarantor hereunder.

     

    (b)           Each
Guarantor hereby agrees that all Indebtedness and other monetary obligations
owed by it to any other Guarantor or any other Subsidiary shall be fully
subordinated to the indefeasible payment in full in cash of the
Obligations.

     

    ARTICLE
IV

     

    Miscellaneous

     

    SECTION
4.01. Notices.  All
communications and notices hereunder shall (except as otherwise expressly
permitted herein) be in writing and given as provided in Section 10.02 of the
Credit Agreement.  All communications and notices hereunder to any
Guarantor shall be given to it in care of the Borrower as provided in Section
10.02 of the Credit Agreement.

     

    SECTION
4.02. Waivers;
Amendment.  (a) No failure or delay by the Administrative Agent
or any Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.  The rights and
remedies of the Administrative Agent and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have.  No waiver of any provision
of this Guaranty Agreement or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 4.02, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which
given.  Without limiting the generality of the foregoing, the making
of a Loan or the issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent or any
Lender may have had notice or knowledge of such Default at the
time.  No notice or demand on any Loan Party in any case shall entitle
any Loan Party to any other or further notice or demand in similar or other
circumstances.

     

    (a) Neither
this Guaranty Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Administrative Agent and the Loan Party or Loan Parties with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 10.01 of the Credit Agreement.

     

    SECTION
4.03. Administrative Agent’s Fees
and Expenses; Indemnification.  (a) The parties hereto agree
that the Administrative Agent shall be entitled to

     

    
      
         

      

      
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    reimbursement
of its expenses incurred hereunder as provided in Section 10.04 of the Credit
Agreement.

     

    (a) Without
limitation of its indemnification obligations under the other Loan Documents,
each Guarantor jointly and severally agrees to indemnify the Administrative
Agent and the other Indemnitees (as defined in Section 10.04(b) of the Credit
Agreement) against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses, including the fees, charges
and disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of,
the execution, delivery or performance of this Guaranty Agreement or any claim,
litigation, investigation or proceeding relating to any of the foregoing
agreement or instrument contemplated hereby, whether or not any Indemnitee is a
party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
any of its Related Parties.

     

    (b) Any such
amounts payable as provided hereunder shall be additional Obligations guaranteed
hereunder.  The provisions of this Section 4.03 shall remain operative
and in full force and effect regardless of the termination of this Guaranty
Agreement or any other Loan Document, the consummation of the transactions
contemplated hereby, the repayment of any of the Obligations, the invalidity or
unenforceability of any term or provision of this Guaranty Agreement or any
other Loan Document, or any investigation made by or on behalf of any Guaranteed
Party.  All amounts due under this Section 4.03 shall be payable on
written demand therefor.

     

    SECTION
4.04. Successors and
Assigns.  Whenever in this Guaranty Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Guarantor or the Administrative Agent that are
contained in this Guaranty Agreement shall bind and inure to the benefit of
their respective successors and assigns.

     

    SECTION
4.05. Survival of
Agreement.  All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Guaranty Agreement or any other Loan Document shall be
considered to have been relied upon by the Lenders and shall survive the
execution and delivery of the Loan Documents and the making of any Loans,
regardless of any investigation made by any Lender or on its behalf and
notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default or incorrect representation or warranty at the time
any credit is extended under the Credit Agreement, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan
or any fee or any other amount payable under any Loan Document, including with
respect to any Letter of Credit, is outstanding and unpaid and so long as the
Commitments have not expired or terminated.

     

    SECTION
4.06. Counterparts; Effectiveness;
Several Agreement.  This Guaranty Agreement may be executed in
counterparts, each of which shall constitute an original

     

    
      
         

      

      
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    but all
of which when taken together shall constitute single
contract.  Delivery of an executed signature page to this Guaranty
Agreement by facsimile transmission or other electronic imaging means shall be
as effective as delivery of a manually signed counterpart of this Guaranty
Agreement.  This Guaranty Agreement shall become effective as to any
Loan Party when a counterpart hereof executed on behalf of such Loan Party shall
have been delivered to the Administrative Agent and a counterpart hereof shall
have been executed on behalf of the Administrative Agent, and thereafter shall
be binding upon such Loan Party and the Administrative Agent and their
respective permitted successors and assigns, and shall inure to the benefit of
such Loan Party, the Administrative Agent and the other Guaranteed Parties and
their respective successors and assigns, except that no Loan Party shall have
the right to assign or transfer its rights or obligations hereunder or any
interest herein (and any such assignment or transfer shall be void) except as
expressly contemplated by this Guaranty Agreement or the Credit
Agreement.  This Guaranty Agreement shall be construed as a separate
agreement with respect to each Loan Party and may be amended, modified,
supplemented, waived or released with respect to any Loan Party without the
approval of any other Loan Party and without affecting the obligations of any
other Loan Party hereunder.

     

    SECTION
4.07. Severability.  Any
provision of this Guaranty Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other
jurisdiction.  The parties shall endeavor in good-faith negotiations
to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.

     

    SECTION
4.08. Right of
Set-Off.  If an Event of Default shall have occurred and be
continuing, each Lender, the L/C Issuer and each of their respective Affiliates
is hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Person or Affiliate to or for the credit or the account
of any Guarantor against any of and all the obligations of such Guarantor then
due and owing under this Guaranty Agreement to such Person, irrespective of
whether or not such Person shall have made any demand under this Guaranty
Agreement.  The rights of each Lender and the L/C Issuer under this
Section 4.08 are in addition to other rights and remedies (including other
rights of set-off) which such Person may have.

     

    SECTION
4.09. Governing Law; Jurisdiction;
Consent to Service of Process.  (a) This Guaranty Agreement
shall be construed in accordance with and governed by the law of the State of
New York.

     

    (b) Each of
the parties hereto hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this Guaranty
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably

     

    
      
         

      

      
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    and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court.  Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  Nothing in this Guaranty
Agreement or any other Loan Document shall affect any right that any of the
parties hereto, the L/C Issuer or any Lender may otherwise have to bring any
action or proceeding relating to this Guaranty Agreement or any other Loan
Document against any Guarantor, in the courts of any jurisdiction.

     

    (c) Each of
the parties hereto hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Guaranty Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section 4.09.  Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

     

    (d) The
Parent hereby irrevocably appoints Adam G. Ciongoli (c/o Willis North America
Inc., One World Financial Center, 200 Liberty Street, 7th floor, New York, New
York 10281), and the Borrower hereby appoints CT Corporation, in each case, as
its authorized agent in the Borough of Manhattan of the City of New York upon
which process may be served in any such suit or proceeding, and agrees that
service of process upon such agent, and written notice of said service to the
Parent or the Borrower, as applicable, by the person serving the same in the
manner provided for notices in Section 4.01, shall be deemed in every respect
effective service of process upon such party in any such suit or
proceeding.  The Parent and the Borrower further agree to take any and
all action as may be necessary to maintain such designation and appointment of
such agents in full force and effect from the date hereof until the Commitments
have expired or been terminated and all Obligations shall have been indefeasibly
paid in full.  Each other Guarantor irrevocably consents to service of
process delivered by hand or overnight courier service, mailed by certified or
registered mail, to Willis North America Inc., One World Financial Center, 200
Liberty Street, 7th floor, New York, New York 10281 (Attention: Adam G.
Ciongoli), and the Administrative Agent irrevocably consents to service of
process in the manner provided for notices in Section 4.01.  Nothing
in this Guaranty Agreement or any other Loan Document will affect the right of
any party to this Guaranty Agreement to serve process in any other manner
permitted by law.

