Document:

Registration Rights Agreement

 Exhibit 4.2 
 CELL THERAPEUTICS, INC. 
 7.5% CONVERTIBLE SENIOR NOTES DUE 2011 
 REGISTRATION RIGHTS AGREEMENT 
 April 27,
2006 
 Cell Therapeutics, Inc., a corporation organized under the laws of the State of Washington (the “Company”),
proposes to issue to the investors listed on Schedule I (the “Investors”) of the Exchange Agreement, dated April 24, 2006, by and among the Investors and the Company (the “Exchange Agreement”) and
signatory hereto, its 7.5% Convertible Senior Notes due 2011 (the “Securities”) upon the terms and subject to the conditions set forth in such Exchange Agreement. As an inducement to the Initial Purchaser to enter into the
Purchase Agreement and the Investors to enter into the Exchange Agreement and in satisfaction of conditions to the obligations of the Initial Purchaser and the Investors thereunder, the Company agrees with the Initial Purchaser and the Investors for
the benefit of Holders (as defined herein) from time to time of the Registrable Securities (as defined herein) as follows: 
 1.
Definitions. 
 Capitalized terms used herein without definition shall have the meanings ascribed to them in the Purchase Agreement. As
used in this Registration Rights Agreement (this “Agreement”), the following defined terms shall have the following meanings: 
 “Additional Interest” has the meaning assigned thereto in Section 8(a) hereof. 
 “Affiliate” of any specified person means any other person which, directly or indirectly, is in control of, is controlled by, or is under common control with such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the direction of the management and policies of such person whether by contract or otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing. 
 “Applicable Amount” means, at the time of computation of any Additional Interest,
(i) with respect to the Securities, the principal amount of the Securities then outstanding, and (ii) with respect to shares of Common Stock which have been issued upon conversion of the Securities pursuant to the Indenture and not sold by
a Holder, the principal amount of Securities that was converted into such number of shares. 
 “Business Day” means each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in the City of New York, State of New York are authorized or obligated by law or executive order to close. 
  

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 “Commission” means the United States Securities and Exchange Commission, or any other
federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose. 
 “Common Stock” means the Company’s common stock, without par value. 
 “DTC” means The
Depository Trust Company. 
 “Effectiveness Period” has the meaning assigned thereto in Section 2(b)(i) hereof.

 “Effective Time” means the time at which the Commission declares any Shelf Registration Statement effective or at which
time any Shelf Registration Statement otherwise becomes effective. 
 “Equity Security” has the meaning assigned thereto in
Section 5 hereof. 
 “Exchange Act” means the United States Securities Exchange Act of 1934, as amended. 
 “Holder” means any person that is the record owner of Registrable Securities (and includes any person that has a beneficial interest in
any Registrable Security in book-entry form). 
 “Indenture” means the Indenture, dated as of or around April 27, 2006,
by and between the Company and U.S. Bank National Association, pursuant to which the Securities are to be issued, and as amended and supplemented from time to time in accordance with its terms. 
 “Issue Date” means the first date of original issuance of the Securities. 
 “Majority of Holders” means Holders holding over fifty percent (50%) of the aggregate principal amount of Registrable Securities
outstanding. 
 “Managing Underwriter” has the meaning assigned thereto in Section 9 hereof. 
 “Notice and Questionnaire” means a Notice of Registration Statement and Selling Securityholder Election and Questionnaire substantially
in the form of Appendix A hereto. 
 “Notice Holder” has the meaning assigned thereto in Section 3(a)(i) hereof.

 The term “person” means an individual, partnership, limited liability company, corporation, trust or unincorporated
organization, or a government or agency or political subdivision thereof. 
 “Prospectus” means the prospectus included in
any Shelf Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the Offering of any portion of the Registrable Securities covered by any Shelf Registration Statement and by all other amendments
and supplements to such prospectus, including all material incorporated by reference in such prospectus and all documents filed after the date of such prospectus by the Company under the Securities Act or the Exchange Act and incorporated by
reference therein. 
  

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 “Registrable Securities” means all or any portion of the Securities issued from time to
time under the Indenture and the shares of Common Stock issuable upon conversion of the Securities, provided, however, that a security ceases to be a Registrable Security when it is no longer a Restricted Security. 
 “Restricted Security” means any Security or share of Common Stock issuable upon conversion thereof except any such Security or share of
Common Stock that (i) has been registered pursuant to an effective registration statement under the Securities Act and sold in a manner contemplated by the Shelf Registration Statement, (ii) has been transferred in compliance with Rule 144
under the Securities Act (or any successor provision thereto) or is transferable pursuant to paragraph (k) of such Rule 144 (or any successor provision thereto) or (iii) has otherwise been transferred and a new Security or share of Common
Stock not subject to transfer restrictions under the Securities Act has been delivered by or on behalf of the Company in accordance with Section 2.6 of the Indenture. 
 “Registration Default” has the meaning assigned thereto in Section 8(a) hereof. 
 “Securities Act” means the United States Securities Act of 1933, as amended. 
 “Shelf Registration” means a registration effected pursuant to Section 2 hereof. 
 “Shelf Registration Statement” means a “shelf” registration statement filed under the Securities Act providing for the
registration of, and the sale on a continuous or delayed basis by the Holders of, all of the Registrable Securities pursuant to Rule 415 under the Securities Act and/or any similar rule that may be adopted by the Commission, filed by the Company
pursuant to the provisions of Section 2 of this Agreement, including the Prospectus contained therein, any amendments and supplements to such registration statement and Prospectus, including post-effective amendments, and all exhibits and all
material incorporated by reference in such registration statement and Prospectus, and any additional “shelf” registration statements filed under the Securities Act to permit the registration and sale of Registrable Securities pursuant to
Section 3(a)(ii) hereof. 
 “Strategic Partner” means (i) a pharmaceutical or biotechnology company with book
equity of at least U.S.$200,000,000, (ii) a pharmaceutical or biotechnology company with sales of at least U.S.$150,000,000, or (iii) a publicly traded, or division or subdivision of a publicly traded, pharmaceutical or biotechnology
company with market capitalization in excess of U.S.$200,000,000. 
 “Suspension Period” has the meaning assigned thereto in
Section 2(c) hereof. 
 “Trust Indenture Act” means the Trust Indenture Act of 1939, or any successor thereto, and the
rules, regulations and forms promulgated thereunder, as the same shall be amended from time to time. 
 The term
“underwriter” means any underwriter, or any person deemed to be an underwriter pursuant to the Securities Act and Exchange Act and the respective rules and regulations thereunder, as in effect at any relevant time, of Registrable
Securities in connection with an offering thereof under a Shelf Registration Statement. 
  

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 Wherever there is a reference in this Agreement to a percentage of the “principal amount” of
Registrable Securities or to a percentage of Registrable Securities, each share of Common Stock issued upon conversion of the Securities which is a Registrable Security shall represent a principal amount or percentage of Registrable Securities
determined based on the aggregate principal amount of Securities that were converted into shares of Common Stock (as adjusted for any stock splits, stock dividends, recapitalizations, combinations, reorganizations and like events) as of the date of
determination. 
 2. Shelf Registration. 
 (a) The Company shall, as soon as practicable, but no later than ten (10) calendar days following the Issue Date, use its best efforts file with the Commission a Shelf Registration Statement to provide for the
offer and sale of the Registrable Securities by the Holders from time to time in accordance with the methods of distribution elected by such Holders and, thereafter, shall use its best efforts to cause such initial Shelf Registration Statement to be
declared effective under the Securities Act no later than sixty (60) calendar days following the Issue Date; provided, however, that the Company may, upon written notice to all the Holders (which notice shall contain no material
nonpublic information), postpone having the Shelf Registration Statement declared effective for a period not to exceed sixty (60) days if the Company is in possession of material non-public information other than any of the results of the
Company’s clinical trails, the disclosure of which would have a material adverse effect on the business, operations, properties, condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole; provided further,
however, that only Holders who are Notice Holders shall be entitled to be named as a selling securityholder in any Shelf Registration Statement as of the date it is declared effective or to use the Prospectus forming a part thereof for offers
and resales of Registrable Securities. None of the Company’s securityholders (other than Holders of Registrable Securities) shall have the right to include any of the Company’s other securities in the Shelf Registration Statement.
Notwithstanding anything to the contrary contained herein, neither the Company nor any of its subsidiaries or affiliates shall disclose the name of any Investors in any filing, announcement, release or otherwise without the prior written consent of
the applicable investor. The receipt of a Notice & Questionnaire shall be considered a valid consent for the purposes of this Section 2 for use of the information contained in such Notice & Questionnaire. 
 (b) Subject to Section 2(c) hereof, the Company shall use its best efforts: 
 (i) to keep any Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of
Section 3(j) hereof, in order to permit the Prospectus forming a part thereof to be usable by Holders until the earlier of: (x) all of the Holders of Registrable Securities are able to sell all Registrable Securities immediately without
restriction pursuant to Rule 144(k) under the Securities Act or any successor rule thereto, (y) all Registrable Securities registered under the Shelf Registration Statements have been sold, or (z) all Registrable Securities have ceased to
be outstanding (such period being referred to herein as the “Effectiveness Period”); and 
 (ii) after
the Effective Time of the initial Shelf Registration Statement, to take the actions provided for in Section 3(a)(ii) hereof after the receipt of a completed and 

  

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signed Notice and Questionnaire from any Holder of Registrable Securities that is not then a Notice Holder; provided, however, that
nothing in this subparagraph shall relieve such holder of the obligation to return a completed and signed Notice and Questionnaire to the Company in accordance with Section 2(a)(ii) hereof. 
 (iii) If at any time the Securities are convertible into securities other than Common Stock, the Company shall, or shall cause any
successor under the Indenture to, cause such securities to be included in the Shelf Registration Statement no later than the date on which the securities may then be convertible into such securities. 
 (c) After the Effective Time of the initial Shelf Registration Statement, the Company may suspend the use of any Prospectus by written notice to the
Notice Holders for a period not to exceed an aggregate of 60 calendar days in any 12-month calendar period and not in excess of 30 consecutive calendar days in any such 12-month calendar period (each such period, a “Suspension
Period”) if: 
 (i) an event has occurred and is continuing, as a result of which the Shelf Registration
Statement would, in the Company’s reasonable judgment, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and 
 (ii) the Company determines in good faith that the disclosure of such event at such time would have a material adverse effect on the
Company and its subsidiaries taken as a whole. 
 3. Registration Procedures. 
 In connection with the Shelf Registration Statements, the following provisions shall apply: 
 (a) (i) not less than twenty (20) calendar days prior to the time the Company in good faith intends to have the initial Shelf
Registration Statement declared effective, the Company shall distribute the Notice and Questionnaire to the Holders of Registrable Securities. The Company shall take action to name as a selling securityholder in the initial Shelf Registration
Statement at the Effective Time each Holder that completes, executes and delivers a Notice and Questionnaire to the Company (a “Notice Holder”) prior to or on the tenth (10th) calendar day after such Holder’s
receipt thereof so that such Holder is permitted to deliver the Prospectus forming a part thereof to purchasers of such Holder’s Registrable Securities in accordance with applicable law. The Company shall not be required to take any action to
name any Holder as a selling securityholder in the initial Shelf Registration Statement at the time of its effectiveness or to enable any Holder to use the Prospectus forming a part thereof for resales of Registrable Securities unless such Holder
has returned a completed and signed Notice and Questionnaire to the Company in a timely manner. 
 (ii) After the Effective
Time of the initial Shelf Registration Statement, the Company shall, upon the request of any Holder of Registrable Securities that is not then a Notice Holder, promptly send a Notice and Questionnaire to such Holder. After the 

  

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Effective Time of the initial Shelf Registration Statement, the Company shall (A) as promptly as practicable, after the date a completed and signed
Notice and Questionnaire is delivered to the Company, and in any event within five (5) Business Days or, if the Company is required to file with the Commission a new Shelf Registration, thirty (30) calendar days, after such date, prepare
and file with the Commission (1) a supplement to the Prospectus or, if required by applicable law, a post-effective amendment to the Shelf Registration Statement or an additional Shelf Registration Statement, and (2) any other document
required by applicable law, so that the Holder delivering such Notice and Questionnaire is named as a selling securityholder in a Shelf Registration Statement and is permitted to deliver the Prospectus to purchasers of such Holder’s Registrable
Securities in accordance with applicable law, and (B) use its best efforts to cause any post-effective amendment or such additional Shelf Registration Statement to become effective under the Securities Act as promptly as is practicable; but in
any event by the date that is (i) ten (10) Business Days after the date of such post-effective amendment, or (ii) forty-five (45) calendar days after the date such additional Shelf Registration Statement is required to be filed;
provided, however, that if a Notice and Questionnaire is delivered to the Company during a Suspension Period, the Company shall not be obligated to take the actions set forth in this clause (ii) until the termination of such Suspension
Period. 
 (b) The Company shall furnish to each Notice Holder no fewer than five (5) Business Days prior to the initial filing of the
Shelf Registration Statement, a copy of such Shelf Registration Statement, and shall furnish to such holders no fewer than two (2) Business Days prior to the filing of any amendment to the Shelf Registration Statement, a copy of such amendment,
and shall use its best efforts to reflect in each such document when so filed with the Commission such comments as such holders and their respective counsel reasonably may propose; provided, however, that the Company shall make the final
decision as to the form and content of each such document. If any such Shelf Registration Statement refers to any Notice Holder by name or otherwise as the holder of any securities of the Company, then such Notice Holder shall have the right to
require (i) the insertion therein of language, in form and substance reasonably satisfactory to such Notice Holder, to the effect that the holding by such Notice Holder of such securities is not to be construed as a recommendation by such
Notice Holder of the investment quality of the Company’s securities covered thereby and that such holding does not imply that such Electing Holder will assist, in meeting any future financial requirements of the Company or (ii) in the
event that such reference to such Electing Holder by name or otherwise is not required by the Securities Act or any similar Federal statute then in force, the deletion of the reference to such Electing Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such reference ceases to be required. 
 (c) The Company shall promptly
take such action as may be necessary so that (i) each of the Shelf Registration Statements and any amendment or supplement thereto and the Prospectus forming a part thereof and any amendment or supplement thereto (and each report or other
document incorporated therein by reference in each case) complies in all material respects with the Securities Act and the Exchange Act and the respective rules and regulations thereunder, as in effect at any relevant time, (ii) each of the
Shelf Registration Statements and any amendment or supplement thereto does not, when it becomes effective, contain an untrue 

  

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statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading,
(iii) each Prospectus forming a part of any Shelf Registration Statement, and any amendment or supplement to such Prospectus, in the form delivered to purchasers of the Registrable Securities during the Effectiveness Period, does not include an
untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of circumstances in which they were made, not misleading, and (iv) a Prospectus filed in compliance with Rule 424
(or any similar provision then in force) under the Securities Act shall be filed within two (2) Business Days of the time the Shelf Registration Statement becomes effective. 
 (d) The Company shall promptly give notice to each Notice Holder, and shall confirm such notice in writing if so requested by any such Notice Holder:

 (i) when the initial Shelf Registration Statement has been filed with the Commission and when the initial Shelf
Registration Statement has become effective; 
 (ii) when any supplement to the Prospectus, Shelf Registration Statement or
post-effective amendment to a Shelf Registration has been filed with the Commission and, with respect to a Shelf Registration Statement or any post-effective amendment, when the same has been declared effective by the Commission; 
 (iii) of any request by the Commission for amendments or supplements to any Shelf Registration Statement or the Prospectus included
therein or for additional information; 
 (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of any Shelf Registration Statement or the initiation of any proceedings for such purpose; 
 (v) of the receipt
by the Company of any notification with respect to the suspension of the qualification of the securities included in any Shelf Registration Statement for sale in any jurisdiction or the initiation of any proceeding for such purpose; and 

(vi) of the happening of any event or the existence of any state of facts that requires the making of any changes in any Shelf
Registration Statement or the Prospectus included therein so that, as of such date, such Shelf Registration Statement and Prospectus do not contain an untrue statement of a material fact and do not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading (which advice shall be accompanied by an instruction to such Holders to suspend the use of the Prospectus until the requisite changes have been made, which notice need not specify
the nature of the event giving rise to such suspension). 
 (e) The Company shall use its best efforts to prevent the issuance, and if issued
to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of any Shelf Registration Statement. 
  

