Document:

Sale and Purchase Agreement

 EXHIBIT 10.1 
  
 SALE AND PURCHASE AGREEMENT OF
THE MÉDI-PARTENAIRES GROUP 
  
 This AGREEMENT is made 
  
 On April
21, 2005, 
  
 BETWEEN THE
UNDERSIGNED: 
  

	1.	UHS INTERNATIONAL INC., 

  
 A corporation organized under the laws of Delaware (United States of America), 
 With its registered offices at 1209 Orange Street, Wilmington, DE 19801 (USA), 
 Represented by Mr. Steve Filton, 
 Who
represents and warrants that he is fully authorized for the purposes hereof, 
  
 Hereinafter referred to as the “MAJORITY SHAREHOLDER”, 
  

	2.	SANTÉ ET LOISIRS, 

  
 A société à responsabilité limitée organized under the laws of France, 

With a share capital of EUR 7,500, 
 With registered offices at 7, rue Royale, 75008 Paris (France), 
 Registered with the Paris Trade Registry under the number 339 896
243, 
 Represented by Mr. Frédéric DUBOIS, 
 Who represents and warrants that he is fully authorized for the purposes hereof, 
  

	3.	CMS STAFF, 

  
 A société civile organized under the laws of France, 
 With a variable share capital, 
 With registered offices at 7, rue Royale, 75008 Paris (France), 

Registered with the Paris Trade Registry under the number 379 042 740, 
 Represented by Mr. Frédéric DUBOIS, 
 Who represents and warrants that he is
fully authorized for the purposes hereof, 
  

	4.	SF STAFF, 

  
 A société civile organized under the laws of France, 
 With a variable share capital, 
 With registered offices at 7, rue Royale, 75008 Paris (France), 

Registered with the Paris Trade Registry under the number 439 835 265, 
 Represented by Mr. Frédéric DUBOIS, 
 Who represents and warrants that he is
fully authorized for the purposes hereof, 
  

 1 

	5.	MP STAFF, 

  
 A société civile organized under the laws of France, 
 With a variable share capital, 
 With registered offices at 7, rue Royale, 75008 Paris (France), 

Registered with the Paris Trade Registry under the number 447 813 171, 
 Represented by Mr. Frédéric DUBOIS, 
 Who represents and warrants that he is
fully authorized for the purposes hereof, 
  
 Parties 2 to 5,
acting severally and not jointly (conjointement et non solidairement) are hereinafter collectively referred to as the“MINORITY SHAREHOLDERS”, 
  
 Parties 1 to 5, acting severally and not jointly (conjointement et non
solidairement) are hereinafter collectively referred to as the “SELLERS”, 
  

	6.	FINANCIERE OPALE, 

  
 A société par actions simplifiée organized under the laws of France, 
 With a share capital of EUR 38,000, 
 With registered offices at 73, avenue des Champs-Elysées, 75008 Paris (France), 
 Registered with the Paris Trade Registry
under the number 481 557 874, 
 Represented by Mr. Frédéric DUBOIS, 
 Who represents and warrants that he is fully authorized for the purposes hereof, 
  
 Hereinafter referred to as the “PURCHASER”. 
  
 The PURCHASER and the SELLERS are hereinafter collectively referred to as
the “PARTIES” and individually referred to as a“PARTY”. 
  

 2 

 WHEREAS 
  

	 	A.	The SELLERS are the owners of the SHARES TRANSFERRED (as defined in section 1.26). 

  

	 	B.	The COMPANY specializes in the acquisition of holding companies, themselves specializing in the administration and acquisition of private acute care hospitals
throughout France. 

  

	 	C.	The COMPANY has shareholdings directly and indirectly in the SUBSIDIARIES which operate these private acute care hospitals, as defined in section 1.28
and listed in EXHIBIT 1.28 which sets out the holding percentage as well as the corporate name and location for each of the SUBSIDIARIES concerned. 

  

	 	D.	The PURCHASER and its advisors had access to (i) a data room located 10, place Vendôme, 75001 Paris, between March 7 and 11, 2005 and (ii) a data room located 7, rue Royale,
75008 Paris, held on March 18, 2005 (hereinafter referred to as the “DATA ROOM”). In this DATA ROOM, they were provided with certain documents and information of an accounting, financial,
operating, legal, tax, real estate and environmental nature regarding the COMPANY and its SUBSIDIARIES (the “DATA ROOM DOCUMENTATION”), so as to perform a due diligence
exercise with the assistance of external professional advisors, a copy of the index of the DATA ROOM DOCUMENTATION being attached as EXHIBIT D hereto. Moreover, the PURCHASER and its advisors were able to
ask questions and obtain the responses regarding the DATA ROOM DOCUMENTATION. The PURCHASER and its advisors also attended a management presentation on March 9, 2005. 

  

	 	E.	Following the completion of the above-mentioned due diligence exercise, the PURCHASER confirmed its wish to acquire the SHARES
TRANSFERRED. The PARTIES have thus come together in order to enter into this AGREEMENT and to determine the terms and conditions of the sale referred to herein (hereinafter referred to as the
“SALE”), as well as their respective rights and obligations. 

  

	 	F.	It is specified that the MINORITY SHAREHOLDERS have shown interest in reinvesting part of the CONSIDERATION they will receive on
COMPLETION as further detailed under sections 3.2 and 4.3 of this AGREEMENT, and in contributing part of their shareholding as further detailed under section 2.1.2 of this AGREEMENT

  
 NOW THEREFORE IT
HAS BEEN AGREED AS FOLLOWS: 
  

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 TABLE OF CONTENTS 
  

					
	1.	  	Definitions	  	5
	2.	  	Acquisition of the Shares Transferred	  	8
	3.	  	Conditions Precedent	  	8
	4.	  	Completion	  	10
	5.	  	Consideration - Payment Terms	  	9
	6.	  	Sellers’ Representations and Warranties	  	12
	7.	  	Purchaser’s Representations and Warranties	  	14
	8.	  	Provisions relating to the luxcos	  	14
	9.	  	Confidentiality	  	15
	10.	  	 Costs
	  	16
	11.	  	 Registration taxes
	  	16
	12.	  	 Caducity of Prior Agreements
	  	16
	13.	  	 Amendments - Waiver
	  	16
	14.	  	 Notices - Delays
	  	16
	15.	  	 Autonomy
	  	18
	16.	  	 Entire Agreement
	  	18
	17.	  	 Cooperation
	  	18
	18.	  	 Language
	  	18
	19.	  	 Applicable Law
	  	18
	20.	  	 Conciliatory Proceedings - Jurisdiction
	  	18
	21.	  	 Number of Original Copies
	  	19

  

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	1.	DEFINITIONS 

  

	1.1	Principles 

  
 The following words shall have the meanings set out hereafter but only when the corresponding words are written in upper case letters. 
  

	1.2	“ACQUISITION DEBTS” 

  
 Any debt to be repaid or settled at COMPLETION as detailed in EXHIBIT 1.2. 
  

	1.3	“01A WARRANT(s)” 

  
 Any class A warrant(s) initially attached to shares of the COMPANY held by the MINORITY SHAREHOLDERS (which
can be detached from them at any time) and to be exercised subject to condition between March 31, 2004 and March 31, 2009, pursuant to the SHAREHOLDERS AGREEMENTS and the decisions of the COMPANY’
shareholders meeting held on June 7, 2001. 
  

	1.4	“01B WARRANT(S)” 

  
 Any class B warrant(s) initially attached to shares of the COMPANY held by the MINORITY
SHAREHOLDERS (which can be detached from them at any time) and to be exercised subject to condition between March 31, 2006 and March 31, 2009, pursuant to the SHAREHOLDERS AGREEMENTS and the decisions of
the COMPANY’s shareholders meeting held on June 7, 2001. 
  

	1.5	“01 WARRANTS” 

  
 The 01A warrants and the 01B warrants. 
  

	1.6	“AGREEMENT” 

  
 This agreement. 
  

	1.7	“BUSINESS DAY(S)” 

  
 Any day(s) on which banks are open for business in Paris. 
  

	1.8	“COMPANY” 

  
 MEDI-PARTENAIRES, 
  
 A société par actions simplifiée incorporated under the laws of France, 
 With a share capital of EUR 51,618,000, 
 With registered offices at 7, rue Royale, 75008 Paris (France), 
 Registered with the Paris Trade Registry
under the number 435 037 551. 
  

	1.9	“COMPLETION” 

  
 The completion of the transfer of the SHARES TRANSFERRED as per section 5 hereafter. 
  

	1.10	“CONSIDERATION” 

  
 The consideration for the SHARES TRANSFERRED stipulated under section 4 hereafter. 
  

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	1.11	“CONTRIBUTED SHAREs” 

  
 162,762 shares of the COMPANY, with a par value of fifteen (15) Euros each held by the CONTRIBUTING
SHAREHOLDERS and contributed in kind to the PURCHASER in the proportions mentioned in EXHIBIT 2. 
  

	1.12	“CONTRIBUTING SHAREHOLDERS” 

  
 Santé et Loisirs, CMS Staff, SF Staff and MP Staff. 
  

	1.13	“DATA ROOM” 

  
 As such term is defined in paragraph D of the recitals. 
  

	1.14	“DATA ROOM DOCUMENTATION” 

  
 As such term is defined in paragraph D of the recitals. 
  

	1.15	“EXHIBIT(S)” 

  
 Any exhibit attached to this AGREEMENT, it being specified that each time that the representations contained in a section of this
AGREEMENT need to be documented, this is done via an EXHIBIT carrying the same number as the relevant representation. 
  

	1.16	“FRENCH MERGER CONTROL RULES” 

  
 As defined in section 3.1 below. 
  

	1.17	“GROUP” or “GROUP COMPANIES” 

  
 The COMPANY, the SUBSIDIARIES and the LUXCOS. 
  

	1.18	“LIQUIDATION COSTS” 

  
 As such term is defined in section 4.2 below. 
  

	1.19	“LUXCOS” 

  
 The following companies: 
  
 UHS HEALTH PARTNERS SARL, 
  
 A société à responsabilité limitée
organized under the laws of Luxemburg, 
 With a share capital of EUR 58,437,725, 
 With registered offices at 23, avenue Monterey, L-2086 Luxemburg, 
 Registered with the Luxemburg Trade Registry under section B number 82377, 
  
 and, 
  
 SANTE PARTENAIRES SARL, 
  
 A société à responsabilité limitée organized under the laws of Luxemburg,

 With a share capital of EUR 45,181,675, 
 With registered offices at 23, avenue Monterey, L-2086 Luxemburg, 
 Registered with the Luxemburg Trade
Registry under section B number 82375. 
  

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	1.20	“SALE” 

  
 As such term is defined in paragraph E of the recitals. 
  

	1.21	“SANTE FINANCE” 

  
 A société par actions simplifiée organized under the laws of France, with a share capital of EUR 59,478,000,
registered offices at 7, rue Royale, 75008 Paris (France) and registered with the Paris Trade Registry under the number 381 745 025. 
  

	1.22	“SANTE INVESTISSEMENT” 

  
 A société en commandite simple organized under the laws of France, with a share capital of EUR 30,000, registered
offices at 7, rue Royale, 75008 Paris (France) and registered with the Paris Trade Registry under the number 379 085 848. 
  

	1.23	“SECURITY INTERESTS” 

  
 The security interests listed in EXHIBIT 1.23. 
  

	1.24	“SGG” 

  
 Services Généraux de Gestion S.A., 23, avenue Monterey, L-2086 Luxemburg. 
  