     

    SECTION
4.10. WAIVER OF JURY
TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
GUARANTY AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    BEEN
INDUCED TO ENTER INTO THIS GUARANTY AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 4.10.

     

    SECTION
4.11. Headings.  Article
and Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Guaranty Agreement and are not to affect
the construction of, or to be taken into consideration in interpreting, this
Guaranty Agreement.

     

    SECTION
4.12. Termination.  (a)
Subject to Section 2.04, this Guaranty Agreement and the Guarantees made herein
shall terminate when all the outstanding Obligations have been indefeasibly paid
in full and the Lenders have no further commitment to lend under the Credit
Agreement.

     

    (b) A
Guarantor (other than the Parent) shall automatically be released from its
obligations hereunder upon the consummation of any transaction permitted by the
Credit Agreement as a result of which such Guarantor ceases to be a Subsidiary
of the Parent; provided that the
Required Lenders shall have consented to such transaction (to the extent
required by the Credit Agreement) and the terms of such consent did not provide
otherwise.

     

    SECTION
4.13. Additional
Guarantors.  If the Parent, at its option pursuant to the
Credit Agreement or otherwise, at any time elects that additional Subsidiaries
become Guarantors hereunder after the date hereof, then such Subsidiary shall
become a Guarantor hereunder with the same force and effect as if originally
named as a Guarantor herein upon (a) execution and delivery by the
Administrative Agent and  such Subsidiary of an instrument in the form
of Exhibit A hereto and (b) delivery to the Administrative Agent of such
Organization Documents, resolutions and favorable opinions of counsel or may be
requested by the Administrative Agent in its reasonable discretion, all in form,
content and scope reasonably satisfactory to the Administrative
Agent.  The execution and delivery of any such instrument shall not
require the consent of any other Loan Party hereunder.  The rights and
obligations of each Loan Party hereunder shall remain in full force and effect
notwithstanding the addition of any new Loan Party as a party to this Guaranty
Agreement.

     

    

     

    [Remainder
of page intentionally left blank]

     

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

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

    

    
      	
              BORROWER:

            	
              WILLIS
      NORTH AMERICA INC.

            
	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
                /s/  Don
      Bailey

            
	 
      	
              Name:

            	
              Don
      Bailey

            
	 
      	
              Title:

            	
              Chief
      Executive Officer

            

    

    

     

    

    

    

    
      
        
          [Guaranty
Agreement – Willis North America Inc.]

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    
      	
              SIGNED AND DELIVERED for
      and on behalf of and as the deed of

              WILLIS GROUP HOLDINGS PUBLIC
      LIMITED COMPANY by its lawfully appointed attorney in the presence
      of:

            	 
      	
              /s/  Michael
      K. Neborak

            
	 
      	 
      	 
      	
              Michael
      K. Neborak

            
	 
      	
                /s/  Nicole
      Napolitano

            	 
      	Chief Financial
      Officer
	 
      	
              (Witness'
      Signature)

            	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              One
      World Financial Center,

              200
      Liberty Street,

              NY,
      NY 10281

            	 
      	 
      
	 
      	
              (Witness'
      Address)

            	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              Deputy
      Company Secretary and Associate General Counsel

            	 
      	 
      
	 
      	
              (Witness'
      Occupation)

            	 
      	 
      

    

    

    

    
      
        
          [Guaranty
Agreement – Willis North America Inc.]

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              EXECUTED and DELIVERED as a
      deed

            	
              )

            
	
              by
      and on behalf of

            	
              )

            
	
              TA
      I LIMITED

            	
              )

            
	 
      	
              )

            
	 
      	
              )

            
	 
      	
              /s/  Shaun
      Bryant

            	 
      
	 
      	
              Shaun
      Bryant signing under a power of attorney dated 28 July
  2010

            
	 
      	 
      

    

    

    
      	
              in
      the presence of:

            	
              )

            	
                /s/
      Sarah Lewis

            	 
      
	
              Name:

            	
              )

            	
              Sarah
      Lewis

            	 
      
	
              Address:

            	
              )

            	
              WILLIS
      LIMITED

            	 
      
	 
      	
              )

            	
              51
      LIME STREET

            	 
      
	 
      	
              )

            	
              LONDON
      EC3M 7DQ

            	 
      
	 
      	
              )

            	 
      	 
      
	
              Occupation:

            	
              )

            	
              COMPANY
      SECRETARY

            	 
      

    

    

    

    

    
      	
              EXECUTED and DELIVERED as a
      deed

            	
              )

            
	
              by
      and on behalf of

            	
              )

            
	
              TA
      II LIMITED

            	
              )

            
	 
      	
              )

            
	 
      	
              )

            
	 
      	
              /s/  Shaun
      Bryant

            	 
      
	 
      	
              Shaun
      Bryant signing under a power of attorney dated 28 July
  2010

            
	 
      	 
      

    

    

    
      	
              in
      the presence of:

            	
              )

            	
                /s/
      Sarah Lewis

            	 
      
	
              Name:

            	
              )

            	
              Sarah
      Lewis

            	 
      
	
              Address:

            	
              )

            	
              WILLIS
      LIMITED

            	 
      
	 
      	
              )

            	
              51
      LIME STREET

            	 
      
	 
      	
              )

            	
              LONDON
      EC3M 7DQ

            	 
      
	 
      	
              )

            	 
      	 
      
	
              Occupation:

            	
              )

            	
              COMPANY
      SECRETARY

            	 
      

    

    

    
      [Guaranty
Agreement – Willis North America Inc.]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
              EXECUTED and DELIVERED as a
      deed

            	
              )

            
	
              by
      and on behalf of

            	
              )

            
	
              TA
      III LIMITED

            	
              )

            
	 
      	
              )

            
	 
      	
              )

            
	 
      	
              /s/  Shaun
      Bryant

            	 
      
	 
      	
              Shaun
      Bryant signing under a power of attorney dated 28 July
  2010

            
	 
      	 
      

    

    

    
      	
              in
      the presence of:

            	
              )

            	
                /s/
      Sarah Lewis

            	 
      
	
              Name:

            	
              )

            	
              Sarah
      Lewis

            	 
      
	
              Address:

            	
              )

            	
              WILLIS
      LIMITED

            	 
      
	 
      	
              )

            	
              51
      LIME STREET

            	 
      
	 
      	
              )

            	
              LONDON
      EC3M 7DQ

            	 
      
	 
      	
              )

            	 
      	 
      
	
              Occupation:

            	
              )

            	
              COMPANY
      SECRETARY

            	 
      

    

    

    

    

    
      	
              EXECUTED and DELIVERED as a
      deed

            	
              )

            
	
              by
      and on behalf of

            	
              )

            
	
              TA
      IV LIMITED

            	
              )

            
	 
      	
              )

            
	 
      	
              )

            
	 
      	
              /s/  Shaun
      Bryant

            	 
      
	 
      	
              Shaun
      Bryant signing under a power of attorney dated 28 July
  2010

            
	 
      	 
      

    

    

    
      	
              in
      the presence of:

            	
              )

            	
                /s/
      Sarah Lewis

            	 
      
	
              Name:

            	
              )

            	
              Sarah
      Lewis

            	 
      
	
              Address:

            	
              )

            	
              WILLIS
      LIMITED

            	 
      
	 
      	
              )

            	
              51
      LIME STREET

            	 
      
	 
      	
              )