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 (f) The Company shall, as promptly as reasonably practicable, furnish to each Notice Holder, upon their
request and without charge, at least one conformed copy of the Shelf Registration Statement and any amendment or supplement thereto, including financial statements but excluding schedules, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits (unless requested in writing to the Company by such Notice Holder). 
 (g) The Company shall, during
the Effectiveness Period, deliver to each Notice Holder, without charge, as many copies of each Prospectus in which the Notice Holder is listed as a selling securityholder included in the applicable Shelf Registration Statement and any amendment or
supplement thereto as such Notice Holder may reasonably request; and the Company consents (except during a Suspension Period or during the continuance of any event described in Section 3(d) (iii)-(vi) above, limited, in the case of
Section 3(d)(v), to the jurisdiction in question thereunder) to the use of the Prospectus and any amendment or supplement thereto by each of the Notice Holders in connection with the offering and sale of the Registrable Securities covered by
the Prospectus and any amendment or supplement thereto during the Effectiveness Period. 
 (h) Prior to any offering of Registrable
Securities pursuant to a Shelf Registration Statement, the Company shall (i) register or qualify or cooperate with the Notice Holders and their respective counsel in connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and sale under the securities or “blue sky” laws of such jurisdictions within the United States as any Notice Holder may reasonably request in writing, (ii) keep
such registrations or qualifications or exemptions therefrom in effect and comply with such laws so as to permit the continuance of offers and sales in such jurisdictions for so long as may be necessary to enable any Notice Holder or underwriter, if
any, to complete its distribution of Registrable Securities pursuant to such Shelf Registration Statement, and (iii) take any and all other actions necessary or advisable to enable the disposition in such jurisdictions of such Registrable
Securities; provided, however, that in no event shall the Company be obligated to (A) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to so qualify but for this
Section 3(h), or (B) subject itself to general or unlimited service of process in any such jurisdiction if it is not otherwise so subject. 
 (i) Unless any Registrable Securities shall be in book-entry only form, the Company shall cooperate with the Notice Holders to facilitate the timely preparation and delivery of certificates representing Registrable
Securities to be sold pursuant to any Shelf Registration Statement, which certificates, if so required by any securities market or exchange upon which any Registrable Securities are quoted or listed, shall be penned, lithographed or engraved, or
produced by any combination of such methods, on steel engraved borders, and which certificates shall be free of any restrictive legends and in such permitted denominations and registered in such names as Notice Holders may request in connection with
the sale of Registrable Securities pursuant to such Shelf Registration Statement. 
 (j) Upon the occurrence of any event or the existence of
any fact contemplated by paragraph 3(d)(vi) above, subject to Section 2(c) hereof, the Company shall promptly, but in any event within ten (10) Business Days following such occurrence or existence, prepare and file (and have declared
effective) a post-effective amendment to any Shelf Registration Statement or 

  

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an amendment or supplement to the related Prospectus included therein or file any other document with the Commission so that, as thereafter delivered to
purchasers of the Registrable Securities, the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading. If the Company notifies the Notice Holders
of the occurrence of any event or the existence of any fact contemplated by paragraph 3(d)(vi) above, the Notice Holder shall suspend the use of the Prospectus and keep the notification provided pursuant to paragraph 3(d)(vi) above confidential
until (i) such Electing Holder has received copies of the supplemented or amended Prospectus contemplated by the preceding sentence or (ii) such Electing Holder is advised in writing by the Company that the use of the Prospectus may be
resumed and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. Notwithstanding the foregoing, but subject to Section 8 hereof, the Company shall not be required to amend or
supplement the Shelf Registration Statement, any related Prospectus or any document incorporated by reference for a period not to exceed an aggregate of sixty (60) calendar days in any 12-month calendar period if the Company is in possession of
material non-public information the disclosure of which would have a material adverse effect on the business, operations, prospects, condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole. 
 (k) Not later than the Effective Time of a Shelf Registration Statement, the Company shall provide a CUSIP number for the debt securities to be sold
pursuant to a Shelf Registration Statement. 
 (l) The Company shall comply with the Securities Act and the Exchange Act and the respective
rules and regulations thereunder, as in effect at any relevant time, and make generally available to its securityholders earnings statements (which need not be audited) satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act) no later than ninety (90) days after the end of any 12-month period (or ninety (90) days after the end of any 12-month period if such period is a fiscal year), or
such shorter period as required by the Securities Act and the Exchange Act and the respective rules and regulations thereunder, as in effect at any relevant time. 
 (m) Not later than the Effective Time of the initial Shelf Registration Statement, the Company shall use its best efforts to cause the Indenture to be qualified under the Trust Indenture Act; in connection with such
qualification, the Company shall cooperate with the Trustee under the Indenture to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and the Company
shall execute, and shall use all efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner. In the event that any such amendment or modification referred to in this Section 3(m) involves the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to
the applicable provisions of the Indenture. 
 (n) The Company shall make reasonably available for inspection by one or more representatives
of the Notice Holders, designated in writing by a Majority of Holders whose Registrable Securities are included in a Shelf Registration Statement, any underwriter 

  

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participating in any disposition pursuant to any Shelf Registration Statement, and any attorney, accountant or other agent retained by such Notice Holders or
any such underwriter (i) all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and (ii) cause the Company’s officers, directors and employees to make available for
inspection all information reasonably requested by such Notice Holders or any such underwriter, attorney, accountant or agent in connection with such Shelf Registration Statement, in each case, as is customary for similar due diligence examinations;
provided, however, that such persons shall, at the Company’s request, first agree in writing with the Company that any information that is reasonably and in good faith designated by the Company in writing as confidential at the time of
delivery or inspection, as the case may be, of such information shall be kept confidential by such persons and shall be used solely for the purposes of exercising rights under this Agreement, unless such disclosure is made in connection with a court
proceeding or required by law, or such records, information or documents become available to the public generally or through a third party without an accompanying obligation of confidentiality or the content of such disclosure was already known and
independently developed by the relevant Notice Holder; provided further, however, that, if the foregoing inspection and information gathering would otherwise disrupt the Company’s conduct of its business, such inspection
and information gathering shall, to the greatest extent possible, be coordinated on behalf of the Notice Holders and the other parties entitled thereto by one counsel designated by and on behalf of the Notice Holders and other parties. 

(o) The Company will use its best efforts to cause the Common Stock issuable upon conversion of the Securities to be quoted or listed on the Nasdaq
National Market or other market or stock exchange on which the Common Stock primarily trades on or prior to the Effective Time of each Shelf Registration Statement hereunder. 
 (p) The Company will cooperate and assist in any filings required to be made with National Association of Securities Dealers, Inc or other market or
stock exchange on which the Common Stock may trade. 
 (q) The Company shall use its best efforts to take all other steps necessary to effect
the registration, offering and sale of the Registrable Securities covered by each Shelf Registration Statement contemplated hereby, including, without limitation, entering into an underwriting agreement in customary form (if the distribution of
Registrable Securities is to be made pursuant to an underwritten public offering) and such other customary agreements as may be necessary, desirable or appropriate, and taking all such other necessary actions in connection therewith. 
 (r) The Company shall: 
 (i)
(A) make reasonably available for inspection by requesting Electing Holders, any underwriter participating in any disposition pursuant to the Shelf Registration Statement, and any attorney selected in accordance with Section 4(b) hereof,
one accountant and any other agent retained by such holders or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries and (B) cause the Company’s
officers, directors and employees to supply all information reasonably requested by such holders or any such underwriter, attorney, accountant or agent in connection 

  

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with the Shelf Registration Statement, in each case, as is customary for similar due diligence examinations; provided, however, that all records, information
and documents that are designated in writing by the Company, in good faith, as confidential shall be kept confidential by such holders and any such underwriter, attorney, accountant or agent, unless such disclosure is made in connection with a court
proceeding or required by law, or such records, information or documents become available to the public generally or through a third party without an accompanying obligation of confidentiality; and provided further that, if the foregoing inspection
and information gathering would otherwise disrupt the Company’s conduct of its business, such inspection and information gathering shall, to the greatest extent possible, be coordinated on behalf of the requesting Electing Holders and the other
parties entitled thereto by one counsel designated by and on behalf of Electing Holders and other parties; 
 (ii) in
connection with any underwritten offering conducted pursuant to Section 9 hereof, make such representations and warranties to the Electing Holders participating in such underwritten offering and to the Managing Underwriter, in form, substance
and scope as are customarily made by the Company to underwriters in primary underwritten offerings of equity and convertible debt securities; 
 (iii) in connection with any underwritten offering conducted pursuant to Section 9 hereof, obtain opinions of counsel to the Company (which counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Managing Underwriter) addressed to each requesting Electing Holder, covering such matters as are customarily covered in opinions requested in primary underwritten offerings of equity and convertible debt securities and such other
matters as may be reasonably requested by such Electing Holders and underwriters (it being agreed that the matters to be covered by such opinions shall include, without limitation, as of the date of the opinion and as of the Effective Time or the
date of the most recent post-effective amendment thereto, as the case may be, the absence from the Shelf Registration Statement and the Prospectus, including the documents incorporated by reference therein, of an untrue statement of a material fact
or the omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading); 
 (iv) in connection with any underwritten offering conducted pursuant to Section 9 hereof, obtain “cold comfort” letters and
updates thereof from the independent public accountants of the Company (and, if necessary, from the independent public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Shelf Registration Statement), addressed to each requesting Electing Holder (if such Electing Holder has provided such letter, representations or documentation, if any, required for such
cold comfort letter to be so addressed) and the underwriters, in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with primary underwritten offerings; 
 (v) in connection with any underwritten offering conducted pursuant to Section 9 hereof, deliver such documents and certificates as
may be reasonably requested by any Electing Holders and the Managing Underwriter, if any, including without limitation certificates to evidence compliance with Section 3(j) hereof and with any conditions contained in the underwriting agreement
or other agreements entered into by the Company. 
  

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 4. Registration Expenses. 
 The Company shall bear all fees, costs and expenses incurred in connection with the performance by the Company of all of its obligations under Sections 2
and 3 of this Agreement whether or not any of the Shelf Registration Statements are declared effective. Such fees, costs and expenses shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees
and expenses (A) with respect to filings required to be made with the National Association of Securities Dealers, Inc., and (B) of compliance with United States federal and state securities or “blue sky” laws (including, without
limitation, reasonable fees and disbursements of the counsel specified in the next sentence in connection with “blue sky” qualifications of the Registrable Securities under the laws of such jurisdictions as a Majority of the Holders whose
Registrable Securities are included in a Shelf Registration Statement may designate)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a form eligible for deposit with The
Depository Trust Company), (iii) duplication expenses relating to copies of any Shelf Registration Statement, Prospectus and other documents delivered to any Holder hereunder, (iv) fees and disbursements of counsel and independent
accountants for the Company in connection with the Shelf Registration Statement, and (v) reasonable fees and disbursements of the Trustee and its counsel and of the registrar and transfer agent for the Common Stock. In addition, the Company
shall bear or reimburse the Notice Holders for the reasonable fees and disbursements of one firm of legal counsel for the Holders, which shall initially be counsel to the Initial Purchaser, but which may, upon the written consent of a majority of
the then current Holders, be another nationally recognized law firm experienced in securities law matters designated by the Company. In addition, the Company shall pay the internal expenses of the Company (including, without limitation, all salaries
and expenses of officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange on which similar
securities of the Company are then listed and the fees and expenses of any person, including special experts, retained by the Company. 
 5. Restrictive Covenant 
 The Company agrees that prior to sixty (60) days after the date on which the Shelf
Registration Statement is first declared effective and available for use, the Company will not (i) directly or indirectly issue, offer, sell, agree to issue, offer or sell, solicit offers to purchase, grant any call option, warrant or other
right to purchase, purchase any put option or other right to sell, pledge, borrow or otherwise dispose of any Common Stock or any security convertible into, or exercisable or exchangeable for, Common Stock (an “Equity
Security”), (ii) will not establish or increase any “put equivalent position” or liquidate or decrease any “call equivalent position” (in each case within the meaning of Rule 16a-1 under of the Exchange Act)
with respect to any Equity Security, and (iii) will not otherwise enter into any swap, derivative or other transaction or arrangement that transfers to another, in whole or in part, any economic consequence of ownership of an Equity Security,
whether or not such transaction is to be settled by delivery of Equity Securities, other securities, cash or other consideration, provided, however, that the preceding restrictions shall not apply to the issuance by the Company of the
Securities, the Common Stock issuable upon conversion of the Securities, and Common Stock issuable upon (1) the conversion of convertible securities or exchange of exchangeable securities outstanding on the date hereof in accordance with the
terms thereof; (2) the exercise of options outstanding on 

  

 12 

 
the date hereof; (3) the exercise of warrants outstanding on the date hereof; (4) the grant to and exercise of options by, or the issuance and sale
of shares to, employees, directors and consultants as approved by the compensation committee of the Board of Directors of the Company; (5) to a Strategic Partner(s) in connection with a biopharmaceutical licensing and/or partner arrangement;
(6) in order to effect the Exchange Agreement; and (7) pursuant to an equity line of credit arrangement; provided further, however, that any issuance of Common Stock pursuant to clause (7) above shall only be permitted to the
extent that such issuance is (i) at a per share price at or above the Conversion Price (as such term is defined in the Indenture) then in effect and (ii) any such issuance or issuances shall not exceed, in the aggregate, $50 million in
gross proceeds to the Company. 
 6. Indemnification and Contribution. 
 (a) Indemnification by the Company. The Company shall indemnify and hold harmless each Holder, each Investor, the Initial Purchaser, any
underwriter, each person, if any, who controls any such Holder, such Investor, the Initial Purchaser or any underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the respective officers,
directors, partners, employees, representatives and agents of any such Holder, such Investor, the Initial Purchaser, any underwriter or any controlling person, from and against any loss, claim, damage, liability, cost or expense whatsoever as
incurred (including, but not limited to, attorneys’ fees and any and all expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts
paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as any such loss, claim, damage, liability, cost or expense (or action
in respect thereof) arises out of, or is based upon, any untrue statement or alleged untrue statement of a material fact contained in the Shelf Registration Statement or any amendment thereto or supplement thereof or any related preliminary
prospectus or the Prospectus or any amendment thereto or supplement thereof, or arises out of, or is based upon, the omission or alleged omission to state therein any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstance in which they were made, not misleading; provided, however, that the Company shall not be liable to any such indemnified party in any such case to the extent that any such loss, claim, damage, liability,
cost or expense arises out of, or is based upon, any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf
of such indemnified party specifically for use therein; provided further, however, that the Company shall not be liable to any such indemnified party in any such case to the extent that such loss, claim, damage, liability, cost or expense
arises from an offer or sale by a Notice Holder of Registrable Securities during a Suspension Period, if such indemnified party is a Notice Holder that received from the Company a notice of the commencement of such Suspension Period prior to the
making of such offer or sale. The foregoing indemnity agreement is in addition to any liability that the Company may otherwise have to any indemnified party, and the Company hereby confirms that it will indemnify the indemnified party with respect
to any breach by the Company of its indemnity obligations hereunder. The Company shall not be liable under this Section 6(a) for any settlement of any action effected without its written consent, which shall not be unreasonably withheld;
provided, however, that with respect to actions pursuant to clauses (i), (ii) and (iii) of Section 6(c), no such consent shall be required. 
  

