Document:

EX-10.10  SERIES A PREFERRED STOCK PURCHASE

 

Exhibit 10.10

SERIES A PREFERRED STOCK PURCHASE AGREEMENT

dated as of September 13, 2006

by and among

TENBY PHARMA INC.

and

THE PURCHASERS SIGNATORY HERETO

 

 

SERIES A PREFERRED STOCK PURCHASE AGREEMENT

     This Series A Preferred Stock Purchase Agreement (this “Agreement”) is dated as of September 13, 2006, by and between Tenby Pharma Inc., a Delaware corporation (the “Company”), and each of the
purchasers identified on the signature pages hereto (each, a “Purchaser” and, collectively, the
“Purchasers”).

     WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506
promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase from the Company, certain securities of
the Company pursuant to the terms set forth herein.

     NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for
other good and valuable consideration the receipt and adequacy of which are hereby acknowledged,
the Company and each Purchaser, severally and not jointly, agree as follows:

ARTICLE I

DEFINITIONS

     1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, the
following terms have the meanings indicated:

     “8-K Filing” is defined in Section 4.8(a).

     “Agreement” is defined in the Preamble.

     “Affiliate” means any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person, as such terms are used in
and construed under Rule 144 under the Securities Act. With respect to a Purchaser, any investment
fund or managed account that is managed on a discretionary basis by the same investment manager as
such Purchaser will be deemed to be an Affiliate of such Purchaser.

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

     “Certificate of Designations” means a certificate of designations of the Series A Preferred
Stock, in the form of Exhibit A.

     “Closing” means the closing of the purchase and sale of the Shares pursuant to Section
2.1 upon the satisfaction of each of the conditions set forth in Sections 5.1 and
5.2.

     “Closing Date” means the date of the Closing.

2

 

     “Closing Price” means, for any date, the price determined by the first of the following
clauses that applies: (i) if the Common Stock is then listed or quoted on the Trading Market, the
closing bid price per share of Common Stock for such date (or the nearest preceding date) on the
Trading Market or exchange on which the Common Stock is then listed or quoted; or (ii) in all other
cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by a majority in interest of the Purchasers.

     “Commission” means the Securities and Exchange Commission.

     “Common Stock” means the common stock of the Company, par value $0.0001 per share.

     “Companies” means, collectively, the Company, each of its Subsidiaries and each of their
respective predecessors.

     “Company” is defined in the Preamble.

     “Company Contract” means any Contract, including any amendment or supplement thereto: (i) to
which the Company or any of its Subsidiaries is a party; (ii) by which the Company or any of its
Subsidiaries or any of their respective assets is or may become bound or under which the Company or
any of its Subsidiaries has, or may become subject to, any obligation; or (iii) under which the
Company or any of its Subsidiaries has or may acquire any right or interest.

     “Company Counsel” means Hill, Ward and Henderson, P.A., counsel to the Company.

     “Company Documents” is defined in Section 3.1(c).

     “Company IP” means all Intellectual Property Rights and Intellectual Property owned by or
exclusively licensed to any of the Companies.

     “Consent” means any approval, consent, ratification, permission, waiver or authorization
(including any Governmental Authorization) of any third party (including any Governmental Body).

     “Contract” means any written, oral or other agreement, contract, subcontract, lease,
understanding, instrument, note, warranty, license, sublicense, insurance policy, benefit plan or
legally binding commitment or undertaking of any nature, whether express or implied.

     “Contribution” means the contribution of shares of capital stock of Sirion by the Old Sirion
Shareholders pursuant to the terms of the Contribution Agreement.

     “Contribution Agreement” means the Contribution Agreement, dated as of the date hereof, by and
among the Company, Sirion and the Old Sirion Shareholders, pursuant to which each of the Old Sirion
Shareholders contributed all of its shares of capital stock of Sirion in exchange for shares of
capital stock of the Company.

     “Disclosure Materials” is defined in Section 3.1(e).

3

 

     “Eligible Market” means the (i) the New York Stock Exchange, (ii) the American Stock Exchange,
(iii) the NASDAQ Global Market, (iv) the NASDAQ Capital Market, (v) the OTC Bulletin Board, or (vi)
the “Pink Sheets” published by the Pink Sheets LLC (or a similar organization or agency succeeding
to its functions of reporting prices).

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

     “FDA” means the United States Food and Drug Administration, or any successor Governmental Body
in the United States.

     “Fenretinide” means 4-hydroxyphenyl retinamide and its active metabolite, 4-methoxyphenyl
retinamide.

     “FTE” means the equivalent of a full-time twelve (12) months’ (including normal vacations,
sick days and holidays) work of an employee of or a consultant to a party; provided,
however, that each party understands and agrees that the other party retains complete
discretion to change the identity of any such employee or consultant.

     “GAAP” means United States generally accepted accounting principles, as recognized by the
American Institute of Certified Public Accountants or the Financial Accounting Standards Board,
consistently applied and maintained on a consistent basis for the Company and its Subsidiaries
throughout the period indicated and consistent with the prior financial practice of the Company;
provided, however, that any accounting principle or practice required to be changed
by the American Institute of Certified Public Accountants or the Financial Accounting Standards
Board (or other appropriate board or committee of either) in order to continue as a generally
accepted accounting principle or practice may be so changed.

     “Governmental Authorization” means any: (i) approval, permit, license, certificate, franchise,
permission, clearance, registration, qualification or other authorization issued, granted, given or
otherwise made available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement; or (ii) right under any Contract with any Governmental Body.

     “Governmental Body” means any: (i) nation, state, commonwealth, province, territory, county,
municipality, district or other jurisdiction of any nature; (ii) federal, state, local, municipal,
foreign, supranational or other government (including the European Union); or (iii) governmental,
self-regulatory or quasi-governmental authority of any nature, including any governmental division,
department, agency, commission, instrumentality, official, organization, unit, body or Person and
any court or other tribunal.

     “Hazardous Materials” means substances that are defined by Legal Requirements concerning the
environment as toxic materials, hazardous wastes or hazardous substances (including without
limitation any asbestos, oils, petroleum-derived compound or pesticides).

     “Initial FTEs” means six (6) FTEs (initially Kenneth Widder, Jay Lichter, Nathan Mata, Yun
Han, Tam Bui and Fran Senchak).

4

 

     “Intellectual Property” means and includes all apparatus, biological materials, clinical data,
chemical compositions or structures, databases and data collections, diagrams, formulae, inventions
(whether or not patentable), know-how, logos, marks (including brand names, product names, logos,
and slogans), methods, processes, proprietary information, protocols, schematics, specifications,
software, techniques, URLs, websites, works of authorship, and other forms of technology (whether
or not embodied in any tangible form and including all tangible embodiments of the foregoing such
as instruction manuals, laboratory notebooks, prototypes, samples, studies, and summaries).

     “Intellectual Property Rights” means and includes all past, present, and future rights of the
following types, which may exist or be created under the Legal Requirements of any jurisdiction in
the world: (i) rights associated with works of authorship, including exclusive exploitation rights,
copyrights and moral rights; (ii) trademark and trade name rights and similar rights; (iii) trade
secret rights; (iv) patents and industrial property rights; (v) other proprietary rights in
Intellectual Property of every kind and nature; and (vi) all registrations, renewals, extensions,
combinations, divisions, or reissues of, and applications for, any of the rights referred to in the
foregoing clauses “(i)” through “(vi)” of this definition.

     “Investors’ Rights Agreement” means the Investors’ Rights Agreement, dated on or about the
Closing Date, by and among the Company and certain stockholders of the Company, in the form of
Exhibit B.

     “Knowledge of the Company” means the actual knowledge, without any duty of inquiry, of Kenneth
Widder, Jay Lichter, Nathan Mata, Barry Butler, Roger Vogel or Randy Milby.

     “Legal Proceeding” means any ongoing or threatened action, suit, litigation, arbitration,
proceeding (including, without limitation, any civil, criminal, administrative, investigative or
appellate proceeding, or partial proceeding, such as a deposition), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or before, or otherwise
involving, any court or other Governmental Body or any arbitrator or arbitration panel.

     “Legal Requirement” means any federal, state, local, municipal, foreign, international,
multinational or other law, statute, constitution, principle of common law, resolution, ordinance,
code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated,
implemented or otherwise put into effect by or under the authority of any Governmental Body.

     “Liabilities” means any debt, obligation, duty or liability of any nature (including unknown,
undisclosed, unmatured, unaccrued, contingent, or indirect) regardless of whether such debt,
obligation, duty or liability would be required to be disclosed on a balance sheet prepared in
accordance with GAAP and regardless of whether such debt, obligation, duty or liability is
immediately due and payable.

     “Lien” means any lien, pledge, hypothecation, charge, mortgage, security interest,
encumbrance, claim, option, right of first refusal, preemptive right, community property interest
or restriction of any nature affecting property, real or personal, tangible or intangible,
including any restriction on the voting of any security, any restriction on the transfer of any
security or

5

 

other asset, any restriction on the receipt of any income derived from any asset and any
filing of or agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statute of any jurisdiction).

     “Losses” means any and all losses, claims, damages, liabilities, settlement costs and
expenses, including without limitation reasonable attorneys’ fees; provided,
however, that Losses shall specifically exclude punitive damages.

     “Material Adverse Effect” means the existence of any fact or circumstance or the occurrence of
any event which could, individually or in the aggregate, (i) adversely affect the legality,
validity or enforceability of any Transaction Document, (ii) have or result in a material adverse
effect on the results of operations, assets, prospects, business or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) adversely impair the
Companies’ ability to perform fully on a timely basis their respective obligations under any of the
Transaction Documents.

     “Material Adverse Event” means (i) the termination of any license agreement pursuant to which
the Companies license any of the Sirion Phase III Compound; (ii) the discovery of any new fact or
circumstance that would (or any bona fide claim of the existence of any such fact or circumstance
which, if true, would), in the opinion of an independent patent counsel, render (a) any material
claim under any patent application relating to Syt101 non-patentable or (b) any issued patent
relating to Syt101 invalid or unenforceable; or (iii) Barry Butler shall cease to be employed on a
full time basis as the Principal Executive Officer of the Company.

     “Material Permits” is defined in Section 3.1(j).

     “Old Sirion Shareholders” means the holders of the capital stock of Sirion immediately prior
to the consummation of the Contribution.

     “Order” means any writ, decree, permanent injunction, order or similar action issued in a
Legal Proceeding.

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

     “Product” means any preparation which contains Syt101 as an active ingredient for sale by
prescription, over-the-counter or any other method.

     “Purchase Price” is defined in Section 2.1.

     “Purchaser” is defined in the Preamble.

     “Purchaser Counsel” means Proskauer Rose LLP, counsel to the Purchaser.

     “Registered IP” means all Intellectual Property Rights that are registered, filed, or issued
under the authority of any Governmental Body, including all patents, registered copyrights,
registered mask works, and registered trademarks and all applications for any of the foregoing.

6

 

     “Registrable Securities” has the meaning given to such term in the Investors’ Rights
Agreement.

     “Representatives” means officers, directors, employees, consultants, agents, attorneys,
accountants, advisors and representatives.

     “Related Person” is defined in Section 4.16(b)(i).

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

     “SEC Reports” is defined in Section 3.1(e).

     “Securities” means the Shares and the Underlying Shares.

     “Securities Act” is defined in the Preamble.

     “Series A Preferred Stock” means the Series A Convertible Preferred Stock, par value $0.0001,
of the Company, which is convertible into shares of Common Stock.

     “Shares” means an aggregate of 3,125,000 shares of Series A Preferred Stock which are being
purchased by the Purchasers pursuant to this Agreement.

     “Sirion” means Sirion Therapeutics, Inc., a North Carolina corporation, the surviving
corporation of the Sirion/Sytera Merger and a wholly-owned Subsidiary of the Company.

     “Sirion Phase III Compound” means Difluprednate.

     “Sirion/Sytera Merger” means the merger of Sytera, Inc., a Delaware corporation, with and into
Sirion Therapeutics, Inc., a North Carolina corporation, pursuant to the terms of the Sirion/Sytera
Merger Agreement.

     “Sirion/Sytera Merger Agreement” means that certain Agreement and Plan of Merger and
Reorganization, dated as of July 5, 2006, by and among the Sirion Therapeutics, Inc., a North
Carolina corporation, Sytera, Inc., a Delaware corporation, Kenneth J. Widder, M.D., as the
representative of the holders of Sytera capital stock, and Barry Butler, as the representative of
the holders of Sirion securities, pursuant to which Sytera was merged with and into Sirion
Therapeutics, Inc., with Sirion Therapeutics, Inc. continuing as the surviving corporation.

     “Subsidiary” is defined in Section 3.1(a).

     “Syt101” means Fenretinide, including any active metabolite or prodrug of Fenretinide or any
hydrate, conjugate, salt, ester, amide, solvate, cocrystal, isomer, polymorph, analogue or other
derivative of any of the foregoing.

7

 

     “Sytera” means Sytera, Inc., a Delaware corporation, which merged with and into Sirion
pursuant to the Sirion/Sytera Merger Agreement and which no longer exists as a separate legal
entity.

     “Tax” means any tax (including any income tax, franchise tax, capital gains tax, gross
receipts tax, value added tax, surtax, excise tax, ad valorem tax, transfer tax, stamp tax, sales
tax, use tax, property tax, business tax, withholding tax or payroll tax), levy, assessment,
tariff, duty (including any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or under the authority
of any Governmental Body.

     “Tax Return” means any return (including any information return), report, statement,
declaration, estimate, schedule, notice, notification, form, election, certificate or other
document or information filed with or submitted to, or required to be filed with or submitted to,
any Governmental Body in connection with the determination, assessment, collection or payment of
any Tax or in connection with the administration, implementation or enforcement of or compliance
with any Legal Requirement relating to any Tax.

     “Trading Day” means (a) any day on which the Common Stock is listed or quoted and traded on
the Trading Market, or (b) if the Common Stock is not then listed or quoted and traded on the
Trading Market, then any Business Day.

     “Trading Market” means the OTC Bulletin Board or, at any time the Common Stock is not quoted
on the OTC Bulletin Board, the primary Eligible Market on which the Common Stock is then listed or
quoted, if any.

     “Transaction Documents” means this Agreement, the Investors’ Rights Agreement, the Certificate
of Designations and each of the certificates and other documents delivered at the Closing pursuant
to Section 2.3 below.

     “Transfer Agent Instructions” means the Irrevocable Transfer Agent Instructions, in the form
of Exhibit C, to be executed by the Company and delivered to and acknowledged in writing by
the Company’s transfer agent pursuant to Section 4.19.

“Transfers” has the meaning given to such term in the Contribution Agreement.

     “Underlying Shares” means the shares of Common Stock issuable upon conversion of the Shares
and in satisfaction of any other obligation of the Company to issue shares of Common Stock pursuant
to the Transaction Documents.

ARTICLE II

PURCHASE AND SALE

     2.1 Sale and Issuance of Series A Preferred Stock at Closing. Subject to the terms
and conditions set forth in this Agreement, at the Closing, the Company shall issue and sell to the
Purchasers, and the Purchasers shall purchase from the Company, the Shares for a purchase price of
$8.00 per share and an aggregate purchase price of
$25,000,000 (the “Aggregate Purchase Price”), allocated among the Purchasers as reflected on
Schedule 2.1.