            	
              LONDON
      EC3M 7DQ

            	 
      
	 
      	
              )

            	 
      	 
      
	
              Occupation:

            	
              )

            	
              COMPANY
      SECRETARY

            	 
      

    

    

    

    
      [Guaranty
Agreement – Willis North America Inc.]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
              EXECUTED and DELIVERED as a
      deed

            	
              )

            
	
              by
      and on behalf of

            	
              )

            
	
              TRINITY
      ACQUISITION PLC

            	
              )

            
	 
      	
              )

            
	 
      	
              )

            
	 
      	
              /s/  Shaun
      Bryant

            	 
      
	 
      	
              Shaun
      Bryant signing under a power of attorney dated 28 July
  2010

            
	 
      	 
      

    

    

    
      	
              in
      the presence of:

            	
              )

            	
                /s/
      Sarah Lewis

            	 
      
	
              Name:

            	
              )

            	
              Sarah
      Lewis

            	 
      
	
              Address:

            	
              )

            	
              WILLIS
      LIMITED

            	 
      
	 
      	
              )

            	
              51
      LIME STREET

            	 
      
	 
      	
              )

            	
              LONDON
      EC3M 7DQ

            	 
      
	 
      	
              )

            	 
      	 
      
	
              Occupation:

            	
              )

            	
              COMPANY
      SECRETARY

            	 
      

    

    

    

    

    
      	
              EXECUTED and DELIVERED as a
      deed

            	
              )

            
	
              by
      and on behalf of

            	
              )

            
	
              WILLIS
      GROUP LIMITED

            	
              )

            
	 
      	
              )

            
	 
      	
              )

            
	 
      	
              /s/  Shaun
      Bryant

            	 
      
	 
      	
              Shaun
      Bryant signing under a power of attorney dated 28 July
  2010

            
	 
      	 
      

    

    

    
      	
              in
      the presence of:

            	
              )

            	
                /s/
      Sarah Lewis

            	 
      
	
              Name:

            	
              )

            	
              Sarah
      Lewis

            	 
      
	
              Address:

            	
              )

            	
              WILLIS
      LIMITED

            	 
      
	 
      	
              )

            	
              51
      LIME STREET

            	 
      
	 
      	
              )

            	
              LONDON
      EC3M 7DQ

            	 
      
	 
      	
              )

            	 
      	 
      
	
              Occupation:

            	
              )

            	
              COMPANY
      SECRETARY

            	 
      

    

    

    
      [Guaranty
Agreement – Willis North America Inc.]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
              EXECUTED and DELIVERED as a
      deed

            	
              )

            
	
              by
      and on behalf of

            	
              )

            
	
              WILLIS
      INVESTMENT UK

            	
              )

            
	
              HOLDINGS
      LIMITED

            	
              )

            
	 
      	
              )

            
	 
      	
              /s/  Shaun
      Bryant

            	 
      
	 
      	
              Shaun
      Bryant signing under a power of attorney dated 28 July
  2010

            
	 
      	 
      

    

    

    
      	
              in
      the presence of:

            	
              )

            	
                /s/
      Sarah Lewis

            	 
      
	
              Name:

            	
              )

            	
              Sarah
      Lewis

            	 
      
	
              Address:

            	
              )

            	
              WILLIS
      LIMITED

            	 
      
	 
      	
              )

            	
              51
      LIME STREET

            	 
      
	 
      	
              )

            	
              LONDON
      EC3M 7DQ

            	 
      
	 
      	
              )

            	 
      	 
      
	
              Occupation:

            	
              )

            	
              COMPANY
      SECRETARY

            	 
      

    

    

    

    

    

    
      
         

          
            [Guaranty
Agreement – Willis North America Inc.]

          

        

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              WILLIS
      NETHERLANDS HOLDINGS B.V.

            
	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
                /s/  A.C. Konijnendijk

            
	 
      	
              Name:

            	
              A.C.
      Konijnendijk

            
	 
      	
              Title:

            	
              Managing
      Director A

            

    

    

     

    

    

    
      [Guaranty
Agreement – Willis North America Inc.]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              BANK OF AMERICA, N.A.,
      as

              Administrative
      Agent

            
	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
                /s/  Aamir
      Saleem

            
	 
      	
              Name:

            	
              Aamir
      Saleem

            
	 
      	
              Title:

            	
              Vice
      President

            

    

    

     

    
      [Guaranty
Agreement – Willis North America Inc.]exv10w1

Exhibit 10.1

COMMON STOCK PURCHASE AGREEMENT

     This Common Stock Purchase Agreement (this “Agreement”) is dated as of August 10,
2010, by and between MannKind Corporation, a Delaware corporation (the “Company”), and
Seaside 88, LP, a Florida limited partnership (such investor, including its successors and assigns,
“Seaside”).

     WHEREAS, subject to the terms and conditions set forth in this Agreement, the Company desires
to issue and sell to Seaside, and Seaside desires to purchase from the Company, up to 18,200,000
shares of Common Stock (as the same may be proportionately adjusted in respect of any stock split,
stock dividend, combination, recapitalization or the like with respect to the Common Stock, all
such adjustments to be made in a commercially reasonable manner) on the Closing Dates;

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

ARTICLE I

DEFINITIONS

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

          “10-Day VWAP” shall be an amount equal to the volume weighted average of actual
trading prices measured in hundredths of cents of the Common Stock on the Trading Market for the
ten consecutive Trading Days immediately prior to a Closing Date, as reported by Bloomberg
Financial Markets.

          “Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a Person as such terms
are used in and construed under Rule 144.

          “Closing” means the Initial Closing and each Subsequent Closing.

          “Closing Dates” means the Initial Closing Date and each Subsequent Closing Date.

          “Commission” means the Securities and Exchange Commission.

          “Common Stock” means the common stock of the Company, par value $0.01 per share, and
any securities into which such common stock may hereafter be reclassified.

          “Common Stock Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock, including without
limitation, any debt, preferred stock, rights, option, warrant or other instrument that is at any
time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.

 

          “Company Counsel” means Cooley LLP, or other counsel (including in-house counsel of
the Company) reasonably acceptable to Seaside.

          “Disclosure Schedules” means the disclosure schedules of the Company delivered
concurrently herewith, as updated by the Company from time to time.

          “Dollar Limit” shall have the meaning ascribed to such term in Section 2.6(b).

          “DTC” means the Depository Trust Company.

          “DWAC” means DTC’s Deposit Withdrawal Agent Commission system.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          “Floor” shall mean $6.50 (as the same may be proportionately adjusted in respect of
any stock split, stock dividend, combination, recapitalization or the like with respect to the
Common Stock, all such adjustments to be made in a commercially reasonable manner).

          “GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

          “Initial Closing” means the closing of the purchase and sale of the Common Stock
pursuant to Section 2.1.

          “Initial Closing Date” means September 22, 2010 or such later date when the
Transaction Document and other documents required to be executed and delivered in connection with
the Initial Closing pursuant this Agreement have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) Seaside’s obligations to purchase the Shares
and (ii) the Company’s obligations to issue and deliver the Shares have been satisfied or waived.

          “Intellectual Property” shall have the meaning ascribed to such term in Section
3.1(q).

          “Lien” means a lien, charge, security interest, encumbrance, right of first refusal,
preemptive right or other restriction.