 13 

 (b) Indemnification by the Notice Holders. Each Notice Holder, severally and not jointly, shall
indemnify and hold harmless the Company, each Investor, the Initial Purchaser, each underwriter, each other Holder, each person, if any, who controls the Company, each Investor, the Initial Purchaser, any underwriter or another Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the respective officers, directors, partners, employees, representatives and agents of the Company, each Investor, the Initial Purchaser, any underwriter,
any other Holder or any controlling person, from and against any loss, claim, damage, liability, cost or expense whatsoever as incurred (including, but not limited to, attorneys’ fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as any such loss, claim, damage, liability, cost or expense (or action in respect thereof) arises out of, or is based upon, any untrue statement or alleged untrue statement of a
material fact contained in the Shelf Registration Statement or any amendment thereto or any related preliminary prospectus or the Prospectus or any amendment thereto or supplement thereof, or arises out of, or is based upon, the omission or alleged
omission to state therein, in light of the circumstances in which they were made, any material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged omission made therein was made in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Notice Holder specifically for use
therein. In no event shall the liability of any selling Notice Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Notice Holder upon the sale of the Registrable Securities pursuant to the Shelf
Registration Statement giving rise to such indemnification obligation. The foregoing indemnity agreement is in addition to any liability that any Notice Holder may otherwise have to the Company, each Investor, the Initial Purchaser and any such
other person. 
 (c) Notices of Claims, Etc. Promptly after receipt by an indemnified party under this Section 5 of notice of any
claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 6, notify the indemnifying party in writing of the claim or the commencement of
that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability that it may have under this Section 6. If any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with
counsel satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under
this Section 6 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that the indemnified party shall have
the right to employ counsel to represent jointly the indemnified party and its respective officers, directors, partners, employees, representatives, agents and controlling persons who may be subject to liability arising out of any claim in respect
of which indemnity may be sought by the indemnified party against the indemnifying party under this Section 6 if (i) employment of such counsel has 

  

 14 

 
been authorized in writing by the indemnifying party, or (ii) such indemnifying party shall not have employed counsel satisfactory to the indemnified
party to have charge of the defense of such proceeding within thirty (30) days of the receipt of notice thereof, or (iii) such indemnified party shall have reasonably concluded that the representation of such indemnified party and those
officers, directors, partners, employees, representatives, agents and controlling persons by the same counsel representing the indemnifying party would be inappropriate under applicable standards of professional conduct due to actual or potential
differing interests between them or where there may be one or more defenses available to them that are different from, additional to or in conflict with those available to the indemnifying party, and in any such event ((i), (ii) or (iii)) the
fees and expenses of such separate counsel shall be paid by the indemnifying party as incurred. It is understood that the indemnifying party shall not be liable for the fees and expenses of more than one separate firm (in addition to local counsel
in each jurisdiction) for all indemnified parties in connection with any proceeding or related proceedings. No indemnifying party shall, without the prior written consent of the indemnified parties, effect any settlement or compromise of, or consent
to the entry of judgment with respect to, any pending or threatened claim, investigation, action, suit or proceeding in respect of which indemnity or contribution may be or could have been sought hereunder (whether or not the indemnified party or
parties are actual or potential parties thereto) unless (A) such settlement, compromise or judgment (1) includes an unconditional release of such indemnified party from all liability arising out of such claim, investigation, action, suit
or proceeding, and (2) does not include a statement as to or an admission of fault, culpability or failure to act by or on behalf of any indemnified party, and (B) the indemnifying party confirms in writing its indemnification obligations
hereunder with respect to such settlement, compromise or judgment. 
 (d) Contribution. If the indemnification provided for in this
Section 6 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of
the losses, claims, damages, costs, expenses or liabilities (or actions in respect thereof) referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party on the other from the registration of the Registrable Securities pursuant to the Shelf Registration, or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and the indemnified
party on the other in connection with the statements or omissions that resulted in such losses, claims, damages, costs, expenses or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative
fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the
Company on the one hand or such Holder or such other indemnified party, as the case may be, on the other, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this Section 6(d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is the subject of this Section 6(d). The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 6(d)

  

 15 

 
were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to herein.
Notwithstanding any other provision of this Section 6(d), no Holder of the Registrable Securities shall be required to contribute any amount in excess of the amount by which the net proceeds received by such Holder from the sale of its
Registrable Securities pursuant to the Shelf Registration Statement exceeds the amount of damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 6(d), each officer, director, partner, employee, representative or agent of an indemnified party, and each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act, shall have the
same rights to contribution as such indemnified party and each officer, director, partner, employee, representative and agent of the Company, and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange
Act, shall have the same rights to contribution as the Company. The Holders’ respective obligations to contribute pursuant to this Section 6(d) are several in proportion to the respective amount of Registrable Securities they have sold
pursuant to a Shelf Registration Statement and not joint. The remedies provided for in this Section 6(d) are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

 (e) Survival. The indemnity and contribution provisions contained in this Section 6 shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Initial Purchaser, any Investor, any underwriter, any Holder, any officer, director, partner, employee, representative or
agent of the Initial Purchaser, any Investor, any underwriter, or any Holder, or any person controlling the Initial Purchaser, any Investor, any underwriter or any Holder, or by or on behalf of the Company, its officers, directors, partners,
employees, representatives or agents or any person controlling the Company, and (iii) any sale of Registrable Securities pursuant to a Shelf Registration Statement. 
 7. Holder’s Obligations. 
 Each Holder agrees, by acquisition of the Registrable Securities, that
no Holder of Registrable Securities shall be entitled to sell any of such Registrable Securities pursuant to a Shelf Registration Statement or to receive a Prospectus relating thereto, unless such Holder has furnished the Company with a Notice and
Questionnaire as required pursuant to Section 3(a) hereof (including all the information required to be included in such Notice and Questionnaire) and the information set forth in the next sentence. Each Notice Holder agrees to promptly furnish
to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Notice Holder not misleading and any other information regarding such Notice Holder and the distribution of such
Registrable Securities as may be required to be disclosed in the Shelf Registration Statement under applicable law, pursuant to comments from the Commission or as the Company may from time to time reasonably request. Any sale of any Registrable
Securities by any Notice Holder shall constitute a representation and warranty by such Notice Holder that the information relating to such Notice Holder and its plan of distribution is as set forth in the Prospectus delivered by such Notice 

  

 16 

 
Holder in connection with such disposition, that such Prospectus does not, as of the time of such sale, contain any untrue statement of a material fact
relating to such Notice Holder or its plan of distribution, and that such Prospectus does not, as of the time of such sale, omit to state any material fact relating to or provided by such Notice Holder or its plan of distribution necessary in order
to make the statements in such Prospectus, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or omission was made in reliance on and in
conformity with written information furnished to the Company by or on behalf of such Notice Holder 
 8. Additional Interest.

 (a) Notwithstanding any postponement of the effectiveness of the Shelf Registration Statement pursuant to Section 2(a) hereof, if:

 (i) on or prior to the sixtieth (60th) day following the Issue Date, such initial Shelf Registration Statement is not
declared effective by the Commission, or 
 (ii) after the effectiveness date of any Shelf Registration Statement,
(A) such Shelf Registration Statement ceases to be effective or usable for the offer and sale of Registrable Securities (other than due to a Suspension Period), and the Company fails to file (and have declared effective), within five
(5) Business Days, a post-effective amendment to such Shelf Registration Statement or amendment or supplement to the Prospectus contained therein or such other document with the Commission to make such Shelf Registration Statement effective or
such Prospectus usable, or (B) the Suspension Periods exceed sixty (60) calendar days, whether or not consecutive, in any 12-month calendar period, or 
 (iii) the Company shall have failed to timely comply with any of its obligations set forth in Section 3(a)(ii) hereof, provided that
such failure is not solely due to the failure of a Holder of Registrable Securities to perform its obligations set forth in Section 3(a)(ii) hereof (each of (i) through (iii) a “Registration Default”),

 the Company shall be required to pay additional interest (“Additional Interest”), from and including the day
following such Registration Default to but excluding the day on which such Registration Default is cured, at a rate per annum equal to an additional one-half of one percent per annum (0.50%) of the Applicable Amount for each 30-day period following
the date of a Registration Default. The Company shall notify the Trustee as promptly as possible, but in no event later than three (3) Business Days after each and any date on which a Registration Default occurs. The requirement of the Company
to pay Additional Interest ceases on the day such Registration Default is cured. 
 (b) In the case of a Registration Default described in
Sections 8(a)(i)-(ii) above, Additional Interest, if any, shall be payable only to Notice Holders of the Securities and, in respect of a Registration Default described in Section 8(a)(iii) above, Additional Interest, if any, shall be
payable only to Notice Holders of the Securities to whom such Registration Default relates. 
  

 17 

 (c) Any amounts to be paid as Additional Interest pursuant to paragraph (a) of this Section 8
shall be paid by wire transfer of immediately available funds or by federal funds check on the first interest payment date in respect of the Registrable Securities following the date on which such Additional Interest begins to accrue. 
 (d) Except as provided in Section 8(a) hereof, the Additional Interest as set forth in this Section 8 shall be the exclusive cash remedy
available to the Holders of Registrable Securities for such Registration Default. In no event shall the Company be required to pay Additional Interest in excess of the applicable maximum amount of four and one-half percent (4.5%) per annum as
set forth above, or twelve percent (12%) per annum when combined with the stated interest on the Securities, regardless of whether one or multiple Registration Defaults exist. 
 9. Underwritten Offering. 
 Any holder
of Registrable Securities who desires to do so may sell Registrable Securities (in whole or in part) in an underwritten offering; provided, however, the Company shall not be required to facilitate an underwritten offering pursuant to the Shelf
Registration Statement by any holders unless the offering relates to at least $10,000,000 principal amount of Securities or the equivalent number of shares of Common Stock in which such Securities are convertible. In any such underwritten offering,
the investment banker or investment bankers and manager or managers (the “Managing Underwriter”) that will administer the offering will be selected by, and the underwriting arrangements with respect thereto (including the
size of the offering) will be approved by, the holders of a majority of the Registrable Securities to be included in such offering; provided, however, that such investment bankers and managers and underwriting arrangements must be reasonably
satisfactory to the Company. No holder may participate in any underwritten offering contemplated hereby unless (a) such holder agrees to sell such holder’s Registrable Securities to be included in the underwritten offering in accordance
with any approved underwriting arrangements, (b) such holder completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such
approved underwriting arrangements and (c) if such holder is not then an Electing Holder, such holder returns a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(a)(ii) hereof within a reasonable
amount of time before such underwritten offering. The holders participating in any underwritten offering shall be responsible for any underwriting discounts and commissions and fees and, subject to Section 4 hereof, expenses of their own
counsel. The Company shall pay all expenses customarily borne by issuers, including but not limited to filing fees, the fees and disbursements of its counsel and independent public accountants and any printing expenses incurred in connection with
such underwritten offering. Notwithstanding the foregoing or the provisions of Section 3(n) hereof, upon receipt of a request from the Managing Underwriter or a representative of holders of a majority of the Registrable Securities to be
included in an underwritten offering to prepare and file an amendment or supplement to the Shelf Registration Statement and Prospectus in connection with an underwritten offering, the Company may delay the filing of any such amendment or supplement
for up to sixty (60) days if the Company is in possession of material non-public information the disclosure of which would have a material adverse effect on the business, operations, prospects, condition (financial or otherwise) of the Company
and its subsidiaries, taken as a whole. 
  

 18 

 10. Rule 144 and 144A. 
 The Company covenants to the Holders of the Registrable Securities that the Company shall use its best efforts to make available, upon request of any
holder of Registrable Securities, to such holder or beneficial owner of Registrable Securities in connection with any sale thereof and any prospective purchaser of such Registrable Securities designated by such holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Registrable Securities pursuant to Rule 144A of the Securities Act, and to timely file the reports required to be filed by it under the Exchange Act
or the Securities Act (including the reports under Section 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 of the Securities Act) and the rules and regulations adopted by the Commission thereunder, all to the
extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144 under the Securities Act, as such may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted by the Commission. Upon the request of any Holder of Registrable Securities in connection with that Holder’s sale pursuant to Rule 144, the Company shall deliver to
such Holder a written statement as to whether it had complied with such requirements. 
 11. Miscellaneous. 
 (a) Specific Performance. The parties hereto acknowledge that there would be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Initial Purchaser, the Investors and the Holders from time to time may be irreparably harmed by any such failure, and accordingly agree that the Initial Purchaser, such Investors and such Holders, in addition to
any other remedy to which they may be entitled at law or in equity and without limiting the remedies available to the Notice Holders under Section 8 hereof, shall be entitled to compel specific performance of the obligations of the Company
under this Agreement in accordance with the terms and conditions of this Agreement, in any court of the United States or any State thereof having jurisdiction. 
 (b) Amendments and Waivers. This Agreement, including this Section 10(b), may be amended, and waivers or consents to departures from the provisions hereof may be given, only by a written instrument duly
executed by the Company and a Majority of Holders. Each Holder of Registrable Securities outstanding at the time of any such amendment, waiver or consent or thereafter shall be bound by any amendment, waiver or consent effected pursuant to this
Section 10(b), whether or not any notice, writing or marking indicating such amendment, waiver or consent appears on the Registrable Securities or is delivered to such Holder. 
 (c) Other Registration Rights. The Company will not, on or after the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The Company shall not permit any securities other than the Registrable Securities
to be included in any Shelf Registration Statement without consent of a majority of the then current Holders. The rights granted to the holders of Registrable Securities hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company’s securities under any agreement in effect on the date hereof. 
  