8

 

     2.2 Closing. The Closing shall take place at the New York offices of Purchaser
Counsel at 10:00 a.m. local time, immediately following the satisfaction or waiver of all of the
conditions set forth in Section 5.1 and Section 5.2 (other than those conditions
that by their nature must be satisfied on the Closing Date), or at such other location or time as
the parties may agree (such date on which the Closing occurs being hereinafter referred to as the
“Closing Date”).

     2.3 Closing Deliveries.

          (a) At the Closing, the Company shall deliver or cause to be delivered to each Purchaser the
following:

          (i) a stock certificate representing the number of Shares indicated below such
Purchaser’s name on the signature page of this Agreement under the heading “Shares,”
registered in the name of such Purchaser;

          (ii) the legal opinion of Company Counsel, in the form of Exhibit D, executed
by such counsel and delivered to the Purchasers;

          (iii) the Investors’ Rights Agreement duly executed by the Company and each of the
other stockholders of the Company party thereto;

          (iv) a certificate dated as of the Closing Date and signed by the chief executive
officer of the Company certifying as to the fulfillment of each of the conditions set forth
in Section 5.1;

          (v) a long-form certified copy of the certificate of incorporation of the Company
(including, without limitation, the Certificate of Designations) as certified by the
Secretary of State of the State of Delaware;

          (vi) a certificate, as of a date within three (3) business days of the Closing Date, as
to the corporate good standing of the Company and each of its Subsidiaries, issued by the
Secretary of State of the State of Delaware confirming such good standing as of such date;
and

          (vii) a certificate, in a form reasonably satisfactory to the Purchasers, executed by
the Secretary of the Company and dated the Closing Date, as to (A) the certificate of
incorporation and by-laws, each as in effect at the Closing, (B) the resolutions as adopted
by the board of directors of the Company, authorizing and approving all matters in
connection with this Agreement, the other Transaction Documents and the transactions
contemplated hereby and thereby, in a form reasonably satisfactory to the Purchasers, and
(C) the incumbency of each officer of the Company executing any Transaction Document or any
other document or agreement executed in connection with the transactions contemplated
thereby.

          (b) At the Closing, each Purchaser shall deliver or cause to be delivered to the Company the
following:

9

 

          (i) the Purchase Price indicated below such Purchaser’s name on the signature page of
this Agreement under the heading “Purchase Price,” in United States dollars and in
immediately available funds, by wire transfer to an account designated in writing by the
Company for such purpose; and

          (ii) the Investors’ Rights Agreement duly executed by such Purchaser.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

     3.1 Representations and Warranties of the Company. The Company hereby makes the
following representations and warranties to the Purchasers:

          (a) Subsidiaries. The Company does not directly or indirectly control or own any
interest in any other corporation, partnership, joint venture or other business association or
entity (a “Subsidiary”), other than those listed in Schedule 3.1(a). Except as disclosed
in Schedule 3.1(a), the Company owns, directly or indirectly, all of the capital stock and
other securities of each Subsidiary free and clear of any Lien, and all the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights.

          (b) Organization and Qualification. The Company and each of the Subsidiaries that is
a corporation is duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with all necessary power and authority: (i) to conduct its
business in the manner in which its business is currently being conducted; (ii) to own and use its
assets in the manner in which its assets are currently owned and used; and (iii) to perform its
obligations under all Company Contracts to which it is a party. Each of the Subsidiaries that is a
limited liability company is duly formed, validly existing and in good standing under the laws of
the jurisdiction of its formation, with all necessary power and authority: (i) to conduct its
business in the manner in which its business is currently being conducted; (ii) to own and use its
assets in the manner in which its assets are currently owned and used; and (iii) to perform its
obligations under all Company Contracts to which it is a party. None of the Companies has
conducted any business under or otherwise used, for any purpose or in any jurisdiction, any
fictitious name, assumed name, trade name or other name, other than the names listed on
Schedule 3.1(b). The Company and each of the Subsidiaries is not and has not been required
to be qualified, authorized, registered or licensed to do business as a foreign corporation or
limited liability company, as applicable, in any jurisdiction. None of the Companies has agreed or
is obligated to make any future investment in or capital contribution to any Person. None of the
Companies nor any of their respective stockholders has ever approved, or commenced any Legal
Proceeding or made any election contemplating, the dissolution or liquidation of the Companies’
business or affairs.

          (c) Certificate of Incorporation and Bylaws; Records. The Company has delivered to
the Purchasers accurate and complete (through the date hereof) copies of: (i) the certificate of
incorporation and bylaws (or, in the case of a limited liability company, the certificate of
formation and limited liability company operating agreement, or similar

10

 

organizational documents),
including all amendments thereto, of the Company and each of the Subsidiaries; (ii) the equity
records of the Company and each of the Subsidiaries; and (iii) the minutes and other records of the
meetings and other proceedings (including any actions taken by written consent or otherwise without
a meeting) of the holders of securities of the Company or any of its Subsidiaries, the board of
directors or board of managers, as applicable, of each of the Companies and all committees of the
board of directors or board of managers, as applicable, of each of the Companies (the items
described in the foregoing clauses “(i),” “(ii)” and “(iii)” of this Section 2.2 being
collectively referred to herein as the “Company Documents”). There have been no formal meetings
held of, or corporate actions taken by, the equityholders of any of the Companies, the board of
directors or board of managers, as applicable, of any of the Companies or any committee of the
board of directors or board of managers, as applicable, of any of the Companies that are not fully
reflected in the Company Documents. There has not been any violation of any of the Company
Documents, and at no time has any of the Companies taken any action that is inconsistent in any
material respect with the Company Documents. The books of account, equity records, minute books
and other records of each of the Companies are accurate, up-to-date and complete in all material
respects, and have been maintained in accordance with Legal Requirements and prudent business
practices.

          (d) Capitalization, Issuance of Securities.

          (i) The authorized capital stock of the Company consists of: (A) 150,000,000 shares of
Common Stock, of which 3,577,833 shares have been issued and are outstanding; and (B)
10,000,000 shares of Preferred Stock, of which 5,000,000 shares have been designated as
Series A Preferred Stock and 1,672,036 shares of which have been issued or are outstanding.
The number of shares and type of all authorized, issued and outstanding capital stock,
options and other securities of the Company (whether or not presently convertible into, or
exercisable or exchangeable for, shares of capital stock of the Company) is set forth in
Schedule 3.1(d), together with the record and beneficial owners thereof. All of the
outstanding shares of capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable. All of the outstanding shares of capital stock
of the Company and all of the outstanding subscriptions, options, calls, warrants or rights
(whether or not currently exercisable) to acquire any shares of capital stock of the Company
or other securities of the Company have been issued in compliance with all applicable
federal and state securities laws and other applicable Legal Requirements and all
requirements set forth in the Company Documents and Company Contracts. No shares of capital
stock of the Company are subject to a repurchase option in favor of the Company, and the
Company has never repurchased, redeemed or otherwise reacquired any shares of capital stock
or other securities of the Company. To the Knowledge of the Company, except as specifically
disclosed in Schedule 3.1(d), no Person or group of related Persons beneficially
owns (as determined pursuant to Rule 13d-3 under the Exchange Act), or has the right to
acquire, by agreement with or by obligation binding upon the Company, beneficial ownership
of in excess of 5% of the outstanding Common Stock, ignoring for such purposes any
limitation on the number of shares of Common Stock that may be owned at any single
time.

11

 

          (ii) Except as set forth on Schedule 3.1(d)(ii), there are no: (A) outstanding
subscriptions, options, calls, warrants or rights (whether or not currently exercisable) to
acquire any shares of capital stock or other securities of any of the Companies; (B)
outstanding securities, notes, instruments or obligations that are or may become convertible
into or exchangeable for any shares of capital stock or other securities of any of the
Companies; (C) outstanding or authorized stock appreciation, phantom stock or similar rights
with respect to the capital stock of any of the Companies; (D) Contracts (other than this
Agreement) under which any of the Companies is or may become obligated to sell, transfer,
exchange or issue any shares of capital stock or any other securities of any of the
Companies; (E) agreements, voting trusts, proxies or understandings with respect to the
voting, or registration under the Securities Act, of any shares of any of the Companies; or
(F) conditions or circumstances (including the existence of any anti-dilution or price
adjustment provisions) that may give rise to or provide a basis for the assertion of a claim
by any Person to the effect that such Person is entitled to acquire or receive any of the
securities of any of the Companies, any shares of capital stock or other securities of any
of the Companies or an adjustment to the conversion or exercise price of any securities of
any of the Companies.

          (iii) The Securities are duly authorized and, when issued and paid for in accordance
with the Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens and shall not be subject to preemptive rights or
similar rights of stockholders. The Company has reserved from its duly authorized capital
stock a number of shares of Common Stock for issuance upon the conversion or exercise of the
Underlying Shares.

          (iv) Schedule 3.1(d)(iv) sets forth a complete and accurate list of all of the
stock option plans and other stock or equity-related plans of each of the Companies.

          (e) SEC Reports; Financial Statements. The Company has filed all reports required to
be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a)
or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the
Company was required by law to file such material) (the foregoing materials, together with the 8-K
Filing, are collectively referred to herein as the “SEC Reports” and, together with this Agreement
and the Schedules to this Agreement, the “Disclosure Materials”) on a timely basis or has received
a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. The Company has delivered to the Purchasers a copy of all SEC Reports filed
within the 10 days preceding the date hereof. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act and the Exchange Act
and the rules and regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading. The consolidated
financial statements of the Company included in the SEC Reports (the “Financial Statements”) comply
in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect thereto as in effect
at the time of filing. The Financial Statements have been prepared in accordance with GAAP, except
as may be otherwise specified in the Financial Statements or the notes thereto, and fairly

12

 

present
in all material respects the assets, liabilities and financial position of the Company and its
consolidated subsidiaries as of and for the dates thereof and the results of operations and cash
flows for the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. The books and records of each of the Companies are true,
accurate and complete in all material respects. All material agreements to which any of the
Companies is a party or to which the property or assets of any of the Companies are subject are
included as part of or specifically identified in the SEC Reports.

          (f) Equipment; Leasehold. Schedule 3.1(f) sets forth a true and complete list
of all inventory, machinery, equipment, furniture, office equipment, supplies, materials, vehicles
and other material items of tangible personal property of every kind owned by the Companies and
used in connection with its business (the “Company Personal Property”). All of the Company
Personal Property and other tangible assets owned by or leased to the Companies are in good
condition and repair (ordinary wear and tear excepted) and are adequate for the conduct of the
Companies’ businesses in the manner in which such businesses are currently being conducted. Other
than transactions occurring in the ordinary course of business, the Companies have not made any
taxable distribution of corporate property during the taxable year beginning January 1, 2006. The
Companies do not own any real property or any interest in real property, except for the leasehold
interest created under the real property leases identified in Schedule 3.1(f) (the “Company
Leased Real Property”).

          (g) Intellectual Property.

          (i) Schedule 3.1(g)(i) accurately identifies: (i) each item of Registered IP in
which any of the Companies has or purports to have an ownership interest of any nature
(whether exclusively, jointly with another Person, or otherwise); (ii) the jurisdiction in
which such item of Registered IP has been registered or filed and the applicable
registration or serial number; and (iii) any other Person that has an ownership interest in
such item of Registered IP and the nature of such ownership interest. The Company has
provided to Purchasers complete and accurate copies of all applications and correspondence
with any Governmental Body related to each such item of Registered IP.

          (ii) Schedule 3.1(g)(ii) accurately identifies: (i) all Intellectual Property
Rights or Intellectual Property licensed to any of the Companies (other than any
non-customized software that is so licensed solely in executable or object code form
pursuant to a non-exclusive, internal-use software license or is generally publicly
available on standard terms for less than $1,000); and (ii) the corresponding Contract or
Contracts pursuant to which such Intellectual Property Rights or Intellectual Property is or
are licensed to any of the Companies. None of the transactions contemplated by this
Agreement or any of the other Transaction Documents will materially adversely alter or
impair the Company’s Intellectual Property Rights or the Intellectual Property licensed to
any of the Companies.

          (iii) Schedule 3.1(g)(iii) accurately identifies each Contract pursuant to
which any Person has been granted any license under, or otherwise has received or acquired
any right (whether or not currently exercisable) or interest in, any Company IP. None of
the Companies is bound by, and no Company IP is subject to, any Contract

13

 

containing any covenant or other provision that in any way limits or restricts the ability of the Companies
to use, exploit, assert, or enforce any Company IP anywhere in the world.

          (iv) The Companies exclusively own all right, title, and interest to and in the Company
IP, free and clear of any Liens. Without limiting the generality of the foregoing:

               (A) All documents and instruments necessary to perfect the rights of the Companies in
the Registered IP have been validly executed, delivered and filed in a timely manner with
the appropriate Governmental Body;

               (B) Each Person who is or was an employee or contractor of any of the Companies and who
is or was involved in the creation or development of any Company IP has signed a valid,
enforceable written agreement containing an assignment of Intellectual Property Rights to
such Company and confidentiality provisions in favor of such Company regarding the Company
IP. No current or former Representative or Affiliate of any of the Companies has any claim,
right (whether or not currently exercisable) or interest to or in any Company IP;

               (C) With respect to Company IP in the form of licenses of third party Intellectual
Property and Intellectual Property Rights, no funding, facilities or personnel of any
Governmental Body within the jurisdictions covered by the license were used, directly or
indirectly, to develop or create, in whole or in part, such Company IP. With respect to all
other Company IP, no funding, facilities or personnel of any Governmental Body were used,
directly or indirectly, to develop or create, in whole or in part, such Company IP;

               (D) Each of the Companies has taken all reasonable steps to maintain the
confidentiality of and otherwise protect and enforce its rights in all proprietary
information that it holds, or purports to hold, as a trade secret;

               (E) None of the Companies has assigned or otherwise transferred ownership of, or agreed
to assign or otherwise transfer ownership of, any Company IP to any other Person; and

               (F) None of the Companies is, or has ever been, a member or promoter of, or a
contributor to, any industry standards body or similar organization that could require or
obligate any of the Companies to grant or offer to any other Person any license or right to
any Company IP.

          (v) (A) With respect to Company IP in the form of licenses from third parties of
Intellectual Property and Intellectual Property Rights: (x) each item of Company IP that is
Registered IP is in compliance with all Legal Requirements and is valid and in full force
and effect; and (y) no application for any type of Registered IP
filed by or on behalf of any of the Companies has been abandoned, allowed to lapse or
rejected.

14

 

               (B) With respect to all other Company IP, each item of Company IP that is Registered IP
is and at all times has been maintained in compliance with all Legal Requirements; all
filings, payments and other actions required to be made or taken to maintain such item of
Registered IP in full force and effect have been made by the applicable deadline; and each
such item of Registered IP is valid and in full force and effect. No application for any
type of Registered IP filed by or on behalf of any of the Companies has been abandoned,
allowed to lapse or rejected. No item of Company IP that is Registered IP is subject to any
maintenance fees or Taxes or actions falling due within ninety (90) days after the Closing
Date.