	1.25	“SHAREHOLDERS AGREEMENTS” 

  
 The agreements entered into between SANTE PARTENAIRES SARL and each of the MINORITY
SHAREHOLDERS on June 7, 2001 in respect of the COMPANY, as listed in EXHIBIT 1.25. 
  

	1.26	“SHARES TRANSFERRED” 

  
 The SOLD SHAREs and the CONTRIBUTED SHAREs altogether, representing on
COMPLETION: 
  
 (i) 2,337,509 shares of
UHS HEALTH PARTNERS SARL, representing 100% of the issued and outstanding share capital and voting rights of UHS HEALTH PARTNERS
SARL, and 
  
 (ii) 637,082 shares of the
COMPANY representing 18,51% of the issued and outstanding voting rights of the COMPANY, 
  
 together granting the PURCHASER a direct and indirect ownership of 3,441,200 shares of the COMPANY, representing 100% of the
COMPANY’S share capital and voting rights. 
  

	1.27	“SOLD SHARES” 

  
 (i) 2,337,509 shares of UHS HEALTH PARTNERS SARL with a par value of twenty-five (25) Euros
each held by the MAJORITY SHAREHOLDER, representing 100% of the share capital and voting rights of UHS HEALTH PARTNERS SARL, which holds 1,807,267 shares
representing 100% of the issued and outstanding share capital and voting rights of SANTÉ PARTENAIRES SARL, which in turn holds 2,804,118 shares of the COMPANY with a par value of
fifteen (15) Euros each, and 
  
 (ii) 474,320 shares of the
COMPANY with a par value of fifteen (15) Euros each held by the MINORITY SHAREHOLDERS, and sold to the PURCHASER in the proportions mentioned in EXHIBIT 2. 

 

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	1.28	“SUBSIDIARY(IES)” 

  
 Any company, grouping or other entity controlled directly or indirectly by the COMPANY and/or SANTÉ
FINANCE, within the meaning of section L. 233-3 of the French Commercial Code (Code de commerce), as well as SANTÉ INVESTISSEMENT, as listed in EXHIBIT 1.28.

  

	1.29	“UHS IRELAND” 

  
 As such term is defined in section 5.2.1 below. 
  

	2.	ACQUISITION OF THE SHARES TRANSFERRED 

  

	2.1	ON COMPLETION, subject to the conditions precedent set out under section 3 hereafter, the SELLERS shall:

  
 2.1.1 sell, transfer, assign, convey and
deliver the SOLD SHARES to the PURCHASER, free and clear of all encumbrances, and 
  
 2.1.2 contribute in kind the CONTRIBUTED SHARES to the PURCHASER, free and clear of all encumbrances.

  
 The detailed allocation of the SHARES
TRANSFERRED (together with the sub-allocation between the SOLD SHARES and the CONTRIBUTED SHARES by each of the SELLERS is shown in EXHIBIT
2). 
  

	2.2	The PURCHASER shall purchase, assume and acquire the SHARES TRANSFERRED free and clear of all encumbrances for the
CONSIDERATION. 

  

	2.3	The SELLERS acknowledge that it is essential for the PURCHASER that the sale and contribution of 100% of the TRANSFERRED
SHARES occur simultaneously failing which the PURCHASER would not have entered into the AGREEMENT with the SELLERS. 

  

	2.4	All rights to dividends attached to the SHARES TRANSFERRED voted out with respect to financial year 2004 and to previous but undistributed and
subsequent profits will be vested in the PURCHASER. 

  

	2.5	Transfer of title to the SHARES TRANSFERRED will take place upon (i) payment in full of that portion of the CONSIDERATION which
is payable in cash on the date of COMPLETION, as per section 4.3 hereafter, with respect to the SOLD SHARES and (ii) issuance and allocation of the shares to be issued by the PURCHASER on
the date of COMPLETION in consideration for the CONTRIBUTED SHARES. 

  

	3.	CONDITIONS PRECEDENT 

  
 The acquisition of the SHARES TRANSFERRED shall take place subject to the fulfillment of the following conditions precedent:

  

	3.1	French merger control approval 

  
 A decision of the French Ministry for Economy and Finance (the “MINISTRY”) pursuant to Article L. 430-1 et
seq. of the French Commercial Code (the “FRENCH MERGER CONTROL RULES”) approving the SALE, shall have been obtained either expressly or
tacitly, if the MINISTRY does not notify the PURCHASER within the required time period any decision in respect of the SALE whether approving or disapproving it. 
  
 The PURCHASER undertakes to (i) make full and accurate filing
with the MINISTRY, within two (2) BUSINESS DAYS as from the date of this AGREEMENT (or earlier, if the SELLERS so agree), at its own expenses, 

  

 8 

 
seeking its approval, of the SALE under the FRENCH MERGER CONTROL RULES and (ii)
use its best endeavors in order to satisfy the condition precedent set out hereinabove, as soon as possible so that the date of COMPLETION set by the PARTIES for June 17, 2005 at the latest, is met. The
SELLERS shall provide the PURCHASER with all necessary information for this purpose and the PURCHASER shall immediately inform the SELLERS of the fulfillment of the condition precedent.

  
 If on June 17, 2005 at the latest, this condition precedent
has not been fulfilled, the AGREEMENT shall lapse and become null and void subject to the SELLERS waiving their right to such lapse in the event that the non-fulfillment of said condition precedent may be attributed to
the PURCHASER. 
  

	3.2	Contribution of the CONTRIBUTED SHARES 

  
 The CONTRIBUTED SHARES shall have been contributed to the PURCHASER in
consideration for that number of shares of the COMPANY as agreed with the CONTRIBUTING SHAREHOLDERS under the terms and conditions of EXHIBIT 3.2. 
  
 The PURCHASER undertakes to take all necessary steps so that
the issuance of new shares of the PURCHASER to be issued to the CONTRIBUTING SHAREHOLDERS in consideration for the contribution of the CONTRIBUTED SHARES has been finally
approved on the tentative date of May 18, 2005, it being agreed by the CONTRIBUTING SHAREHOLDERS and the PURCHASER that (i) should the latter fail to notify the SELLERS in writing that such
issuance has been approved within the time period mentioned above, and/or that (ii) should the CONTRIBUTING SHAREHOLDERS fail to tender the CONTRIBUTED SHARES to the
PURCHASER on the date of COMPLETION in consideration for newly issued shares of the PURCHASER, the PURCHASER shall have the obligation to acquire the SOLD
SHARES and the CONTRIBUTED SHARES which the CONTRIBUTING SHAREHOLDERS then undertake to sell, transfer and deliver for a cash consideration equal to that payable for each of
the SOLD SHARES. 
  

	4.	CONSIDERATION - PAYMENT TERMS 

  

	4.1	Amount of the CONSIDERATION 

  
 4.1.1 Subject to the provisions of sections 4.1.2 and 4.2 below, the CONSIDERATION for all the SHARES
TRANSFERRED, which is two hundred million fifteen thousand Euros (EUR 215,000,000), is not subject to any upwards or downwards adjustment. 
  
 The allocation of the CONSIDERATION between the SOLD SHARES and the
CONTRIBUTED SHARES shall be as follows: 
  

	 	•	 	One hundred seventy eight million seven hundred thirteen thousand seven hundred ninety nine Euros and eighty four cents (EUR 178,713,799.84) for the
SOLD SHARES transferred by the MAJORITY SHAREHOLDER, 

  

	 	•	 	twenty seven million fifteen thousand seven hundred eighty five Euros and nineteen cents (EUR 27,015,785.19) for the SOLD SHARES
transferred by the MINORITY SHAREHOLDERS; 

  

	 	•	 	Nine million two hundred seventy thousand four hundred fourteen Euros and ninety seven cents (EUR 9,270,414.97) for the CONTRIBUTED
SHARES for which the PURCHASER shall (i) issue nine million two hundred seventy thousand four hundred and thirteen (9,270,413) new shares to be allocated among the CONTRIBUTING
SHAREHOLDERS, and (ii) pay to the CONTRIBUTING SHAREHOLDERS cash amount of one Euro and ninety seven cents (EUR 1.97). 

  
 Details of the allocation of the CONSIDERATION between the
SELLERS are set forth in EXHIBIT 2 to the AGREEMENT. 
  

 9 

 4.1.2 The CONSIDERATION to be paid to the MAJORITY
SHAREHOLDER shall be increased by the amount of the debt (principal of EUR 40,125,219.46 plus accrued interest up to the date of COMPLETION) owed by the COMPANY to UHS HEALTH
PARTNERS SARL pursuant to a loan agreement dated May 10, 2001, it being specified that such loan shall remain in force between the COMPANY and UHS HEALTH
PARTNERSSARL after the date of COMPLETION. 
  

	4.2	Costs of liquidation of the LUXCOS 

  
 All costs associated with the termination of the operations and the liquidation of the LUXCOS, including but not limited to all outstanding
and unpaid liabilities and provisions for liabilities of any nature whatsoever vis-à-vis third parties (the “LIQUIDATION COSTS”) shall be borne by the MAJORITY
SHAREHOLDER. The MAJORITY SHAREHOLDER shall provide the PURCHASER no later than four (4) BUSINESS DAYS prior to COMPLETION with an itemized list
(with the corresponding amounts) of the LIQUIDATION COSTS, duly certified by SGG, it being agreed that the LIQUIDATION COSTS shall be deducted from the portion of the
CONSIDERATION payable to the MAJORITY SHAREHOLDER as set forth in section 4.1 above. 
  
 In the event the LIQUIDATION COSTS should be determined in the future to exceed the amount of the LIQUIDATION
COSTS provided by the MAJORITY SHAREHOLDER on COMPLETION, the MAJORITY SHAREHOLDER shall pay to the PURCHASER, on first demand and upon
provision of appropriate supporting documentation, the amount of such excess. Conversely, in the event the LIQUIDATION COSTS should be determined in the future to be less than the amount of the
LIQUIDATION COSTS provided by the MAJORITY SHAREHOLDER on COMPLETION, the PURCHASER shall pay to the MAJORITY SHAREHOLDER, on
first demand and upon provision of appropriate supporting documentation, the amount of such difference. 
  

	4.3	Payment of the CONSIDERATION 

  
 The portion of the CONSIDERATION due in respect of the SOLD SHARES shall be paid, subject to the provisions
of section 4.2 above; by the PURCHASER to the SELLERS on the date of COMPLETION in immediately available funds by bank wire transfer to such accounts as the SELLERS shall have notified in
writing to the PURCHASER no later than four (4) BUSINESS DAYS prior to COMPLETION. 
  
 The portion of the CONSIDERATION due in respect of the CONTRIBUTED SHARES shall be paid by the
PURCHASER to the CONTRIBUTING SHAREHOLDERS on the date of COMPLETION by way of issuance of nine million two hundred seventy thousand four hundred and thirteen (9,270,413) new shares to be
allocated among the CONTRIBUTING SHAREHOLDERS as shown in EXHIBIT 2, as well as the payment to the CONTRIBUTING SHAREHOLDERS of a cash amount of one Euro and ninety
seven cents (EUR 1.97), subject however to the provisions of section 3.2 above. 
  

	5.	COMPLETION 

  

	5.1	Date and place 

  
 COMPLETION shall take place at the offices of Linklaters, 25, rue de Marignan, 75008 Paris, within five (5) BUSINESS
DAYS following the fulfillment of the conditions precedent referred to under section 3 above and in any event no later than June 17, 2005 or on any other place or date as shall be agreed upon by the PARTIES. 