 19 

 (d) Third Party Beneficiary. The holders of Registrable Securities shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one hand, and the Purchasers and the Investors, on the other hand, and shall have the right to enforce such agreements directly to the extent they may deem such enforcement
necessary or advisable to protect its rights or the rights of holders of Registrable Securities hereunder. 
 (e) Notices. All notices
and other communications provided for or permitted hereunder shall be made in writing, shall be delivered by hand delivery, by telecopier, by courier guaranteeing overnight delivery or by first-class mail, return receipt requested, and shall be
deemed given (i) when made, if made by hand delivery, (ii) upon confirmation, if made by telecopier (provided notice is also given by some other means permitted by this Section 11(e)), (iii) one Business Day after being deposited
with such courier, if made by overnight courier, or (iv) on the date indicated on the notice of receipt, if made by first-class mail, to the parties as follows: 
  

	 	(x)	if to a Holder of Registrable Securities, at the most current address given by such Holder to the Company in a Notice and Questionnaire or any amendment thereto;

  

	 	(y)	if to the Company, to: 

 Cell
Therapeutics, Inc. 
 201 Elliott Avenue West, Suite 400 
 Seattle, Washington 98119 
 Attention: Louis A. Bianco 
 Telephone: (206) 282-7100
 Facsimile: (206) 272-4397
 with a copy to: 
 O’Melveny & Myers LLP 
 275 Battery Street, Suite 2600 
 San Francisco, California 94111 
 Attention: Michael J. Kennedy, Esq. and David M. Miscia,
Esq. 
 Facsimile: (415) 984-8701 
  

	 	(z)	if to the Investors, to the address of each Investor set forth on Schedule I hereto, with a copy to such counsel as they may indicate on Schedule I hereto; 

or to such other address as such person may have furnished to the other persons identified in this Section 11(e) in writing in accordance
herewith. 
 (f) Parties in Interest. The parties to this Agreement intend that all Holders of Registrable Securities shall be
entitled to receive the benefits of this Agreement and that any Notice Holder shall be bound by the terms and provisions of this Agreement by reason of such election with respect to the Registrable Securities which are included in a Shelf
Registration Statement. All of the terms and provisions of this Agreement shall be binding upon, shall inure 

  

 20 

 
to the benefit of and shall be enforceable by the respective successors and assigns of the parties hereto and any Holder from time to time of the Registrable
Securities to the aforesaid extent. In the event that any transferee of any Holder of Registrable Securities shall acquire Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee
shall, without any further writing or action of any kind, be entitled to receive the benefits of and, if a Notice Holder, be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement to the
aforesaid extent. 
 (g) Counterparts; Facsimile Signatures. This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Facsimile signatures shall constitute original signatures for all
purposes of this Agreement. 
 (h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof. 
 (i) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to any provisions relating to conflicts of law. 
 (j) Severability. In the event
that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the rights and privileges of the parties hereto shall be enforceable to the fullest extent permitted by
law. 
 (k) Survival. The respective indemnities, agreements, covenants, representations, warranties and other provisions set forth in
this Agreement or made pursuant hereto shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of the Initial Purchaser, any Investor, any Holder, or any officer,
director, partner, employee, representative or agent of the Initial Purchaser or such Investor or Holder, any agent or underwriter, any officer, director, partner, employee, representative or agent of such agent or underwriter, or any controlling
person of any of the foregoing, and shall survive the transfer and registration of the Registrable Securities of such Holder. 
 12.
Submission to Jurisdiction; Appointment of Agent for Service. 
 The Company agrees that any suit, action or proceeding against the
Company arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in any state or federal court in The City of New York, New York, and waives any objection which it may now or hereafter have to the laying
of venue of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding. The Company expressly accepts the non-exclusive jurisdiction of any such court in respect of any such suit,
action or proceeding. The Company agrees that a final judgment in any such proceeding brought in any such court shall be conclusive and binding thereupon and may be 

  

 21 

 
enforced in any other court in the jurisdiction to which the Company is or may be subject by suit upon such judgment. 
 [Remainder of Page Intentionally Left Blank] 
  

 22 

 Please confirm that the foregoing correctly sets forth the agreement between the Company and you.

  

					
	 Very truly yours,
  
 Cell Therapeutics, Inc.

		
	By:	 	/s/ James A. Bianco
		 	Name:	 	James A. Bianco, M.D.
		 	Title:	 	President & Chief Executive Officer

  

			
	 Accepted as of the date hereof:
  
 [INVESTOR]

		
	By:	 	/s/ [Investor Representative]
		 	 Name:
 Title:

 [Signature Page to Registration Rights Agreement] 

 APPENDIX A 
 CELL THERAPEUTICS, INC. 
 FORM OF NOTICE OF REGISTRATION STATEMENT AND 
 SELLING SECURITYHOLDER ELECTION AND QUESTIONNAIRE 
 7.5% CONVERTIBLE SENIOR NOTES DUE 2011 
 NOTICE 
 Cell Therapeutics, Inc. (the “Company”) has filed, or intends shortly to file, with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 or such other Form
as may be available (the “Shelf Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Company’s 7.5% Convertible Senior Notes due
2011 (CUSIP No. 150934 AJ6) (the “Notes”), and common stock, no par value (the “Common Stock”), issuable upon conversion of the Notes (the “Shares” and together with the Notes, the “Transfer Restricted
Securities”) in accordance with the terms of the Registration Rights Agreement, dated as of April 27, 2006 (the “Registration Rights Agreement”), between the Company and the investors signatory thereto. A copy of the Registration
Rights Agreement is available from the Company. All capitalized terms not otherwise defined herein have the meanings ascribed thereto in the Registration Rights Agreement. 
 To sell or otherwise dispose of any Transfer Restricted Securities pursuant to the Shelf Registration Statement, a beneficial owner of Transfer
Restricted Securities generally will be required to be named as a Selling Securityholder in the related Prospectus, deliver a Prospectus to purchasers of Transfer Restricted Securities, be subject to certain civil liability provisions of the
Securities Act and be bound by those provisions of the Registration Rights Agreement applicable to such beneficial owner (including certain indemnification rights and obligations, as described below). To be included in the Shelf Registration
Statement, this Notice and Questionnaire must be completed, executed and delivered to the Company at the address set forth herein for receipt prior to or on the 20th calendar day from the receipt hereof (the “Notice and Questionnaire
Deadline”). Beneficial Owners that do not complete and return this Notice and Questionnaire prior to the Notice and Questionnaire Deadline and deliver it to the Company as provided below will not be named as Selling Securityholders in the Shelf
Registration Statement and, therefore, will not be permitted to sell any Transfer Restricted Securities pursuant to the Shelf Registration Statement. 
 Certain legal consequences arise from being named as a Selling Securityholder in the Shelf Registration Statement and the related Prospectus. Accordingly, holders and beneficial owners of Transfer Restricted
Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a Selling Securityholder in the Shelf Registration Statement and the related Prospectus. 

 ELECTION 
 The undersigned holder (the “Selling Securityholder”) of Transfer Restricted Securities hereby elects to include in the Shelf Registration Statement the Transfer Restricted Securities beneficially owned by
it and listed below in Item III (unless otherwise specified under Item III). The undersigned, by signing and returning this Notice and Questionnaire, understands that it will be bound with respect to such Transfer Restricted Securities by the terms
and conditions of this Notice and Questionnaire and the Registration Rights Agreement. 
 Pursuant to the Registration Rights Agreement, the
Selling Securityholder has agreed to indemnify and hold harmless the Company, the Initial Purchaser, any underwriter, each other Holder, their respective officers, directors, partners, employees, representatives and agents, and each person, if any,
who controls the Company, the Initial Purchaser, any underwriter and any other Holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against certain losses arising in connection
with statements concerning the Selling Securityholder made in the Shelf Registration Statement or the related Prospectus in reliance upon the information provided in this Notice and Questionnaire. 
 The Selling Securityholder hereby provides the following information and represents and warrants that such information is accurate and complete:

 QUESTIONNAIRE 
 I. A.
    Full Legal Name of Selling Securityholder: 
  

	 	B.	Full legal name of registered holder (if not the same as (a) above) through which Transfer Restricted Securities listed in (3) below are held: 

                                       
                                        
                                        
                                        
                                        
                                
  

	 	C.	Full legal name of DTC participant (if applicable and if not the same as (b) above) through which Transfer Restricted Securities listed in Item III are held:

                                       
                                        
                                        
                                        
                                        
                                
  

	 	D.	Taxpayer identification or social security number of Selling Securityholder: 

                                       
                                        
                                        
                                        
                                        
                                
 II.        Address for notices to Selling Securityholder: 
                                       
                                        
                                        
                                        
                                        
                                        

                                       
                                        
                                        
                                        
                                        
                                        

  

	
	Telephone:                                     
                                        
    
	
	Fax:                                      
                                        
                
	
	Email:                                     
                                        
             
	
	Contact
Person:                                       
                                 

	 	III.	Beneficial ownership of Transfer Restricted Securities: 

  

	 	A.	Type of Transfer Restricted Securities beneficially owned, and principal amount of Notes or number of shares of Common Stock, as the case may be, beneficially owned:

                                       
                                        
                                        
                                        
                                        
                                
  

	 	B.	CUSIP No(s). of such Transfer Restricted Securities beneficially owned: 

                                       
                                        
                                        
                                        
                                        
                                
  

	 	C.	Amount of Transfer Restricted Securities that the undersigned wishes to be included in the Shelf Registration Statement: 

                                       
                                        
                                        
                                        
                                        
                                
  

	 	IV.	Beneficial ownership of the Company’s securities owned by the Selling Securityholder: 

 EXCEPT AS SET FORTH BELOW IN THIS ITEM IV, THE UNDERSIGNED IS NOT THE BENEFICIAL OR REGISTERED OWNER OF ANY SECURITIES OF THE COMPANY OTHER THAN THE
TRANSFER RESTRICTED SECURITIES LISTED ABOVE IN ITEM III (“Other Securities”). 
  

	 	A.	Type and amount of Other Securities beneficially owned by the Selling Securityholder: 

                                       
                                        
                                        
                                        
                                        
                                
  

	 	B.	CUSIP No(s). of such Other Securities beneficially owned: 

                                       
                                        
                                        
                                        
                                        
                                
  

	 	V.	Relationship with the Company: 

 Except as set forth below,
neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during
the past three years. 
 State any exception here: 
                                       
                                        
                                        
                                        
                                        
                                        
           
                                       
                                        
                                        
                                        
                                        
                                        
           
                                       
                                        
                                        
                                        
                                        
                                        
           
  

	 	VI.	Nature of the Selling Securityholder: 

  

	 	(a)	Identify any natural person or other person having voting and investment control over the Company securities owned by the Selling Securityholder. 

                                       
                                        
                                        
                                        
                                        
                                        
                    
 Is the Selling
Securityholder a reporting company under the Exchange Act, a majority owned subsidiary of a reporting company under the Exchange Act or a 

 
registered investment company under the Investment Company Act? If so, please state which one. 
                                       
                                        
                                        
                                        
                                        
                                        
                    
 If the entity is a
majority owned subsidiary of a reporting company, identify the majority stockholder that is a reporting company. 
                                       
                                        
                                        
                                        
                                        
                                        
                    

	 	(b)	Is the Selling Securityholder a registered broker-dealer? 

  ̈ Yes  ̈ No 
 If yes, state whether the Selling Securityholder received the Transfer Restricted Securities as compensation for underwriting activities and, if so,
provide a brief description of the transaction(s) involved. 
                                       
                                        
                                        
                                        
                                        
                                        
                    
 State whether the
Selling Securityholder is an affiliate of a broker-dealer and if so, list the name(s) of the broker-dealer affiliate(s). For the purposes of this Item VI(b), an “affiliate” of a broker-dealer includes any company that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such broker-dealer, and does not include individuals employed by any such broker-dealers or by their affiliates. 
  ̈ Yes  ̈ No 
  
 If the answer is “Yes”, you must answer the following: 
 If the Selling Securityholder is an affiliate of a
registered broker-dealer, the Selling Securityholder purchased the Transfer Restricted Securities (i) in the ordinary course of business, and (ii) at the time of the purchase of the Transfer Restricted Securities, had no agreements or
understanding, directly or indirectly, with any person to distribute the Transfer Restricted Securities. 
  ̈ Yes  ̈ No 
  
 If the answer is “No”, state any exceptions here: 
                                       
                                        
                                        
                                        
                                        
                                        
                    
 If the answer is
“No”, this may affect your ability to be included in the Shelf Registration Statement. 
  

	 	VII.	Plan of Distribution: 

 Except as set forth below, the
undersigned (including its donees or pledgees) intends to distribute the Transfer Restricted Securities listed above in Item III pursuant to the Shelf Registration Statement only as follows (if at all). Such Transfer Restricted Securities may be

 
sold from time to time directly by the undersigned or, alternatively, through underwriters, broker-dealers or agents. If the Transfer Restricted Securities
are sold through underwriters or broker-dealers, the Selling Securityholder will be responsible for underwriting discounts or commissions or agent’s commissions. Such Transfer Restricted Securities may be sold in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices. Such sales may be effected in transactions (which may involve crosses or block transactions): 
  

	 	1.	on any national securities exchange or quotation service on which the Transfer Restricted Securities may be listed or quoted at the time of sale; 

  

	 	2.	in the over-the-counter market; 

  

	 	3.	in transactions otherwise than on such exchanges or services or in the over-the-counter market; or 

  

	 	4.	through the writing of options. 

 In connection with sales
of the Transfer Restricted Securities or otherwise, the undersigned may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Transfer Restricted Securities and deliver Transfer Restricted Securities to
close out such short positions, or loan or pledge Transfer Restricted Securities to broker-dealers that in turn may sell such securities. State any exceptions here: 
                                       
                                        
                                        
                                        
                                        
                                        
           
                                       
                                        
                                        
                                        
                                        
                                        
           
 By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees it will comply, with the prospectus delivery requirements and other provisions of the Securities Act and Exchange Act and the respective rules and regulations promulgated thereunder, particularly
Regulation M thereunder (or any successor rules or regulations), in connection with any offering of Transfer Restricted Securities pursuant to the Shelf Registration Statement. 
 If the Selling Securityholder transfers all or any portion of the Transfer Restricted Securities listed in Item III above after the date on which such
information is provided to the Company, the Selling Securityholder agrees to notify the transferee(s) at the time of the transfer of its rights and obligations under this Notice and Questionnaire and the Registration Rights Agreement and agrees to
deliver a notice of such transfer to the Trustee and the Company (i) in the case of a transfer of the Notes or the shares of Common Stock issuable upon conversion of the Notes, in substantially the form attached as Exhibit 1 to this Notice and
Questionnaire, or (ii) in the case of a transfer of shares of Common Stock issuable upon conversion of the Warrants, in substantially the form attached as Exhibit 2 to this Notice and Questionnaire. 
 By signing below, the Selling Securityholder consents to the disclosure of the information contained herein in its answers to Items I through VI above
and the inclusion of such information in the Shelf Registration Statement and the related Prospectus. The Selling Securityholder understands that such information will be relied upon by the Company in connection with the preparation or amendment of
the Shelf Registration Statement and the related Prospectus. 

 In accordance with the Selling Securityholder’s obligation under the Registration Rights Agreement
to provide such information as may be required by law for inclusion in the Shelf Registration Statement, the Selling Securityholder agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may
occur subsequent to the date hereof at any time while the Shelf Registration Statement remains effective. All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing at the address set forth below. 
 Once this Notice and Questionnaire is executed by the Selling Securityholder and received by the Company, the terms of this Notice and Questionnaire and
the representations and warranties contained herein shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives and assigns of the Company and the Selling Securityholder
with respect to the Transfer Restricted Securities beneficially owned by such Selling Securityholder and listed in Item III above. It shall be governed by, and construed in accordance with, the laws of the State of New York without regard to the
conflict of laws provisions thereof. 

 IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to
be executed and delivered either in person or by its authorized agent. 
 Dated: 
  

			
	BENEFICIAL OWNER
	
	  
		
	By:	 	  
		 	 Name:
 Title:

 Please return the completed and executed Notice and Questionnaire for receipt prior to or on
the 20th calendar day from receipt hereof to: 
 Cell Therapeutics, Inc. at: 
 201 Elliott Avenue West, Suite 400 
 Seattle,
Washington 98119 
 Attention: Louis A. Bianco 
 with a copy to: 
 O’Melveny & Myers LLP at: 
 275 Battery Street, Suite 2600 
 San
Francisco, California 94111 
 Attention: Michael J. Kennedy, Esq. and David M. Miscia, Esq. 

 EXHIBIT 1 TO NOTICE AND QUESTIONNAIRE 
 NOTICE OF TRANSFER PURSUANT 
 TO REGISTRATION STATEMENT 
 Cell Therapeutics, Inc. 
 201 Elliott Avenue West, Suite 400 
 Seattle, Washington 98119 
  

	Re:	Cell Therapeutics, Inc. 