          “Material Adverse Effect” means any condition, event, change or effect that would
reasonably be expected to have a material adverse effect on (i) the legality, validity or
enforceability of any Transaction Document, (ii) the results of operations, assets, business or
financial condition of the Company and its Subsidiaries, taken as a whole, or (iii) the Company’s
ability to perform in any material respect on a timely basis its obligations under the Transaction
Document, but shall not mean or include any condition, event, change or effect which (1) is or
results from events or occurrences relating to the economy in general (including arising from
terrorist attacks, acts of war or the outbreak of war or international hostilities, or any
escalation or material worsening thereof, civil unrest, sabotage or military actions, whether in
the United States or elsewhere) or the Company’s industry in general and not specifically relating
to the Company or having a disproportionate impact on the Company, (2) results from the
announcement of this

2

 

Agreement or the transactions contemplated hereby, or (3) is or results from any breach of any
representation, warranty, covenant or agreement contained in this Agreement by Seaside.

          “Per Share Purchase Price” shall be the 10-Day VWAP multiplied by 0.92.

          “Permits” shall have the meaning ascribed to such term in Section 3.1(r).

          “Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind.

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

          “Prospectus Supplement” means the supplement or supplements to the base prospectus
contained in the Registration Statement to be filed in connection with the sale to Seaside, or the
resale by Seaside, of the Shares.

          “Registration Statement” means the registration statement of the Company, Commission
File No. 333-166404, as the same may be amended from time to time, including any related Rule
462(b) registration statement or amendment thereto, covering the sale to Seaside, or the resale by
Seaside, of the Shares.

          “Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

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

          “Seaside Party” shall have the meaning ascribed to such term in Section 4.6.

          “SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

          “Securities Act” means the Securities Act of 1933, as amended.

          “Shares” means the shares of Common Stock issued or issuable to Seaside pursuant to
this Agreement.

          “Short Sales” shall include, without limitation, all “short sales” as defined in Rule
200 of Regulation SHO of the Exchange Act and all types of forward sale contracts, options, puts,
calls, swaps and similar arrangements (including on a total return basis).

          “Subsequent Closing” means each closing of the purchase and sale of the Common Stock
pursuant to Section 2.2.

3

 

          “Subsequent Closing Date” means every 14th day (or, if such day is not a
Trading Day, then the first day thereafter that is a Trading Day) commencing 14 days after the
Initial Closing Date and ending on or about the date that is approximately 50 weeks subsequent to
the Initial Closing Date, or such later dates when all conditions precedent to (i) Seaside’s
obligations to purchase the Shares and (ii) the Company’s obligations to issue and deliver the
Shares have been satisfied or waived, in each event with respect to such Subsequent Closing, unless
this Agreement is earlier terminated pursuant to the terms hereof.

          “Subsidiary” shall have the meaning ascribed to such term in Section 3.1(a).

          “Trading Day” means a day on which the Common Stock is traded on a Trading Market.

          “Trading Market” means whichever of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the New York Stock Exchange,
the NYSE Alternext Exchange, the NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market or
the Nasdaq Global Select Market.

          “Transaction Document” means this Agreement.

ARTICLE II

PURCHASE AND SALE

     2.1 Initial Closing. On the Initial Closing Date, Seaside shall purchase from the
Company, and the Company shall issue and sell to Seaside, 700,000 Shares at the Per Share Purchase
Price. Upon satisfaction or waiver of the conditions set forth in Sections 2.3, 2.4, 2.5 and 2.6,
the Initial Closing shall occur on the Initial Closing Date at the offices of White White & Van
Etten PC, 55 Cambridge Parkway, Cambridge, MA 02142, or such other location as the parties shall
mutually agree.

     2.2 Subsequent Closings. On each Subsequent Closing Date, subject to Section 2.6,
Seaside shall purchase from the Company, and the Company shall issue and sell to Seaside, 700,000
Shares (as the same may be proportionately adjusted in respect of any stock split, stock dividend,
combination, recapitalization or the like with respect to the Common Stock, all such adjustments to
be made in a commercially reasonable manner) at the Per Share Purchase Price. Upon satisfaction or
waiver of the conditions set forth in Sections 2.3, 2.4, 2.5 and 2.6, each Subsequent Closing shall
occur on the Subsequent Closing Date at the offices of White White & Van Etten PC, 55 Cambridge
Parkway, Cambridge, MA 02142, or such other location as the parties shall mutually agree.

     2.3 Deliveries by the Company. On each Closing Date, the Company shall deliver or
cause to be delivered to Seaside the following:

          (a) subject to Section 2.6(b), 700,000 Shares (as the same may be proportionately adjusted in
respect of any stock split, stock dividend, combination, recapitalization or the like with respect
to the Common Stock, all such adjustments to be made in a commercially reasonable manner),
registered in the name of Seaside, via the DTC DWAC system, as specified on the signature pages
hereto;

4

 

          (b) an officer’s certificate of the Company’s Chief Executive Officer or Chief Financial
Officer in substantially the form of Exhibit A attached hereto; and

          (c) solely on the Initial Closing Date, a legal opinion of Company Counsel, in substantially
the form of Exhibit B attached hereto.

     2.4 Deliveries by Seaside. On each Closing Date, Seaside shall deliver or cause to be
delivered to the Company an amount equal to the Per Share Purchase Price for each such Closing
multiplied by 700,000 (as the same may be proportionately adjusted in respect of any stock split,
stock dividend, combination, recapitalization or the like with respect to the Common Stock, all
such adjustments to be made in a commercially reasonable manner), subject to Section 2.6(b), in
each case by wire transfer of immediately available funds to the account as specified in writing by
the Company, and in each case less the amount due Seaside for reimbursement of its expenses
pursuant to Section 5.2 hereof.

     2.5 Closing Conditions.

          (a) The obligations of the Company hereunder in connection with each Closing are subject to
the satisfaction by Seaside, or waiver by the Company, of the following conditions:

               (i) the accuracy on the Closing Date of the representations and warranties of Seaside
contained herein;

               (ii) all obligations, covenants and agreements of Seaside required to be performed at or prior
to the Closing Date shall have been performed;

               (iii) the delivery by Seaside of the items set forth in Section 2.4 of this Agreement;

               (iv) with respect to any Subsequent Closing, the 10-Day VWAP shall equal or exceed the Floor,
as set forth in Section 2.6(a) of this Agreement; and

               (v) the Registration Statement shall have been declared effective by the Commission and shall
be in full force and effect.

          (b) The obligations of Seaside hereunder in connection with each Closing are subject to the
satisfaction by the Company, or waiver by Seaside, of the following conditions:

               (i) the accuracy on the Closing Date of the representations and warranties of the Company
contained herein (as qualified and limited by the Disclosure Schedules, as updated through such
Closing Date);

               (ii) all obligations, covenants and agreements of the Company required to be performed at or
prior to the Closing Date shall have been performed, and all Required Approvals shall have been
obtained;

               (iii) the delivery by the Company of the items set forth in Section 2.3 of this Agreement;

5

 

               (iv) with respect to any Subsequent Closing, the 10-Day VWAP shall equal or exceed the Floor,
as set forth in Section 2.6(a) of this Agreement;

               (v) there shall have been no Material Adverse Effect with respect to the Company since the
date hereof that has not been cured by the Company;

               (vi) the Registration Statement shall have been declared effective by the Commission and shall
be in full force and effect;

               (vii) the purchase of Shares at a Subsequent Closing from the Company shall not cause
Seaside’s beneficial ownership of the Common Stock, calculated in accordance with Rule 13d-3
promulgated by the Commission, to exceed 10% of the Company’s outstanding common stock immediately
after such Subsequent Closing; and

               (viii) from the date hereof to each Closing Date, trading in the Common Stock shall not have
been suspended by the Commission and trading in securities generally as reported by Bloomberg
Financial Markets shall not have been suspended or limited, or minimum prices shall not have been
established on securities whose trades are reported by such service, or on any Trading Market, nor
shall a banking moratorium have been declared either by the United States or New York State
authorities nor shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or any material
adverse change in, any financial market which, in each case, in the reasonable judgment of Seaside,
makes it impracticable or inadvisable to purchase the Shares at the Closing.