          (vi) To the Knowledge of the Company, no Person has infringed, misappropriated or
otherwise violated or is currently infringing, misappropriating or otherwise violating any
Company IP.

          (vii) To the Knowledge of the Company, none of the Company IP owned or licensed by any
of the Companies currently infringes, misappropriates or otherwise violates or has ever
infringed (directly, contributorily, by inducement or otherwise), misappropriated or
otherwise violated any Intellectual Property Right of any other Person. Without limiting
the generality of the foregoing:

               (A) To the Knowledge of the Company, no infringement, misappropriation or similar claim
or Legal Proceeding is pending or has been threatened against any of the Companies; and

               (B) None of the Companies is bound by any Contract to indemnify, defend, hold harmless
or reimburse any other Person with respect to any Intellectual Property infringement,
misappropriation or any similar claim. None of the Companies has ever assumed, or agreed to
discharge or otherwise take responsibility for, any existing or potential liability of
another Person for the infringement, misappropriation or violation of any Intellectual
Property Right.

          (h) Contracts. Schedule 3.1(h) identifies each Company Contract and provides
an accurate description of the terms of each Company Contract that is not in written form. The
Company has delivered to the Purchasers accurate and complete copies of all written Company
Contracts. Each Company Contract is valid, binding and enforceable by each of the Companies party
thereto in accordance with its terms subject to: (i) laws of general application relating to
bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies. None of the Companies has violated or
breached, or committed any default under, any Company Contract, and, to the Knowledge of the
Company, no other Person has violated or breached, or committed any default under, any Company
Contract. Schedule 3.1(h) provides an accurate and complete list of all Consents required
under any Company Contract to consummate the transactions contemplated by the Transaction
Documents.

          (i) Finder’s Fee. No brokerage or finder’s fees or commissions are or will be payable
by any of the Companies to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions

15

 

contemplated by this
Agreement and the other Transaction
Documents, and none of the Companies has taken any action that
would cause any Purchaser to be liable for any such fees or commissions.

          (j) Compliance with Legal Requirements. Each of the Companies is, and has at all
times been, in compliance with all material applicable Legal Requirements, and, to the Knowledge of
the Company, each of the Companies is, and has at all times been, in compliance with all other
applicable Legal Requirements. None of the Companies has ever received any notice or other
communication from any Person regarding any actual or possible violation of, or failure to comply
with, any Legal Requirement. The Companies possess all material Governmental Authorizations issued
by the appropriate Governmental Body necessary to conduct their respective businesses and own their
respective assets (each a “Material Permit”), and no Legal Proceedings are pending or, to the
Knowledge of the Company, threatened to revoke, modify or limit any Material Permit.

          (k) Legal Proceedings. There is no pending Legal Proceeding, and to the Knowledge of
the Company, no Person has threatened to commence any Legal Proceeding, that (i) involves or
affects any of the Companies or any of the assets owned or used by any of the Companies, or (ii)
that challenges the purchase of the Shares or any of the other transactions contemplated by the
Transaction Documents. To the Knowledge of the Company, no Legal Proceeding has ever been
commenced that involves or affects any of the Companies or the assets owned by any of the
Companies. There is no Order in which any of the Companies is named or to which any of the assets
of the Companies is subject. None of the Companies or any director or officer thereof, is or has
been the subject of any Legal Proceeding involving a claim of violation of or liability under
federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and
to the Knowledge of the Companies, there is not pending or contemplated, any investigation by the
Commission involving any of the Companies or any current or former director or officer of any of
the Companies. The Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by any of the Companies under the Exchange Act or
the Securities Act. No strike, work stoppage, slow down or other material labor problem exists or,
to the Knowledge of the Company, is threatened or imminent with respect to any of the employees of
any of the Companies.

          (l) No Undisclosed Liabilities. The Companies have no Liabilities, except for (i)
Liabilities reflected on the Financial Statements, (ii) accounts payable incurred in the ordinary
course of business since the date of the last balance sheet reflected in the Financial Statements,
none of which are material in nature or exceed $25,000, (iii) Liabilities under the Company
Contracts, and (iv) Liabilities incurred in connection with the negotiation of the Transaction
Documents and the transactions contemplated thereby. Since the date of the latest audited
financial statements included within the SEC Reports, except as specifically disclosed in the SEC
Reports, (i) there has been no event, occurrence or development that has had or that could result
in a Material Adverse Effect, (ii) none of the Companies has incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of
business consistent with past practice, and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or required to be disclosed in filings made
with the Commission, (iii) none of the Companies has altered its method of accounting or the
identity of its auditors, (iv) none of the Companies has declared or made any dividend or

16

 

distribution of cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock, and (v) none of the Companies has
issued any equity securities to any officer, director or Affiliate, except pursuant to existing
Company stock option plans. The Company does not have pending before the Commission any request
for confidential treatment of information.

          (m) Tax Matters. All Tax Returns required to be filed by or on behalf of any of the
Companies with any Governmental Body before the Closing Date (the “Company Returns”): (i) have
been or will be filed on or before the applicable due date (including any extensions of such due
date); (ii) have been, or will be when filed, accurately and completely prepared in all material
respects in compliance with all applicable Legal Requirements; and (iii) have been provided or made
available to the Purchasers. All Taxes owed by each of the Companies have been paid when due,
whether or not such amounts are shown on any Company Returns. The Financial Statements fully
accrue all actual and contingent Liabilities for unpaid Taxes with respect to all periods through
the date thereof and the Company has made adequate provision for unpaid Taxes after that date in
its books and records. No Company Return has ever been examined or audited by any Governmental
Body. No claim or Legal Proceeding is pending or has been threatened against or with respect to
any of the Companies in respect of any Tax. There are no unsatisfied Liabilities for Taxes,
including Liabilities for interest, additions to tax and penalties thereon and related expenses,
with respect to which any notice of deficiency or similar document has been received by any of the
Companies (other than Liabilities for Taxes asserted under any such notice of deficiency or similar
document which are being contested in good faith by the Company and with respect to which adequate
reserves for payment have been established). There are no Liens for Taxes upon any of the assets
of the Company except Liens for current Taxes not yet due and payable. For federal income tax
purposes, the Sirion/Sytera Merger constituted a reorganization within the meaning of Section
368(a)(1) of the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the “Code”). The parties to the Sirion/Sytera Merger Agreement have
adopted the Sirion/Sytera Merger Agreement as a “plan of reorganization” within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations. The shares of
capital stock of Sirion issued and to be issued to the holders of Sytera Securities (as defined in
the Sirion/Sytera Merger Agreement) in connection with the Sirion/Sytera Merger constituted and
will constitute consideration paid in connection with the Sirion/Sytera Merger and the receipt of
stock in exchange for stock in connection with the Sirion/Sytera Merger was and will be tax-free
within the meaning of Section 354 of the Code. The Transfers qualify as a tax-free transfer under
Section 351 of the Code and pursuant to the application of Section 351, no gain or loss has been or
will be recognized by the Company, Sirion or the Old Sirion Shareholders upon such transfer. The
Company is not an investment company within the meaning of Section 351(e)(1) of the Code Treasury
Regulations Section 1.351-1(c)(1)(ii). The Company has no plan or intention to redeem or otherwise
reacquire any stock issued to the Old Sirion Shareholders or the Purchasers in connection with the
Transfers. The Old Sirion Shareholders and the Purchasers will be in “control” (within the meaning
of Section 368(c) of the Code) of the Company immediately after the Transfers and, to the Knowledge
of the Company, have no plan or intention to dispose of the stock of the Company received in the
Transfers.

          (n) Employee and Labor Matters.

17

 

               (i) Schedule 3.1(n)(i) contains a list of all of the employees of each of the
Companies as of the date of this Agreement and correctly reflects, in all material respects,
the nature and amount of all compensation payable to them, their dates of employment and
their positions. All of the employees listed on Schedule 3.1(n) are “at will”
employees. Each of the Companies has at all times complied with all material Legal
Requirements related to the employment of its employees. Except as set forth on
Schedule 3.1(n)(i), each of the Companies has compensated all individuals for, or
otherwise cancelled or satisfied all of their respective obligations with respect to, all
accrued vacation, deferred compensation and other similar benefits. Since January 1, 2006,
none of the Companies has increased the salary or benefits level of any of its employees.

               (ii) Except as set forth on Schedule 3.1(n)(ii), there are no Plans, as defined
below, contributed to, maintained or sponsored by any of the Companies, to which any of the
Companies is obligated to contribute or with respect to which any of the Companies has any
liability or potential liability, whether direct or indirect. For purposes of this
Agreement, the term “Plans” shall mean: (a) employee benefit plans as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), whether
or not funded and whether or not terminated, (b) employment agreements, and (c) personnel
policies or fringe benefit plans, policies, programs and arrangements, whether or not
subject to ERISA, whether or not funded, and whether or not terminated, including without
limitation, stock bonus, deferred compensation, pension, severance, bonus, vacation, travel,
incentive, and health, disability and welfare plans.

               (iii) Except as set forth on Schedule 3.1(n)(iii), none of the Initial FTEs is
obligated under any Contract, or subject to any Order, that would conflict with his or her
obligation to use his or her best efforts to promote the interests of the Companies after
the Closing Date, or that conflicts with the business of the Companies as presently
conducted. During the past ten (10) years, to the Knowledge of the Company, none of the
Initial FTEs has been (i) charged with, indicted for or convicted of any misdemeanor related
to moral turpitude or any felony; (ii) a party to a proceeding with respect to any
misdemeanor related to moral turpitude or any felony; or (iii) the subject of a bankruptcy
proceeding or has been the officer or director of a company that has been the subject of a
bankruptcy proceeding. To the Knowledge of the Company, no Initial FTE has plans to
terminate his or her employment with the Company or Sirion, as applicable, as a result of
the transaction contemplated by this Agreement or any other Transaction Document.

          (o) Authority; Binding Nature of Agreement. The Company has all necessary corporate
power and authority to enter into and to perform its obligations under each of the Transaction
Documents to which it is a party, and the execution, delivery and performance by it of such
Transaction Documents and any other documents or agreements executed in connection with the
transaction contemplated hereunder have been duly authorized by all necessary action on the part of
its stockholders and board of directors. Each of the Transaction Documents and any other documents
or agreements executed in connection with the transaction contemplated
hereunder to which the Company is a party constitutes the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject to: (i) laws of

18

 

general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of
law governing specific performance, injunctive relief and other equitable remedies.

          (p) Non-Contravention. Neither the execution, delivery or performance of the
Transaction Documents, nor the consummation of any of the transactions contemplated thereby, will
directly or indirectly (with or without notice or lapse of time): (i) result in a violation of any
of the provisions of the Company Documents; (ii) to the Knowledge of the Company, result in a
violation of, or give any Governmental Body or other Person the right to challenge any of the
transactions contemplated by the Transaction Documents or to exercise any remedy or obtain any
relief under, any Legal Requirement or any Order to which any of the Companies, or any of the
assets owned, used or controlled by any of the Companies, is subject; or (iii) result in a
violation or breach of, or result in a default under, any provision of any Company Contract.

          (q) Environmental Protection. No Hazardous Materials are or, to the Knowledge of the
Company, have been located in, on or about the Company Leased Real Property. To the Knowledge of
the Company, the Company Leased Real Property has not been used for the storage, manufacture or
disposal of Hazardous Materials, and the Companies have not used, or provided permission to others
to use, the Company Leased Real Property for the storage, manufacture or disposal of Hazardous
Materials. Specifically, but without limitation, to the Knowledge of the Company, there are and
have been no storage tanks located on the Company Leased Real Property. To the Knowledge of the
Company, no Hazardous Materials have been transported off site from the Company Leased Real
Property.

          (r) Insurance. Schedule 3.1(r) contains a brief description of all insurance
policies maintained by any of the Companies with respect to its business, its assets and the
Company Leased Real Property. Such policies are valid, binding and enforceable in accordance with
their terms, are in full force and effect, and all premiums due thereon have been paid.

          (s) Transactions With Affiliates and Employees. Except as set forth in SEC Reports
filed at least ten days prior to the date hereof, none of the officers or directors of any of the
Companies and, to the Knowledge of the Company, none of the employees of any of the Companies is
presently a party to any transaction with any of the Companies (other than for services as
employees, officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer, director or such
employee or, to the Knowledge of the Company, any entity in which any officer, director, or any
such employee has a substantial interest or is an officer, director, trustee or partner.

          (t) FDA Matters.

               (i) Each of the Companies (including each of its predecessors) has been and is in
compliance in all material respects with all applicable Legal Requirements, including the
United States Federal Food, Drug and Cosmetic Act, as amended from time to time, and all
regulations promulgated thereunder (the “FFDCA”), in its development efforts related to any
Product and in conducting any related clinical trials. None of the
Companies has (i) made to the FDA any untrue statement of a material fact regarding any

19

 

Product (whether in any submission or otherwise) nor (ii) failed to disclose to the FDA any
material fact required to be disclosed to it by the FDA regarding such Product.

               (ii) None of the Companies nor any of their respective officers, directors, agents,
Affiliates or employees (a) was or is presently debarred pursuant to the Generic Drug
Enforcement Act of 1992 (“GDEA”), (b) has been debarred or excluded from participation in
the Medicare program, any state Medicaid program or any other federal health care program,
(c) has been charged with, indicted for, or convicted of a criminal offense that would lead
to debarment or exclusion under the GDEA, or from participation in the Medicare program, any
state Medicaid program or any other federal health care program, or (d) has been or is under
investigation by any Governmental Body for debarment or exclusion action.

          (u) Internal Accounting Controls. Except as disclosed in Schedule 3.1(a), the
Companies maintain a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.

          (v) Sarbanes-Oxley Act. The Company is in compliance with applicable requirements of
the Sarbanes-Oxley Act of 2002 and applicable rules and regulations promulgated by the Commission
thereunder in effect as of the date of this Agreement, except where such noncompliance could not be
reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

          (w) Private Placement. Neither the Company nor any Person acting on the Company’s
behalf has sold or offered to sell or solicited any offer to buy the Securities by means of any
form of general solicitation or advertising. Neither the Company nor any of its Affiliates nor any
Person acting on the Company’s behalf has, directly or indirectly, at any time within the past six
months, made any offer or sale of any security or solicitation of any offer to buy any security
under circumstances that would (i) eliminate the availability of the exemption from registration
under Regulation D under the Securities Act in connection with the offer and sale of the Securities
as contemplated hereby or (ii) cause the offering of the Securities pursuant to the Transaction
Documents to be integrated, in an manner that would require the registration under the Securities
Act of the sale of the Securities to the Purchasers, with prior offerings by the Company for
purposes of any applicable law, regulation or shareholder approval provisions. The Company is not,
and is not an Affiliate of, an “investment company” within the meaning of the Investment Company
Act of 1940, as amended. The Company is not a United States real property holding corporation
within the meaning of the Foreign Investment in Real Property Tax Act of 1980.

          (x) Registration Rights. None of the Companies has granted or agreed to grant to any
Person any rights (including “piggy back” registration rights) to have any securities

20

 

of the
Company registered with the Commission or any other Governmental Body that have not been satisfied.

          (y) Application of Takeover Protections. The Company and its Board of Directors have
taken all necessary action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could become applicable to
the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without limitation the Company’s
issuance of the Securities and the Purchasers’ ownership of the Securities.