 7.5% Convertible Senior Notes due
2011 (the “Notes”) 
 Ladies and Gentlemen: 
 Please be advised that                  has transferred
$                 aggregate principal amount of the above-referenced Notes or
                 shares of the Company’s common stock issued on conversion or repurchase of Notes, pursuant to the Registration Statement on Form S-3 (File
No. 333-                ) filed by the Company. 
 We hereby certify that the prospectus delivery requirements, if any, of the Securities Act of 1933, as amended, have been satisfied with respect to the transfer described above and that the above named beneficial owner of the Notes or
common stock is named as a selling securityholder in the Prospectus, dated             , or in amendments or supplements thereto, and that the aggregate principal amount of the Notes
or number of shares of common stock transferred are [all] [a portion of] the Notes or common stock listed in such Prospectus, as amended or supplemented, opposite such owner’s name. 
  

			
	 Very truly yours,
 [name]

		
	By:	 	  
		 	(Authorized Signature)

 Dated:Purchase Agreement

 Exhibit 10.1 
 Cell Therapeutics, Inc. 
 $33,156,000 
 7.5% Convertible Senior Notes due 2011 
 PURCHASE AGREEMENT 
 April 24, 2006 
 CRT Capital Group LLC 
 262 Harbor Drive 
 Stamford, CT 06902 
 Ladies and Gentlemen: 
 Cell Therapeutics, Inc., a
corporation organized under the laws of the State of Washington (the “Company”), hereby confirms to CRT Capital Group LLC (“CRT” or the “Initial Purchaser”), its agreement to
issue and sell to CRT, as set forth below. 
 1. The Transactions. 
 (a) Subject to the terms and conditions herein contained, the Company proposes to issue and sell to the Initial Purchaser $33,156,000
aggregate principal amount of its 7.5% Convertible Senior Notes due 2011 (the “Firm Notes”). The Company also agrees to issue to the Initial Purchaser an option to purchase up to an additional $4,973,400 aggregate principal
amount of its 7.5% Convertible Senior Notes due 2011 (the “Option Notes” and, together with the Firm Notes, the “Notes”). The conversion rate of the Notes is 478.519 shares per each $1,000 principal
amount of Notes, subject to adjustment. The Notes shall be convertible into shares of common stock, no par value, of the Company (the “Common Stock” or “Conversion Shares”). The Notes will
(i) have the terms and provisions which are described in the Prospectus Supplement (as defined below) under the heading “Description of Notes” and such other terms as are customary, and (ii) be issued pursuant to the provisions
of the Indenture (the “Indenture”), to be dated on or about April 26, 2006, between the Company and U.S. Bank National Association, as trustee (the “Trustee”). The Notes and the Conversion Shares,
which the Initial Purchaser may elect to purchase pursuant to the terms of this Agreement, are hereinafter referred to collectively as the “Securities.” 
 (b) In connection with the sale of the Securities, the Company has prepared and delivered to the Initial Purchaser a Prospectus
Supplement, dated the date hereof, to its Prospectus dated April 19, 2006, in form and substance satisfactory to you (the “Prospectus Supplement”), and, together with the Prospectus dated April 19, 2006, the
“Prospectus”), setting forth information regarding the Company, the Securities and the terms of the Offering and the transactions contemplated by the Offering Documents (as defined 

 
below). The Prospectus Supplement incorporates by reference the Company’s (i) Annual Report on Form 10-K for the year ended December 31, 2005,
(ii) Current Reports on Form 8-K filed with the Securities and Exchange Commission (the “Commission”) on March 31, 2006, and April 11, 2006, (iii) Proxy Statement for the annual meeting of stockholders of
the Company held on June 17, 2005, and (iv) the Company’s registration statement on Form 8-A/A, filed with the Commission on January 10, 2003 (all such documents listed in clauses (i) through (iv) above (including
documents filed thereunder as incorporated therein) are referred to herein as the “Incorporated Documents”). Any references herein to the Prospectus Supplement shall be deemed to include, in each case, all amendments and
supplements thereto and the Incorporated Documents and any amendments thereto made prior to the completion of the Offering. The Company hereby confirms that it has authorized the use of the Prospectus Supplement in connection with the offering and
resale of the Securities by the Initial Purchaser. 
 (c) This Agreement, the Securities, and the Indenture are herein
referred to as the “Offering Documents.” 
 2. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with the Initial Purchaser: 
 (a) The Company meets the requirements for use of
Form S-3 under the Securities Act of 1933, as amended (the “Securities Act”) and has prepared and filed with the Commission a registration statement (file number 333-131533) on Form S-3, including a related
basic prospectus, for registration under the Securities Act of the offering and sale of, among other things, the Securities, including all documents incorporated by reference (therein “Registration Statement”). The Company
may have filed one or more amendments thereto. The Company will next file with the Commission one of the following: (1) after the effective date of such Registration Statement (the “Effective Date”), a final Prospectus
Supplement relating to the Securities in accordance with Rules 430A and 424(b); (2) or a final Prospectus Supplement in accordance with Rules 415 and 424(b). In the case of clause (1), the Company has included in such
Registration Statement, as amended at the Effective Date, all information (other than Rule 430A and 430B Information) required by the Securities Act and the rules thereunder to be included in such Registration Statement and the Prospectus
Supplement. As filed, such final Prospectus Supplement or such amendment and form of final Prospectus Supplement shall contain all Rule 430A Information, together with all other such required information, and, except to the extent the Initial
Purchaser shall agree to a modification, shall be in all substantive respects in the form furnished to you, shall contain only such specific additional information and other changes (beyond that contained in the basic prospectus and any preliminary
prospectus) as the Company has advised you. The Registration Statement, at the time of execution, shall meet the requirements set forth in Rule 415(a)(1)(x). 
  

 2 

 (b) On the Effective Date, the Registration Statement did or will, and when the
Prospectus Supplement is first filed in accordance with Rule 424(b) and on the Closing Date (as defined in Section 4) and on any date on which Option Notes are purchased, if such date is not the Closing Date (a “Additional
Closing Date,” as defined in Section 4), the Prospectus Supplement (and any supplement thereto) will, comply in all material respects with the applicable requirements of the Act and the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) and the respective rules thereunder; on the Effective Date and at the date hereof, the Registration Statement did not or will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein not misleading; and, on the Effective Date, the Prospectus Supplement, if not filed pursuant to Rule 424(b), will not, and on the date of any
filing pursuant to Rule 424(b) and on the Closing Date and any settlement date, the Prospectus Supplement (together with any supplement thereto) will not, include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to the information contained
in or omitted from the Registration Statement or the Prospectus Supplement (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Initial Purchaser through the
Initial Purchaser specifically for inclusion in the Registration Statement or the Prospectus Supplement (or any supplement thereto). 
 (c) As of their respective filing dates, each of the Incorporated Documents complied in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder applicable to the Incorporated Documents, and no Incorporated Document contained or contains any untrue statement of a material fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances existing at the time it is delivered to a purchaser, not misleading. As of their respective filing dates, the financial statements of the Company included in the
Incorporated Documents complied as to form in all material respects with then applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto, were prepared in accordance with generally accepted
accounting principles in the United States, applied consistently with the past practices of the Company, and as of their respective dates, fairly presented in all material respects the financial position of the Company and the results of its
operations as of the time and for the periods indicated therein (except as may be indicated in the notes thereto or, in the case of the unaudited statements, as permitted by Form 10-Q, and Regulations S-K and S-X of the Commission). 
  

 3 

 (d) The Company understands and confirms that the Initial Purchaser will rely on the
representations set forth herein in effecting transactions in securities of the Company. 
 (e) Subsequent to the respective
dates as of which information is given in the Prospectus, except as disclosed in the Prospectus, the Company has not declared, paid or made any dividends or other distributions of any kind on or in respect of its capital stock and there has been no
adverse change or any development which could, individually or in the aggregate, have or result in a adverse change, whether or not arising from transactions in the ordinary course of business, in or affecting (i) the business, condition
(financial or otherwise), results of operations, stockholders’ equity, properties or prospects of the Company and the subsidiaries of the Company listed on Exhibit 21.1 to the Company’s Annual Report of Form 10-K for the year ended
December 31, 2005 (each a “Subsidiary” and collectively, the “Subsidiaries”) taken as a whole; (ii) the long-term debt or capital stock of the Company and the Subsidiaries taken as a whole;
or (iii) the ability of the Company to consummate the Offering or any of the other transactions contemplated by the Offering Documents (any such change or development being a “Material Adverse Effect”). Since the date of
the latest balance sheet included or incorporated by reference in the Prospectus, neither the Company nor any Subsidiary has incurred or undertaken any liabilities or obligations, whether direct or indirect, accrued or absolute, liquidated or
contingent, matured or unmatured, or entered into any transactions, including any acquisition or disposition of any business or asset, which are material to the Company and the Subsidiaries, individually or taken as a whole, except for liabilities,
obligations and transactions which are disclosed in the Prospectus. 
 (f) Except as contemplated by this Agreement, the
Offering Documents or as disclosed in the Prospectus or the Incorporated Documents, since December 31, 2005, through the date immediately preceding the Closing Date, neither the Company nor any of its Subsidiaries has (i) issued any stock,
options, bonds or other corporate securities other than pursuant to the Company’s option plans, (ii) borrowed any amount or incurred or became subject to any liabilities (absolute, accrued or contingent), other than current liabilities
incurred in the ordinary course of business and liabilities under contracts entered into in the ordinary course of business, (iii) discharged or satisfied any lien, charge, mortgage, pledge, security interest, claim, equity, trust or other
encumbrance, preferential arrangement, defect or restriction of any kind whatsoever (any “Lien”) or adverse claim or paid any obligation or liability (absolute, accrued or contingent), other than current liabilities shown on
the balance sheets of the Company and current liabilities incurred in the ordinary course of business, (iv) declared or made any payment or distribution of cash or other property to the stockholders of the Company or purchased or redeemed any
securities of the Company, (v) mortgaged, pledged or subjected to any Lien or adverse claim any of its properties or assets, except for Liens for taxes not yet due and payable or otherwise in the ordinary course of business, (vi) sold,

  

 4 

 
assigned or transferred any of its assets, tangible or intangible, except in the ordinary course of business or in an aggregate amount less than $250,000,
(vii) suffered any extraordinary losses or waived any rights of material value other than in the ordinary course of business, (viii) made any capital expenditures or commitments therefor other than in the ordinary course of business or in
an aggregate amount less than $250,000, (ix) entered into any other transaction other than in the ordinary course of business in an aggregate amount less than $250,000 or entered into any material transaction, whether or not in the ordinary
course of business, (x) made any charitable contributions or pledges, (xi) suffered any damages, destruction or casualty loss, whether or not covered by insurance, affecting any of the properties or assets of the Company or any other
properties or assets of the Company which could, individually or in the aggregate, have or result in a Material Adverse Effect, (xii) made any material change in the nature or operations of the business of the Company or (xiii) entered
into any agreement or commitment to do any of the foregoing. 
 (g) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus and, after giving effect to the Offering, will be as set forth in the Prospectus. Except as disclosed in the Prospectus, all of the issued and outstanding shares of capital stock of the Company are fully
paid and non-assessable and have been duly and validly authorized and issued, in compliance with all applicable federal, state and foreign securities laws and are not in violation of or subject to any preemptive or similar right that does or will
entitle any person, upon the issuance or sale of any security, to acquire from the Company any Common Stock or other security of the Company or any security convertible into, or exercisable or exchangeable for, Common Stock or any other such
security (any “Relevant Security”). 
 (h) The Conversion Shares have been duly authorized and
reserved, and if and when issued upon conversion of the Notes in accordance with their terms and the Indenture, will be validly issued, fully paid and non-assessable, free of any preemptive or similar rights and any Liens; will have been issued in
compliance with all applicable federal, state and foreign securities laws, will not have been issued in violation of or subject to any preemptive or similar right that does or will entitle any person to acquire any Relevant Security from the Company
upon issuance or sale of the Notes or the Conversion Shares and, except as disclosed in the Prospectus, will not be subject to any restriction upon the voting or transfer thereof pursuant to applicable law or the Company’s certificate of
incorporation, bylaws or governing documents or any agreement to which the Company or any Subsidiary is a party or by which any of them may be bound. 
 (i) The Common Stock (including the Conversion Shares) conforms to the descriptions thereof contained in the Prospectus. Except as disclosed in, and as of the date or dates disclosed in, the Prospectus, neither the
Company nor any Subsidiary has outstanding warrants, options to purchase, or any preemptive rights or other rights to subscribe for or to purchase, or any 

  

 5 

 
contracts or commitments to issue or sell, any Common Stock or other security of the Company or any Subsidiary or any security convertible into, or
exercisable or exchangeable for, Common Stock or any other such security. 
 (j) Each of the Subsidiaries are wholly-owned by
the Company. The Subsidiaries are the only “significant subsidiaries” of the Company within the meaning of Regulation S-X promulgated under the Securities Act. All of the issued shares of capital stock of or other ownership interests in
the Subsidiaries have been duly and validly authorized and issued and are fully paid and non-assessable and are owned directly or indirectly by the Company free and clear of any Lien. 
 (k) Each of the Company and each Subsidiary has been duly organized and validly exists as a corporation in good standing under the laws of
its jurisdiction of incorporation. Each of the Company and each Subsidiary has all requisite power and authority to carry on its business as it is currently being conducted and as described in the Prospectus, and to own, lease and operate its
respective properties. Each of the Company and each Subsidiary is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the character or location of its properties (owned, leased or licensed) or
the nature or conduct of its business makes such qualification necessary, except for those failures to be so qualified or in good standing which could (individually and in the aggregate) have or result in a Material Adverse Effect. 
 (l) The Company has the requisite power and authority to execute, deliver and perform its obligations under the Notes. The Notes have been
duly and validly authorized by the Company for issuance and, when executed by the Company and authenticated by the Trustee in accordance with the provisions of the Indenture and when delivered to and paid for by the Initial Purchaser in accordance
with the terms hereof, will have been duly executed, issued and delivered and will constitute valid and legally binding obligations of the Company free of any Liens, entitled to the benefits of the Indenture and enforceable against the Company in
accordance with their terms except that the enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally,
and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) ((i) and (ii) collectively, the “Enforceability Exceptions”) and will be convertible
into the Conversion Shares in accordance with their terms. At the Closing Date, the Notes will be in the form contemplated by the Indenture. 
 (m) The Company has the requisite power and authority to execute, deliver and perform its obligations under the Indenture. The Indenture has been duly and validly authorized by the Company and meets the requirements
for qualification under the Trust Indenture Act of 1939, as 

  

 6 

 
amended (the “TIA”), and, when executed and delivered by the Company (assuming the due authorization, execution and delivery by the
Trustee), will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except that the enforcement thereof may be limited by the Enforceability Exceptions. 
 (n) The Company has the requisite power and authority to execute, deliver and perform its obligations under this Agreement. This Agreement
has been duly and validly authorized by the Company and when executed and delivered by the Company (assuming the due authorization, execution and delivery by the Initial Purchaser), will constitute a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms, except that the enforcement thereof may be limited by the Enforceability Exceptions. 
 (o) There exists as of the date hereof (after giving effect to the transactions contemplated by each of the Offering Documents) no event or condition that would constitute a default or an event of default under any of
the Offering Documents. 
 (p) The execution, delivery, and performance of this Agreement, the Indenture and the consummation
of the transactions contemplated by the Offering Documents do not and will not conflict with, require consent under or result in a breach of any of the terms and provisions of, or constitute a default (or an event which with notice or lapse of time,
or both, would constitute a default) under, violate or result in the creation or imposition of any Lien upon any property or assets of the Company or any Subsidiary pursuant to, (i) any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant, instrument, franchise, license or permit to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or their respective properties,
operations or assets may be bound; (ii) any provision of the certificate or articles of incorporation, bylaws or other organizational documents of the Company or any Subsidiary; or (iii) any law, rule, regulation, ordinance, directive,
judgment, decree or order of any judicial, regulatory or other legal or governmental agency or body, domestic or foreign, having jurisdiction over the Company, any Subsidiary or any of its or their properties; except, in the case of clauses
(i) and (iii) above, as have been or will be obtained or could not reasonably be expected to have a Material Adverse Effect. 
 (q) Each of the Company and each Subsidiary has such permits, licenses, consents, exemptions, franchises, authorizations and other approvals (each, a “Consent”) of, and has made all filings
with and given all notices to, all governmental or regulatory authorities and self-regulatory organizations and all courts and other tribunals as are necessary to own, lease, license and operate its respective properties and to conduct its business,
and, in all material respects complying therewith, except where the failure to have any 