     2.6 The Floor; Dollar Limit on Purchases.

          (a) In the event that the 10-Day VWAP does not equal or exceed the Floor, as calculated with
respect to any Closing Date, then such Closing will not occur. In each such event, there will be
one fewer Closing pursuant to this Agreement and the aggregate number of Shares to be purchased
hereunder shall be reduced by 700,000 Shares (as the same may be proportionately adjusted in
respect of any stock split, stock dividend, combination, recapitalization or the like with respect
to the Common Stock, all such adjustments to be made in a commercially reasonable manner) for each
such Closing that does not occur because the Floor has not been reached.

          (b) If for any Subsequent Closing the amount of the proposed investment by Seaside at such
Closing is greater than two times the amount invested by Seaside at the immediately preceding
Closing (the “Dollar Limit”), then Seaside shall have the option to reduce the number of
Shares purchased at such Subsequent Closing such that the amount of the investment at such Closing
is an amount equal to (as near as possible) the Dollar Limit.

          (c) In the event that the Registration Statement is not effective and in full force and effect
with respect to any Closing Date, then such Closing will not occur. In each such event, there will
be one fewer Closing pursuant to this Agreement and the aggregate number of Shares to be purchased
hereunder shall be reduced by 700,000 Shares (as the same may be proportionately adjusted in
respect of any stock split, stock dividend, combination, recapitalization or the like with respect
to the Common Stock, all such adjustments to be made in a commercially reasonable manner) for each
such Closing that does not occur because the Registration Statement is not effective and in full
force and effect on the applicable Closing Date.

6

 

          (d) In the event that the Company furnishes to Seaside a certificate signed by the Chief
Executive Officer or Chief Financial Officer of the Company stating that a material development or
potential material development involving the Company has occurred which the Company would be
obligated to disclose in the Prospectus Supplement, which disclosure would, in the good faith
judgment of the Chief Executive Officer, Chief Financial Officer, General Counsel or the Board of
Directors of the Company, be premature or otherwise inadvisable at such time, then such Subsequent
Closing will not occur; provided, however, that the Company will not be permitted to cancel a
Subsequent Closing pursuant to this Section 2.6(d) more than eight times during the term of this
Agreement. In the event that a Subsequent Closing is cancelled pursuant to this Section 2.6(d),
then an additional Subsequent Closing will be added to the end of the schedule set forth in the
definition of Subsequent Closing Date as a replacement for the cancelled Subsequent Closing such
that the number of Closings pursuant to this Agreement will remain unchanged as a consequence of
the delivery of a certificate pursuant to this Section 2.6(d).

ARTICLE III

REPRESENTATIONS AND WARRANTIES

     3.1 Representations and Warranties of the Company. Except as set forth under the
corresponding section of the Disclosure Schedules, which Disclosure Schedules may be updated before
any Closing and shall be deemed a part hereof, the Company hereby makes the representations and
warranties set forth below to Seaside as of the date hereof and as of each Closing Date (provided
that representations and warranties that speak as of a specific date shall continue to be true and
correct as of such Closing with respect to such date):

          (a) Subsidiaries. All of the significant subsidiaries (as that term is defined in
Rule 1-02 of Regulation S-X promulgated by the Commission) of the Company are listed in the
Company’s most recent Annual Report on Form 10-K as modified by any subsequent SEC Reports filed
with the SEC (each a “Subsidiary”). The Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all the
issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase
securities. If the Company has no subsidiaries, then references in the Transaction Document to the
Subsidiaries will be disregarded.

          (b) Organization and Qualification. Each of the Company and the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite
power and authority to own and use its properties and assets and to carry on its business as
currently conducted. Neither the Company nor any Subsidiary is in violation or default of any of
the provisions of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to
conduct business and is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good standing, as the
case may be, would not reasonably be expected to result in a Material Adverse Effect and, to the
knowledge of the Company, no Proceeding has been instituted in any such jurisdiction revoking,

7

 

limiting or curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.

          (c) Authorization; Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by the Transaction Document
and otherwise to carry out its obligations thereunder. The execution and delivery of the
Transaction Document by the Company and the consummation by it of the transactions contemplated
thereby have been duly authorized by all necessary action on the part of the Company and its
stockholders, and no further action is required by the Company or its stockholders in connection
therewith other than in connection with the Required Approvals. The Transaction Document has been
(or upon delivery will have been) duly executed by the Company and, when delivered in accordance
with the terms hereof, will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other equitable remedies
and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

          (d) No Conflicts. The execution, delivery and performance of the Transaction Document
by the Company, the issuance and sale of the Shares at each Closing and the consummation by the
Company of the other transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, violate
or constitute a default (or an event that with notice or lapse of time or both would become a
default) under, or result in the creation of any Lien upon any of the properties or assets of the
Company or any Subsidiary pursuant to, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement
(written or oral), credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) to which the Company or any Subsidiary is a party or by which any property or
asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required
Approvals, conflict with or result in a violation of (x) any law, rule or regulation to which the
Company or a Subsidiary is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is bound or affected, or (y) any
order, judgment, injunction, decree or other restriction of any court or governmental authority
that names the Company or a Subsidiary or to or by which, to the Company’s knowledge, the Company
or a Subsidiary or any property or asset thereof is bound or affected, except in the case of each
of clauses (ii) and (iii), such as would not reasonably be expected to result in a Material Adverse
Effect.

          (e) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization, approval or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other governmental authority, the
Trading Market or other Person (including its stockholders) in connection with the execution,
delivery and performance by the Company of the Transaction Document, other than (i) the filing of
the Prospectus Supplement and (ii) any notice filings or SEC Reports as are required to be made

8

 

following each Closing Date under applicable federal and state securities laws or under applicable
rules and regulations of the Trading Market (collectively, the “Required Approvals”).

          (f) Issuance of the Shares. The Shares are duly authorized and, when issued and paid
for in accordance with the Transaction Document, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens. The Company has reserved from its duly authorized
capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement.
The issuance by the Company to Seaside or the resale by Seaside of the Shares has been registered
under the Securities Act and all of the Shares when delivered will be freely transferable and
tradable on the Trading Market by Seaside without restriction (other than any restrictions arising
solely from the status, acts or omissions of Seaside). The Registration Statement is effective and
available for the issuance or the resale by Seaside of the Shares thereunder and the Company has
not received any notice that the Commission has issued or intends to issue a stop-order with
respect to the Registration Statement or that the Commission otherwise has suspended or withdrawn
the effectiveness of the Registration Statement, either temporarily or permanently, or intends or
has threatened in writing to do so. The “Plan of Distribution” section under the Registration
Statement as supplemented by the Prospectus Supplement permits the issuance and sale, or the resale
by Seaside, of the Shares hereunder.