          (z) Indebtedness. Except as set forth on Schedule 3.1(z) and (i) trade
payables arising in the ordinary course of business not more than sixty (60) days past due, and
(ii) other indebtedness incurred in the ordinary course of business not exceeding $100,000, the
Companies do not have any indebtedness.

          (aa) Disclosure. The Company has not made any representation, warranty or statement
in this Agreement, or in any of the schedules or exhibits attached to this Agreement, that contains
any untrue statement of a material fact or, to the reasonable knowledge of the Company or any of
the individuals listed on
Schedule 3.1(aa), omitted to state any material fact
necessary in order to make the statements made herein and therein, in the light of the
circumstances under which they were made, not misleading. No event or circumstance has occurred or
information exists with respect to the Company or any of its 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 but which has not been so
publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under
the Exchange Act are being incorporated into an effective registration statement filed by the
Company under the Securities Act). The Company acknowledges and agrees that the Purchasers do not
make and have not made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2.

          (bb) Acknowledgment Regarding the Purchaser’s Purchase of Securities. The Company
acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s
length purchaser with respect to this Agreement and the transactions contemplated hereby. The
Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the
Company or any other Purchaser (or in any similar capacity) with respect to this Agreement, the
Sirion/Sytera Merger Agreement and the Contribution Agreement and the transactions contemplated
hereby and thereby and any advice given by any Purchaser or any of their respective representatives
or agents in connection with this Agreement and the transactions contemplated hereby is merely
incidental to such Purchaser’s purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision to enter into this
Agreement has been based solely on the independent evaluation of the Company and its

 

			
	 	 	 

21

 

representatives, after consultation with and advice from its legal and financial advisors. The
Company further acknowledges that no Purchaser has made any promises or commitments other than as
set forth in this Agreement, including any promises or commitments for any additional investment by
any such Purchaser in the Company.

     3.2 Representations and Warranties of the Purchasers. Each Purchaser hereby, as to
itself only and for no other Purchaser, represents and warrants to the Company as follows:

          (a) Organization; Authority. Such Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization with the
requisite corporate, limited liability company or partnership power and authority to enter into and
to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder. The execution, delivery and performance by such
Purchaser of the Transaction Documents to which it is a party have been duly authorized by all
necessary corporate or, if such Purchaser is not a corporation, such partnership, limited liability
company or other applicable like action, on the part of such Purchaser. Each of the Transaction
Documents to which such Purchaser is a party has been duly executed by such Purchaser and, when
delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Purchaser, enforceable against it in accordance with its terms.

          (b) Investment Intent. Such Purchaser is acquiring the Securities as principal for
its own account for investment purposes only and not with a view to or for distributing or
reselling such Securities or any part thereof in violation of applicable securities laws, without
prejudice, however, to such Purchaser’s right, subject to the provisions of this Agreement, at all
times to sell or otherwise dispose of all or any part of such Securities in compliance with
applicable federal and state securities laws. Such Purchaser is acquiring the Securities hereunder
in the ordinary course of its business. Such Purchaser does not have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the Securities.

          (c) Purchaser Status. At the time such Purchaser was offered the Securities, it was,
and at the date hereof it is an “accredited investor” as defined in Rule 501(a) under the
Securities Act.

          (d) Experience of Purchaser. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able
to bear the economic risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.

          (e) Certain Fees. No brokerage or finder’s fees or commissions are or will be payable
by such Purchaser to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the transactions contemplated
by this Agreement, and such Purchaser has not taken any action that would cause the Company to be
liable for any such fees or commissions.

22

 

ARTICLE IV

OTHER AGREEMENTS OF THE PARTIES

     4.1 Transfer Restrictions.

          (a) Securities may only be disposed of pursuant to an effective registration statement under
the Securities Act or pursuant to an available exemption from the registration requirements of the
Securities Act, and in compliance with any applicable state securities laws. In connection with
any transfer of Securities other than pursuant to an effective registration statement or to the
Company or pursuant to Rule 144(k), except as otherwise set forth herein, the Company may require
the transferor to provide to the Company an opinion of counsel selected by the transferor, the form
and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that
such transfer does not require registration under the Securities Act. Notwithstanding the
foregoing, the Company hereby consents to and agrees to register on the books of the Company and
with its transfer agent, without any such legal opinion, any transfer of Securities by a Purchaser
to an Affiliate of such Purchaser, provided that the transferee certifies to the Company that it is
an “accredited investor” as defined in Rule 501(a) under the Securities Act.

          (b) In addition to any legends required pursuant to any other Transaction Document, the
Purchasers agree to the imprinting, so long as is required by this Section 4.1(b), of the
following legend on any certificate evidencing Securities:

          “Neither these securities nor the securities into which
these securities are convertible have been registered with the
Securities and Exchange Commission or the securities commission of
any state in reliance upon an exemption from registration under the
Securities Act of 1933, as amended (the “Securities Act”), and,
accordingly, may not be offered or sold except pursuant to an
effective registration statement under the Securities Act or
pursuant to an available exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and
in compliance with applicable state securities laws or blue sky
laws. Notwithstanding the foregoing, these securities and the
securities issuable upon conversion of these securities may be
pledged to an “accredited investor” within the meaning of Rule
501(a) under the Securities Act in connection with a bona fide
margin account or other loan secured by such securities.”

     Certificates evidencing Securities shall not be required to contain such legend or any other
legend (i) while a Registration Statement covering the resale of such Securities is effective
under the Securities Act, or (ii) following any sale of such Securities pursuant to Rule 144,
or (iii) if such Securities are eligible for sale under Rule 144(k), or (iv) if such legend is not
required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the Staff of the Commission). At such time as a legend is no

23

 

longer
required for certain Securities, the Company will, no later than three Trading Days following the
delivery by a Purchaser to the Company or the Company’s transfer agent of a legended certificate
representing such Securities and, if reasonably requested by the Company, a legal opinion
reasonably satisfactory to the Company regarding the removal of such legend, deliver or cause to be
delivered to such Purchaser a certificate representing such Securities that is free from all
restrictive and other legends. The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions on transfer set
forth in this Section. For so long as any Purchaser owns Securities, the Company will not effect
or publicly announce its intention to effect any exchange, recapitalization or other transaction
that effectively requires or rewards physical delivery of certificates evidencing the Common Stock.

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

     4.2 Furnishing of Information. As long as any Purchaser owns Securities and is not
eligible to sell all such Securities pursuant to paragraph (k) of Rule 144, the Company covenants
to timely file (or obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof pursuant to the
Exchange Act. Upon the request of any such Person, the Company shall deliver to such Person a
written certification of a duly authorized officer as to whether it has complied with the preceding
sentence. As long as any Purchaser owns Securities, if the Company is not required to file reports
pursuant to such laws, it will prepare and furnish to the Purchasers and make publicly available in
accordance with paragraph (c) of Rule 144 such information as is required for the Purchasers to
sell the Securities under Rule 144. The Company further covenants that it will take such further
action as any holder of Securities may reasonably request, all to the extent required from time to
time to enable such Person to sell such Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144.

     4.3 Integration. The Company shall not, and shall use its best efforts to ensure that
no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Securities in a manner that would require the registration
under the

24

 

Securities Act of the sale of the Securities to the Purchasers, or that would be
integrated with the offer or sale of the Securities for purposes of the rules and regulations of
the Trading Market.

     4.4 Reservation of Securities. The Company shall maintain a reserve from its duly
authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount
as may be required to fulfill its obligations in full under the Transaction Documents.

     4.5 Conversion and Exercise Procedures. The form of Conversion Notice included in the
Certificate of Designations sets forth the totality of the procedures required in order to convert
the Shares under the Transaction Documents. No additional legal opinion or other information or
instructions shall be necessary to enable the Purchasers to convert the Shares. The Company shall
honor conversions of the Shares and shall deliver Underlying Shares in accordance with the terms,
conditions and time periods set forth in the Transaction Documents.

     4.6 Access. In addition to any other rights provided by law or set forth herein, from
and after the date of this Agreement and for so long as any of the Shares remain outstanding, the
Company shall, and shall cause each of the Subsidiaries, to give each Purchaser and its
representatives, at the request of such Purchaser, access, including for the conduct of
environmental assessments, during reasonable business hours to (a) all properties, assets, books,
contracts, commitments, reports and records relating to the Company and the Subsidiaries, and (b)
the management, accountants, lenders, customers and suppliers of the Company and the Subsidiaries;
provided, however, that the Company shall not be required to provide such Purchaser access to any
information or Persons if the Company reasonably determines that access to such information or
Persons cannot be provided to such Purchaser in a manner that would avoid an adverse affect on the
attorney-client privilege between the Company and its counsel or the disclosure of trade secrets,
material nonpublic information or other confidential or proprietary information, as applicable.

     4.7 Securities Laws Compliance.

          (a) Securities Act. The Company shall timely prepare and file with the Commission the
form of notice of the sale of securities pursuant to the requirements of Regulation D regarding the
sale of the Series A Preferred Stock under this Agreement.

          (b)
State Securities Law Compliance — Sale. The Company shall timely prepare and file
such applications, consents to service of process (but not including a general consent to service
of process) and similar documents and take such other steps and perform such
further acts as shall be required by the state securities law requirements of the State of
Connecticut with respect to the sale of the Series A Preferred Stock under this Agreement.

          (c)
State Securities Law Compliance — Resale. Beginning on the earlier of (x) six
months following the date of this Agreement and (y) the date which a registration statement is
effective and shares of Common Stock are available for trading pursuant to the terms of the
Investors’ Rights Agreement, and continuing until either (i) the Purchasers have sold all of their
Registrable Securities under a registration statement pursuant to the Investors’ Rights Agreement
or (ii) the Common Stock becomes a “covered security” under Section 18(b)(1)(A) of the Securities
Act, the Company shall maintain within either Moody’s Industrial Manual or Standard

25

 

and Poor’s
Standard Corporation Descriptions (or any successors to these manuals which are similarly qualified
as “recognized securities manuals” under state Blue Sky laws) an updated listing containing (i) the
names of the officers and directors of the Company, (ii) a balance sheet of the Company as of a
date that is at no time older than eighteen months and (iii) a profit and loss statement of the
Company for either the preceding fiscal year or the most recent year of operations.

     4.8 Securities Laws Disclosure; Publicity.

          (a) The Company shall, on the Closing Date, issue a press release acceptable to a majority in
interest of the Purchasers disclosing all material terms of the transactions contemplated hereby.
In addition, within four (4) Trading Days following the Closing Date, the Company shall file a
Current Report on Form 8-K describing the terms of the transactions contemplated by the Transaction
Documents in the form required by the Exchange Act, and attaching the material Transaction
Documents as exhibits to such Form 8-K (including all attachments, the “8-K Filing”).

          (b) From and after the filing of the 8-K Filing with the Commission, no Purchaser shall be in
possession of any material, nonpublic information received from the Company, any of its
Subsidiaries or any of its respective officers, directors, employees or agents, that is not
disclosed in the 8-K Filing. The Company shall not, and shall cause each of its Subsidiaries and
its and each of their respective officers, directors, employees and agents, not to, provide any
Purchaser with any material nonpublic information regarding the Company or any of its Subsidiaries
from and after the filing of the 8-K Filing with the Commission without the express written consent
of such Purchaser. In the event of a breach of the foregoing covenant by the Company, any of its
Subsidiaries, or any of its or their respective officers, directors, employees and agents, in
addition to any other remedy provided herein or in the Transaction Documents, the Purchasers shall
have the right to make a public disclosure, in the form of a press release, public advertisement or
otherwise, of such material nonpublic information without the prior approval by the Company, its
Subsidiaries, or any of its or their respective officers, directors, employees or agents. The
Purchasers shall not have any liability to the Company, its Subsidiaries, or any of its or their
respective officers, directors, employees, stockholders or agents for any such disclosure.

          (c) Subject to the foregoing, neither the Companies nor the Purchasers shall issue any press
releases or any other public statements with respect to the transactions contemplated hereby
without the consent of the other; provided, however, that the Company
shall be entitled, without the prior approval of a majority in interest of the Purchasers, to
make any press release or other public disclosure with respect to such transactions (i) in
substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required
by applicable law and regulations (provided that in the case of clause (i) the Purchasers shall be
consulted by the Company in connection with any such press release or other public disclosure prior
to its release). Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such Purchaser, except to
the extent such disclosure (but not any disclosure as to the controlling Persons thereof)

26

 

is
required by law or Trading Market regulations, in which case the Company shall provide such
Purchaser with prior notice of such disclosure.

     4.9 Use of Proceeds. The Company shall use the net proceeds from the sale of the
Securities hereunder (i) to pay off all promissory notes issued to the stockholders of Sytera in
connection with the Sirion/Sytera Merger Agreement; (ii) to pay out from time to time any
Additional Payments (as defined in the Sirion/Sytera Merger Agreement) that become due to the
former stockholders of Sytera pursuant to the Sirion/Sytera Merger Agreement; (iii) to pay off two
(2) promissory notes issued to a stockholder of the Company, in the aggregate principal amount of
$17,500, plus accrued and unpaid interest thereon; (iv) to pay all expenses incurred by the Company
in connection with the Contribution including, without limitation, review of the Contribution
Agreement and related agreements, and all legal fees payable in connection therewith; and (v) for
general working capital purposes.

     4.10 No Impairment. At all times after the date hereof, the Company will not take or
permit any action, or cause or permit any Subsidiary to take or permit any action that impairs or
adversely affects the rights of the Purchasers under any Transaction Document.

     4.11 Rights of Stockholders. Each time the Company delivers a notice or other
communication to holders of the Common Stock it will contemporaneously deliver a copy of such
notice or communication to each Purchaser. The Company acknowledges and agrees that, for so long
as any Purchaser holds any Securities (whether or not such Purchaser holds shares of Common Stock),
(a) the officers and directors of the Company will owe the same duties (fiduciary and otherwise) to
each Purchaser as are owed to a holder of Common Stock and (b) each Purchaser will be entitled to
all rights and remedies with respect to such duties as are available to a holder of Common Stock
under the corporate law of the Company’s jurisdiction of incorporation.

     4.12 Shareholders Rights Plan. In the event that a shareholders rights plan is
adopted by the Company, no claim will be made or enforced by the Company or any other Person that
any Purchaser is an “Acquiring Person” under any such plan or in any way could be deemed to trigger
the provisions of such plan by virtue of receiving Securities under the Transaction Documents.

     4.13 Board of Directors; Meetings. The Company shall use its reasonable best efforts
to ensure that meetings of its board of directors are held at least four times each year and at
least once each quarter.

     4.14 Restrictive Agreements Prohibited. Neither the Company nor any Subsidiary shall
become a party to any agreement, arrangement or understanding which by its terms expressly
restricts the Company’s performance of this Agreement or any other Transaction Document.

     4.15 Affiliated Transactions. As long as a Purchaser owns Securities, the Company
shall notify such Purchaser of all transactions and agreements (including without limitation, any
amendment of an existing agreement) by and between any of the Companies, on the one hand, and any
officer, employee, director or stockholder of the Company or persons otherwise

27

 

Affiliated with, or
a member of the family of, any such Person, on the other hand, which are not conducted on an
arm’s-length basis on terms and conditions no less favorable to the Company or the Subsidiary, as
applicable, than could be obtained from non-related persons, and the Company shall, to the extent
required by applicable Legal Requirements, make timely public disclosure of such transactions and
agreements.