 

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	5.2	Instruments to be signed and delivered on COMPLETION 

  

	 	5.2.1 	On COMPLETION, the SELLERS shall deliver to the PURCHASER: 

  

	 	•	 	original certificates of OBC bank certifying that it has released the pledges (as detailed in EXHIBIT 5.2.1a) granted by the
MINORITY SHAREHOLDERS over part of their SHARES TRANSFERRED as security for the complete repayment of the loans granted by said bank to the MINORITY
SHAREHOLDERS, 

  

	 	•	 	upon full repayment of the relevant part of the ACQUISITION DEBTS by the PURCHASER, a deed of release from the relevant banks and
lenders confirming release of the SECURITY INTERESTS, 

  

	 	•	 	original executed copies of share transfer forms for all of the SOLD SHARES and CONTRIBUTED SHARES held by the
MINORITY SHAREHOLDERS, 

  

	 	•	 	a letter signed by UHS HEALTH PARTNERS SARL approving the transfer to the PURCHASER of the
SOLD SHARES of UHS HEALTH PARTNERS SARL, 

  

	 	•	 	regarding the COMPANY, SANTE FINANCE, SANTE INVESTISSEMENT and the LUXCOS, where
applicable, the shareholders’ registers (registres des mouvements de titres) and the shareholders’ individual accounts (comptes d’actionnaires), the minute books for their supervisory and executive boards or boards of
directors, and shareholders’ meetings (registre des procès-verbaux du conseil de surveillance et du directoire or registre des procès-verbaux du conseil d’administration and registre des procès-verbaux des
assemblées générales), 

  

	 	•	 	the original executed copies of the resignation letters as at the date of COMPLETION from the GROUP COMPANIES’ representatives
and/or members of any board or committee, the names of which are set out in EXHIBIT 5.2.1b, said letters specifying that the resigning representatives and/or members have no claim whatsoever against any of the
GROUP COMPANIES, 

  

	 	•	 	the irrevocable and unconditional waiver by each and all SELLERS of all rights under the SHAREHOLDERS AGREEMENTS including the
acknowledgment (i) that the same will cease to be of any effect as from the date of COMPLETION and (ii) that the MINORITY SHAREHOLDERS have irrevocably waived their rights to exercise the
01WARRANTS in the form set forth in EXHIBIT 5.2.1c, 

  

	 	•	 	the tax forms relating to the transfer of the SOLD SHARES referred to in section 1.27 (ii), for the purposes of registration with the French tax
authorities, 

  

	 	•	 	a copy of the agreement relating to the transfer of 100% of the issued and outstanding share capital and voting rights of UHS Ireland Ltd, a company organized under the laws of the
Republic of Ireland (hereinafter “UHS IRELAND”), to the MAJORITY SHAREHOLDER or any other entity designated by the MAJORITY
SHAREHOLDER, for a consideration equal to the amount of the receivable held by UHS IRELAND against UHS HEALTH PARTNERS SARL, such transfer not
resulting in a taxable capital gain for UHS HEALTH PARTNERS SARL or evidence that UHS IRELAND has been effectively liquidated into UHS
HEALTH PARTNERS SARL, it being agreed that the PURCHASER shall not bear, directly or indirectly, any cost with respect to said transfer or liquidation, 

  

	 	•	 	a certificate issued by SGG certifying the existence and the amount of the receivable (principal of EUR 40,125,219.46 plus accrued interest up to the date of
COMPLETION) held by UHS HEALTH PARTNERS SARL against the COMPANY, pursuant to a loan agreement dated May 10, 2001, 

  

	 	•	 	the duly approved financial statements of each of the LUXCOS as at December 31, 2004, 

  

 11 

	 	•	 	a written confirmation by the MAJORITY SHAREHOLDER. that none of the LUXCOS has, since January 1, 2005, incurred any liability other
than those resulting from its ongoing and current operations, nor has acquired or disposed of any assets prior to COMPLETION except as contemplated under this AGREEMENT, 

  

	 	•	 	the written confirmation that the MINORITY SHAREHOLDERS have caused the full repayment to SANTE PARTENAIRES
SARL of the collateral (principal plus accrued interest up to COMPLETION) granted by SANTÉ PARTENAIRES SARL to OBC bank in guarantee of the loans
granted by said bank to the MINORITY SHAREHOLDERS, 

  

	 	•	 	the written confirmation that, to the extent applicable to the MAJORITY SHAREHOLDER, the ACQUISITION DEBTS are fully
repaid or settled (in principal and accrued but unpaid interest and other accessories owed at the date of COMPLETION) as provided in EXHIBIT 1.2, parts I and II, 

  

	 	•	 	a certificate of reiteration issued by the SELLERS reiterating the representations and warranties granted under section 6 below, and 

  

	 	•	 	a certificate of reiteration issued by the MAJORITY SHAREHOLDER reiterating the representations and warranties granted under section 8.1 below.

  

	 	5.2.2 	Following delivery of the documents referred to in section 5.2.1 above, the PURCHASER shall: 

  

	 	•	 	in consideration for the SOLD SHARES by the MAJORITY SHAREHOLDER, pay (i) one hundred seventy eight million seven hundred
thirteen thousand seven hundred ninety nine Euros and eighty four cents (EUR 178,713,799.84), plus (ii) the amount referred to in section 4.1.2, this global amount being reduced by the amount of the LIQUIDATION
COSTS, as initially certified by SGG, as set forth in section 4.2, 

  

	 	•	 	pay twenty seven million fifteen thousand seven hundred eighty five Euros and nineteen cents (EUR 27,015,785,19) to the MINORITY
SHAREHOLDERS, corresponding to the payment of that portion of the CONSIDERATION relating to the SOLD SHARES transferred by the MINORITY SHAREHOLDERS,

  

	 	•	 	procure that, to the extent applicable to the PURCHASER, the ACQUISITION DEBTS be fully repaid or settled (in principal and accrued but
unpaid interest and other accessories owed at the date of COMPLETION) as provided in EXHIBIT 1.2, 

  

	 	•	 	issue a certificate of reiteration issued by the PURCHASER reiterating the representations and warranties granted under section 7 below. 

  

	6.	SELLERS’ REPRESENTATIONS AND WARRANTIES 

  
 The SELLERS make and grant the representations and warranties
as follows, on a several basis (responsabilité conjointe et non solidaire), as at the date hereof. 
  
 The PURCHASER hereby acknowledges that (i) the representations and warranties made by the SELLERS are limited to the ones
contained in this section 6 and that it does not enter into this AGREEMENT in reliance on any other representations, warranties, covenants or undertakings, and that (ii) the representations and warranties made by the
MAJORITY SHAREHOLDER under section 8.1 below, in respect of the LUXCOS, shall be of no effect on the MINORITY SHAREHOLDERS, which shall bear no liability hereunder.

  

 12 

	6.1	Authority of SELLERS 

  

	 	6.1.1 	The execution, delivery and performance of this AGREEMENT by the SELLERS have been duly authorized and approved by the
SELLERS’ corporate bodies where applicable and do not require any further authorization or consent of the SELLERS or their shareholders. 

  

	 	6.1.2 	This AGREEMENT will, when executed, constitute a valid and binding obligation of the SELLERS. 

  

	6.2	No violation, consents and approvals 

  
 Subject to the fulfillment of the conditions precedent provided in section 3 above, neither the execution and the delivery of this
AGREEMENT, nor its performance by the SELLERS shall contravene or violate any requirements of law, court orders, or orders of any governmental authority. 
  

	6.3	Share capital 

  
 EXHIBIT 6.3 sets forth the amount of the GROUP COMPANIES’ share capital, detailing all the
securities issued by the GROUP COMPANIES, the categories and respective rights thereof and holders thereof. 
  
 The MAJORITY SHAREHOLDER represents that it is the full and sole owner of 2,337,509 shares of UHS
HEALTH PARTNERS SARL, representing 100% of the issued and outstanding share capital and voting rights of UHS HEALTH PARTNERS SARL, which owns
1,807,267 shares of SANTE PARTENAIRES SARL, representing 100% of the issued and outstanding share capital and voting rights of SANTE PARTENAIRES SARL, itself
the full and sole owner of 2,804,118 shares of the COMPANY, representing 81.49% of the issued and outstanding voting rights of the COMPANY. 
  
 The MINORITY SHAREHOLDERS represent that they are the full and sole owners of 637,082 shares
of the COMPANY which they transfer to the PURCHASER, as set out in EXHIBIT 2, representing 18.51% of the issued and outstanding voting rights of the COMPANY. 
  
 The transfer of the shares representing (i) 100% of the issued and
outstanding share capital and voting rights of UHS HEALTH PARTNERS SARL by the MAJORITY SHAREHOLDER together with the shares representing (ii) 18,51% of the
issued and outstanding voting rights of the COMPANY by the MINORITY SHAREHOLDERS, grants the PURCHASER a direct and indirect ownership of 3,441,200 shares of the COMPANY,
representing 100% of the COMPANY’S share capital and voting rights, on a fully diluted basis. 
  
 The CONTRIBUTED SHARES and the portion of the SOLD SHARES to be transferred by the
MINORITY SHAREHOLDERS, as set out in EXHIBIT 2 (i.e. 474,320 shares of the COMPANY) are freely transferable subject to the provisions of
EXHIBIT 6.3 and, as at COMPLETION, will not be subject to any pledge, lien, third party right and other encumbrances. 
  
 The COMPANY has not issued any securities other than the 3,441,200 shares representing 100% of its issued and outstanding share capital.

  
 Except for the 01WARRANTS, the exercise of
which will be waived by the MINORITY SHAREHOLDERS as set out in EXHIBIT 5.2.1c, none of the GROUP COMPANIES has issued any right, option, warrant, bond, security or
instrument which could eventually grant the holder thereof, directly or indirectly, any right to shares of each of the GROUP COMPANIES, investment certificates, claims or voting rights at the GROUP
COMPANIES shareholders’ or bond holders’ meetings. 
  

 13 

	6.4	T2A 

  
 The PURCHASER is aware of the recent changes in the French Social Security system of reimbursement (pricing per medical treatment or T2A) and of the related consequences of such changes on the
cash-flows of the GROUP. 
  

	7.	PURCHASER’S REPRESENTATIONS AND WARRANTIES 

  
 The PURCHASER makes the following representations and
warranties as at the date hereof. 
  

	7.1	The execution, delivery and performance of this AGREEMENT by the PURCHASER have been duly authorized and approved by the
PURCHASER’s corporate bodies and do not require any further authorization or consent of the PURCHASER or its shareholders. This AGREEMENT will, when executed by Mr. Frédéric Dubois who
is fully authorized for such purposes, constitute a valid and binding obligation of the PURCHASER. 

  

	7.2	The PURCHASER is a société par actions simplifiée duly incorporated and validly existing in accordance with the laws of France. The
PURCHASER, which has the full legal capacity to carry out its business activities, in the manner in which they are currently carried out, represents, moreover, that it has the full authority, capacity and power to sign the
AGREEMENT and carry out the SALE. 

  

	7.3	The PURCHASER is not insolvent (état de cessation des paiements), and is not subject to any court-ordered reorganization or liquidation proceedings, or
to any proceedings within the scope of the prevention and out-of-court settlement of corporate difficulties, or any other conciliation or proceedings that affect the rights of creditors. 

  

	7.4	The PURCHASER has the funds necessary to carry out the SALE contemplated in this AGREEMENT in accordance with the terms and conditions
as set out here above. 

  

	8.	PROVISIONS RELATING TO THE LUXCOS 

  

	8.1	MAJORITY SHAREHOLDER’S REPRESENTATIONS AND WARRANTIES RELATING
TO THE LUXCOS 

  
 The MAJORITY SHAREHOLDER makes the following representations, grants the following warranties concerning the LUXCOS as at the date hereof, and undertakes to indemnify the
PURCHASER in the manner set forth below. 
  