          (g) Capitalization. The capitalization of the Company is as set forth in the
Registration Statement as of the dates set forth therein. The Company has not issued any capital
stock since its most recently filed periodic report under the Exchange Act, other than pursuant to
the exercise of employee stock options under the Company’s stock option plans, the issuance of
shares of Common Stock to employees pursuant to the Company’s employee stock purchase plan, the
issuance of shares of Common Stock to consultants pursuant to written consulting agreements and to
vendors in payment for goods and services and the issuance of shares of Common Stock pursuant to
the vesting, conversion or exercise of outstanding Common Stock Equivalents, and as otherwise set
forth in the Disclosure Schedules. No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Document. Except as disclosed in the SEC Reports or Section 3.1(g) of the Disclosure
Schedules, there are no outstanding options, warrants, rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock
Equivalents. Except as disclosed in the SEC Reports or Section 3.1(g) of the Disclosure Schedules,
the issue and sale of the Shares will not obligate the Company to issue shares of Common Stock or
other securities to any Person (other than Seaside) and will not result in a right of any holder of
Company securities to adjust the exercise, conversion, exchange or reset price under such
securities. All of the outstanding shares of capital stock of the Company are validly issued,
fully paid and nonassessable, have been issued in material compliance with all federal and state
securities laws and requirements of the Trading Market, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for or purchase
securities. No further approval or authorization of any stockholder or the Board of Directors of
the Company is required for the issuance and sale of the Shares, other than the Required Approvals.
There are no stockholders agreements, voting agreements or other similar agreements with respect
to the Company’s capital stock to which the

9

 

Company is a party or, to the knowledge of the Company, between or among any of the Company’s
stockholders.

          (h) SEC Reports; Financial Statements. The Company has filed or furnished all
reports, schedules, forms, statements and other documents required to be filed or furnished by it
under the Securities Act and the Exchange Act (including all required exhibits thereto), including
pursuant to Section 13(a) or 15(d) thereof (the foregoing materials, as the same may be amended,
and including the exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports”) for the 12 months preceding the date
hereof (or such shorter period as the Company was required by law to file such material) and any
notices, reports or other filings pursuant to applicable requirements of the Trading Market on a
timely basis or has received a valid extension of such time of filing, and has filed any such SEC
Reports and notices, reports or other filings pursuant to applicable requirements of the Trading
Market prior to the expiration of any such extension. As of their respective dates, the SEC
Reports complied in all material respects with the applicable requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and
none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements (i) have been prepared in
accordance with United States generally accepted accounting principles applied on a consistent
basis during the periods involved (“GAAP”), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial statements may not
contain all footnotes required by GAAP, and (ii) fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments.

          (i) Material Changes. Since the date of the latest audited financial statements
included within the SEC Reports, except as specifically disclosed in the SEC Reports, (i) there has
been no event, occurrence or development that has had or that would reasonably be expected to
result in a Material Adverse Effect, except as has been reasonably cured by the Company, (ii) the
Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables,
accrued expenses and other liabilities incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii)
the Company has not altered its method of accounting except as otherwise required pursuant to GAAP,
(iv) the Company has not declared or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock (other than in connection with repurchases of unvested stock issued to employees
of the Company) and (v) the Company has not issued any equity securities to any officer, director
or Affiliate, except pursuant to existing Company stock option and incentive plans or awards.

10

 

          (j) Litigation. Except as disclosed in the SEC Reports, there is no Proceeding
pending or, to the knowledge of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties, or to the Company’s knowledge any of their
respective officers or directors (in any such officer’s or director’s capacity as such) before or
by any court, arbitrator, governmental or administrative agency or regulatory authority (federal,
state, county, local or foreign) which (i) adversely affects or challenges the legality, validity
or enforceability of the Transaction Document or the Shares or (ii) would, if there were an
unfavorable decision, ruling or finding, have or reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any Subsidiary, nor, to the knowledge of the Company, any
director or officer thereof (in his or her capacity as such), is or has been the subject of any
Proceeding involving a claim or violation of, or liability under, any federal or state securities
laws or a claim of breach of fiduciary duty. There has not been and, to the knowledge of the
Company, there is not currently pending or contemplated, any investigation by the Commission
involving the Company or any Subsidiary or any current or former director or officer of the Company
or any Subsidiary (in his or her capacity as such). The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed by the Company or
any Subsidiary under the Exchange Act or the Securities Act and, to the Company’s knowledge, no
proceeding for such purpose is pending before or threatened by the Commission.

          (k) Compliance. Neither the Company nor any Subsidiary (i) is in default under or in
violation of (and no event has occurred that has not been waived that, with notice or lapse of time
or both, would reasonably be expected to result in a default by the Company or any Subsidiary
under), nor has the Company or any Subsidiary received notice of a claim that it is in default
under or that it is in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body naming the Company or a Subsidiary or of which the Company has
knowledge, or (iii) is in violation of any statute, rule or regulation of any governmental
authority or the Trading Market, including without limitation all foreign, federal, state and local
laws applicable to its business, except in each case as would not reasonably be expected to have a
Material Adverse Effect.

          (l) Listing and Maintenance Requirements. The Company’s Common Stock is registered
pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or
which to its knowledge is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act, nor has the Company received any notification that the Commission is
contemplating terminating such registration. The Company has not, in the 12 months preceding the
date hereof or any Closing Date, received notice from any Trading Market on which the Common Stock
is or has been listed or quoted (as applicable) to the effect that the Company is not in compliance
with the listing or quotation (as applicable) and maintenance requirements of such Trading Market.
The Company is, and immediately after the consummation of the transactions contemplated hereby will
be, in compliance with all such listing or quotation (as applicable) and maintenance requirements.

          (m) Application of Takeover Protections. The Company and its Board of Directors have
taken all necessary action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights

11

 

agreement) or other similar anti-takeover provision under the Company’s certificate of
incorporation (or similar charter documents) and the laws of its state of incorporation that is or
could become applicable to Seaside as a result of Seaside and the Company fulfilling their
obligations or exercising their rights under the Transaction Document, including without limitation
the Company’s issuance of the Shares and Seaside’s ownership of the Shares.

          (n) Effective Registration Statement. The Registration Statement has been declared
effective by the Commission and remains effective as of the date hereof and the Company knows of no
reason why the Registration Statement will not continue to remain effective for the foreseeable
future. The Company is eligible to use Form S-3 registration statements for the issuance of
securities.

          (o) Acknowledgment Regarding Seaside’s Purchase of Shares. The Company acknowledges
and agrees that Seaside is acting solely in the capacity of an arm’s length purchaser with respect
to this Agreement and the transactions contemplated hereby and thereby. The Company further
acknowledges that Seaside is not acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to this Agreement and the transactions contemplated hereby and
thereby and any advice given by Seaside or any of its representatives or agents in connection with
this Agreement and the transactions contemplated hereby and thereby is merely incidental to
Seaside’s purchase of the Shares. The Company further represents to Seaside that the Company’s
decision to enter into this Agreement has been based solely on the independent evaluation of the
transactions contemplated hereby and thereby by the Company and its representatives.

          (p) Approvals. The issuance and listing or quotation (as applicable) on the Trading
Market of the Shares requires no further approvals, including but not limited to, the approval of
stockholders.