     4.16 Indemnification.

          (a) Survival. The representations and warranties contained herein shall survive the
Closing and the delivery and conversion of the Shares until the earlier of (x) ninety (90) days
following the date on which the Company shall file with the Commission the Company’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2006, which Form 10-K shall include complete
financial statements meeting all of the requirements of Regulation S-X, and (y) the first
anniversary of the Closing Date, and shall thereafter be of no further force or effect, except that
the representations and warranties contained in Sections 3.1(a), (b), (d)
and (m) shall survive for the applicable statute of limitations period; provided,
however, (i) representations and warranties which are the basis for claims asserted under
this Agreement prior to the expiration of such applicable time periods shall also survive until the
final resolution of those claims; and (ii) any representation or warranty made falsely by a party
hereto fraudulently or intentionally shall survive the Closing without limitation. Each of the
covenants and agreements contained herein shall survive indefinitely, unless such covenant or
agreements terminates earlier in accordance with its terms.

          (b) General Indemnification.

               (i) If any Purchaser or any of its Affiliates or any officer, director, partner, controlling
person, employee or agent of a Purchaser or any of its Affiliates (a “Related Person”) becomes
involved in any capacity in any Legal Proceeding brought by or against any Person in connection
with or as a result of any breach or failure to comply by any of the Companies or any officer,
director, employee or agent of any of the Companies or any of their respective Affiliates with any
representation, warranty or covenant in the Transaction
Documents, the Company will indemnify and hold harmless such Purchaser or Related Person for
its reasonable legal and other expenses (including the costs of any investigation, preparation and
travel) and for any Losses incurred in connection therewith, as such expenses or Losses are
incurred. In addition, the Company shall indemnify and hold harmless each Purchaser and each
Related Person from and against any and all Losses, as incurred, arising out of or relating to any
breach by any of the Companies of any of the representations, warranties or covenants made by the
Companies in this Agreement or any other Transaction Document. The indemnification obligations of
the Company under this paragraph shall be in addition to any liability that the Company may
otherwise have and shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of the Purchasers and any such Related Persons. The Company also
agrees that neither the Purchasers nor any Related Persons shall have any liability to the Company
or any Person asserting claims on behalf of or in right of the Company in connection with or as a
result of the transactions contemplated by the Transaction Documents and any other documents or
agreements executed in connection with the transaction contemplated hereunder, except to the extent
that any losses, claims, damages, liabilities or expenses incurred by the Company result from the
gross negligence or willful misconduct of a

28

 

Purchaser or Related Person in connection with such
transactions. If any of the Companies breaches its obligations under any Transaction Document,
then, in addition to any other liabilities the Company may have thereunder or under applicable law,
the Company shall pay or reimburse the Purchasers on demand for all costs of collection and
enforcement (including reasonable attorneys fees and expenses). Without limiting the generality of
the foregoing, the Company specifically agrees to reimburse the Purchasers on demand for all costs
of enforcing the indemnification obligations in this paragraph.

               (ii) Notwithstanding anything to the contrary contained in Section 4.16(b)(i) above,
to the extent that (i) any Losses arise solely out of a breach by the Company of any representation
or warranty which relates solely to the business or operations of the Company prior to the
consummation of the Contribution, and (ii) the Purchasers seek indemnification for such Losses
hereunder, the Company shall indemnify each of the Purchasers and the Old Sirion Shareholders for
their respective pro rata portions of the aggregate amount of such Losses incurred by all
Purchasers and Old Sirion Shareholders, based upon the number of shares of Common Stock (on an
as-converted basis, without giving effect to any limitations on conversion contained in the
Certificate of Designations) held by such Purchaser or Old Sirion Shareholder.

               (iii) The aggregate liability to the Purchasers for indemnification under this Section
4.16(b) arising from any inaccuracy of any of the Company’s representations or warranties
(other than those in Sections 3.1(a), (b), (d) and (m)) shall not
exceed the Aggregate Purchase Price plus all amounts the Purchasers and Related Parties are
entitled to recover pursuant to Section 4.16(d) below; provided, however,
that indemnity claims arising from fraud, willful misconduct or intentional misrepresentation shall
not be subject to such limitation.

          (c) Conduct of Indemnification Proceedings. If any Legal Proceeding shall be brought
or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only)
to the extent that such failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.

     An Indemnified Party shall have the right to employ separate counsel in any such Legal
Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party
has agreed in writing to pay such fees and expenses; or (ii) the Indemnifying Party shall have
failed promptly to assume the defense of such Legal Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Legal Proceeding; or (iii) the named parties to
any such Legal Proceeding (including any impleaded parties) include both such Indemnified Party and
the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent such Indemnified
Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the

29

 

expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof
and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall
not be liable for any settlement of any such Legal Proceeding effected without its written consent,
which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending Legal Proceeding in
respect of which any Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the subject matter of such
Legal Proceeding.

          (d) Expense Reimbursement. All fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with investigating or preparing
to defend such Legal Proceeding in a manner not inconsistent with this Section) shall be paid to
the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is
not entitled to indemnification hereunder; provided, that the Indemnified Party undertakes in
writing to reimburse all such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification hereunder).

     4.17 Approvals; Taking of Actions. The Company shall use its commercially reasonable
best efforts to (i) take or cause to be taken all actions, and to do or cause to be done all other
things, necessary, proper or advisable to consummate the transactions contemplated by the Agreement
and any other Transaction Document as promptly as practicable, and (ii) obtain in a timely manner
all necessary waivers, consents and approvals and effect all necessary registrations and filings.
The Purchasers and the Company shall cooperate with each other in connection with the making of all
such filings, including providing copies of all such documents to the non-filing party and its
advisors prior to filing. The Purchasers and the Company shall use their respective commercially
reasonable efforts to furnish to each other all information required for any application or other
filing to be made pursuant to the rules and regulations of any applicable law in connection with
the
transactions contemplated by this Agreement and any other Transaction Document. The Company
shall give any notices to third parties, and use their commercially reasonable efforts to obtain
any third party consents related to or required in connection with or to consummate the
transactions contemplated hereby.

     4.18 Tax Covenants. The Company shall not take or fail to take any action which
reasonably could be expected to cause the Sirion/Sytera Merger to fail to qualify as a
reorganization within the meaning of Section 368(a)(1) of the Code and will report the transactions
contemplated by the Sirion/Sytera Merger Agreement consistent with such position and will take no
position in any Tax filing or Legal Proceeding inconsistent therewith. The Company shall not take
or fail to take any action which reasonably could be expected to cause the Transfers to fail to
qualify as a tax-free transfer under Section 351 of the Code and will report the transactions
contemplated by the Contribution Agreement and this Agreement consistent with such position and
will take no position in any Tax filing or Legal Proceeding inconsistent therewith.

     4.19 Transfer Agent Instructions. In connection with the selection and engagement of
a transfer agent for the Common Stock, the Company shall use commercially reasonable efforts to
have the Transfer Agent Instructions acknowledged by such transfer agent.

30

 

ARTICLE V

CONDITIONS

     5.1 Conditions Precedent to the Obligations of the Purchasers. The obligation of each
Purchaser to acquire Securities at the Closing is subject to the satisfaction or waiver by such
Purchaser, at or before the Closing, of each of the following conditions:

          (a) Performance. The Companies shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by them at or prior to the Closing, including, without
limitation, delivering or causing the delivery of those items required to be delivered pursuant to
Section 2.3(a);

          (b) No Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents;

          (c) Contribution. The Contribution shall have been consummated in accordance with the
terms and conditions of the Contribution Agreement with no material modification to or waiver of
the terms thereof;

          (d) RxDR Acquisition. Sirion shall have purchased all of the outstanding membership
interests of RX Development Resources, LLC, a Florida limited liability company, pursuant to a
membership interest purchase agreement in form and substance reasonably satisfactory to the
Purchasers;

          (e) Organizational Documents. The certificate of incorporation and by-laws of the
Company, as in effect at the Closing, shall be in form and substance reasonably satisfactory to the
Purchasers;

          (f) Certain Documents. The following documents delivered in connection with the
Contribution shall each be in form and substance reasonably satisfactory to the Purchasers: (i)
the information statement (or similar document) and letter of transmittal delivered to each Old
Sirion Shareholder, (ii) the legal opinion delivered by Company Counsel, and (iii) the tax opinion
delivered by counsel to Sirion; and

          (g) Material Adverse Event. The Company shall not have experienced a Material Adverse
Event.

     5.2 Conditions Precedent to the Obligations of the Company. The obligation of the
Company to sell Securities at the Closing is subject to the satisfaction or waiver by the Company,
at or before the Closing, of each of the following conditions:

          (a) Performance. The Purchasers shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Purchasers at or prior

31

 

to the Closing,
including, without limitation, delivering or causing the delivery of those items required to be
delivered pursuant to Section 2.2(b);

          (b) No Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents;

          (c) RxDR Acquisition. Sirion shall have purchased all of the outstanding membership
interests of RX Development Resources, LLC, a Florida limited liability company; and

          (d) Contribution. The Contribution shall have been consummated in accordance with the
terms and conditions of the Contribution Agreement with no material modification to or waiver of
the terms thereof as in effect on the date hereof.

ARTICLE VI

MISCELLANEOUS

     6.1 Termination.

          (a) This Agreement may be terminated at any time prior to the Closing:

               (i) by mutual written consent of a majority in interest of the Purchasers and the
Company;

               (ii) by a majority in interest of the Purchasers, by giving written notice to the
Company, if the Closing shall not have occurred on or before October 31, 2006 (or such later
date as the parties may mutually agree) by reason of the failure of any condition precedent
under Section 5.1 (unless the failure results primarily from a breach by a Purchaser
of any representation, warranty, or covenant of a Purchaser contained in this Agreement or a
Purchaser’s failure to fulfill a condition precedent to Closing or other default or acts or
omissions to act by a Purchaser that has the effect of delaying the Closing Date); and

               (iii) by the Company, by giving written notice to the Purchasers, if the Closing shall
not have occurred on or before October 31, 2006 by reason of the failure of any condition
precedent under Section 5.2 (unless the failure results primarily from a breach by
the Company of any representation, warranty, or covenant of the Company contained in this
Agreement or the Company’s failure to fulfill a condition precedent to Closing or other
default or acts or omissions to act by the Company that has the effect of delaying the
Closing Date).

          (b) Effect of Termination. In the event of termination of this Agreement as provided in
Section 6.2(a), this Agreement shall immediately become void and have no effect (other than
Section 6.3 which shall remain in full force and effect and survive any termination of this
Agreement) and there shall be no liability or obligation on the part of the Purchasers, the

32

 

Company
or their respective officers, directors, stockholders or Affiliates with respect to this Agreement,
except to the extent that such termination results from the intentional and knowing breach by any
party of any of its representations or warranties or the willful breach by any such party of any of
its covenants set forth in this Agreement.

     6.2 Fees and Expenses. At and contingent upon the consummation of the Closing, the
Company shall pay to the Purchasers all documented legal fees and out-of-pocket expenses incurred
by the Purchasers in connection with due diligence and the preparation and negotiation of the
Transaction Documents and otherwise in connection with this transaction. Except as expressly set
forth in this paragraph or the Transaction Documents to the contrary, each party shall pay the fees
and expenses of its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation, execution, delivery and
performance of this
Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and
duties levied in connection with the issuance of any Securities.

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

     6.4 Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (a) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section prior to 5:30 p.m. (New York City time)
on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in this Section on a day
that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier
service, specifying next business day delivery, or (d) upon actual receipt by the party to whom
such notice is required to be given if delivered by hand. The addresses for such notices and
communications are those set forth on the signature pages hereof, or such other address as may be
designated in writing hereafter, in the same manner, by such Person by two Trading Days’ prior
notice to the other party in accordance with this Section 6.5. Notwithstanding anything to
the contrary contained in the foregoing, any and all certificates evidencing the Securities, or any
other securities required to be delivered to a Purchaser, shall be delivered to the custodian for
such Purchaser as set forth on such Purchaser’s signature page hereto.

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

33

 

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

     6.7 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written consent of a majority in
interest of the Purchasers. A Purchaser may assign its rights under this Agreement to any Person to
whom such Purchaser assigns or transfers any Securities; provided such transferee agrees in writing
to be bound, with respect to the transferred Securities, by the provisions hereof and of the
applicable Transaction Documents that apply to the “Purchasers.” Notwithstanding anything to the
contrary in this Section 6.8 and subject to Section 4.1(c), Securities may be
pledged to any Person in connection with a bona fide margin account secured by such Securities.

     6.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not for the benefit of,
nor may any provision hereof be enforced by, any other Person, except that (i) each Related Person
is an intended third party beneficiary of Section 4.16 and may enforce the provisions of
such Section directly against the Company, and (ii) each Old Sirion Shareholder is an intended
third party beneficiary of Section 4.16(b).

     6.9 Governing Law; Venue; Waiver Of Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New York. Each party
agrees that all legal proceedings concerning the interpretation, enforcement and defense of the
transactions contemplated by any of the Transaction Documents (whether brought against a party
hereto or its respective Affiliates, directors, officers, stockholders, employees or agents) shall
be commenced exclusively in the State and U.S. Federal courts sitting in the City of New York,
Borough of Manhattan. Each party hereto hereby irrevocably submits to the exclusive jurisdiction
of the State and U.S. Federal courts sitting in the City of New York, Borough of Manhattan and the
U.S. federal courts sitting in the state of florida for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of this agreement), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action or proceeding is
improper. Each party hereto hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each
party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial
by jury in any legal proceeding arising out

34

 

of or relating to this Agreement or any of the
Transaction Documents or the transactions contemplated hereby or thereby. If either party shall
commence an action or proceeding to enforce any provisions of this Agreement or any Transaction
Document, then the prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable attorneys fees and other reasonable costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.

     6.10 Execution. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which together shall constitute one and the same
instrument. The exchange of copies of this Agreement or amendments thereto and of signature pages
by facsimile transmission or by email transmission in portable digital format, or similar format,
shall constitute effective execution and delivery of such instrument(s) as to the parties and may
be used in lieu of the original Agreement or amendment for all purposes. Signatures of the parties
transmitted by facsimile or by email transmission in portable digital format, or similar format,
shall be deemed to be their original signatures for all purposes.

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

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

     6.13 Replacement of Securities. If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued
in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with the issuance of such
replacement Securities.

     6.14 Remedies. In addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, each of the Purchasers and the Company will be
entitled to specific performance under the Transaction Documents. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in any

35

 

action for
specific performance of any such obligation the defense that a remedy at law would be adequate.

     6.15 Independent Nature of Purchasers. The obligations of each Purchaser under any
Transaction Document are several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. The decision of each Purchaser to purchase Shares
pursuant to this Agreement has been made by such Purchaser independently of any other Purchaser and
independently of any information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company or of the Subsidiaries which may have been made or given by
any other Purchaser or by any agent or employee of any other Purchaser, and no Purchaser or any of
its agents or employees shall have any liability to any other Purchaser (or any other person)
relating to or arising from any such information, materials, statements or opinions. Nothing
contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or the transactions contemplated
by the Transaction Document. Subject to Section 6.5, each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the rights arising out
of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such purpose.