 The
MAJORITY SHAREHOLDER is the full and sole owner of 2,337,509 shares of UHS HEALTH PARTNERS SARL, REPRESENTING 100% of the issued and outstanding
share capital and voting rights of UHS HEALTH PARTNERS SARL, which owns 1,807,267 shares of SANTE PARTENAIRES SARL, representing 100% of the
issued and outstanding share capital and voting rights of SANTE PARTENAIRES SARL. 
  
 UHS HEALTH PARTNERS SARL has not issued any securities other than the 2,337,509 shares
representing 100% of its issued and outstanding share capital and the said shares are not be subject to any pledge, lien, third party right and other encumbrances. 
  
 SANTE PARTENAIRES SARL has not issued any securities other than the 1,807,267
shares representing 100% of its issued and outstanding share capital and the said shares will not be subject to any pledge, lien, third party right and other encumbrances on the date of COMPLETION. 
  

 14 

 The 2,804,118 shares of the COMPANY, being held by SANTÉ
PARTENAIRES SARL, are freely transferable and as at COMPLETION will not be subject to any pledge, lien, third party rights and other encumbrances. 
  
 Since the date of incorporation of the LUXCOS and up to the
date hereof, the activities carried on by said LUXCOS have been exclusively limited to (i) the participation in financing operations involving the UHS group incurred in connection with the acquisition, development and operations of
the GROUP COMPANIES, resulting on the date hereof in the ACQUISITION DEBTS detailed in EXHIBIT 1.2 and (ii) the holding of shares in the following companies: the
GROUP COMPANIES and UHS IRELAND. 
  
 The financial statements of the LUXCOS drawn up as at December 31, 2004 and attached as EXHIBIT 8.1 were prepared in accordance with the Luxemburg generally accepted accounting
principles and give a true and fair view of the assets and liabilities and financial situation of the LUXCOS as at such date. 
  

	8.2	INDEMNIFICATION RELATING TO THE ACQUISITION AND LIQUIDATION
OF THE LUXCOS 

  
 Notwithstanding the provisions of section 4.2 above, the MAJORITY SHAREHOLDER shall indemnify and hold harmless the PURCHASER for (i) any amount (including any liability of
any nature whatsoever, whether current or deferred) that may be due by the LUXCOS, or the PURCHASER (following its acquisition of said LUXCOS), in connection with the LUXCOS’
activities, operations, assets, liabilities prior and up to COMPLETION and (ii) any amounts or costs (including taxes, rights or duties) relating to or resulting from (a) the disposal of any assets of the LUXCOS
completed prior to, or on COMPLETION pursuant to the terms of this AGREEMENT and (b) the winding-up and liquidation of any of the LUXCOS, comprising the payment of any amount (including for the
repayment of any indebtedness of any of the LUXCOS) due to any third party or the MAJORITY SHAREHOLDER or any affiliate thereof, in connection with, as a result of, or at the time of, the winding-up or
liquidation of any of the LUXCOS, in excess of or other than the LIQUIDATION COSTS, as finally determined pursuant to section 4.2. Any amount due hereunder by the MAJORITY
SHAREHOLDER shall be payable to the PURCHASER within thirty (30) BUSINESS DAYS of receipt of a notification in writing from the PURCHASER requesting such payment by the
MAJORITY SHAREHOLDER, together with satisfactory supporting documentation. 
  

	8.3	MODIFICATIONS TO THE STRUCTURE OF THE TRANSACTION

  
 The PARTIES acknowledge that
the MAJORITY SHAREHOLDER has not yet finalized the tax and legal analysis which it is currently performing in order to set up the most optimized transaction structure at its level for the transaction. Therefore, in the
event where the MAJORITY SHAREHOLDER would propose, after the date hereof, that modifications be made to the structure of the transaction (including the elements described in Part II of EXHIBIT
1.2), the PURCHASER undertakes to consider them in good faith and make its best efforts to respond favorably to any such proposal, it being understood that the PURCHASER’s undertakings are given under the
condition that such modifications have no impact on the state of COMPLETION and have no financial adverse consequence, whether immediate or deferred, for the PURCHASER. 
  

	9.	CONFIDENTIALITY 

  

	9.1	Announcements 

  
 No announcement in connection with this AGREEMENT shall be made by or on behalf of any of the PARTIES hereto or their
respective groups otherwise than with the prior approval of the other (such approval not to be unreasonably withheld or delayed), except as required by law. 
  

 15 

	9.2	Other confidentiality undertaking 

  
 Except in order to satisfy any legal or regulatory obligation binding upon the PARTIES, or for the purpose of defending their interest in
the event of a dispute between the PARTIES, the PARTIES shall keep this AGREEMENT and its EXHIBITS confidential. 
  

	10.	COSTS 

  
 Subject to section 11, each PARTY hereto shall bear the costs and expenses incurred by it in connection with this AGREEMENT
and the transactions contemplated hereunder. 
  

	11.	REGISTRATION TAXES 

  
 Registration taxes and stamp duties due in connection with the transfer of the SHARES TRANSFERRED shall be borne by the
PURCHASER. 
  

	12.	CADUCITY OF PRIOR AGREEMENTS 

  
 This AGREEMENT supersedes and replaces any prior agreements entered into between the PARTIES
in connection with the scope of this AGREEMENT and the transactions contemplated hereunder. 
  

	13.	AMENDMENTS - WAIVER 

  
 Any amendment to this AGREEMENT shall be made by means of a written instrument signed by the PARTIES. 
  
 No failure to act or request performance from one PARTY shall
be deemed a waiver to any of its rights under this AGREEMENT. 
  

	14.	NOTICES - DELAYS 

  

	14.1	Representation of the MINORITY SHAREHOLDERS 

  
 In order to facilitate all communication between the PARTIES in respect of the AGREEMENT, the
MINORITY SHAREHOLDERS irrevocably grant powers to Mr. Frédéric Dubois, who accepts, to represent them within the scope of the performance of the AGREEMENT, in particular with respect to (i)
all notifications to be made, (ii) all actions to be taken and (iii) the follow up of all procedures to be carried out within the scope of the AGREEMENT. 
  

 16 

	14.2	Form of the notices 

  
 Any notification in respect of the AGREEMENT shall be made in writing and shall be considered to have been duly sent and received (i) on
the same day if it is hand-delivered, (ii) within one (1) BUSINESS DAY of it being sent if it is sent by fax or e-mail, followed by a confirmation by registered letter with return receipt requested within twenty four
(24) hours, (iii) within five (5) BUSINESS DAYS of it being sent if it is sent by an international courier service (such as Federal Express), or (iv) on the date of first presentation thereof if it is sent by registered
letter with return receipt requested, to the following addresses: 
  
 For the
purposes of this section, the addresses of the PARTIES are the following: 
  
 The MAJORITY SHAREHOLDER: 
  
 UHS INTERNATIONAL INC. 
 For the attention of the Chief Financial Officer

 Mr. Steve Filton 
 Address: 367 South Gulph Road 
 King of Prussia, PA 
 USA 
 Fax: 00 1 610 768 33 18 
 Email: steve.filton@uhsinc.com 
  
 Copied to Alain Decombe 
 Coudert Frères 
 52 avenue des Champs-Elysées 
 75008 Paris 
 Email: alain.decombe@coudert.com 
 Fax: 33.1.53.83.60.60 
  
 The
MINORITY SHAREHOLDERS: 
  
 Mr.
Frédéric Dubois 
 Address: c/o MEDI-PARTENAIRES, 7, rue Royale, 75008 Paris 
 Fax: 33.1.43.12.34.32 
 Email: f.dubois@medi-partenaires.fr 

 
 Copied to GATIENNE BRAULT &
ASSOCIÉS 
 144 rue de Courcelles 
 75017
Paris 
 Fax : 33.1.55.651.652 
 Email : gb@brault.net 

 
 The PURCHASER: 
  
 FINANCIÈRE OPALE 
 For the attention of the President 
 Mr. Frédéric Dubois

 Address: 7 rue Royale, 75008 Paris 
 Fax: 33.1.43.12.34.32

  
 Copied to Michel Frieh 
 LINKLATERS 
 25 rue de Marignan 
 75008 Paris 
 Fax : 33.1.43.59.50.63 
 Email : michel.frieh@linklaters.com 
  
 In the event of a change of address or addressee, the relevant PARTY shall notify the other PARTIES in the form set out above. 

 

 17 

	14.3	Computation of delays 

  
 Delays shall be computed by applying the rules set by the French New Code of Civil Procedure. 
  

	15.	AUTONOMY 

  
 The invalidity or inapplicable nature (in full or in part) of any provision of the AGREEMENT shall not have an impact on the validity or
applicability of the other provisions of the AGREEMENT, which shall retain their full effect and scope. In the event that the validity of any of the provisions of the AGREEMENT is called into question, the
PARTIES commonly agree to amend the provision that has become invalid in order that (i) this provision be valid and (ii) the initial scope of this provision and of the AGREEMENT be maintained. 
  

	16.	ENTIRE AGREEMENT 

  
 The AGREEMENT (as well as any document and instrument to which reference is made in the AGREEMENT) and its
EXHIBITS are indivisible and constitute the entire agreement between the PARTIES in respect of the SALE. 
  

	17.	COOPERATION 

  
 The PARTIES shall cooperate with respect to the performance of any steps or formalities that may be required for the implementation of the
AGREEMENT or for the consequences hereof. 
  

	18.	LANGUAGE 

  
 This AGREEMENT shall be executed in English, except for some of the EXHIBITS which are drafted in French. 
  

	19.	APPLICABLE LAW 

  
 This AGREEMENT shall be governed by and construed in accordance with the laws of France. 
  

	20.	CONCILIATORY PROCEEDINGS – JURISDICTION 

  
 Any dispute which may arise in the context of this AGREEMENT or relating thereto shall be settled in
accordance with the procedures stipulated under this section 20, which shall constitute the sole and exclusive procedures for settling disputes of this nature. 
  

	20.1	Conciliatory Proceedings 

  

	 	(i)	 The PARTIES undertake to resolve rapidly and in good faith any disputes arising in the context of the AGREEMENT or relating thereto by
negotiations between the PARTIES concerned, and their designated representatives. To this effect, any PARTY shall give to the other PARTY a written notice of any dispute which has not been settled in the
ordinary course of business. Within fifteen (15) BUSINESS DAYS of the delivery of such notice, the PARTY having received such notice shall reply to the other PARTY in writing. The notice
and reply shall include (a) a declaration of the position of the PARTY issuing the notice or reply, as the case may be, and a summary of the 

  

 18 

	 	 
arguments in support of such position and (b) the name and the position of the person who will represent such PARTY in connection with the
dispute concerned and any other person who shall accompany said person (including external advisors). Within thirty (30) BUSINESS DAYS of the receipt of the above notice, the representatives of the
PARTIES concerned shall meet at a mutually acceptable time and place, and subsequently, as often as the PARTIES deem reasonable and necessary to settle the dispute. All reasonable requests for information made by either
PARTY to the other PARTY shall be complied with. 

  

	 	(ii)	If the issue has not been settled within sixty (60) BUSINESS DAYS of the receipt of the initial notice or if the PARTIES have not
succeeded in meeting within thirty (30) BUSINESS DAYS of receipt of such notice, either PARTY may institute legal proceedings as provided for in section 20.2 below. 

  

	 	(iii)	All negotiations carried out in accordance with this section shall be confidential and shall be treated as negotiations for compromise and settlement for the purposes of all
applicable regulations. 