  

 7 

 
such Consent or to make any such filing or notice would not, singly or in the aggregate, have a Material Adverse Effect. Each of the Company and each
Subsidiary is in compliance in all material respects with the rules, regulations and applicable laws and orders of the authorities and governing bodies having jurisdiction with respect thereto; and no event has occurred (including), without
limitation, the receipt of any notice from any authority or governing body) that would result in or, after notice or lapse of time or both, would result in, revocation, suspension or termination of any such Consent or would result in or, after
notice or lapse of time or both, would result in any other impairment of the rights of the holder of any such Consent; except where such failure to be in compliance or the occurrence of any such event or the presence of any such restriction would
not, singly or in the aggregate, have a Material Adverse Effect. 
 (r) No Consent, filing, order, registration, approval,
authorization qualification of, with or from any judicial, regulatory or other legal or governmental agency or body or any third party, foreign or domestic, is required by the Company for the execution, delivery and performance of this Agreement,
the Indenture, or consummation of the Offering and the other transactions contemplated by the Offering Documents, including the issuance, sale and delivery of the Notes (and the issuance of the Conversion Shares upon conversion of the Notes), except
such Consents as may be required under the rules of the Nasdaq Stock Market or state securities or “blue sky” laws or the approval of the Commission of a resale registration statement on Form S-3 as contemplated by the Registration Rights
Agreement to be entered into between the Company and certain bondholders of the Company. No consent, approval or authorization of the stockholders of the Company is required in connection with the issuance of the Securities. 
 (s) Except as disclosed in the Prospectus, there is no judicial, regulatory, arbitral or other legal or governmental proceeding or other
claim, action, suit, inquiry, litigation, Commission comment letters, or arbitration, domestic or foreign, pending to which the Company or any Subsidiary is a party or of which any property, operations or assets of the Company or any Subsidiary is
the subject which, individually or in the aggregate, if determined adversely to the Company or any Subsidiary, could reasonably be expected to have a Material Adverse Effect, and to the best of the Company’s knowledge, no such proceeding,
claim, action, suit, litigation or arbitration is threatened or contemplated. 
 (t) The financial statements, including the
notes thereto, included in the Incorporated Documents are true, correct and complete copies of the consolidated audited balance sheets of the Company at December 31, 2004 and 2005 and the related consolidated audited statements of operations,
changes in stockholders’ equity (deficit) and comprehensive income (loss) and cash flows for the years ended December 31, 2004 and 2005 and present fairly, in all material respects, as of the dates and for the periods specified, the
financial position, cash flows and results of operations of the Company and its 

  

 8 

 
consolidated subsidiaries for which financial statements are included in the Incorporated Documents; such financial statements have been prepared in
conformity with United States generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as otherwise noted therein); and the financial and statistical information included or incorporated by
reference in the Prospectus presents fairly the information included therein and, if so required, has been prepared on a basis consistent with that of the financial statements that are included in the Incorporated Documents and is derived from the
books and records of the respective entities presented therein and, to the extent such information is a range, projection or estimate, is based on the good faith belief and estimates of the management of the Company. 
 (u) Grant Thornton, LLP, which examined certain of such financial statements, was, to the best of the Company’s knowledge, an
independent public accounting firm as required by the Securities Act and the Exchange Act at the time of such examination through its resignation on August 31, 2005. Stonefield Josephson, Inc., which examined certain financial statements as set
forth in its reports included in the Prospectus Supplement, is, to the best of the Company’s knowledge, an independent public accounting firm as required by the Securities Act and the Exchange Act. 
 (v) The Company is subject to and in full compliance with the reporting requirements of Section 13 or 15(d) of the Exchange Act and
files reports with the Commission on the EDGAR System. The Common Stock is registered pursuant to Section 12(g) of the Exchange Act and the outstanding shares of Common Stock are listed for quotation on the Nasdaq National Market, and the
Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or de-listing the Common Stock from the Nasdaq National Market, nor has the Company received any
notification (written or oral) that the Commission or the Nasdaq National Market is contemplating terminating such registration or listing or that the Company is not in compliance with the continuing listing or maintenance requirements of the Nasdaq
National Market. 
 (w) The Company and the Subsidiaries have filed in a timely manner each document or report required to be
filed by each pursuant to the Exchange Act, including, without limitation, the Incorporated Documents. Since the date of the Prospectus Supplement, no event or circumstance has occurred or information exists with respect to the Company or any of the
Subsidiaries or its or their business, properties, prospects, operations or financial conditions which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company that has not been filed within the period
required by such law, rule or regulation. 
 (x) The Company and each Subsidiary maintain a system of internal accounting and
other controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s 

  

 9 

 
general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with United
States generally accepted accounting principles and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accounting
for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 
 (y) Neither the Company nor any of its affiliates (within the meaning of Rule 144 under the Securities Act) has taken, directly or indirectly, any action that constitutes or is designed to cause or result in, or which could reasonably be
expected to constitute, cause or result in, the stabilization or manipulation of the price of any security to facilitate the sale or resale of the Securities. 
 (z) Except as described in the Prospectus Supplement, no holder of any Relevant Security has any rights to require registration of any
Relevant Security as part or on account of, or otherwise in connection with the Offering and any of the other transactions contemplated by the Offering Documents, and any such rights so disclosed have been effectively waived by the holders thereof,
and any such waivers remain in full force and effect, other than in respect of the Exchange Agreement dated April 24, 2006, by and among the Company and the investors listed on Schedules I thereto. 
 (aa) The Company is not and, immediately after the sale of the Securities as contemplated hereunder will not be an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder. 
 (bb) Except as disclosed in the Prospectus, no relationship, direct or indirect, exists between or among the Company or any affiliate of the Company, on the one hand, and any director, officer, stockholder, customer
or supplier of the Company or any affiliate of the Company, on the other hand, which is required by the Exchange Act to be described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, which is not so
described and described as required in such reports. 
 (cc) Each of the Company and each Subsidiary owns or leases all such
properties as are necessary to the conduct of their respective businesses as presently operated and as proposed to be operated as described in the Prospectus. The Company and each Subsidiary have good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by them, in each case free and clear of all Liens except such as are described in the Prospectus or such as could not reasonably be expected to have a Material Adverse Effect; and
any real property and buildings held under lease or sublease by the Company and any Subsidiary are held by them under valid, subsisting and enforceable leases or subleases with such exceptions as are 

  

 10 

 
not material to, and do not interfere with, the use made and proposed to be made of such property and buildings by the Company and such Subsidiary.

 (dd) The Company and each Subsidiary owns, licenses or possesses all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names currently employed by them in the connection with the
business now operating by them that are necessary for the conduct of the business (“Intellectual Property”) of the Company and the Subsidiaries, except where failure to own, license or possess or otherwise to be able to
acquire such intellectual property would not singly, or in the aggregate, have a Material Adverse Effect. To the knowledge of the Company, the Intellectual Property does not infringe on or conflict with the rights or intellectual property of third
parties, and neither the Company nor any Subsidiary has received any notice of infringement of or conflict with asserted rights of others with respect to any intellectual property that, singly or in the aggregate, if the subject of unfavorable
decision, ruling or finding, would have a Material Adverse Effect, in each case except as described in the Prospectus. 
 (ee)
Each of the Company and each Subsidiary has prepared and timely filed all federal, state, local, foreign and other material tax returns that are required to be filed by it and has paid or made provision for the payment of all taxes, assessments,
governmental or other similar charges, including, without limitation, all material sales and use taxes and all taxes which the Company or the Subsidiary is obligated to withhold from amounts owing to employees, creditors and third parties, with
respect to the periods covered by such tax returns (whether or not such amounts are shown as due on any tax return). There is no tax Lien, whether imposed by any federal, state, local, foreign or other taxing authority, outstanding against the
assets, properties or business of the Company or any Subsidiary. 
 (ff) No collective bargaining agreement covering any
employee of the Company or any Subsidiary exists that is binding on either the Company or any Subsidiary, and, to the Company’s knowledge, no petition has been filed or proceeding instituted by an employee or group of employees of either the
Company or any Subsidiary with the National Labor Relations Board seeking recognition of a bargaining representative. To the Company’s knowledge, no organizational effort currently is being made or threatened by or on behalf of any labor union
to organize any employees of either the Company or any Subsidiary, and there is no threatened, imminent or current labor strike, dispute or organized work stoppage in effect by the employees of either the Company or any Subsidiary which could have
or result in a Material Adverse Effect. 
 (gg) No “prohibited transaction” (as defined in either Section 406
of the Employee Retirement Income Security Act of 1974, as amended, 

  

 11 

 
including the regulations and published interpretations thereunder (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended
from time to time (the “Code”)), “accumulated funding deficiency” (as defined in Section 302 of ERISA) or other event of the kind described in Section 4043(b) of ERISA (other than events with respect to which the 30-day
notice requirement under Section 4043 of ERISA has been waived) has occurred with respect to any employee benefit plan (as defined in Section 3(3) of ERISA) for which the Company or any Subsidiary would have any liability; each employee
benefit plan (as defined in Section 3(3) of ERISA) for which the Company or any Subsidiary would have any liability is in compliance in all material respects with applicable law, including, without limitation, ERISA and the Code; the Company
has not incurred and does not expect to incur material liability under Title IV of ERISA with respect to the termination of, or withdrawal from, any “pension plan” (as defined in Section 3(2)); and each pension plan (as defined in
Section 3(2)) for which the Company would have any material liability that is intended to be qualified under Section 401(a) of the Code is so qualified and, to the Company’s knowledge, nothing has occurred, whether by action or by
failure to act, which could cause the loss of such qualification. 
 (hh) Each of the Company and its subsidiaries is in
compliance in all material respects with all rules, laws and regulations relating to the use, treatment, storage and disposal of toxic substances and protection of health or the environment (“Environmental Law”) which are
applicable to its business; (ii) neither the Company nor any of its subsidiaries has received any written notice from any governmental authority or third party of an asserted claim under Environmental Laws; (iii) each of the Company and
its subsidiaries has received all permits, licenses and other approvals required of it under applicable Environmental Laws to conduct its business and is in compliance with all terms and conditions of any such permit, license or approval;
(iv) to the Company’s knowledge, no facts currently exist that will require the Company or its subsidiaries to make future material capital expenditures to comply with Environmental Laws; and (v) no property which is or has been
owned, leased or occupied by the Company or its subsidiaries has been designated as a Superfund site pursuant to the Comprehensive Environmental Response, Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.) or
otherwise designated as a contaminated site under applicable state or local law. Neither the Company nor any of its subsidiaries has been named as a “potentially responsible party” under the CERCLA 1980. In the ordinary course of its
business, the Company periodically reviews the effect of Environmental Laws on the business, operations and properties of the Company and its subsidiaries, in the course of which the Company identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws, or any permit, license or approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review, the Company has reasonably concluded that such associated costs and liabilities would not, singly or in the aggregate, have a Material Adverse Effect. 
  

 12 

 (ii) The Company and the Subsidiaries maintain insurance of the types, against such
losses and in the amounts and with such insurers as are customary in the Company’s industry and otherwise reasonably prudent, including risks customarily insured against by similarly situated companies, all of which insurance is in full force
and effect. 
 (jj) All material agreements to which the Company and the Subsidiaries are parties and which are required to
have been filed by the Company pursuant to the Securities Act, the Exchange Act, and the rules and regulations thereunder have been filed by the Company with the Commission. As of the date hereof, except as disclosed in the Incorporated Documents
and except for those agreements that by their terms are no longer in effect, each such agreement is in full force and effect and is binding on the Company and, to the Company’s knowledge, is binding upon such other parties, in each case in
accordance with its terms, and neither the Company nor, to the Company’s knowledge, any other party thereto is in breach of or default under any such agreement. Except as disclosed in the Incorporated Documents, the Company has not received any
written notice regarding the termination of any such agreements. 
 (kk) Neither the Company nor any Subsidiary (i) is in
violation of its certificate of incorporation, bylaws, or other organizational documents, or (ii) is in default under, and no event has occurred which, with notice or lapse of time or both, would constitute a default under or result in the
creation or imposition of any Lien upon any of its property or assets pursuant to, any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant, instrument, franchise,
license or permit to which it is a party or by which it is bound or to which any of its property or assets is subject, or has received a notice or claim of any such default or has knowledge of any breach of such contracts by the other party or
parties thereto, except where the consequences of such violation would have a Material Adverse Effect, except (in the case of clause (ii) above) defaults or Liens disclosed in the Prospectus. 
 (ll) The certificates for the shares of Common Stock (including the Conversion Shares) conform to the requirements of the Nasdaq National
Market and the General Corporation Law of the State of Washington. 
 (mm) Except as described in the Prospectus, the Company
and each Subsidiary have complied with and established such boards and policies as required by the Sarbanes-Oxley Act of 2002. The Company is subject to and is in compliance with all of the requirements of the Nasdaq National Market. 
 (nn) Other than CRT (as the Initial Purchaser), no finder, broker, agent, financial person or other intermediary has acted on behalf of
the Company in connection with the resale of the Securities to the Initial Purchaser, 

  

 13 

 
the resale of the Notes by the Initial Purchaser or the consummation of this Agreement or any of the transactions contemplated hereby. 
 The Company acknowledges that the Initial Purchaser and, for purposes of the opinions to be delivered to the Initial Purchaser pursuant to Section 8
hereof, counsel to the Company and counsel to the Initial Purchaser will rely upon the accuracy and truth of the foregoing representations and hereby consents to such reliance. 
 3. Purchase, Sale and Delivery of the Securities 
 (a) On the basis of the representations, warranties, agreements and covenants herein contained and subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the Initial Purchaser,
and the Initial Purchaser agrees to purchase from the Company, at 96% of their principal amount (subject to Section 3(c) hereof), the aggregate principal amount of the Firm Notes set forth on Schedule 1 hereto. 
 (b) In addition, on the basis of the representations, warranties, agreements and covenants contained herein, and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the Initial Purchaser to purchase up to $4,973,400 in aggregate principal amount Option Notes from the Company at the same price as the purchase price to be paid by the Initial
Purchaser for the Firm Notes. The option granted hereunder may be exercised at any time, regardless of whether any of the Firm Notes have been converted or repurchased by the Company, on or after the first (1st) day following the Closing Date
to and including the thirtieth (30th) day following the Closing Date upon written or telegraphic notice by the Initial Purchaser to the Company, which notice may be given from time to time on one or more occasion. Such Notice shall set forth
(i) the amount (which shall be an integral multiple of $1,000 in aggregate principal amount at issuance) of Option Notes as to which the Initial Purchaser are exercising the option, and (ii) the time, date and place at which such Option
Notes will be delivered. Such time and date of delivery is called the “Additional Closing Date.” The Additional Closing Date must not be later than eight (8) full business days after the Initial Purchaser exercise the option, with the
actual date determined by the Initial Purchaser. The Initial Purchaser may cancel the option at any time prior to its expiration by giving written notice of such cancellation to the Company. 
 (c) Delivery of and payment for the Securities shall be made at the offices of O’Melveny & Myers LLP, at Embarcadero Center
West, 275 Battery Street, San Francisco, California 94111, on April 26, 2006, or such other date as the Initial Purchaser and the Company shall mutually agree, at such time and date being herein referred to as the “Closing
Date.” The Securities shall be delivered on the Closing Date against payment of the purchase price therefore by wire transfer of immediately available funds to an account specified in writing to the Initial Purchaser by the Company. If
requested by the Initial Purchaser, one or more global securities representing the Securities shall be registered by the 

  

 14 

 
Trustee in the name of Cede & Co., the nominee of The Depository Trust Company (“DTC”), and credited to such accounts as CRT
shall request, upon notice to the Company at least 48 hours prior to the Closing Date. 
 (d) Notwithstanding anything to the
contrary herein, to the extent that any subsequent purchaser of the Securities from the Initial Purchaser listed on Schedule I hereto (a “Subsequent Purchaser”) has withdrawn its commitment, as set forth on Schedule 1
attached hereto, to purchase all or a portion of the Securities, or such Subsequent Purchaser has actually made or has threatened to make any amendments, alterations, modifications, withdrawals, waivers or breaches of its Purchaser Letter or fails
to perform in any way under its Purchaser Letter, the Initial Purchaser’s obligation to purchase the Notes under this Agreement shall be terminated or adjusted downward on a dollar for dollar basis accordingly, at the sole discretion of the
Initial Purchaser. 
 (e) Delivery to the Initial Purchaser of and payment for the Option Notes shall be made on the
Additional Closing Date in the same manner as payment for the Firm Notes. 
 4. Offering by the Initial Purchaser. The Initial
Purchaser proposes to make an offering of the Securities at the price and upon the terms set forth in the Prospectus as soon as practicable after this Agreement is entered into and as in the judgment of the Initial Purchaser is advisable.