     6.16 Adjustments in Share Numbers and Prices. In the event of any stock split,
subdivision, dividend or distribution payable in shares of Common Stock (or other securities or
rights convertible into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination or other similar recapitalization or event occurring after the date
hereof, each reference in any Transaction Document to a number of shares or a price per share shall
be amended to appropriately account for such event.

[Remainder of page intentionally left blank.

Signature pages follow.]

36

 

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

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	TENBY PHARMA INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Barry Butler 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	 	 	3110 Cherry Palm Drive, Suite 340	 	 
	 	 	Tampa, Florida 33619	 	 
	 	 	Facsimile No.: (813) 496-7328	 	 
	 	 	Telephone No.: (813)	 	 
	 	 	Attn: Barry Butler	 	 
	 
	 	 	 	 	 	 
	 	 	with a copy (which shall not constitute notice) to:	 	 
	 
	 	 	 	 	 	 
	 	 	Hill, Ward and Henderson, P.A.	 	 
	 	 	101 East Kennedy Boulevard, Suite 3700	 	 
	 	 	Tampa, Florida 33602	 	 
	 	 	Facsimile No.: (813) 221-2900	 	 
	 	 	Telephone No.: (813) 222-8705	 	 
	 	 	Attn: Reid Haney, Esq.	 	 

[Remainder of page intentionally left blank

Signature pages for the Purchasers follow.]

37

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	NORTH SOUND LEGACY	 	 
	 	 	    INSTITUTIONAL FUND LLC	 	 
	 
	 	 	 	 	 	 
	 	 	By: North Sound Capital LLC; Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Thomas E. McAuley	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Thomas E. McAuley	 	 
	 

	 	 	 	Title: Chief Investment Officer	 	 
	 
	 	 	 	 	 	 
	 	 	Number of Shares:
875,000	 	 
	 	 	Purchase Price:
$7,000,000	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	 	 	20 Horseneck Lane	 	 
	 	 	Greenwich, Connecticut 06830	 	 
	 	 	Facsimile No.: (203) 340-5701	 	 
	 	 	Telephone No.: (203) 340-5784	 	 
	 	 	Attn: Andrew B. David, Esq.	 	 
	 
	 	 	 	 	 	 
	 	 	with a copy (which shall not constitute notice) to:	 	 
	 
	 	 	 	 	 	 
	 	 	Proskauer Rose LLP	 	 
	 	 	1585 Broadway	 	 
	 	 	New York, New York 10036	 	 
	 	 	Facsimile No.: (212) 969-2900	 	 
	 	 	Telephone No.: (212) 969-3000	 	 
	 	 	Attn: Adam J. Kansler, Esq.	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Delivery of Securities:	 	 
	 
	 	 	 	 	 	 
	 	 	Morgan Stanley & Co.	 	 
	 	 	1221 Avenue of the Americas, 28th Floor	 	 
	 	 	New York, NY 10020	 	 
	 	 	Facsimile No.:	 	 
	 	 	Telephone No.:	 	 
	 	 	Attn: Peter Small	 	 
	 
	 	 	 	 	 	 
	 	 	with a copy to:	 	 
	 
	 	 	 	 	 	 
	 	 	North Sound Legacy Institutional Fund LLC	 	 
	 	 	20 Horseneck Lane	 	 
	 	 	Greenwich, Connecticut 06830	 	 
	 	 	Facsimile No.: (203) 340-5701	 	 
	 	 	Telephone No.: (203) 340-5784	 	 
	 	 	Attn: Andrew B. David, Esq.	 	 

PSAP – Signature Page

 

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	NORTH SOUND LEGACY	 	 
	 

	 	 	 	     INTERNATIONAL LTD.	 	 
	 
	 	 	 	 	 	 
	 	 	By: North Sound Capital LLC; Investment Advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Thomas E. McAuley	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Thomas E. McAuley	 	 
	 

	 	 	 	Title: Chief Investment Officer	 	 
	 
	 	 	 	 	 	 
	 	 	Number of
Shares: 2,250,000	 	 
	 	 	Purchase Price:
$18,000,000	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	 	 	20 Horseneck Lane	 	 
	 	 	Greenwich, Connecticut 06830	 	 
	 	 	Facsimile No.: (203) 340-5701	 	 
	 	 	Telephone No.: (203) 340-5784	 	 
	 	 	Attn: Andrew B. David, Esq.	 	 
	 
	 	 	 	 	 	 
	 	 	with a copy (which shall not constitute notice) to:	 	 
	 
	 	 	 	 	 	 
	 	 	Proskauer Rose LLP	 	 
	 	 	1585 Broadway	 	 
	 	 	New York, New York 10036	 	 
	 	 	Facsimile No.: (212) 969-2900	 	 
	 	 	Telephone No.: (212) 969-3000	 	 
	 	 	Attn: Adam J. Kansler, Esq.	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Delivery of Securities:	 	 
	 
	 	 	 	 	 	 
	 	 	Morgan Stanley & Co.	 	 
	 	 	1221 Avenue of the Americas, 28th Floor	 	 
	 	 	New York, NY 10020	 	 
	 	 	Facsimile No.:	 	 
	 	 	Telephone No.:	 	 
	 	 	Attn: Peter Small	 	 
	 
	 	 	 	 	 	 
	 	 	with a copy to:	 	 
	 
	 	 	 	 	 	 
	 	 	North Sound Legacy International Ltd.	 	 
	 	 	20 Horseneck Lane	 	 
	 	 	Greenwich, Connecticut 06830	 	 
	 	 	Facsimile No.: (203) 340-5701	 	 
	 	 	Telephone No.: (203) 340-5784	 	 
	 	 	Attn: Andrew B. David, Esq.	 	 

PSPA – Signature Page

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page Number	 
	ARTICLE I DEFINITIONS
	 	 	2	 
	1.1 Definitions
	 	 	2	 
	ARTICLE II PURCHASE AND SALE
	 	 	8	 
	2.1 Sale and Issuance of Series A Preferred Stock at Closing
	 	 	8	 
	2.2 Closing
	 	 	9	 
	2.3 Closing Deliveries
	 	 	9	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES
	 	 	10	 
	3.1 Representations and Warranties of the Company
	 	 	10	 
	3.2 Representations and Warranties of the Purchasers
	 	 	22	 
	ARTICLE IV OTHER AGREEMENTS OF THE PARTIES
	 	 	23	 
	4.1 Transfer Restrictions
	 	 	23	 
	4.2 Furnishing of Information
	 	 	24	 
	4.3 Integration
	 	 	24	 
	4.4 Reservation of Securities
	 	 	25	 
	4.5 Conversion and Exercise Procedures
	 	 	25	 
	4.6 Access
	 	 	25	 
	4.7 Securities Laws Compliance
	 	 	25	 
	4.8 Securities Laws Disclosure; Publicity
	 	 	26	 
	4.9 Use of Proceeds
	 	 	27	 
	4.10 No Impairment
	 	 	27	 
	4.11 Rights of Stockholders
	 	 	27	 
	4.12 Shareholders Rights Plan
	 	 	27	 
	4.13 Board of Directors; Meetings
	 	 	27	 
	4.14 Restrictive Agreements Prohibited
	 	 	27	 
	4.15 Affiliated Transactions
	 	 	27	 
	4.16 Indemnification
	 	 	28	 
	4.17 Approvals; Taking of Actions
	 	 	30	 
	4.18 Tax Covenants
	 	 	30	 
	4.19 Transfer Agent Instructions
	 	 	30	 
	ARTICLE V CONDITIONS
	 	 	31	 
	5.1 Conditions Precedent to the Obligations of the Purchasers
	 	 	31	 
	5.2 Conditions Precedent to the Obligations of the Company
	 	 	31	 
	ARTICLE VI MISCELLANEOUS
	 	 	32	 
	6.1 Termination
	 	 	32	 
	6.2 Fees and Expenses
	 	 	33	 
	6.3 Entire Agreement
	 	 	33	 
	6.4 Notices
	 	 	33	 
	6.5 Amendments; Waivers
	 	 	33	 
	6.6 Construction
	 	 	34	 
	6.7 Successors and Assigns
	 	 	34	 
	6.8 No Third-Party Beneficiaries
	 	 	34	 
	6.9 Governing Law; Venue; Waiver Of Jury Trial
	 	 	34	 
	6.10 Execution
	 	 	35	 

 

 

	 	 	 	 	 
	 	 	Page Number	 
	6.11 Severability
	 	 	35	 
	6.12 Rescission and Withdrawal Right
	 	 	35	 
	6.13 Replacement of Securities
	 	 	35	 
	6.14 Remedies
	 	 	35	 
	6.15 Independent Nature of Purchasers
	 	 	36	 
	6.16 Adjustments in Share Numbers and Prices
	 	 	36	 

Exhibits:

	 	 	 
	Exhibit A

	 	Form of Certificate of Designations
	Exhibit B

	 	Form of Investors’ Rights Agreement
	Exhibit C

	 	Transfer Agent Instructions
	Exhibit D

	 	Opinion of Company CounselEX-10.11  INVESTORS' RIGHTS AGREEMENT

 

Exhibit 10.11

INVESTORS’ RIGHTS AGREEMENT

     This Investors’
Rights Agreement (this “Agreement”) is made and entered into as of September 13, 2006, among Tenby Pharma Inc., a Delaware corporation (the “Company”), and the investors
signatory hereto (each such investor is a “Investor” and all such investors are, collectively, the
“Investors”).

     WHEREAS, immediately prior to the execution of this Agreement, the Company, Sirion
Therapeutics, Inc., a North Carolina corporation (“Sirion”) and each of the shareholders of Sirion
(the “Sirion Shareholders”) entered into that certain Contribution Agreement, pursuant to which
each of the Sirion Shareholders contributed all of its shares of capital stock of Sirion in
exchange for shares of capital stock of the Company (the “Contribution”);

     WHEREAS, simultaneously with the execution and delivery of this Agreement, the Company and
certain of the Investors (the “North Sound Investors”) are entering into that certain Series A
Preferred Stock Purchase Agreement (the “Purchase Agreement”), pursuant to which the North Sound
Investors are purchasing from the Company an aggregate of 3,125,000 shares of Series A Preferred
Stock for an aggregate purchase price of $25,000,000 (the “Financing”); and

     WHEREAS, the Company and the Investors have agreed to enter into this Agreement in connection
with the Contribution and as a condition to the closing of the Financing.

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

          1. Definitions. In addition to the terms defined elsewhere in this Agreement, (a)
capitalized terms that are not otherwise defined herein have the meanings given to such terms in
the Purchase Agreement, and (b) the following terms have the meanings indicated:

     “Effective Date” means the date that a Registration Statement is declared effective by
the Commission.

     “Effectiveness Period” means the period commencing on the Effective Date of a
Registration Statement and ending on (i) with respect to the initial Registration Statement
required to be filed pursuant to Section 2, the first to occur of (a) the fifth
anniversary of the Effective Date and (b) the date when all Registrable Securities covered
by such Registration Statement cease to be Registrable Securities, and, (ii) with respect to
any additional Registration Statements that may be required pursuant to Section 3,
until the first to occur of (a) the later of (x) the fifth anniversary of the Effective Date
of the initial Registration Statement filed pursuant to Section 2, and (y) the first
anniversary of the Effective Date of such Registration Statement, and (b) the date when all
Registrable Securities covered by such Registration Statement cease to be Registrable
Securities.

     “Filing Date” means, with respect to the initial Registration Statement required to be
filed pursuant to Section 2, the 60th day following the Closing Date,
and, with respect to any additional Registration Statements that may be required pursuant to
Section 3, the

 

 

30th day following the date on which the Company receives a valid request
for registration pursuant to Section 3.

     “Holder” means any holder, from time to time, of Registrable Securities.

     “Investor Counsel” means Proskauer Rose LLP, counsel to the Investors for purposes of
this Agreement; provided, however, that if none of the North Sound Investors
are listed as a “Selling Stockholder” in a Registration Statement, the Holders of a majority
of the Registrable Securities to be sold pursuant to such Registration Statement shall be
entitled to select alternative counsel to act as “Investor Counsel” with respect to such
Registration Statement.

     “Investor Request” means a request from Investors that in the aggregate possess a
majority of the Registrable Securities outstanding or deemed to be outstanding as of the
date of such request.

     “Nominal Value” means $8.00 per share, as adjusted for any stock dividends,
combinations, splits, recapitalizations and the like occurring with respect to the Common
Stock following the date of this Agreement.

     “Outside Investor” means each of the North Sound Investors, Avalon Ventures VI GP Fund,
LLC, Avalon Ventures VI, L.P., Avalon Ventures VII, L.P. and PharmaBio Development Inc.

     “Prospectus” means the prospectus included in a Registration Statement (including,
without limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), 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 a Registration Statement, and all other amendments and supplements to
the Prospectus, including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.

     “Registrable Securities” means (i) any Common Stock, including Underlying Shares and
any other shares of Common Stock issued or issuable upon conversion of any shares of Series
A Preferred Stock (without giving effect to any limitations on conversion contained in the
Certificate of Designations); and (ii) any securities issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar event with respect to the
foregoing. As to any particular Registrable Securities, such securities will cease to be
Registrable Securities when such securities have been sold by a Person: (i) in a transaction
in which such Person’s rights under this Agreement are not assigned in accordance with the
provisions of this Agreement; (ii) pursuant to an effective registration statement under the
Securities Act; or (iii) pursuant to Rule 144 (or any similar provision then in force) under
the Securities Act.

     “Registration Statement” means any registration statement to be filed under the
Securities Act, which covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus included therein, all amendments and

2

 

supplements to such Registration Statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto and all material incorporated by reference
or deemed to be incorporated by reference in such Registration Statement.

     “Required Effectiveness Date” means, with respect to the initial Registration Statement
required to be filed pursuant to Section 2, the 150th day following the
Closing Date, and, with respect to any additional Registration Statements that may be
required pursuant to Section 3, the 60th day following the date on which
the Company receives a valid request for registration pursuant to Section 3;
provided, that such 150 day or 60 day period, as applicable, shall be extended for
so long as the Company shall continue to comply with each of the applicable requirements of
Section 5 below and use its best efforts to cause such Registration Statement to be
declared effective by the Commission as promptly as practicable, up to a maximum of an
additional 90 days.

     “Rule 415,” “Rule 416,” “Rule 424” and “Rule 461” means Rule 415, Rule 416, Rule 424
and Rule 461, respectively, promulgated by the Commission pursuant to the Securities Act, as
such Rule(s) may be amended from time to time, or any similar rule(s) or regulation(s)
hereafter adopted by the Commission having substantially the same effect as such Rule(s).

     “Qualified Public Offering” means a bona fide firm commitment underwritten public
offering pursuant to a registration statement under the Securities Act which results in
aggregate gross proceeds to the Company of not less than $35,000,000.