  

	20.2	Legal proceedings 

  
 If a dispute has not been settled by the conciliatory proceedings provided for in section 20.1 above within the timeframe mentioned in section 20.1 (ii),
either PARTY involved in the above conciliatory procedure may institute proceedings before the competent courts of Paris (subject to a thirty (30)- BUSINESS DAY prior notice to the other
PARTY); with the exception of, however, the situation of the PARTY which, having requested that the other PARTY participate in a conciliatory procedure and having met with a refusal on the part of the
other PARTY, may institute proceedings before the expiration of the above-mentioned deadline. 
  

	20.3	Conservatory measures 

  
 The procedures specified in this section 20 shall be the sole and exclusive procedures for settling disputes between the PARTIES arising in
the context of this AGREEMENT or relating thereto. However, a PARTY may, without prejudice to the above procedures, (i) initiate any necessary action in order to avoid the opposition of a statute of limitations and (ii)
undertake any legal action, notably of a conservatory nature, such as summary procedure, if according to its personal appreciation of the facts, said action is necessary to protect its rights, avoid an immediate loss or maintain the status quo.

  

	21.	NUMBER OF ORIGINAL COPIES 

  
 The PARTIES agree that they shall depart from the rules of evidence as set by the French Civil Code, and in
particular by section 1325 thereof. They shall not request that one original be signed per PARTY as evidence of their commitments hereunder. 
  
 There shall be: 
  

	 	•	 	One original copy remitted to the MAJORITY SHAREHOLDER, 

  

	 	•	 	One original copy remitted to Mr. Frédéric DUBOIS for the parties collectively referred to as the MINORITY SHAREHOLDERS,

  

	 	•	 	One original copy remitted to the PURCHASER. 

  
 These three (3) original copies and the remittance of a photocopy of this AGREEMENT to all the PARTIES shall sufficiently
constitute the non rebuttable evidence of their commitments hereunder. 
  

 19 

 Executed in three (3) original copies 
  

									
	UHS INTERNATIONAL INC.	 	 	 	 
				
	 /s/ Steve Filton
	 	 	 	 	 	 
					
	 By:
	 	 Steve Filton
	 	 	 	 	 	 
	 Signed in King of Prussia, PA, USA
	 	 	 	 	 	 
			
	SANTE ET LOISIRS	 	 	 	CMS STAFF
			
	 /s/ Frédéric Dubois
	 	 	 	 /s/ Frédéric Dubois

					
	 By:
	 	 Mr. Frédéric DUBOIS
	 	 	 	 By:
	 	 Mr. Frédéric DUBOIS

	 Signed in Luxemburg
	 	 	 	 Signed in Luxemburg

			
	SF STAFF	 	 	 	MP STAFF
			
	 /s/ Frédéric Dubois
	 	 	 	 /s/ Frédéric Dubois

					
	 By:
	 	 Mr. Frédéric DUBOIS
	 	 	 	By:	 	 Mr. Frédéric DUBOIS

	 Signed in Luxemburg
	 	 	 	 Signed in Luxemburg

			
	FINANCIERE OPALE	 	 	 	 
				
	 /s/ Frédéric Dubois
	 	 	 	 	 	 
					
	 By:
	 	 Mr. Frédéric DUBOIS
	 	 	 	 	 	 
	 Signed in LuxemburgSecurities Purchase Agreement

 EXHIBIT 10.2 
  
 SECURITIES PURCHASE AGREEMENT 
  

This Securities Purchase Agreement (this “Agreement”) is dated as of February 3, 2005, among Active Power, Inc., a Delaware
corporation (the “Company”), and each purchaser identified on the signature pages and Schedule A hereto (each, including its successors and assigns, a “Purchaser” and collectively the
“Purchasers”); and 
  
 WHEREAS, subject to the
terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act (as defined below), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and
not jointly, desires to purchase from the Company in the aggregate, up to $20,000,000 of shares of Common Stock and certain Additional Investment Rights on the Closing Date. 
  
 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 each Purchaser 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: 
  
 “Action” shall have the meaning ascribed to such term in Section 3.1(j). 
  
 “Additional Investment Right” means the
Additional Investment Rights as described in Section 2.2(a)(iii). 
  
 “Additional Investment Right Exercise Price” shall have the meaning ascribed to such term in Section 2.2(a)(iii). 
  
 “Additional Investment Right Shares” means the shares of Common Stock issuable upon
exercise of the Additional Investment Rights. 
  
 “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.
With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser. 
  
 “Closing” means the closing of the purchase
and sale of the Common Stock and the Additional Investment Rights pursuant to Section 2.1. 
  
 “Closing Date” means the Trading Day when all of the Transaction Documents have been executed and delivered by the
applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities have been satisfied or waived. 

 “Commission” means the Securities and Exchange Commission. 

 
 “Common Stock” means the common stock of
the Company, par value $0.001 per share, together with the associated Rights, 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, options, warrants 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 Andrews Kurth LLP. 
  
 “Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith. 
  
 “Effective Date” means the date that the Registration Statement is first declared effective by the Commission.

  
 “Evaluation Date” shall have
the meaning ascribed to such term in Section 3.1(r). 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers, directors of the
Company or others providing services to the Company pursuant to the Company’s 2000 Stock Incentive Plan, as amended, or any stock or option plan or agreement duly adopted by a majority of the non-employee members of the Board of Directors of
the Company, a majority of the members of a committee of non-employee directors or a duly authorized committee of the Board of Directors of the Company established for such purpose, (b) shares of Common Stock issuable pursuant to the Company’s
Employee Stock Purchase Plan, as amended and restated, (c) securities upon the exercise of or conversion of any Securities issued hereunder, and any convertible securities, options or warrants issued and outstanding on the date of this Agreement,
provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise or conversion price of any such securities, and (d) securities issued pursuant to acquisitions
or strategic transactions, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, and in good faith judgment of the Board, an operating company, in which the Company receives benefits in addition to the
investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities. 

 “FW” means Feldman Weinstein LLP with offices located at 420 Lexington
Avenue, Suite 2620, New York, New York 10170-0002. 
  
 “GAAP” shall have the meaning ascribed to such term in Section 3.1(h). 
  
 “Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(o). 
  
 “Legend Removal Date” shall have the
meaning ascribed to such term in Section 4.1(c). 
  
 “Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction. 
  
 “Material Adverse Effect” shall have the meaning ascribed to such term in Section 3.1(b). 
  
 “Material Permits” shall have the meaning
ascribed to such term in Section 3.1(m). 
  
 “Participation Maximum” shall have the meaning ascribed to such term in Section 4.13. 
  
 “Per Share Purchase Price” equals $3.64, subject to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement. 
  
 “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. 
  
 “Pre-Notice” shall have the meaning ascribed to such term in Section 4.13. 
  
 “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. 
  
 “Purchaser Party” shall have the meaning ascribed to such term in Section 4.9. 
  
 “Registration Rights Agreement” means the
Registration Rights Agreement, dated as of the date of this Agreement, among the Company and each Purchaser, in the form of Exhibit A hereto. 
  
 “Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights
Agreement and covering the resale by the Purchasers of the Shares and the Additional Investment Right Shares. 

 “Required Approvals” shall have the meaning ascribed to such term in
Section 3.1(e). 
  
 “Rights”
shall mean the Company’s preferred share purchase rights pursuant to that certain Rights Agreement dated December 13, 2001, as amended or restated from time to time. 
  
 “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h). 

 
 “Securities” means the Shares, the
Additional Investment Rights and the Additional Investment Right Shares. 
  
 “Securities Act” means the Securities Act of 1933, as amended. 
  
 “Shares” means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement. 
  
 “Short Sales” shall include, without
limitation, all “short sales” as defined in Rule 3b-3 of the Exchange Act. 
  
 “Subscription Amount” means, as to each Purchaser, the amounts set forth below such Purchaser’s signature block on
the signature page hereto, in United States dollars and in immediately available funds. 
  
 “Subsidiary” shall mean the subsidiaries of the Company, if any, set forth on Schedule 3.1(a). 
  
 “Trading Day” means a day on which the
Common Stock is traded on a Trading Market. 
  
 “Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the Nasdaq SmallCap Market, the American Stock Exchange, the New York Stock
Exchange or the Nasdaq National Market. 
  
 “Transaction Documents” means this Agreement, the Additional Investment Rights and the Registration Rights Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.

  
 “VWAP” shall mean, for any
period of time in question, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the volume weighted average price of the Common Stock for such period on the
primary Trading Market on which the Common Stock is then listed 

 
or quoted as reported by Bloomberg Financial L.P. (based on a trading day from 9:30 a.m. ET to 4:02 p.m. Eastern Time); (b) if the Common Stock is not then
listed or quoted on a Trading Market and if prices for the Common Stock are then quoted in the “Pink Sheets” published by the Pink Sheets LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most
recent closing price per share of the Common Stock so reported; or (c) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchaser. 
  
 ARTICLE II. 
 PURCHASE AND SALE 
  
 2.1 Closing. On the Closing Date, each Purchaser shall purchase from the Company, severally and not jointly with the other Purchasers, and the Company shall issue and sell to each Purchaser, (a) a number of Shares equal to such
Purchaser’s Subscription Amount divided by the Per Share Purchase Price and (b) the Additional Investment Rights as determined pursuant to Section 2.2(a)(iii). The aggregate Subscription Amounts for Shares sold hereunder shall be up to
$20,000,000. Upon satisfaction of the conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of FW or such other location as the parties shall mutually agree. 
  
 2.2 Deliveries. 
  
 (a) On the Closing Date, the Company shall deliver or cause
to be delivered to each Purchaser the following: 
  
 (i) this Agreement duly executed by the Company; 
  
 (ii) a copy of the irrevocable instructions to the Company’s transfer agent instructing the transfer agent to deliver, on an expedited basis, a certificate evidencing a number of Shares equal to such
Purchaser’s Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser; 
  
 (iii) a copy of an Additional Investment Right, registered in the name of such Purchaser, pursuant to which such Purchaser shall have the
right to purchase up to the number of shares of Common Stock equal to 30% of the Shares to be issued to such Purchaser and which shall be exercisable immediately upon issuance until the earlier of (a) the three (3) month anniversary of the Effective
Date and (b) the 24 month anniversary of the Closing Date, at an exercise price equal to $3.64, subject to adjustment therein (the “Additional Investment Right Exercise Price”), which Additional Investment Right shall
otherwise in the form of Exhibit B attached hereto; 
  
 (iv) the Registration Rights Agreement duly executed by the Company; and 
  
 (v) a legal opinion of Company Counsel, covering the matters addressed in the form of Exhibit C attached hereto. 

 (b) On the Closing Date, each Purchaser shall deliver or cause to be delivered to the
Company the following: 
  
 (i) this Agreement
duly executed by such Purchaser; 
  
 (ii) such
Purchaser’s Subscription Amount by wire transfer to the account as specified in writing by the Company; and 
  
 (iii) the Registration Rights Agreement duly executed by such Purchaser. 
  
 2.3 Closing Conditions. 
  
 (a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met: 

 
 (i) the accuracy when made and on the Closing Date of the
representations and warranties of the Purchasers contained herein; 
  
 (ii) all obligations, covenants and agreements of the Purchasers required to be performed at or prior to the Closing Date shall have been performed; and 
  
 (iii) the delivery by the Purchasers of the items set forth in Section 2.2(b) of this Agreement. 

 
 (b) The respective obligations of the Purchasers
hereunder in connection with the Closing are subject to the following conditions being met: 
  
 (i) the accuracy in all material respects on the Closing Date of the representations and warranties of the Company contained herein;

  
 (ii) all obligations, covenants and
agreements of the Company required to be performed at or prior to the Closing Date shall have been performed; 
  
 (iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement; 
  
 (iv) there shall have been no Material Adverse Effect with
respect to the Company since the date hereof; and 
  
 (v) From the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be
terminated prior to the Closing), and, at any time prior to the Closing Date, 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 on which the Common Stock is listed or included for quotation, 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 each Purchaser, makes it impracticable or inadvisable to purchase the Shares at the Closing. 
  