          (q) Intellectual Property. The Company possesses such right, title and interest in
and to, or possesses legal rights to use, all such patents, patent rights, trade secrets,
inventions, know-how, trademarks, trade names, copyrights, service marks and other proprietary
rights (“Intellectual Property”) as are material to the conduct of the Company’s business
except Intellectual Property the failure of which to possess would not reasonably be expected to
have a Material Adverse Effect. Except as disclosed in the SEC Reports, the Company has not
received any notice of infringement, misappropriation or conflict from any third party as to
Intellectual Property owned by or exclusively licensed to the Company that has not been resolved or
disposed of, which infringement, misappropriation or conflict would, if the subject of an
unfavorable decision, ruling or finding, reasonably be expected to have a Material Adverse Effect.
To the Company’s knowledge, it has not infringed, misappropriated, or otherwise conflicted with the
valid Intellectual Property of any third parties, which infringement, misappropriation or conflict
would, if the subject of an unfavorable decision, ruling or finding, reasonably be expected to have
a Material Adverse Effect.

          (r) Permits. The Company has made all filings, applications and submissions required
by, and possesses all approvals, licenses, certificates, certifications, clearances, consents,
exemptions, marks, notifications, orders, permits and other authorizations issued by, the
appropriate federal, state or foreign regulatory authorities necessary to own or lease its
properties

12

 

and to conduct its businesses (collectively, “Permits”), except for such Permits the
failure of which to possess or obtain would not reasonably be expected to have a Material Adverse
Effect. The Company has not received any written notice of proceedings relating to the limitation,
revocation, cancellation, suspension, modification or non-renewal of any such Permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably
be expected to have a Material Adverse Effect, and has no reason to believe that any such Permit
will not be renewed in the ordinary course.

          (s) Disclosure. The Company confirms that neither the Company nor any officer,
director or employee of the Company acting on its behalf (as such term is used in Regulation FD)
has provided Seaside or its agents or counsel with any information that constitutes or might
reasonably be expected to constitute material, non-public information except insofar as the
existence and terms of the proposed transactions hereunder may constitute such information. The
Company understands and confirms that Seaside will rely on the foregoing representations and
covenants in effecting transactions in securities of the Company. None of the representations and
warranties of the Company contained herein, nor any statement made by the Company in any
disclosure, schedule, exhibit, certificate or other document furnished or to be furnished to
Seaside in connection herewith, contains or will contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading.

     3.2 Representations and Warranties of Seaside. Seaside hereby makes the
representations and warranties set forth below to the Company as of the date hereof and as of each
Closing Date (provided that representations and warranties that speak as of a specific date shall
continue to be true and correct as of such Closing with respect to such date):

          (a) Organization; Authority. Seaside is a limited partnership duly organized, validly
existing and in good standing under the laws of the state of Florida, with full right, power and
authority to own and use its properties and assets and to carry on its business as currently
conducted and to enter into and to consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder and thereunder. The execution, delivery and
performance by Seaside of the transactions contemplated by this Agreement have been duly authorized
by all necessary action on the part of Seaside and no such further action is required. The
Transaction Document has been (or upon delivery will have been) duly executed by Seaside, and, when
delivered by Seaside in accordance with the terms thereof, will constitute the valid and legally
binding obligation of Seaside, enforceable against it in accordance with its terms, except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law.

          (b) Experience of Seaside. Seaside, either alone or together with its
representatives, has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the prospective investment in the
Shares, and has so evaluated the merits and risks of such investment. Seaside has access to
sufficient capital to fund its anticipated obligations set forth in Sections 2.1 and 2.2. Seaside
is

13

 

able to bear the economic risk of an investment in the Shares and, at the present time, is able to
afford a complete loss of such investment.

          (c) Short Sales. Seaside has not directly or indirectly executed any Short Sales or
other hedging transactions in the securities of the Company.

          (d) No Brokers or Finders. Except for Omni Capital Corporation, whose fees will be
paid by the Company, no agent, broker, investment banker or other firm is or will be entitled to
any broker’s or finder’s fee or any commission or similar fee from Seaside in connection with any
of the transactions contemplated by this Agreement.

          (e) Limited Ownership. The purchase by Seaside of the Shares issuable to it at the
Closings will not result in Seaside (individually or together with any other Person with whom
Seaside has identified, or will have identified, itself as part of a “group” in a public filing
made with the Commission involving the Company’s securities) acquiring, or obtaining the right to
acquire, in excess of 19.9% of the outstanding shares of Common Stock or the voting power of the
Company on a post-transaction basis that assumes that all Closings contemplated by this Agreement
shall have occurred.

          (f) Investment Intent. Based on its past experience in transactions similar to the
transaction contemplated by this Agreement and its intentions with respect to the Shares that are
issuable to it under this Agreement, Seaside does not believe it is an underwriter.

ARTICLE IV

OTHER AGREEMENTS OF THE PARTIES

     4.1 No Transfer Restrictions. Certificates evidencing the Shares shall not contain
any legend restricting their transferability by Seaside. The Company shall cause its counsel to
issue a legal opinion to the Company’s transfer agent if required by the Company’s transfer agent
to effect a transfer of any of the Shares; such opinion shall be provided by the Company’s counsel
at no expense to Seaside.

     4.2 Securities Laws Disclosure; Publicity. The Company shall, by 9:00 a.m. Eastern
time on the Trading Day following the date hereof, file a Current Report on Form 8-K which attaches
as an exhibit this Agreement, in a form reasonably acceptable to Seaside and its counsel, if
Seaside is readily available to review such Form 8-K in a timely manner, disclosing the material
terms of the transactions contemplated hereby.

     4.3 Shareholders Rights Plan. No claim will be made or enforced by the Company or,
with the consent of the Company, any other Person that Seaside is an “Acquiring Person” or similar
designation under any shareholders rights plan or similar plan or arrangement in effect or
hereafter adopted by the Company, or that Seaside could be deemed to trigger the provisions of any
such plan or arrangement, by virtue of receiving Shares under the Transaction Document or under any
other agreement between the Company and Seaside.

     4.4 Investment Company Status. The Company shall conduct its business in a manner so
that it will not become subject to the Investment Company Act of 1940, as amended.

14

 

     4.5 Non-Public Information. The Company covenants and agrees that neither it nor any
other Person acting on its behalf will provide Seaside or its agents or counsel with any
information that the Company believes constitutes material non-public information. The Company
understands and confirms that Seaside shall be relying on the foregoing representations in
effecting transactions in securities of the Company. Seaside covenants and agrees that it shall
not, and shall cause its counsel not to, knowingly request from the Company or any person acting on
the Company’s behalf any material non-public information (other than any such information disclosed
prior to the date of this Agreement).

     4.6 Indemnification of Seaside. Subject to the provisions of this Section 4.6, the
Company will indemnify and hold Seaside and its respective directors, officers, stockholders,
partners, members, employees, agents and Affiliates (each, a “Seaside 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 actual and reasonable
attorneys’ fees and costs of investigation reasonably incurred in connection with defending or
investigating any suit or action in respect thereof to which any Seaside Party is or reasonably
believes it may become a party under the Securities Act, the Exchange Act or any other federal or
state statutory law or regulation, at common law or otherwise, insofar as such losses, liabilities,
obligations, claims, demands, contingencies, damages, costs and expenses arise out of or are based
on (a) any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or any Prospectus Supplement, or (b) 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, provided that the Company will not be liable in any such case to
the extent that any such liability, obligation, claim, demand, contingency, damage, cost or expense
arises out of or is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written information furnished
to the Company by and regarding Seaside expressly for inclusion therein. If any action shall be
brought against any Seaside Party in respect of which indemnity may be sought pursuant to this
Agreement, such Seaside 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. Any Seaside 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 Seaside 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 Seaside Party such that common representation would be unethical or
ineffective. The Company will not be liable to any Seaside Party under this Agreement (x) for any
settlement by a Seaside Party effected without the Company’s prior written consent, which consent
shall not be unreasonably withheld or delayed; or (y) to the extent, but only to the extent, that a
loss, liability, obligation, claim, demand, damage, cost or expense is attributable to any Seaside
Party’s breach of any of the representations, warranties, covenants or agreements made by Seaside
in this Agreement.