 5. Certain Covenants. For the purposes of this Section 6, “Closing Date” shall refer to the Closing Date for the
Firm Notes and any Additional Closing Date for the Option Notes. 
 (a) The Company covenants and agrees with the Initial
Purchaser that: 
 (aa) The Company shall prepare the Prospectus in a form approved by the Initial Purchaser and file such
Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be
required by the Rules. 
 (bb) The Company will not amend or supplement the Prospectus or any amendment or supplement thereto
of which the Initial Purchaser shall not previously have been advised and furnished a copy for a reasonable period of time prior to the proposed amendment or supplement and as to which the Initial Purchaser shall not have given their consent, other
than by filing documents under the Exchange Act that are incorporated by reference therein, without notice to the Initial Purchaser. The Company will promptly, upon the reasonable request of the Initial Purchaser or counsel to the Initial Purchaser,
make any amendments or supplements to the Prospectus that may be reasonably necessary or advisable in connection with the resale of the Notes by 

  

 15 

 
the Initial Purchaser. As soon as the Company is advised thereof, the Company will notify the Initial Purchaser and its counsel, and confirm the notice in
writing, of any order preventing or suspending the use of the Offering Documents, or the suspension of the qualification or registration of the Securities for offering or the suspension of any exemption for such qualification or registration of the
Securities for offering in any jurisdiction, or of the institution or threatened institution of any proceedings for any of such purposes, and the Company will use its best efforts to prevent the issuance of any such order and, if issued, to obtain
as soon as reasonably possible the lifting thereof. 
 (cc) The Company will use its best efforts to qualify or exempt the
Notes for offer and sale under the securities or “blue sky” laws of such jurisdictions as the Initial Purchaser may reasonably designate and the Company will make such applications and furnish information as may be required for such
purposes, and will continue any such qualifications or exemptions in effect for as long as may be necessary to complete the distribution of the Securities by the Initial Purchaser; provided, however, that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to execute a general consent to service of process in any jurisdiction or to take any other action that would subject it to general service of process or to taxation in respect of doing
business in any jurisdiction in which it is not otherwise subject. 
 (dd) If, at any time prior to the completion of the
resale by the Initial Purchaser of the Securities, any event shall occur as a result of which it is necessary, in the reasonable judgment of the Initial Purchaser, to amend or supplement the Prospectus in order to make such Prospectus not misleading
in the light of the circumstances existing at the time it is delivered to a purchaser, or if for any other reason it shall be necessary to amend or supplement the Prospectus in order to comply with applicable laws, rules or regulations, the Company
shall notify the Initial Purchaser of any such event and (subject to Section 6(a)) forthwith amend or supplement such Prospectus at its own expense so that, as so amended or supplemented, such Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading and will comply with all applicable laws, rules or regulations.

 (ee) The Company will, without charge, provide to the Initial Purchaser and to counsel to the Initial Purchaser as many
copies of each of the Prospectus or any amendment or supplement thereto as the Initial Purchaser or its counsel may reasonably request. 
 (ff) The Company will not take any action prohibited by Regulation M under the Exchange Act in connection with the distribution of the Securities contemplated hereby. 
  

 16 

 (gg) Neither the Company nor any of its affiliates (within the meaning of Rule 144 under
the Securities Act) will take, directly or indirectly, any action that constitutes or is designed to cause or result in, or which could reasonably be expected to constitute, cause or result in, the stabilization or manipulation of the price of any
security to facilitate the sale or resale of the Securities. 
 (hh) The Company will cause the Notes to be eligible for
clearance and settlement through DTC. 
 (ii) The Company will use its best efforts to list the Conversion Shares for
quotation on the Nasdaq National Market by Closing. 
 (jj) The Company will, at all times, authorize, reserve and keep
available, free of preemptive rights, enough shares of Common Stock for the purpose of enabling the Company to satisfy its obligations to issue the Conversion Shares upon conversion of the Notes. 
 (kk) Prior to the Closing, the Company will not incur any material indebtedness or dispose of any material assets or make any material
acquisition or change in its business or operations, except with the Initial Purchaser’s knowledge or consent. The Company shall not, during the period commencing on the date hereof and ending on the earlier of the Closing Date, issue any press
release or other public communication, or hold any press conference with respect to the Company’s financial condition, results of operations or the Offering, without the prior consent of the Initial Purchaser, which consent shall not be
unreasonably withheld or delayed, subject to the Company’s obligation to comply with applicable laws. 
 6. Expenses. Whether or
not the Offering is consummated or this Agreement is terminated (pursuant to Section 12 or otherwise), the Company agrees to pay the following costs and expenses and all other costs and expenses incident to the performance by the Company of its
obligations hereunder: (a) the negotiation, preparation, printing, typing, reproduction, execution and delivery of this Agreement and of the other Offering Documents, any amendment or supplement to or modification of any of the foregoing and
any and all other documents furnished pursuant hereto or thereto or in connection herewith or therewith; (b) the preparation, printing or reproduction of the Prospectus and each amendment or supplement to it; (c) the delivery (including
postage, air freight charges and charges for counting and packaging) of such copies of each the Prospectus and all amendments or supplements to any of them as may be reasonably requested for use in connection with the offer and sale of the Notes;
(d) the preparation, printing, authentication, issuance and delivery of certificates for the Notes and the Conversion Shares, including any stamp taxes in connection with the original issuance and sale of the Securities; (e) the
reproduction and delivery of this Agreement and the other Offering Documents, the preliminary and supplemental “blue sky” memoranda and all other agreements or documents reproduced and delivered in connection with the offering of the
Securities; (f) the exemption from, or registration or qualification of the 

  

 17 

 
Securities for offer and sale under the securities or “blue sky” laws of the several states (including filing fees and the reasonable fees,
expenses and disbursements of counsel to the Initial Purchaser relating to such registration and qualification); (g) the transportation and other expenses incurred by or on behalf of Company representatives in connection with presentations to
and related communications with prospective purchasers of the Notes; (h) the fees and expenses of counsel (including local and special counsel, if any) for the Company; (i) fees and expenses of the Trustee, including fees and expenses of
its counsel; and (j) all expenses and listing fees incurred in connection with the application for listing for quotation of the Common Stock on the Nasdaq National Market. 
 7. Conditions of the Initial Purchaser’s Obligations. For purposes of this Section 7, “Closing Date” shall refer to the
Closing Date for the Securities. The obligations of the Initial Purchaser to purchase and pay for the Securities are subject to the absence from any certificates, opinions, written statements or letters furnished to the Initial Purchaser pursuant to
this Section 7 of any misstatement or omission and to the following additional conditions unless waived in writing by the Initial Purchaser: 
 (A) The Initial Purchaser shall have received an opinion, in form and substance satisfactory to the Initial Purchaser, in its sole discretion, dated the Closing Date, of O’Melveny & Myers, LLP, counsel
to the Company. 
 (B) The Initial Purchaser shall have received an opinion, in form and substance satisfactory to the Initial
Purchaser, in its sole discretion, dated the Closing Date, of Foley & Lardner, intellectual property counsel to the Company. 
 (C) The Initial Purchaser shall have received a comfort letter, in form and substance satisfactory to the Initial Purchaser, in its sole discretion, dated the Closing Date, of Stonefield Josephson, Inc., registered
independent auditor of the Company. 
 (D) The Initial Purchaser shall have received an opinion, in form and substance
satisfactory to the Initial Purchaser, in its sole discretion, dated the Closing Date, of DLA Piper Rudnick Gray Cary US LLP, counsel to the Initial Purchaser. 
 (E) The representations and warranties of the Company contained in this Agreement shall be true and correct on and as of the Closing Date,
and the Company shall have complied in all respects with all covenants, agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date. 
 (F) None of the issuance and sale of the Securities pursuant to this Agreement or any of the transactions contemplated by this Agreement
or any of the other Offering Documents shall be enjoined (temporarily or permanently) and no restraining order or other injunctive 

  

 18 

 
order shall have been issued; and there shall not have been any legal action, statute, order, decree or other administrative proceeding enacted, instituted
or overtly threatened against the Company or against the Initial Purchaser relating to the issuance or the trading of the Securities or the Initial Purchaser’ activities in connection therewith or any other transactions contemplated by this
Agreement or the Prospectus or the other Offering Documents. 
 (G) Subsequent to the date of this Agreement and since the
date of the most recent financial statements in the Prospectus (exclusive of any amendment or supplement thereto after the date hereof), there shall not have occurred (i) any change, or any development involving a prospective change in, or
affecting the business, condition (financial or other), properties or results of operations of, the Company or any Subsidiary not disclosed in the Prospectus that is, in the judgment of the Initial Purchaser, so material and adverse as to make it
impracticable or inadvisable to proceed with the Offering on the terms and in the manner contemplated by the Prospectus, or (ii) any event or development relating to or involving the Company or any Subsidiary or any of their respective officers
or directors that makes any statement made in the Prospectus untrue or that, in the opinion of the Company and its counsel or the reasonable judgment of the Initial Purchaser, requires the making of any addition to or change in the Prospectus in
order to state a material fact necessary in order to make the statements made therein not misleading. 
 (H) The Initial
Purchaser shall have received certificates, dated the Closing Date and signed by the President and Chief Executive Officer and the Chief Financial Officer of the Company, to the effect that: 
 (i) All of the representations and warranties of the Company set forth in this Agreement are true and correct on and as of the Closing
Date, all covenants agreements, conditions and obligations of the Company to be performed, satisfied or complied with hereunder in all respects on or prior the Closing Date have been duly performed, satisfied or complied with. 
 (ii) No event has occurred and is continuing, as a result of which the Prospectus including all exhibits and attachments thereto would
contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances existing at the time it is delivered to the Initial
Purchaser, not misleading. 
 (iii) The issuance and sale of the Notes pursuant to this Agreement and the Prospectus and the
consummation of the transactions contemplated by the Offering Documents have not been 

  

 19 

 
enjoined (temporarily or permanently) and no restraining order or other injunctive order has been issued and there has not been any legal action, order,
decree or other administrative proceeding instituted or, to such officers’ knowledge, threatened against the Company relating to the issuance or the trading of the Securities or the Initial Purchaser’ activities in connection therewith or
in connection with any other transactions contemplated by this Agreement or the Prospectus or the other Offering Documents. 
 (iv) Subsequent to the date of this Agreement and since the date of the most recent financial statements in the Prospectus (exclusive of any amendment or supplement thereto after the date hereof), there has not occurred (1) any change,
or any development involving a prospective change, in or affecting the business, condition (financial or other), properties or results of operations of the Company or any Subsidiary, not contemplated by the Prospectus, or, in the judgment of the
Initial Purchaser, could result in a Material Adverse Effect upon the Company, or (2) any event or development relating to or involving the Company or any Subsidiary or any of their respective officers or directors that, in the judgment of the
Initial Purchaser, makes any statement made in the Prospectus untrue or that requires the making of any addition to or change in the Prospectus in order to state a material fact necessary in order to make the statements made therein not misleading.

 (v) At the Closing Date and after giving effect to the consummation of the transactions contemplated by the Prospectus
Supplement there shall exist no Default or Event of Default (as defined in the Indenture). 
 (I) Each of the Offering
Documents and each other agreement or instrument executed in connection with the transactions contemplated thereby shall be satisfactory in form and substance to the Initial Purchaser and shall have been executed and delivered by all the respective
parties thereto (other than the Initial Purchaser) and shall be in full force and effect, and there shall have been no amendments, alterations, modifications or waivers of any provision thereof since the date of this Agreement. 
 (J) There shall have been Purchaser Letters executed and delivered by the Subsequent Purchasers agreeing to fund a total of $33,156,000
none of the Subsequent Purchasers shall have actually made or threatened to make any amendments, alterations, modifications, withdrawals, waivers or breaches with respect to its Purchaser Letter and/or its commitment set forth on Schedule 1
attached hereto or failed to perform in any respect with respect to its Purchaser Letter and/or its commitment set forth on Schedule 1 attached hereto and the Initial 

  

 20 

 
Purchaser shall have no reasonable good faith belief that such commitments or purchases will not be funded. 
 (K) All proceedings taken in connection with the issuance of the Notes and the transactions contemplated by this Agreement, the other
Offering Documents and all documents and papers relating thereto shall be satisfactory to the Initial Purchaser and counsel to the Initial Purchaser. The Initial Purchaser and counsel to the Initial Purchaser shall have received copies of such
papers and documents as they may reasonably request in connection therewith, all in form and substance satisfactory to them. 
 (L) The Notes shall be eligible for clearance on DTC. 
 (M) At the Closing Date, the Company and the Trustee shall
have entered into the Indenture, in form and substance satisfactory to the Initial Purchaser, in its sole discretion, and the Initial Purchaser shall have received counterparts, dated the Closing Date and executed by each of the parties thereto and
the Notes shall have been duly executed and delivered by the Company and duly authenticated by the Trustee. 
 (N) There are
no pending or threatened legal or governmental proceedings to which the Company or the Subsidiaries is a party or of which any property of the Company or the Subsidiaries is the subject, which, the Initial Purchaser believes, in its sole discretion,
if determined adversely to the Company or the Subsidiaries, would individually or in the aggregate have a Material Adverse Effect on the financial position or results of operations of the Company and the Subsidiaries taken as a whole; and

 (O) There shall have been executed by each of the Subsequent Purchasers, as listed on Schedule 1, an Exchange Agreement
with the Company representing an aggregate exchange of $40,668,000 principal amount of the Company’s 5.75% Convertible Senior Secured Subordinated Notes due June 15, 2008 and the Company’s 5.75% Convertible Subordinated Notes due
June 15, 2008 for $33,156,000 principal amount of the Company’s 7.5% Convertible Senior Notes due April 26, 2011. 
 All such
opinions, certificates, letters, schedules, documents or instruments delivered pursuant to this Agreement will comply with the provisions hereof only if they are satisfactory in all respects to the Initial Purchaser and counsel to the Initial
Purchaser. The Company shall furnish to the Initial Purchaser such conformed copies of such opinions, certificates, letters, schedules, documents and instruments in such quantities as the Initial Purchaser shall reasonably request. 
  