 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 shall be deemed a part hereof, the Company hereby makes the representations and warranties set forth below to each Purchaser: 
  
 (a) Subsidiaries. All of the direct and indirect
subsidiaries of the Company are set forth on Schedule 3.1(a). 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 Documents to the Subsidiaries will be disregarded. 
  
 (b) Organization and Qualification. The Company and each of 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,
could not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business or financial
condition of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii)
or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. 
  
 (c) Authorization; Enforcement. The Company has the
requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of 

 
the Transaction Documents and otherwise to carry out its obligations thereunder. The execution and delivery of each of the Transaction Documents 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 no further action is required by the Company in connection therewith other than in
connection with the Required Approvals. Each Transaction Documents 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 applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies. 
  
 (d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company, the issuance and sale of the
Shares 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, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a
Company or Subsidiary debt or otherwise) or other understanding 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 any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority 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; except in the case of each of clauses (ii) and (iii), such as could not have or 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 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 or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than (i) filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Registration
Statement, (iii) application(s) to each applicable Trading Market for the listing of the Shares and the Additional Investment Right Shares for trading thereon in the time and manner required thereby, and (iv) the filing of Form D with the Commission
and such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”). 
  
 (f) Issuance of the Securities. The Shares and Additional Investment Rights are duly authorized and, when issued and paid for in
accordance with the Transaction 

 
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company, other than restrictions on
transfer provided for in the Transaction Documents. The Additional Investment Right Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, and free and clear of all Liens
imposed by the Company, other than transfer restrictions imposed by the Transaction Documents. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the
Additional Investment Rights. 
  
 (g)
Capitalization. The capitalization of the Company as of February 1, 2005 is as set forth on Schedule 3.1(g) of the Disclosure Schedules. The Company has not issued any capital stock since October 27, 2004, the date the Company filed
its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2004, 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 and pursuant to the conversion or exercise of outstanding Common Stock Equivalents. 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 Documents. Except as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, script 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. The issue and sale of the Securities will not obligate the Company to issue shares of Common Stock or
other securities to any Person (other than the Purchasers) 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 compliance with all federal and state securities laws, 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, the Board of Directors of the Company or others is required for the issuance and sale of the Shares. There are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital stock to which the 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 all reports, schedules, forms, statements and other documents required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or
such shorter period as the Company was required by law to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC
Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the 

 
expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, 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 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 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, immaterial, year-end audit adjustments. 
  
 (i) Material Changes. Since September 30, 2004 (the date of the latest unaudited 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 could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (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 and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing
Company stock option plan or agreement or employee stock purchase plan. The Company does not have pending before the Commission any request for confidential treatment of information. 
  
 (j) Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there
were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation
of or liability under 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 pending or contemplated, any investigation by the Commission involving the Company
or any current or former director or officer of the Company. 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. 
  
 (k) Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company which could reasonably be expected to result in a Material Adverse Effect.

  
 (l) 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 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, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws applicable to its business except in each case as would not have a Material Adverse Effect. 
  
 (m) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not have or reasonably
be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

  
 (n) Title to Assets. The Company and
the Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to the business of the Company and the Subsidiaries and good and marketable title in all personal property owned by them that is
material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made
of such property by the Company and the Subsidiaries and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company
and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries are in compliance. 
  
 (o) Patents and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights necessary or material for use in connection with their respective businesses as described in the SEC Reports and which the failure to so
have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a written notice that the Intellectual Property Rights used by the Company or any

 
Subsidiary violates or infringes upon the rights of any Person. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and
there is no existing infringement by another Person of any of the Intellectual Property Rights of others. 
  
 (p) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage. To the Company’s knowledge, such
insurance contracts and policies are accurate and complete. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business without a significant increase in cost. 
  
 (q) Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the
Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of
the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $60,000 other than (i) for payment of salary or consulting fees for
services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) for other employee benefits, including stock option agreements under any stock option plan of the Company or the issuance of Common Stock under the
Company’s employee stock purchase plan. 
  
 (r) Sarbanes-Oxley; Internal Accounting Controls. The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company, including its Subsidiaries, is made known to the certifying officers by others within those
entities, particularly during the period in which the Company’s most recently filed periodic report under the Exchange Act, as the case may be, was prepared. The Company’s certifying officers have evaluated the effectiveness of the
Company’s controls and procedures as of the date prior to the filing date of the most recently filed 

 
periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report
under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant
changes in the Company’s internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the Company’s knowledge, in other factors that could significantly affect the Company’s internal
controls. 
  
 (s) Certain Fees. No
brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by
this Agreement. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions
contemplated by this Agreement. 
  
 (t)
Private Placement. Assuming the accuracy of the Purchasers representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers
as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market. 
  
 (u) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become subject to the Investment
Company Act. 
  
 (v) Registration Rights.
Other than each of the Purchasers, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company. 
  
 (w) Listing and Maintenance Requirements. The Company’s Common Stock is registered pursuant to
Section 12(g) 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, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to
the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such
listing and maintenance requirements. 
  
 (x)
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 agreement) or other similar anti-takeover provision
under the Company’s Certificate of Incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their
obligations or exercising their rights under the Transaction Documents, including without limitation the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities. 
  
 (y) Disclosure. The Company confirms that, neither
the Company nor, to the Company’s knowledge, any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that constitutes or would reasonably be expected to constitute material,
non-public information. The Company understands and confirms that the Purchasers will rely on the foregoing representations and covenants in effecting transactions in securities of the Company. All disclosure provided to the Purchasers regarding the
Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, furnished by or on behalf of the Company with respect to the representations and warranties made herein are true and correct with
respect to such representations and warranties and do not 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. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

  
 (z) No Integrated Offering. Assuming
the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholder approval
provisions, including, without limitation, under the rules and regulations of any Trading Market on which any of the securities of the Company are listed or designated. 
  
 (aa) Solvency. Based on the financial condition of the Company as of the Closing Date after giving
effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s
existing debts and other liabilities (including known contingent liabilities) as they mature; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as
proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash
flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or 

 
in respect of its debt when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they
mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the
bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The SEC Reports set forth as of the dates thereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the
Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the
ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness. 
  
 (bb) Form S-3 Eligibility. The Company is eligible to register the resale of its Common Stock by the Purchasers under Form S-3
promulgated under the Securities Act and the Company hereby covenants and agrees to use its reasonable best efforts to maintain its eligibility to use Form S-3 until the Registration Statement covering the resale of the Shares shall have been filed
with, and declared effective by, the Commission. 
  
 (cc) Taxes. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and each Subsidiary has filed all necessary federal, state and
foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been asserted or threatened against the Company or any Subsidiary. 
  
 (dd) General Solicitation. Neither the Company nor,
to the Company’s knowledge, any Person acting on behalf of the Company has offered or sold any of the Shares by any form of general solicitation or general advertising. The Company has offered the Shares for sale only to the Purchasers and
certain other “accredited investors” within the meaning of Rule 501 under the Securities Act. 
  
 (ee) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on
behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or
domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which
the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended. 

 (ff) Accountants. The Company’s accountants are set forth on Schedule
3.1(ff) of the Disclosure Schedule. To the Company’s knowledge, such accountants, who the Company expects will express their opinion with respect to the financial statements to be included in the Company’s Annual Report on Form 10-K
for the year ending December 31, 2004 are a registered public accounting firm as required by the Securities Act. 
  
 (gg) Acknowledgment Regarding Purchasers’ Purchase of Shares. The Company acknowledges and agrees that each of the Purchasers
is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with this Agreement and the
transactions contemplated hereby is merely incidental to the Purchasers’ purchase of the Shares. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company and its representatives. 
  
 (hh) Acknowledgement Regarding Purchasers’ Trading Activity. Anything in this Agreement or elsewhere herein to the contrary
notwithstanding (except for Section 4.15 hereof), it is understood and agreed by the Company (i) that none of the Purchasers have been asked to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities
of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) that past or future open market or other transactions by any Purchaser, including Short Sales, and
specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities; (iii) that any Purchaser, and counter parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and
(iv) that each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. 
  
 3.2 Representations and Warranties of the Purchasers. Each Purchaser hereby, for itself and for no other Purchaser,
represents and warrants as of the date hereof and as of the Closing Date to the Company as follows: 
  
 (a) Organization; Authority. Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations thereunder. The
execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar action on the part of such Purchaser. Each Transaction Documents to which it is
a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid 

 
and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except (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) Own Account. Such Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof, has no present intention of
distributing any of such Securities and has no arrangement or understanding with any other persons regarding the distribution of such Securities (this representation and warranty not limiting such Purchaser’s right to sell the Securities
pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such Purchaser does not have any
agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities. 
  
 (c) Purchaser Status. At the time such Purchaser was offered the Securities, it was, and at the date hereof it is, and on each date
on which it exercises any Additional Investment Rights, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional
buyer” as defined in Rule 144A(a) under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act. 
  
 (d) Experience of Such Purchaser. Such Purchaser, 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 Securities, and has so evaluated the merits and risks of such investment.
Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. 
  
 (e) General Solicitation. Such Purchaser is not purchasing the Securities as a result of any
advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general
advertisement. 
  
 (f) Short Sales. Such
Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any Short Sales in the securities of the Company (including, without limitations, any Short Sales
involving the Company’s securities) since 9 P.M. (New York Time) on January 28, 2005 which was the time that such Purchaser was first contacted regarding an investment in the Company (“Discussion Time”) through the date hereof.

 The Company acknowledges and agrees that each Purchaser does not make or has not made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.2. 
  
 ARTICLE IV. 
 OTHER AGREEMENTS OF THE PARTIES

  
 4.1 Transfer Restrictions. 
  
 (a) The Securities may only be disposed of in compliance
with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an affiliate of a Purchaser or in connection with a pledge as
contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the
terms of this Agreement and shall have the rights of a Purchaser under this Agreement and the Registration Rights Agreement. 
  
 (b) The Purchasers agree to the imprinting, so long as is required by this Section 4.1(b), of a legend on any of the Securities in the
following form: 
  
 THESE SECURITIES HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT. 
  
 The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide
margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees

 
to be bound by the provisions of this Agreement and the Registration Rights Agreement and, if required under the terms of such arrangement, such Purchaser
may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required
in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably
request in connection with a pledge or transfer of the Securities, including, if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any required prospectus supplement under Rule
424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder. 
  
 (c) Certificates evidencing the Shares and Additional Investment Right Shares shall not contain any legend (including the legend set forth
in Section 4.1(b)), (i) while a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities Act, or (ii) following any sale of such Shares or Additional Investment Right Shares
pursuant to Rule 144, or (iii) if such Shares or Additional Investment Right Shares are eligible for sale under Rule 144(k), or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Company’s transfer agent promptly after the Effective Date if required by the Company’s transfer
agent to effect the removal of the legend hereunder. If all or any portion of an Additional Investment Right is exercised at a time when there is an effective registration statement to cover the resale of the Warrant Shares or Additional Investment
Right Shares, such Additional Investment Right Shares, as the case may be, shall be issued free of all legends. The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it
will, no later than three Trading Days following the delivery by a Purchaser to the Company or the Company’s transfer agent of a certificate representing Shares or Additional Investment Right Shares, as the case may be, issued with a
restrictive legend (such date, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing such Securities that is free from all restrictive and other legends. The Company may not make
any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section. Certificates for Securities subject to legend removal hereunder shall be transmitted by the
transfer agent of the Company to the Purchasers by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System. 
  