     4.7 Listing or Quotation of Common Stock. The Company hereby agrees to use its best
efforts to maintain the listing or quotation (as applicable) of the Common Stock on its current
Trading Market and all other Trading Markets on which such Common Stock may hereafter be

15

 

listed or quoted (as applicable), and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of such Trading Market(s), provided that
best efforts shall not require the expenditure of time or money that is unreasonable in light of
the likelihood of success of the efforts. The Company further agrees that, if the Company applies
to have the Common Stock traded on any Trading Market other than its current Trading Market, it
will include in such application all of the Shares and will take such other action as is reasonably
necessary to cause all of the Shares to be listed on such other Trading Market.

     4.8 Stockholder Approval. The Company shall not issue shares of Common Stock or
Common Stock Equivalents, if such issuance would require stockholder approval pursuant to
applicable rules of the Trading Market, unless and until such stockholder approval is obtained.

     4.9 Short Sales; Limits on Trading. Seaside covenants that neither it nor any Person
acting on its behalf or pursuant to any understanding with it will (a) execute any Short Sales in
the securities of the Company from the date hereof until the final Subsequent Closing contemplated
hereby, or (b) sell a quantity of Shares that exceeds 10% of the total number of shares of Common
Stock traded on any Trading Day.

     4.10 Prospectus Supplement. The Company will use its best efforts to file the
Prospectus Supplement in accordance with the requirements of Rule 424 promulgated under the
Securities Act on or before the Initial Closing Date and, if required, before each Subsequent
Closing Date.

ARTICLE V

MISCELLANEOUS

     5.1 Termination. This Agreement may be terminated by the Company, immediately upon
written notice to Seaside; provided, however, that no such termination pursuant to
this Section 5.1 will affect the right of any party to sue for any breach by the other party (or
parties).

     5.2 Fees and Expenses. Except as otherwise set forth in this Agreement and as set
forth in this Section 5.2 below, each party shall pay the fees and expenses of its own advisers,
counsel, accountants and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
The Company shall pay all stamp and other taxes and duties levied in connection with the delivery
of the Shares. Notwithstanding the foregoing, at the Initial Closing the Company shall reimburse
Seaside for the fees and expenses of its counsel, White White & Van Etten PC, in an amount equal to
$25,000 and at each Subsequent Closing the Company shall reimburse Seaside for the fees and
expenses of its counsel, White White & Van Etten PC, in an amount equal to $2,500. Such legal fees
may be withheld by Seaside from the amount to be paid for the Shares purchased at the Initial
Closing and any Subsequent Closing.

     5.3 Entire Agreement. The Transaction Document, together with the exhibits and
schedules thereto (including the Disclosure Schedules), contain the entire understanding of the
parties with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties acknowledge have
been merged into such documents, exhibits and schedules.

16

 

     5.4 Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (a) the date of transmission, if such notice or communication is delivered via
electronic mail or facsimile at the electronic mail address or facsimile number set forth on the
signature pages attached hereto prior to 5:30 p.m. (Eastern time) on a Trading Day, (b) the next
Trading Day after the date of transmission, if such notice or communication is delivered via
electronic mail or facsimile at the electronic mail address or facsimile number set forth on the
signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (Eastern
time) on any Trading Day, (c) the second Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom
such notice is required to be given. The address for such notices and communications shall be as
set forth on the signature pages attached hereto or as otherwise provided in writing from time to
time by the addressee to the other party.

     5.5 Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by the Company and Seaside or,
in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No
waiver of any default with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise of any such right.

     5.6 Headings. The headings herein are for convenience only, do not constitute a part
of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The
language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.

     5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns. Neither party may assign this
Agreement or any rights or obligations hereunder without the prior written consent of other party;
provided that Seaside may assign its rights and obligations under this Agreement to an affiliate
of Seaside without obtaining the Company’s prior written consent so long as the assignee shall
agree in writing to be bound by such obligations and provided that Seaside shall in any event
remain liable for the obligations of any such assignee under this Agreement.

     5.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not for the benefit of,
nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in
Section 4.6.

     5.9 Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of the Transaction Document shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. The parties hereby waive all rights to a trial by jury. If either party
shall commence an action or proceeding to enforce any provisions of the Transaction Document, then
the prevailing party in such action or proceeding shall be reimbursed by the other party for its

17

 

reasonable attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.

     5.10 Survival. The representations and warranties herein shall survive the Closings
and delivery of the Shares for the applicable statute of limitations.

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

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

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

     5.14 Remedies. In addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, Seaside and the Company will be entitled to
specific performance under the Transaction Document. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of the obligations set
forth herein and hereby agree to waive in any such action for specific performance of any such
obligation the defense that a remedy at law would be adequate.

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

18

 

     5.16 Construction. The parties agree that each of them and/or their respective
counsel has reviewed and had an opportunity to revise the Transaction Document and, therefore, the
normal rule of construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of the Transaction Document or any
amendments hereto.

(Signature Pages Follow)

19

 

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

	 	 	 	 	 

	MannKind Corporation	 	Address for Notice:
	 
	 	 	 	 
	By:

	 	/s/ Hakan S. Edstrom	 	28903 North Avenue Paine
	 

	 	Name: Hakan S. Edstrom
	 	Valencia, CA 91355
	 

	 	Title: President and Chief Operating Officer
	 	Attention: David Thomson, Esq.
	 

	 	 	 	Fax: 661-775-5350
	 

	 	 	 	Email: dthomson@mannkindcorp.com
	 
	 	 	 	 
	With a copy (which shall not constitute notice) to:	 	Cooley LLP
	 

	 	 	 	4401 Eastgate Mall
	 

	 	 	 	San Diego, CA 92121-1909
	 

	 	 	 	Attention: D. Bradley Peck, Esq.
	 

	 	 	 	Fax: 858-550-6420
	 

	 	 	 	Email: bpeck@cooley.com
	 
	 	 	 	 
	Seaside 88, LP	 	Address for Notice:
	 
	 	 	 	 
	By: Seaside 88 Advisors, LLC	 	 
	 
	 	 	 	 
	By:

	 	/s/ William J. Ritger
	 	750 Ocean Royale Way
	 

	 	 

Name: William J. Ritger

Title: Manager
	 	Suite 805

North Palm Beach, FL 33408
	 

	 	 
	 	Attention: William J. Ritger and
	 

	 	 	 	Denis M. O’Donnell, M.D.
	 

	 	 	 	Fax: 866-358-6721
	 

	 	 	 	Email: wjr@seaside88.com
	 
	 	 	 	 
	With a copy (which shall not constitute notice) to:	 	White White & Van Etten PC
	 

	 	 	 	55 Cambridge Parkway
	 

	 	 	 	Cambridge, MA 02142
	 

	 	 	 	Attention: David A. White, Esq.
	 

	 	 	 	Fax: 617-225-0205
	 

	 	 	 	Email: daw@wwvlaw.com
	 
	 	 	 	 
	DWAC Instructions for Common Stock:	 	 
	 
	 	 	 	 
	DTC # - 0571 -	 	 
	Account number - G53-1348923

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