 21 

 8. Indemnification. 
 (a) The Company shall indemnify and hold harmless (i) the Initial Purchaser, (ii) each person, if any, who controls the Initial
Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and (iii) the respective members, officers, directors, partners, employees, Initial Purchaser and agents of the Initial Purchaser or
any controlling person, from and against any and all losses, liabilities, claims, damages and expenses whatsoever as incurred (including, but not limited to, reasonable attorneys’ fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any investigation or litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus Supplement or the omission or alleged omission to state in the Prospectus Supplement a material fact necessary to make the statements therein not misleading; provided, however, that the
Company will not be liable in any such case to the extent, but only to the extent, that any such loss, liability, claim, damage or expense arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Initial Purchaser expressly for use in the section entitled “Underwriting” therein. The parties acknowledge
and agree that such information provided by or on behalf of the Initial Purchaser consists solely of the material identified in Section 16 hereof. This indemnity agreement will be in addition to any liability that the Company may otherwise
have, including under this Agreement. 
 (b) The Initial Purchaser shall indemnify and hold harmless (i) the Company,
(ii) each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and (iii) the officers, directors, partners, employees, representatives and agents of
the Company, from and against any and all losses, liabilities, claims, damages and expenses whatsoever as incurred (including, but not limited to, attorneys’ fees and any and all expenses whatsoever incurred in investigating, preparing or
defending against any investigation or litigation, commenced or threatened, or any claim whatsoever and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact
provided by such Initial Purchaser and contained in the section entitled “Underwriting” of the Prospectus, or arise out of or are based upon the omission or alleged omission to state in the section entitled “Underwriting” of

  

 22 

 
the Prospectus Supplement a material fact necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of such Initial Purchaser expressly for use therein; provided, however, that in no case shall the Initial Purchaser be liable or responsible for any amount in excess of the discounts and commissions received
by such Initial Purchaser in connection with the sale of the Securities. The parties acknowledge and agree that such information provided by or on behalf of an Initial Purchaser consists solely of the material identified in Section 16 hereof.
This indemnity will be in addition to any liability that an Initial Purchaser may otherwise have, including under this Agreement. 
 (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is to be sought in writing of the commencement thereof (but the failure so to notify an indemnifying party shall not relieve it from any liability which it may have under
this Section 9). In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate, at its own expense in the defense of
such action, and to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel satisfactory to such indemnified
party; provided, however, that counsel to the indemnifying party shall not (except with the written consent of the indemnified party) also be counsel to the indemnified party. Notwithstanding the foregoing, the indemnified party or parties
shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been
authorized in writing by one of the indemnifying parties in connection with the defense of such action, (ii) the indemnifying parties shall not have employed counsel to take charge of the defense of such action within a reasonable time after
notice of commencement of the action, (iii) the indemnifying party does not diligently defend the action after assumption of the defense, or (iv) such indemnified party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those available to one or all of the indemnifying parties (in which case the indemnifying party or parties shall not have the right to direct the defense of such action on behalf of
the indemnified party or parties), in any of which events such fees and expenses of one such counsel and any local counsel shall be borne by the indemnifying parties. No indemnifying party shall, without the prior written consent of the indemnified
parties, effect any settlement or compromise of, or consent to the entry of judgment with respect to, any pending or threatened claim, investigation, action 

  

 23 

 
or proceeding in respect of which indemnity or contribution may be or could have been sought by an indemnified party under this Section 9 or
Section 10 hereof (whether or not the indemnified party is an actual or potential party thereto), unless (x) such settlement, compromise or judgment (A) includes an unconditional release of the indemnified party from all liability
arising out of such claim, investigation, action or proceeding, and (B) does not include a statement as to or an admission of fault, culpability or any failure to act, by or on behalf of the indemnified party, and (y) the indemnifying
party confirms in writing its indemnification obligations hereunder with respect to such settlement, compromise or judgment. 
 9.
Contribution. In order to provide for contribution in circumstances in which the indemnification provided for in Section 9 is for any reason held to be unavailable from an indemnifying party or is insufficient to hold harmless a party
indemnified thereunder, the Company, on the one hand, and the Initial Purchaser, on the other hand, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnification provision
(including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted, but after deducting in the case of losses, liabilities, claims, damages
and expenses suffered by the Company, any contribution received by the Company from persons, other than the Initial Purchaser, who may also be liable for contribution, including persons who control the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) to which the Company and the Initial Purchaser may be subject, in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the
Initial Purchaser, on the other hand, from the offering of the Securities or, if such allocation is not permitted by applicable law in such proportion as is appropriate to reflect not only the relative benefits referred to above but also the
relative fault of the Company, on the one hand, and the Initial Purchaser, on the other hand, in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on the one hand, and the Initial Purchaser, on the other hand, shall be deemed to be in the same proportion as (a) the total proceeds from the offering of the Securities
(net of discounts but before deducting expenses) received by the Company bear to (b) the discounts and commissions received by the Initial Purchaser, respectively. The relative fault of the Company, on the one hand, and the Initial Purchaser,
on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company
or the Initial Purchaser and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Initial Purchaser agree that it would not be just and equitable if
contribution pursuant to this Section 10 were determined by pro rata allocation (even if the Initial Purchaser were treated as one entity for such purpose) or by any other method of allocation which does not take into account the
equitable considerations referred to above. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in Section 9 shall be deemed to include any legal or other 

  

 24 

 
expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by
any judicial, regulatory or other legal or governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this
Section 10, (i) in no case shall either of the Initial Purchaser be required to contribute any amount in excess of the amount by which the discounts and commissions received by such Initial Purchaser in respect of the Notes resold by the
Initial Purchaser in the initial placement of such Notes exceeds the amount of any damages which such Initial Purchaser has otherwise been required to pay by reason of any untrue or alleged untrue statement or omission, or alleged omission, and
(ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 10, (A) each person, if any, who controls either of the Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and (B) the respective officers, directors,
partners, employees, representatives and agents of the Initial Purchaser or any controlling person shall have the same rights to contribution as such Initial Purchaser, and (C) each person, if any, who controls any Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and (D) the officers, directors, employees, representatives and agents of the Company shall have the same rights to contribution as the Company, subject in each case
to clauses (i) and (ii) of this Section 10. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution
may be made against another party or parties under this Section 10, notify such party or parties from whom contribution may be sought, but the failure to so notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this Section 9 or otherwise. No party shall be liable for contribution with respect to any action or claim settled without its prior written consent, provided that
such written consent shall not be unreasonably withheld or delayed. 
 10. Survival Clause. The respective representations,
warranties, agreements, covenants and indemnities of the Company and the Initial Purchaser set forth in this Agreement shall remain in full force and effect, regardless of (a) any investigation made by or on behalf of officers, directors,
partners, employees, agents, representatives or controlling persons referred to in Sections 9 and 10 hereof, and (b) delivery of and payment for the Notes, and shall, subject to Section 14 hereof, be binding upon and shall, subject to
Section 14 hereof, inure to the benefit of, any successors, permitted assigns, heirs and legal representatives of the Company, the Initial Purchaser and the indemnified parties referred to in Section 9 hereof. The respective agreements,
covenants and indemnities set forth in Sections 7, 9, 10, 11 and 12 hereof shall remain in full force and effect, regardless of any termination of this Agreement. 
 11. Termination. (a) This Agreement may be terminated in the sole discretion of the Initial Purchaser by notice to the Company if (i) any conditions to be satisfied or obligations to be performed
hereunder by the Company, including but not limited to those set forth in Section 8, or for which the Company is responsible, have not 

  

 25 

 
been satisfied or performed in all respects on or prior to the Closing Date, or (ii) at or prior to the Closing Date or at prior to the Additional
Closing Date, as the case may be: 
 (A) any domestic or international event or act or occurrence has materially disrupted, or
in the opinion of the Initial Purchaser will in the immediate future materially disrupt, the market for the Company’s securities or securities in general; 
 (B) trading on the New York Stock Exchange or the Nasdaq Stock Market shall have been suspended or made subject to material limitations,
or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required, on the New York Stock Exchange or the Nasdaq Stock Market, or by order of the Commission or other regulatory body
or governmental authority having jurisdiction; 
 (C) a banking moratorium has been declared by any state or federal authority
or if any material disruption in commercial banking or securities settlement or clearance services shall have occurred; 
 (D)
(1) there shall have occurred any outbreak or escalation of hostilities or acts of terrorism involving the United States or there is a declaration of a national emergency or war by the United States, or (2) there shall have been any other
calamity or crisis or any change in political, financial or economic conditions if the effect of any such event in (1) or (2), in the opinion of the Initial Purchaser, makes it impracticable or inadvisable to proceed with the offering, sale and
delivery of the Notes or the Optional Notes, as the case may be, on the terms and in the manner contemplated by the Prospectus Supplement; or 
 (b) Subject to paragraph (c) below, termination of this Agreement pursuant to this Section 12 shall be without liability of any party to any other party except as provided in Section 11 hereof.

 (c) If this Agreement shall be terminated pursuant to any of the provisions hereof, or if the sale of the Securities
provided for herein is not consummated because any condition to the obligations of the Initial Purchaser set forth herein is not satisfied or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or
comply with any provision hereof, the Company will, subject to demand by the Initial Purchaser, reimburse the Initial Purchaser for all out-of-pocket expenses (including the reasonable fees and the expenses of its counsel), incurred by the Initial
Purchaser in connection herewith. 
 12. Notices. All notices and other communications provided for or permitted hereunder shall be
made in writing, shall be delivered by hand delivery, by telecopier, by courier guaranteeing overnight delivery or by first-class mail, return receipt 

  

 26 

 
requested, and shall be deemed given (i) when made, if made by hand delivery, (ii) upon confirmation, if made by telecopier (provided notice is
also given by some other means permitted by this Section 13), (iii) one Business Day after being deposited with such courier, if made by overnight courier, or (iv) on the date indicated on the notice of receipt, if made by first-class
mail, to the parties as follows: to the Initial Purchaser c/o CRT Capital Group LLC, 262 Harbor Drive, Stamford, CT 06902, Attention: Eric Seal, facsimile number: (203) 569-6890, and with a copy to DLA Piper Rudnick Gray Cary US LLP, 1251
Avenue of the Americas, New York, NY 10020, Attention: William Haddad, Esq., facsimile number: (212) 835-6001, and if sent to the Company, to Cell Therapeutics, Inc., 501 Elliot Avenue West, Suite 400, Seattle, Washington 98119, Attention:
Dr. James Bianco, facsimile number: (206) 272-4397, and with a copy to O’Melveny & Meyers, Embarcadero Center West, 275 Battery Street, Suite 2600, San Francisco, California 94111, Attention: Michael Kennedy, Esq., and David
Miscia, Esq., facsimile number: (415) 984-8701. 
 13. Successors. This Agreement shall inure to the benefit of and be binding
upon the Initial Purchaser and the Company and their respective successors, permitted assigns and legal representatives, and nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person except that (a) the indemnities of the Company contained in Section 9 of this Agreement shall also be for the benefit of any person or persons who control an Initial Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and the respective officers, directors, partners, employees, agents and representatives of the Initial Purchaser and any such person or persons, and (b) the
indemnities of an Initial Purchaser contained in Section 9 of this Agreement shall also be for the benefit of the directors, officers, employees, agents and representatives of the Company and any person or persons who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act. No purchaser of Securities from the Initial Purchaser will be deemed a successor or an assign because of such purchase. Prior to the Closing, no
party may assign this Agreement or any of its rights hereunder without the prior written consent of the other party or parties. 
 14. No
Waiver; Modifications in Writing. No failure or delay on the part of the Company or the Initial Purchaser in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such
right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to the Company or
the Initial Purchaser at law or in equity or otherwise. No waiver of or consent to any departure by the Company or the Initial Purchaser from any provision of this Agreement shall be effective unless signed in writing by the party entitled to the
benefit thereof; provided that notice of any such waiver shall be given to each party hereto as set forth below. Except as otherwise provided herein, no amendment, modification or termination of any provision of this Agreement shall be
effective unless signed in writing by or on behalf of 

  

 27 

 
the Company and the Initial Purchaser. Any amendment, supplement or modification of or to any provision of this Agreement, any waiver of any provision of
this Agreement, and any consent to any departure by the Company or the Initial Purchaser from the terms of any provision of this Agreement shall be effective only in the specific instance and for the specific purpose for which made or given. Except
where notice is specifically required by this Agreement, no notice to or demand on the Company in any case shall entitle the Company to any other or further notice or demand in similar or other circumstances. 
 15. Information Supplied by the Initial Purchaser. The statements set forth in the sixth, eighth, ninth and tenth paragraphs in the Prospectus
Supplement under the heading “Plan of Distribution” constitute the only information furnished by the Initial Purchaser to the Company for purposes of Sections 2(a), 9(a) and 9(b) hereof. 
 16. Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto and supersedes all prior agreements,
representations, warranties, understandings and arrangements, oral or written, among the parties hereto with respect to the subject matter hereof. 
 17. No Fiduciary Obligations. The Company acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to this Agreement, including the determination of the public offering price of the Securities and any
related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the Initial Purchaser, on the other hand, (ii) in connection with the offering contemplated hereby and the process
leading to such transaction, the Initial Purchaser are and have been acting solely as a principal and is not the agent or fiduciary of the Company or their respective stockholders, creditors, employees or any other party, (iii) the Initial
Purchaser have not assumed or will not assume an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether the Initial Purchaser have advised
or is currently advising the Company or on other matters) and the Initial Purchaser have no obligation to the Company with respect to the offering contemplated hereby except the obligations expressly set forth in this Agreement, (iv) the
Initial Purchaser and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company, and (v) the Initial Purchaser have not provided any legal, accounting, regulatory or
tax advice with respect to the offering contemplated hereby and the Company and have consulted their own legal, accounting, regulatory and tax advisors to the extent they deemed appropriate. 
 18. APPLICABLE LAW; JURISDICTION; WAIVER OF JURY TRIAL. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH
HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW. The Company agrees that any suit, action or proceeding against the Company arising
out of or based upon this Agreement or the transactions 

  

 28 

 
contemplated hereby may be instituted in any state or federal court in The City of New York, New York, and waives any objection which it may now or hereafter
have to the laying of venue of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding. The Company expressly accepts the non-exclusive jurisdiction of any such court in respect
of any such suit, action or proceeding. The Company agrees that a final judgment in any such proceeding brought in any such court shall be conclusive and binding thereupon and may be enforced in any other court in the jurisdiction to which the
Company is or may be subject by suit upon such judgment. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR
IN ANY WAY RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 
 19. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  

 29 

 If the foregoing correctly sets forth our understanding, please indicate your acceptance thereof in the
space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and the Initial Purchaser. 
  

			
	 Very truly yours,

	
	 CELL THERAPEUTICS, INC.

	
	 a Washington corporation

		
	By:	 	 /s/ James A. Bianco

		 	 Name: James A. Bianco, M.D.

		 	 Title: Chief Executive Officer

 The foregoing Agreement is hereby confirmed and accepted as of the date first above written. 
  

					
	 CRT CAPITAL GROUP LLC

		
	By:	 	/s/ ERIC SEAL
		 	 Name:
	 	 Eric Seal

		 	 Title:
	 	 Senior Vice President

 [Signature Page to Purchase Agreement]

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