 (d) In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, for each $1,000 of Shares or Additional Investment Right Shares (based on the VWAP of the Common Stock on the date such Securities are submitted to the Company’s transfer agent) subject to Section 4.1(c), $10 per
Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day 

 
after the Legend Removal Date until such certificate is delivered. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the
Company’s failure to deliver certificates representing any Securities as required by the Transaction Documents, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief. 
  
 (e) Each Purchaser, severally and not jointly with the other Purchasers, agrees that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon
the Company’s reliance that the Purchaser will sell any Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom. 
  
 4.2 Furnishing of Information. As long as any Purchaser owns
Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. As long as any
Purchaser owns Securities, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the
Purchasers to sell the Securities under Rule 144. The Company further covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time to time to enable such Person to sell such
Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144. 
  
 4.3 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Purchasers or that would be
integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is
obtained before the closing of such subsequent transaction. 
  
 4.4 Securities Laws Disclosure; Publicity. The Company shall, by 8:30 a.m. Eastern time on the Trading Day following the date hereof, issue a press release in form reasonably acceptable to each Purchaser disclosing the material terms
of the transactions contemplated hereby. Within four (4) business days following the date hereof, the Company shall issue a Current Report on Form 8-K disclosing the material terms of the transactions contemplated hereby, and shall attach each
Transaction Document required to be filed as an exhibit thereto. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release or otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to
any press release of the Company, which consent shall not unreasonably be withheld in either case, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such
public statement or communication. Notwithstanding the foregoing, the Company shall not publicly 

 
disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market,
without the prior written consent of such Purchaser, except (i) to the extent the name of each Purchaser and each Purchaser’s Subscription Amount is contained in the Transaction Documents which are filed as exhibits to the reports, forms or
other documents the Company is required to file under the Securities Act and the Exchange Act, (ii) as required by federal securities law in connection with the registration statement contemplated by the Registration Rights Agreement and (iii) to
the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under subclause (i), (ii) or (iii). 
  
 4.5 Shareholder Rights Plan. No claim will be made or enforced by the
Company or, to the knowledge of the Company, any other Person that any Purchaser is an “Acquiring Person” under any shareholder rights plan or similar plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents. The Company shall conduct its business in a manner so that it will not become subject to the Investment
Company Act. 
  
 4.6 Non-Public Information. The Company
covenants and agrees that neither it nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such
Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that each Purchaser shall be relying on the foregoing representations in effecting transactions in
securities of the Company. 
  
 4.7 Use of Proceeds. Except
as set forth on Schedule 4.7 attached hereto, the Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes. The Company has no present intention to use the net proceeds from the sale of the
Securities hereunder for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), to redeem any Common Stock or Common Stock
Equivalents or to settle any outstanding litigation. 
  
 4.8 Reimbursement. If any Purchaser becomes involved in any capacity in any Proceeding by or against any Person who is a stockholder of the Company (except as a result of sales, pledges, margin sales and similar transactions by such
Purchaser to or with any current stockholder), solely as a result of such Purchaser’s acquisition of the Securities under this Agreement, the Company will reimburse such Purchaser for its actual and reasonable legal and other out-of-pocket
expenses (including the cost of any investigation preparation and travel in connection therewith) incurred in connection therewith, as such expenses are incurred. The reimbursement obligations of the Company under this paragraph shall be in addition
to any liability which the Company may otherwise have, shall extend upon the same terms and conditions to any Affiliates of the Purchasers who are actually named in such action, proceeding or investigation, and partners, directors, agents, employees
and controlling persons (if any), as the case may be, of the Purchasers and any such Affiliate, and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company, the 

 
Purchasers and any such Affiliate and any such Person. The Company also agrees that neither the Purchasers nor any such Affiliates, partners, directors,
agents, employees or controlling persons shall have any liability to the Company or any Person asserting claims on behalf of or in right of the Company solely as a result of acquiring the Securities under this Agreement. 
  
 4.9 Indemnification of Purchasers. Subject to the provisions of this
Section 4.9, the Company will indemnify and hold the Purchasers and their directors, officers, shareholders, partners, employees and agents (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or
relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against a Purchaser, or any of them or their
respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser’s
representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser may have with any such stockholder or any violations or alleged violation by the Purchaser of state or federal securities
laws or any conduct by such Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing. Any Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof and the Company’s payment of such fees and expenses
has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate
counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party. The Company will not be liable to any Purchaser Party under this Agreement (i) for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or agreements made by the Purchasers in this Agreement or in the other Transaction Documents. 
  
 4.10 Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at
all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement and the Additional Investment Right Shares pursuant to any exercise of the
Additional Investment Rights. 
  
 4.11 Listing of Common
Stock. The Company hereby agrees to use best efforts to maintain the listing of the Common Stock on a Trading Market, and as soon as reasonably practicable following the Closing (but not later than the earlier of the 

 
Effective Date and the first anniversary of the Closing Date) to list (or qualify for inclusion for quotation) all of the Shares and Additional Investment
Right Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will include in such application all of the Shares and Additional Investment Right Shares and
will take such other action as is necessary to cause all of the Shares and Additional Investment Right Shares to be listed on such other Trading Market as promptly as possible. The Company will take all action reasonably necessary to continue the
listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. 
  
 4.12 Equal Treatment of Purchasers. No consideration shall be offered
or paid to any person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. For clarification purposes,
this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended to treat for the Company the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise. 
  
 4.13 Participation in Future Financing.  
  
 (a) From the date hereof until twelve (12) months after the Effective Date, upon any financing by the Company of its Common Stock or Common Stock
Equivalents (a “Subsequent Financing”), each Purchaser shall have the right to participate in up to 30% of such Subsequent Financing (the “Participation Maximum”). 
  
 (b) At least 5 Trading Days prior to the closing of the Subsequent Financing,
the Company shall deliver to each Purchaser a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser if it wants to review the details of such financing (such
additional notice, a “Subsequent Financing Notice”). Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but no later than 1 Trading Day after
such request, deliver a Subsequent Financing Notice to such Purchaser. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder, the
Person or Persons (if then known) with whom such Subsequent Financing is proposed to be effected, and attached to which shall be a term sheet or similar document relating thereto if the same shall exist for such proposed financing, otherwise a
summary of the proposed material terms of the Subsequent Financing. 
  
 (c) Any Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30 p.m. (New York City time) on the 5th Trading Day after the Purchaser has received the Pre-Notice that the Purchaser is willing to participate in the Subsequent Financing, the amount of the
Purchaser’s participation, and that the Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing Notice. If the Company receives no notice from a Purchaser as of such fifth Trading
Day, such Purchaser shall be deemed to have notified the Company that it does not elect to participate. 

 (d) If by 5:30 p.m. (New York City time) on the fifth Trading Day after all of the Purchasers have
received the Pre-Notice, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees to participate) is, in the aggregate, less than the Participation Maximum of the Subsequent
Financing, then the Company may effect the remaining portion of such Subsequent Financing on the terms and to the Persons set forth in the Subsequent Financing Notice. 
  
 (e) The Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have
the right of participation set forth above in this Section 4.13, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 60
Trading Days after the date of the initial Subsequent Financing Notice. In the event the Company receives responses to Subsequent Financing Notices from Purchasers seeking to purchase more than the aggregate amount of the Subsequent Financing, each
such Purchaser shall have the right to purchase their Pro Rata Portion (as defined below) of the Participation Maximum. “Pro Rata Portion” is the ratio of (x) the Subscription Amount of Securities purchased by a participating Purchaser and
(y) the sum of the aggregate Subscription Amount of all participating Purchasers. 
  
 (f) Notwithstanding the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance. 
  
 4.14 Subsequent Equity Sales. 
  
 (a) From the date hereof until 90 days after the Effective Date, neither the Company nor any Subsidiary shall issue shares of Common Stock
or Common Stock Equivalents; provided, however, the 90 day period set forth in this Section 4.14 shall be extended for the number of Trading Days during such period in which (y) trading in the Common Stock is suspended by any Trading Market, or (z)
following the Effective Date, the Registration Statement is not effective or the prospectus included in the Registration Statement may not be used by the Purchasers for the resale of the Shares and Additional Investment Right Shares. 
  
 (b) From the date hereof until the earlier of (i) two (2)
years after the Effective Date or (ii) such time as the Purchasers collectively hold less than 10% of the Securities issued pursuant to this Agreement (including unexercised but unexpired Additional Investment Rights), the Company shall be
prohibited from effecting or entering into an agreement to effect any Subsequent Financing involving a “Variable Rate Transaction” or an “MFN Transaction” (each as defined below). The term “Variable Rate Transaction”
shall mean a transaction in which the Company issues or sells (i) any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion,
exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial 

 
issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the
initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, including,
but not limited to, an equity line of credit, whereby the Company may sell securities at a future determined price. The term “MFN Transaction” shall mean a transaction in which the Company issues or sells any securities in a capital
raising transaction or series of related transactions which grants to an investor the right to receive additional shares based upon future transactions of the Company on terms more favorable than those granted to such investor in such offering. Any
Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. 
  
 (c) Notwithstanding the foregoing, this Section 4.14 shall not apply in respect of an Exempt Issuance,
except that no Variable Rate Transaction or MFN Transaction shall be an Exempt Issuance. 
  
 4.15 Short Sales. Each Purchaser covenants that neither it nor any affiliates acting on its behalf or pursuant to any understanding with it have executed or will execute any Short Sales during the period from
the Discussion Time until prior to the time that the transactions contemplated by this Agreement are first publicly announced as described in Section 4.4. Notwithstanding the foregoing, no Purchaser makes any representation, warranty or covenant
hereby that it will not engage in Short Sales in the securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced as described in Section 4.4. 
  
 4.16 Delivery of Securities After Closing. The Company shall deliver,
or cause to be delivered, the respective Shares and Additional Investment Right purchased by each Purchaser to such Purchaser within 3 Trading Days of the Closing Date. 
  
 ARTICLE V. 
 MISCELLANEOUS 
  
 5.1 Termination. This Agreement
may be terminated by any Purchaser, by written notice to the other parties, if the Closing has not been consummated on or before February 14, 2005; provided that no such termination 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, each party shall pay the fees and expenses of its 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 Securities. 
  
 5.3 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire
understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits
and schedules. 

 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 facsimile at the facsimile number set forth on the signature pages
attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages
attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City 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. 
  
 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 each Purchaser 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. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser. Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to the “Purchasers”. 
  
 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 4.9. 
  
 5.9 Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and 

 
any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan
for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives,
and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or inconvenient venue for such proceeding. Each party
hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law. 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 Documents, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its 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 Closing and delivery of the Shares and Additional Investment Right Shares for the duration of the statute of limitations applicable to such matter. 
  
 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 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 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 Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Documents and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may
rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights. 

 5.14 Replacement of Securities. If any certificate or instrument evidencing any Securities is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement Securities. 
  
 5.15 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific
performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any
action for specific performance of any such obligation the defense that a remedy at law would be adequate. 
  
 5.16 Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a
Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or
setoff had not occurred. 
  
 5.17 Independent Nature of
Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,
an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents
and the Company acknowledges that, to its knowledge, the Purchasers are not acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party
in any proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in their review and negotiation of the Transaction Documents. For reasons of administrative convenience only, Purchasers and their respective
counsel have chosen to communicate with the Company through FW. FW does not represent the Purchasers but only RBC Capital Markets, who has acted as placement agent to the transaction. The Company has elected to provide all Purchasers with the same
terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by the Purchasers. 

 5.18 Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or
other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or
security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled. 
  