          2. Mandatory Registration.

          (a) As soon as possible following the Closing Date (but not later than the Filing Date), the
Company shall prepare and file with the Commission a “Shelf” Registration Statement covering the
resale of fifty percent (50%) of all Registrable Securities for an offering to be made on a
continuous basis pursuant to Rule 415. Such Registration Statement shall be on Form SB-2 (except
if the Company is not then eligible to register for resale the Registrable Securities on Form SB-2,
in which case such registration shall be on another appropriate form in accordance herewith to
which the Holders consent, which consent may not be unreasonably withheld), and shall contain
(except if otherwise directed by the Holders) the “Plan of Distribution” attached hereto as
Annex A. The Company shall use its best efforts to cause such Registration Statement to be
declared effective under the Securities Act as promptly as possible after the filing thereof, and
in any event prior to the Required Effectiveness Date (including filing with the Commission a
request for acceleration of effectiveness in accordance with Rule 461 within three (3) days of the
date that the Company is notified (orally or in writing, whichever is earlier) by the Commission
that a Registration Statement will not be “reviewed,” or will not be subject to further review) and
shall use its best efforts to keep such Registration Statement continuously effective during the
Effectiveness Period. The Company shall notify each Holder in writing promptly (and in any event
within one business day) after receiving notification from the Commission that a Registration
Statement has been declared effective. For purposes of the obligations of the Company under this
Agreement, no Registration Statement shall be considered “effective” with respect to any
Registrable Securities unless such Registration Statement lists the Holders of such Registrable
Securities as “Selling Stockholders” and includes such other

3

 

information as is required to be disclosed with respect to such Holders to permit them to sell
their Registrable Securities pursuant to such Registration Statement. Such Registration Statement
also shall cover, to the extent allowable under the Securities Act and the rules promulgated
thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock
resulting from stock splits, stock dividends or similar transactions with respect to the
Registrable Securities.

          (b) Upon the occurrence of any Event (as defined below) and on every monthly anniversary
thereof until the earlier of the date the applicable Event is cured or the first anniversary of the
occurrence of the Event, as partial relief for the damages suffered therefrom by the Holders (which
remedy shall not be exclusive of any other remedies available at law or in equity), the Company
shall pay to each Holder an amount in cash, as liquidated damages and not as a penalty, equal to
2.0% of the Nominal Value of the Registrable Securities held by such Holder. The liquidated
damages payable pursuant to the terms hereof (i) shall not apply to the extent, but only to the
extent, that the shares of Common Stock required to be included in the applicable Registration
Statement are not otherwise available to be sold as a result of the restrictions contained in
Section 8 hereof, and (ii) shall apply on a pro-rata basis for any portion of a month prior to
the cure of an Event. For such purposes, each of the following shall constitute an “Event”: (w) a
Registration Statement is not filed on or prior to the applicable Filing Date or is not declared
effective on or prior to the applicable Required Effectiveness Date; (x) after the Effective Date
for a Registration Statement, if the Company is not eligible to use Form S-3 under the Securities
Act (or similar or successor form) at such time, a Holder is not permitted to sell Registrable
Securities under such Registration Statement (or a subsequent Registration Statement filed in
replacement thereof) for any reason for five (5) or more consecutive Trading Days or an aggregate
of twenty (20) or more Trading Days in any 12- month period; (y) after the Effective Date for a
Registration Statement, if the Company is eligible to use Form S-3 under the Securities Act (or
similar or successor form) at such time, a Holder is not permitted to sell Registrable Securities
under such Registration Statement (or a subsequent Registration Statement filed in replacement
thereof) for any reason for five or more Trading Days (whether or not consecutive); or (z) at any
time after the Common Stock is first listed or quoted on an Eligible Market, the Common Stock is
not listed or quoted, or is suspended from trading, on an Eligible Market for a period of five
Trading Days (which need not be consecutive Trading Days).

          (c) At the election of any Holder, any amount required to be paid by the Company to such
Holder pursuant to Section 2(b) may instead be added to the Stated Value of the outstanding
Preferred Stock then owned by such Holder. A Holder may make such election by delivering written
notice to the Company at any time before such cash payment is received by such Holder.

          3. Demand Registration.

          (a) If at any time after the earliest of (i) the first anniversary of the Closing Date, (ii)
the closing of a Qualified Public Offering, or (iii) the average daily trading volume of the shares
of Common Stock exceeds 10,000 shares (as adjusted for stock splits, stock combinations or similar
events) for ten consecutive Trading Days, the Company shall receive a written Investor Request that
the Company file a registration statement under the Securities Act, then the

4

 

Company shall, within ten (10) days of the receipt thereof, give written notice of such
request to all Holders and, subject to the limitations of Section 3(b) below, shall file
(as expeditiously as practicable, and in any event prior to the applicable Filing Date) and use its
best efforts to cause to become effective no later than the applicable Required Effectiveness Date,
a Registration Statement under the Securities Act with respect to all Registrable Securities which
the Holders request to be registered within twenty (20) days of the mailing of such notice by the
Company in accordance with Section 13(g) below.

          (b) If the Holders intend to distribute the Registrable Securities covered by their request by
means of an underwriting, they shall so advise the Company as a part of their request made pursuant
to this Section 3 and the Company shall include such information in the written notice
referred to in Section 3(a). In such event, the right of any Holder to include such Holder’s
Registrable Securities in such registration shall be conditioned upon such Holder’s participation
in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting
to the extent provided herein. A majority in interest of the Holders of Registrable Securities
participating in the underwriting, in consultation with the Company, shall select the managing
underwriter or underwriters in such underwriting, which underwriter shall be reasonably acceptable
to the Company. All Holders proposing to distribute their securities through such underwriting
shall (together with the Company as provided in Section 5(m)) enter into an underwriting agreement
in customary form with the underwriter or underwriters so selected for such underwriting by a
majority in interest of such Holders; provided, however, that no Holder (or any of
their assignees) shall be required to make any representations, warranties or indemnities except as
they relate to such Holder’s ownership of shares and authority to enter into the underwriting
agreement and to such Holder’s intended method of distribution, and the liability of such Holder
shall be limited to an amount equal to the net proceeds from the offering received by such Holder.
Notwithstanding any other provision of this Section 3, if the underwriter advises a Holder that
marketing factors require a limitation of the number of shares to be underwritten, then the Holder
shall so advise the Company and the Company shall so advise all Holders of Registrable Securities
which would otherwise be underwritten pursuant hereto, and the number of shares of Registrable
Securities that may be included in the underwriting shall be allocated as follows: (i) first,
among holders of Registrable Securities that have elected to participate in such underwritten
offering, in proportion (as nearly as practicable) to the aggregate amount of Registrable
Securities held by all such holders, until such holders have included in the underwriting all
shares requested by such holders to be included, and (ii) thereafter, among all other holders of
Common Stock, if any, that have the right and have elected to participate in such underwritten
offering, in proportion (as nearly as practicable) to the amount of shares of Common Stock owned by
such holders. Without the consent of a majority in interest of the Holders of Registrable
Securities participating in a registration referred to in Section 3(a), no securities other
than Registrable Securities shall be covered by such registration if the inclusion of such other
securities would result in a reduction of the number of Registrable Securities covered by such
registration or included in any underwriting or if, in the opinion of the managing underwriter, the
inclusion of such other securities would adversely impact the marketing of such offering.

          (c) The Company shall be obligated to effect only two (2) registrations (and, in each case,
only if such registration would include Registrable Securities with an aggregate value of at least
five million dollars ($5,000,000), calculated using the stated offering price disclosed

5

 

on the cover of the final prospectus covering such Registrable Securities) pursuant to an
Investor Request under this Section 3 (an offering which is not consummated shall not be
counted for this purpose unless such offering is withdrawn at the request of a majority in interest
of the Holders participating in such Investor Request).

          (d) Notwithstanding the foregoing, if the Company shall furnish to the Holders requesting a
Registration Statement pursuant to this Section 3, a certificate signed by the chief
executive officer or chief financial officer of the Company stating that in the good faith judgment
of the Board of Directors of the Company, it would be seriously detrimental to the Company and its
stockholders for such registration statement to be filed by reason of a material pending
transaction and it is therefore essential to defer the filing of such registration statement, the
Company shall have the right to defer such filing for a period of not more than ninety (90) days
after receipt of the Investor Request; provided, however, that the Company may not
utilize this right more than once in any twelve (12) month period. Likewise, the Company shall not
be obligated to effect any registration pursuant to this Section 3 within one hundred
eighty (180) days after the Effective Date of a previous Registration Statement filed pursuant to
this Section 3.

          4. Piggy-Back Registrations.

          (a) If (but without any obligation to do so) the Company proposes to register (including for
this purpose a registration effected by the Company for stockholders other than the Investors) any
of its stock or other securities under the Securities Act in connection with the public offering of
such securities solely for cash (other than a registration on Form S-8 (or similar or successor
form) relating solely to the sale of securities to participants in a Company stock plan or to other
compensatory arrangements to the extent includable on Form S-8 (or similar or successor form), or a
registration on Form S-4 (or similar or successor form)), the Company shall, at such time, promptly
give each Holder written notice of such registration. Upon the written request of each Holder
given within twenty (20) days after mailing of such notice by the Company in accordance with
Section 13(g), the Company shall use its best efforts to cause to be registered under the
Securities Act all of the Registrable Securities that each such Holder has requested to be
registered. The Company shall have no obligation under this Section 4 to make any offering
of its securities, or to complete an offering of its securities that it proposes to make.

          (b) If the Company intends to distribute the stock or other securities referenced in
Section 4(a) by means of an underwriting with an underwriter selected in the Company’s sole
discretion, it shall so advise the Holders as a part of the written notice referred to in
Section 4(a). In such event, the right of any Holder to include such Holder’s Registrable
Securities in such registration shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company as provided in Section 5(m)) enter into an
underwriting agreement in customary form with the underwriter or underwriters so selected for such
underwriting.

          (c) If any registration undertaken pursuant to this Section 4 is an underwritten
primary registration on behalf of the Company, and the managing underwriters advise the

6

 

Company that marketing factors require a limitation of the number of shares to be
underwritten, then the Company shall include in such registration: (i) first, the securities the
Company proposes to sell; and (ii) second, the Registrable Securities requested to be included in
such registration, pro rata among the Holders of such Registrable Securities on the basis of the
number of Registrable Securities owned by each such Holder.

          (d) If, at any time after giving notice of its intention to register any of its securities as
set forth in Section 4(a) and before the Effective Date of the Registration Statement filed
in connection with such registration, the Company shall determine, for any reason, not to register
such securities, the Company may, in its sole discretion, give written notice of such determination
to each Holder that requested to have its Registrable Securities included in such registration and
thereupon shall be relieved of its obligation pursuant to Section 4 to register any
Registrable Securities in connection with such registration.

          5. Registration Procedures. In connection with the Company’s registration obligations
hereunder, the Company shall:

          (a) Not less than three Trading Days prior to the filing of each Registration Statement or any
related Prospectus or any amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to
the Holders and Investor Counsel copies of all such documents proposed to be filed, which documents
(other than those incorporated or deemed to be incorporated by reference) will be subject to the
review of such Holders and Investor Counsel, and (ii) cause its officers and directors, counsel and
independent certified public accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of respective counsel, to conduct a reasonable investigation within the meaning
of the Securities Act. The Company shall not file such a Registration Statement or any such
Prospectus or any amendments or supplements thereto to which the Holders of a majority of the
Registrable Securities and Investor Counsel shall reasonably object.

          (b) (i) Prepare and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection therewith as may
be necessary to keep such Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to
be filed pursuant to Rule 424; and (iii) respond as promptly as reasonably possible, and in any
event within ten (10) Trading Days, to any comments received from the Commission with respect to
any Registration Statement or any amendment thereto and as promptly as reasonably possible provide
the Holders and Investor Counsel true and complete copies of all correspondence from and to the
Commission relating to a Registration Statement.

          (c) Notify the Holders of Registrable Securities to be sold and Investor Counsel as promptly
as reasonably possible, and (if requested by any such Person) confirm such notice in writing no
later than one Trading Day thereafter, of any of the following events: (i) the Commission notifies
the Company whether there will be a “review” of any Registration Statement; (ii) the Commission
comments in writing on any Registration Statement (in which case the Company shall deliver to each
Holder a copy of such comments and of all written

7

 

responses thereto); (iii) any Registration Statement or any post-effective amendment is
declared effective; (iv) the Commission or any other Federal or state governmental authority
requests any amendment or supplement to a Registration Statement or Prospectus or requests
additional information related thereto; (v) the Commission issues any stop order suspending the
effectiveness of any Registration Statement or initiates any Proceedings for that purpose; (vi) the
Company receives notice of any suspension of the qualification or exemption from qualification of
any Registrable Securities for sale in any jurisdiction, or the initiation or threat of any
Proceeding for such purpose; or (vii) the financial statements included in any Registration
Statement become ineligible for inclusion therein or any statement made in any Registration
Statement or Prospectus or any document incorporated or deemed to be incorporated therein by
reference is untrue in any material respect or any revision to a Registration Statement, Prospectus
or other document is required so that it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading.

          (d) Use its best efforts to avoid the issuance of or, if issued, obtain the withdrawal of (i)
any order suspending the effectiveness of any Registration Statement or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.

          (e) Furnish to each Holder and Investor Counsel, without charge, at least one conformed copy
of each Registration Statement and each amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein by reference, and all
exhibits to the extent requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the Commission.

          (f) Promptly deliver to each Holder and Investor Counsel, without charge, as many copies of
the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement
thereto as such Persons may reasonably request. Subject to the limitations set forth in this
Agreement, the Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or supplement thereto.

          (g) (i) In the time and manner required by each Trading Market, if at all, prepare and file
with such Trading Market an additional shares listing application covering all of the Registrable
Securities included in any registration; (ii) take all steps necessary to cause such Registrable
Securities to be approved for listing on each Trading Market as soon as reasonably practicable
thereafter; (iii) to the extent available to the Company, provide to the Investors evidence of such
listing; and (iv) maintain the listing of such Registrable Securities on each such Trading Market.

          (h) If the shares of Common Stock are then listed or quoted on an Eligible Market, use its
best efforts to list the Registrable Securities covered by such Registration Statement with each
Trading Market;

8

 

          (i) Prior to any public offering of Registrable Securities, use its best efforts to register
or qualify or cooperate with the selling Holders and Investor 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 Holder requests in writing, to keep each such
registration or qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by a Registration Statement (provided that the
Company shall not be required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 5(i), (ii) subject itself
to taxation in any such jurisdiction, or (iii) consent to general service of process in any such
jurisdiction).

          (j) Cooperate with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee pursuant to an
effective Registration Statement, which certificates shall be free, to the extent permitted
pursuant to Section 12(a), of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any such Holders may
request.

          (k) Upon the occurrence of any event described in Section 5(c)(vii), as promptly as
reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to
such a Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither such Registration Statement nor its related
Prospectus will contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

          (l) Subject to the execution of appropriate confidentiality agreements, cooperate with any due
diligence investigation undertaken by the Holders in connection with the sale of Registrable
Securities, including without limitation by making available any documents and information;
provided that the Company will not deliver or make available to any Holder material, nonpublic
information unless such Holder specifically requests in advance to receive material, nonpublic
information.

          (m) If Holders of a majority of the Registrable Securities being offered pursuant to a
Registration Statement select underwriters for the offering or if securities are otherwise being
sold pursuant to any underwritten public offering, the Company shall enter into and perform its
obligations under an underwriting agreement, in usual and customary form, including, without
limitation, by providing customary legal opinions, comfort letters and indemnification and
contribution obligations.