 5.19 Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the
Transaction Documents 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 Documents or any amendments hereto.

  
 (Signature Page Follows) 

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

					
	Active Power, Inc.	 	Address for Notice:
			
	By:	 	 /s/ Joseph F. Pinkerton, III

	 	 Active Power, Inc.
 2128 W. Braker Lane, BK
12
 Austin, Texas 78758
 Fax: 512.836
 Email: jpinkerton@activepower.com
 Attn: Chief Executive
Officer

	Name:	 	Joseph F. Pinkerton, III	 
	Title:	 	Chairman of the Board, President and	 
	 	 	Chief Executive Officer	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

  
 With a copy to (which shall not
constitute notice): 
  
 Andrews Kurth LLP 
 111 Congress Avenue, Suite 1700 
 Austin, Texas 78701 
 Fax: 512.320.9292 
 Attn: J. Matthew Lyons 
  
 With a copy to (which shall not constitute notice): 
  
 Active Power, Inc. 
 2128 W. Braker Lane, BK 12 
 Austin, Texas 78758 
 Fax: 512.836.4511 
 Email: mchibib@activepower.com 
 Attn: General Counsel 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES FOR PURCHASERS FOLLOW] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: Capital Ventures International
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Martin Kobinger

	Name of Authorized Signatory: Heights Capital Management, Inc. Authorized Signatory
	Title of Authorized Signatory: Investment Manager

  
 Address for Notice of Purchaser:

  
 Heights Capital Management, Inc. 
 101 California Street, Suite 3250 
 San Francisco, CA 94111 
 Attn: Martin Kobinger 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 401 City Line Avenue, Suite 220 
 Bala Cynwyd, PA 19004 
 Attn: Accounts Receivable 
  
 Subscription Amount:
$2,500,024.80 
 Shares: 686,820 
 Additional Investment Right
Shares: 206,046 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: Smithfield Fiduciary LLC
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Adam J. Chill

	Name of Authorized Signatory: Adam J. Chill
	Title of Authorized Signatory: Authorized Signatory

  
 Address for Notice of Purchaser:

  
 c/o Highbridge Capital Management, LLC 
 9 West 57th Street, 27th Floor 
 New York, NY 10019

 Attention: Ari J. Storch/Adam J. Chill 
 Tel: 2120287-4720

 Fax: 212-751-0755 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Subscription Amount: $3,640,000 
 Shares: 1,000,000 
 Additional Investment Right Shares: 300,000 
 EIN Number: [PROVIDE THIS
UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: D.B. Zwirn Special Opportunities Fund, L.P.
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Daniel B. Zwirn

	Name of Authorized Signatory: Daniel B. Zwirn
	Title of Authorized Signatory: Managing Partner

  
 Address for Notice of Purchaser:

  
 745 Fifth Avenue 
 18th Floor 
 New York, NY 10151 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Subscription Amount: $1,800,009.12 
 Shares: 494,508 
 Additional Investment Right Shares: 148,352 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: D.B. Zwirn Special Opportunities Fund, Ltd.
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Daniel B. Zwirn

	Name of Authorized Signatory: Daniel B. Zwirn
	Title of Authorized Signatory: Managing Partner

  
 Address for Notice of Purchaser:

  
 745 Fifth Avenue 
 18th Floor 
 New York, NY 10151 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Subscription Amount: $2,700,013.68 
 Shares: 741,762 
 Additional Investment Right Shares: 222,529 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: Southport Millennium Fund, L.P.
	Signature of Authorized Signatory of Purchaser:	 	 /s/James M. Thorburn

	Name of Authorized Signatory: Southport Millennium Management, LLC (GP), James M. Thorburn
	Title of Authorized Signatory: Managing Member of GP

  
 Address for Notice of Purchaser:

  
 c/o Dawson-Herman Capital Management, Inc. 
 354 Pequot Avenue 
 Southport, CT 06890 
 Attention: James M. Thorburn 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Subscription Amount: $117,208 
 Shares: 32,200 
 Additional Investment Right Shares: 9,660 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: Southport Millennium Fund II, L.P.
	Signature of Authorized Signatory of Purchaser:	 	 /s/ James M. Thorburn

	Name of Authorized Signatory: Southport Millennium II Management, LLC (GP), James M. Thorburn
	Title of Authorized Signatory: Managing Member of GP

  
 Address for Notice of Purchaser:

  
 c/o Dawson-Herman Capital Management, Inc. 
 354 Pequot Avenue 
 Southport, CT 06890 
 Attention: James M. Thorburn 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Subscription Amount: $195,468 
 Shares: 53,700 
 Additional Investment Right Shares: 16,110 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: Southport Millennium Micro Cap Fund, L.P.
	Signature of Authorized Signatory of Purchaser:	 	 /s/ James M. Thorburn

	Name of Authorized Signatory: Southport Micro Cap Management, LLC (GP), James M. Thorburn
	Title of Authorized Signatory: Managing Member of GP

  
 Address for Notice of Purchaser:

  
 c/o Dawson-Herman Capital Management, Inc. 
 354 Pequot Avenue 
 Southport, CT 06890 
 Attention: James M. Thorburn 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Subscription Amount: $47,684 
 Shares: 13,100 
 Additional Investment Right Shares: 3,930 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: Southport Millennium Offshore Fund, Inc.
	Signature of Authorized Signatory of Purchaser:	 	 /s/ James M. Thorburn

	Name of Authorized Signatory: James M. Thorburn
	Title of Authorized Signatory: Director

  
 Address for Notice of Purchaser:

  
 c/o Dawson-Herman Capital Management, Inc. 
 354 Pequot Avenue 
 Southport, CT 06890 
 Attention: James M. Thorburn 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Subscription Amount: $549,640 
 Shares: 151,000 
 Additional Investment Right Shares: 45,300 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: Southport Energy Plus Partners L.P.
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Anthony Grammalva

	Name of Authorized Signatory: Anthony Grammalva
	Title of Authorized Signatory: CEO-Sound Energy Partners, Inc. its Investment Manager

  
 Address for Notice of Purchaser:

  
 354 Pequot Avenue 
 Southport, CT 06890 
 Attention: Slavko Negulic 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Mike Farrell 
 Seward & Kissel LLP 
 One Battery Park Plaza 
 New York, NY 10004 
  
 Subscription Amount:
$1,350,804 
 Shares: 371,100 
 Additional Investment Right
Shares: 111,330 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: Southport Energy Plus Offshore Fund, Inc.
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Anthony Grammalva

	Name of Authorized Signatory: Anthony Grammalva
	Title of Authorized Signatory: CEO-Sound Energy Partners, Inc. its Investment Advisor

  
 Address for Notice of Purchaser:

  
 354 Pequot Avenue 
 Southport, CT 06890 
 Attention: Slavko Negulic 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Mike Farrell 
 Seward & Kissel LLP 
 One Battery Park Plaza 
 New York, NY 10004 
  
 Subscription Amount:
$341,068 
 Shares: 93,700 
 Additional Investment Right Shares:
28,110 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: Sound Energy Capital Offshore Fund, Ltd.
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Anthony Grammalva

	Name of Authorized Signatory: Anthony Grammalva
	Title of Authorized Signatory: GP-Sound Energy Capital Management, L.P. its Investment Advisor

  
 Address for Notice of Purchaser:

  
 354 Pequot Avenue 
 Southport, CT 06890 
 Attention: Slavko Negulic 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Mike Farrell 
 Seward & Kissel LLP 
 One Battery Park Plaza 
 New York, NY 10004 
  
 Subscription Amount:
$128,128 
 Shares: 35,200 
 Additional Investment Right Shares:
10,560 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: SF Capital Partners Ltd.
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Robert J. Barnard

	Name of Authorized Signatory: Robert J. Barnard
	Title of Authorized Signatory: Authorized Signatory

  
 Address for Notice of Purchaser:

  
 c/o Stark Offshore Management, LLC 
 3600 South Lake Drive 
 St. Francis, WI 53235 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Subscription Amount: $1,820,000.00 
 Shares: 500,000 
 Additional Investment Right Shares: 150,000 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: Portside Growth and Opportunity Fund
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Jeffrey Smith

	Name of Authorized Signatory: Jeffrey Smith
	Title of Authorized Signatory: Authorized Signatory

  
 Address for Notice of Purchaser:

  
 C/o Ramius Capital Group, LLC 
 666 Third Avenue, 26th Floor

 New York, NY 10017 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Christina Pesci 
 Citigroup 
 390 Greenwich St. 5th Floor

 New York, NY 10013 
 Telephone: 212-723-5811 
  
 Subscription Amount: $3,245,351.20 
 Shares: 891,580 
 Additional Investment Right Shares: 267,474 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: ALM Brand Bank
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Lars Hackenberg

	Name of Authorized Signatory: Lars Hackenberg
	Title of Authorized Signatory: Senior Portfolio Manager

  
 Address for Notice of Purchaser:

  
 Midtermolen 7 
 DK – 2100 Copenhagen 
  
 Address for Delivery
of Securities for Purchaser (if not same as above): 
  
 DTC 0997 State Street
Bank 
 Acc. 26Q2 Alm Brand Bank (ALMBDKKK) 
 State Street Bank

 2 International Place 
 Boston, MA 02110 
 PO Box 5048 
 Boston MA 02107 
  
 Subscription Amount: $546,000 
 Shares:150,000 
 Additional Investment Right Shares: 45,000 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: IMPAX Environmental Market (Ireland) Fund
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Adrian Cornwell

	Name of Authorized Signatory: Adrian Cornwell
	Title of Authorized Signatory: Marketing Manager

  
 Address for Notice of Purchaser:

  
 Bruce Jenkyn-Jones 
 IMPAX Asset Management 
 Broughton House, 6-8 Jackville Street 
 London, WIS 3PG, UK 
 Tel +44 (0) 20 7 434 1122 
 Fax: +44 (0) 20 7 437 1245 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Brown Brothers Harriman & Co. 
 Investor Services, 140 Broadway 
 New York, NY 10005-1101, USA 
  
 Subscription Amount: $54,600 
 Shares:15,000 
 Additional Investment Right Shares: 4,500 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: IMPAX Environmental Market PLC
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Bruce Jenkyn-Jones

	Name of Authorized Signatory: Bruce Jenkyn-Jones
	Title of Authorized Signatory: Investment Manager

  
 Address for Notice of Purchaser:

  
 Bruce Jenkyn-Jones 
 IMPAX Asset Management 
 Broughton House, 6-8 Jackville Street 
 London, WIS 3PG, UK 
 Tel +44 (0) 20 7 434 1122 
 Fax: +44 (0) 20 7 437 1245 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Booth A Co 
 50 South Lasalle Street 
 Chicago, IL 60875, USA 
  
 Subscription Amount: $218,400 
 Shares: 60,000 
 Additional Investment Right Shares: 18,000 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 

 [PURCHASER SIGNATURE PAGES TO ACPW SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

			
	Name of Purchaser: PNE Invest Ltd.
	Signature of Authorized Signatory of Purchaser:	 	 /s/

	Name of Authorized Signatory:
	Title of Authorized Signatory:
	Email Address of Purchaser:

  
 Address for Notice of Purchaser:

  
 Helvetia Court, South Esplanade 
 P.O. Box 474, St. Pedro Port GYL 4EE, Guernsey 
 Attn: Jane Davis 

Ph: +44 1 481 725 440 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 George Fuger 
 Credit Suisse Asset Management 
 Qiess                     , 30 
 PO Box 800 
 CH – 8070 Zurid         
  
 Subscription Amount: $600,017.60 
 Shares: 164,840 
 Additional Investment Right Shares: 43,452 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER]

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