          (n) Comply with all applicable rules and regulations of the Commission.

          6. Registration Expenses. All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation, (a) all

9

 

registration and filing fees (including, without limitation, fees and expenses (i) with
respect to filings required to be made with any Trading Market, and (ii) in compliance with
applicable state securities or Blue Sky laws (including, without limitation, fees and disbursements
of counsel for the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities and determination of the eligibility of the Registrable Securities for
investment under the laws of such jurisdictions as requested by the Holders)), (b) printing
expenses (including, without limitation, expenses of printing certificates for Registrable
Securities and of printing prospectuses requested by the Holders), (c) messenger, telephone and
delivery expenses, (d) fees and disbursements of counsel for the Company and Investor Counsel for
the Holders (which Investor Counsel’s fees shall not exceed $30,000, and (e) fees and expenses of
all other Persons retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. Notwithstanding the foregoing, all underwriting fees, brokerage
discounts and selling commissions applicable to a sale by a Holder incurred in connection with any
registration of Registrable Securities, together with any legal fees and expenses in excess of the
$30,000 limitation, shall be borne pro rata by the Holders in accordance with the
number of Registrable Securities included in such registration by each such Holder.

          7. Indemnification

          (a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors,
partners, members, agents, brokers (including brokers who offer and sell Registrable Securities as
principal as a result of a pledge or any failure to perform under a margin call of Common Stock),
investment advisors and employees of each of them, each Person who controls any such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, partners, members, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all Losses, as incurred,
arising out of or relating to any untrue or alleged untrue statement of a material fact contained
in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in
light of the circumstances under which they were made) not misleading, except to the extent, but
only to the extent, that (i) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder expressly for use therein,
or to the extent that such information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved in writing by such
Holder expressly for use in a Registration Statement, such Prospectus or such form of Prospectus or
in any amendment or supplement thereto or (ii) in the case of an occurrence of an event of the type
specified in Section 5(c)(v)-(vii), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or
defective and prior to the receipt by such Holder of the Advice contemplated in Section
13(f). The Company shall notify the Holders promptly of the institution, threat or assertion
of any Proceeding of which the Company is aware in connection with the transactions contemplated by
this Agreement.

10

 

          (b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, agents and employees of such controlling Persons,
to the fullest extent permitted by applicable law, from and against all Losses (as determined by a
court of competent jurisdiction in a final judgment not subject to appeal or review) arising solely
out of any untrue statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely
out of any omission of a material fact required to be stated therein or necessary to make the
statements therein not misleading to the extent, but only to the extent, that such untrue statement
or omission is contained in any information so furnished in writing by such Holder to the Company
specifically for inclusion in such Registration Statement or such Prospectus. In no event shall
the liability of any selling Holder hereunder be greater in amount than the dollar amount of the
net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to
such indemnification obligation.

          (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees
and expenses incurred in connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations
or liabilities pursuant to this Agreement, except (and only) to the extent that such failure shall
have proximately and materially adversely prejudiced the Indemnifying Party.

          An Indemnified Party shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party has agreed in
writing to pay such fees and expenses; or (ii) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (iii) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party
(in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense thereof and such counsel shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be unreasonably withheld.
No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from all liability on
claims that are the subject matter of such Proceeding.

11

 

          All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such Proceeding in a manner
not inconsistent with this Section 7(c)) shall be paid to the Indemnified Party, as
incurred, within ten Trading Days of written notice thereof to the Indemnifying Party (regardless
of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnified Party undertakes to reimburse all such fees and expenses
to the extent it is finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).

          (d) Contribution. If a claim for indemnification under Section 7(a) or
7(b) is unavailable to an Indemnified Party (by reason of public policy or otherwise), then
each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as
is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in
connection with the actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission.
The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 7(c), any reasonable attorneys’ or other reasonable
fees or expenses incurred by such party in connection with any Proceeding to the extent such party
would have been indemnified for such fees or expenses if the indemnification provided for in this
Section 7 was available to such party in accordance with its terms.

          The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 7(d) were determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable considerations referred to in
the immediately preceding paragraph. Notwithstanding the provisions of this Section 7(d),
no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by
which the proceeds actually received by such Holder from the sale of the Registrable Securities
subject to the Proceeding exceeds the amount of any damages that 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.

          The indemnity and contribution agreements contained in this Section 7 are in addition
to any liability that the Indemnifying Parties may have to the Indemnified Parties.

          8. Restriction on Sales.

          (a) Each Holder hereby agrees with the Company that, during the one year period following the
Closing Date, it shall not sell or otherwise transfer or dispose of (other than to donees,
affiliates or partners who agree to be similarly bound) any Registrable Securities. To the

12

 

extent that a Holder is released from the restrictions of this Section 8 (any such
release shall be effectuated in accordance with the requirements of subsection (d) hereof), each
other Holder will be similarly released on a pro rata or other equitable basis (as determined in
good faith by the Board of Directors of the Company).

          (b) (i) Notwithstanding anything to the contrary contained in Section 8(a) above, the North
Sound Investors shall have the right to sell all of the Registrable Securities held by them
(collectively, the “NSI Shares”) to a single purchaser (or group of Affiliated purchasers) in a
privately negotiated transaction if the North Sound Investors determine in good faith that such
sale is reasonably necessary to the conduct of their operations; provided, however,
that if and for so long as, in the reasonable good faith judgment of the Board of Directors of the
Company, such sale would have a material negative impact on an ongoing active round of financing of
the Company, such sale shall require the prior consent of the Company.

               (ii) If the North Sound Investors propose to sell the NSI Shares pursuant to this Section
8(b), they shall deliver a written notice to the Company (the “NSI Notice”) which NSI Notice shall
specify the proposed aggregate cash purchase price for the NSI Shares (the “NSI Price”) together
with any other material terms and conditions of the proposed sale.

               (iii) Within twenty one (21) days following receipt of the NSI Notice, the Company shall
notify the North Sound Investors whether the Company (or its designee) elects to purchase the NSI
Shares at the NSI Price on such terms and conditions as are specified in the NSI Notice (such
notification is hereinafter referred to as the “Company Acceptance”). If the Company does not
provide a Company Acceptance to the North Sound Investors within such twenty one (21) day period,
the Company shall be deemed to have declined to purchase (or designate a third party to purchase)
the NSI Shares. A Company Acceptance shall be deemed to be an irrevocable commitment by the
Company (or its designee) to purchase the NSI Shares from the North Sound Investors.

               (iv) If the Company (or its designee) does not elect to purchase the NSI Shares, the North
Sound Investors may sell the NSI Shares to a single purchaser (or group of Affiliated purchasers)
for an aggregate cash purchase price not less than the NSI Price, and on such other terms and
conditions as are no more favorable to such purchaser(s) than those specified in the NSI Notice;
provided, that the North Sound Investors may sell the NSI Shares for an aggregate purchase
price less than the NSI Price or on terms more favorable to such purchaser(s) if, prior to such
sale, the North Sound Investors shall first offer to the Company (or its designee) the opportunity
to purchase the NSI Shares at such lower aggregate purchase price and on such more favorable terms
and conditions, as the case may be (the “NSI Revised Offer”), which NSI Revised Offer shall remain
open until 5:30 p.m. on the second Trading Day following the Company’s receipt of the NSI Revised
Offer pursuant to Section 13(g) below.

               (v) The closing of the purchase of the NSI Shares by the Company pursuant to this Section
8(b) shall take place no later than five (5) Trading Days after the delivery of the Company
Acceptance or the Company’s acceptance of the NSI Revised Offer, as applicable, at 10:00 a.m. local
time at the principal offices of the Company, or at such other date, time or place as the Company
and the North Sound Investors may agree. At such closing, the North Sound Investors shall sell,
transfer and deliver to the Company (or its designee) the NSI

13

 

Shares so purchased by the Company and shall deliver to the Company a certificate or other evidence
representing the NSI Shares. Simultaneously with delivery of such certificates, the Company shall
deliver to the North Sound Investors, by wire transfer of immediately available funds to such bank
account as the North Sound Investors shall designate, a cash amount equal to the NSI Price (as the
same may be revised by the NSI Revised Offer, if applicable), in full payment of the purchase price
of the NSI Shares being purchased.

          (c) In addition to any legends required pursuant to Section 12(a) or any other
Transaction Document, the Holders agree to the imprinting, so long as is required by this
Section 8, of the following legend on any certificate evidencing Registrable Securities:

“The securities represented by this certificate are subject to the
provisions of an Investors’ Rights Agreement dated as of September [7],
2006 (a copy of which is on file with the Secretary of the Company) and
may not be sold, transferred, assigned, pledged, hypothecated or
otherwise disposed of except in compliance with the provisions of such
Investors’ Rights Agreement.”

          (d) The Company covenants and agrees to fully enforce the restrictions contained in this
Section 8 against each Holder, except to the extent such restrictions are subsequently
waived or modified pursuant to a written instrument executed by the Company and the Holders of at
least 662/3% of the Registrable Securities. In furtherance of the foregoing, the Company shall issue
stop transfer instructions to its transfer agent consistent with the restrictions contained herein.
The Company may not make any notation on its records or give instructions to any transfer agent of
the Company that enlarge the restrictions on transfer set forth in this Section 8.

          9. Right of First Offer.

          (a) The Company shall not issue, sell or exchange, agree to issue, sell or exchange, or
reserve or set aside for issuance, sale or exchange, (i) any shares of Common Stock, (ii) any other
equity securities of the Company, including, without limitation, shares of Preferred Stock, (iii)
any option, warrant or other right to subscribe for, purchase or otherwise acquire any equity
securities of the Company, or (iv) any debt or other securities directly or indirectly convertible
into capital stock of the Company (collectively, “Covered Securities”), unless in each such case
the Company shall have first complied with this Section 9.

          (b) If the Company wishes to issue any Covered Securities, it shall deliver written notice to
each Investor (hereinafter referred to as the “Notice of Offer”) which Notice of Offer shall
specify (i) a description of the Covered Securities the Company proposes to issue and sell, (ii)
the number of such Covered Securities which the Company wishes to sell (the “Offer Securities”);
(iii) the proposed cash purchase price per share or unit for the Offer Securities (the “Offer
Price”); and (iv) all other material terms and conditions of the offer. The Notice of Offer shall
constitute an irrevocable offer by the Company to sell to the Investors the Offer Securities at the
Offer Price, as hereinafter provided.

14

 

          (c) Within 30 days following receipt of the Notice of Offer, each Investor shall notify the
Company as to the number of Offer Securities, if any, it is electing to purchase (any such
notification is hereinafter referred to as the “Investor’s Acceptance” and any such Investor
electing to purchase Offer Securities, an “Accepting Investor”). If an Investor does not provide
an Investor’s Acceptance to the Company within such period, such Investor shall be deemed to have
declined to purchase any of the Offer Securities. An Investor’s Acceptance shall be deemed to be
an irrevocable commitment to purchase from the Company the number of Offer Securities which such
Investor has elected to purchase pursuant to its Investor’s Acceptance, subject to allocation of
the Offer Securities among Investors accepting the Notice of Offer, as hereinafter provided.

          (d) If the Investors have elected to purchase a number of Offer Securities that in the
aggregate exceeds the total number of Offer Securities, the Offer Securities shall be allocated
among the Accepting Investors as follows: (x) first, among the Accepting Investors as nearly as
possible in proportion to the number of Registrable Securities then held by such Accepting
Investors and (y) second, among those Accepting Investors that elected to purchase more Offer
Securities than the number to which they are entitled under clause (x), as nearly as possible in
proportion to the number of Registrable Securities held by such Accepting Investors. This
Section 9(d) shall be construed and given effect in such manner that no Investor shall be
required or entitled to purchase a number of Offer Securities greater than the number set forth in
its Investor’s Acceptance. The Company shall promptly notify each Accepting Investor, if any, of
the number of securities allocated to it, and each such Accepting Investor shall be obligated to
purchase at the Offer Price such securities at a closing as set forth in Section 9(f).

          (e) If the Accepting Investors do not elect to purchase all of the Offer Securities available
for purchase under this Section 9, the Company may, within a period of three months from
the date of the Notice of Offer, sell the remaining Offer Securities not subject to an Investor’s
Acceptance to one or more third parties (each a “Third Party Purchaser”) for cash at a price per
share not less than the Offer Price, and on such other terms and conditions as are no more
favorable to the proposed Third Party Purchaser than those specified in the Notice of Offer. If
the Company does not complete the sale of the Offer Securities within such three-month period, the
provisions of this Section 9 shall again apply, and no sale of such Offer Securities by the
Company shall be made otherwise than in accordance with the terms of this Agreement.

          (f) The closing of purchases of Offer Securities by Investors pursuant to this Section
9 shall take place no later than 60 days after the date of the Notice of Offer, at 10:00 A.M.
local time at the principal offices of the Company, or at such other date, time or place as the
parties to the sale may agree. At least five (5) business days prior to such closing, the Company
shall notify the Investor(s) in writing of the names of purchasers and the portion of the Offer
Securities to be purchased by each. At such closing, the Company shall sell, transfer and deliver
to each purchaser the Offer Securities so purchased by such purchaser and shall deliver to each
purchaser a certificate or other evidence representing the Offer Securities sold to such purchaser.
Simultaneously with delivery of such certificates, each purchaser of the Offer Securities shall
deliver to the Company, by wire transfer of immediately available funds to such bank account as the
Company shall designate, a cash amount equal to the product of the Offer Price and the number of
Offer Securities being acquired by such purchaser, in full payment of the purchase price of the
Offer Securities purchased.

15

 

          (g) The term “Covered Securities” shall not include shares of Common Stock issued or
issuable:

               (i) upon conversion of the Series A Preferred Stock;

               (ii) to officers, directors or employees of, or consultants to, the Corporation pursuant to
(x) stock options outstanding on the date hereof, or (y) stock agreements, purchase plans, employee
stock incentive programs or stock options granted after the date hereof on terms approved by the
Board of Directors of the Company, if any, up to a maximum of 534,566 shares of Common Stock in the
aggregate;

               (iii) for consideration other than cash pursuant to a merger, consolidation, acquisition or
similar business combination approved by the Board of Directors, provided such transaction is not
principally for the purpose of raising equity capital;

               (iv) for consideration other than cash in connection with any other strategic transaction
unanimously approved by the Board of Directors, including any joint venture, licensing arrangement,
distribution arrangement or development agreement, up to a maximum of 500,000 shares of Common
Stock, provided such transaction is not principally for the purpose of raising equity capital;

               (v) as a dividend or distribution on any shares of capital stock of the Company; and

               (vi) in a Qualified Public Offering.

          (h) In the event that any Offer Securities to be issued are voting securities, each Investor
shall have the right under this Section 9 to purchase, in lieu of its share of such voting
securities, an identical number of non-voting securities that have the same economic rights as such
voting securities and that are freely convertible into such voting securities, subject to any
restrictions on conversion which such Investor shall request.

          (i) This Section 9 shall terminate and be of no further force and effect upon the
consummation of a Qualified Public Offering.

          10. Delivery of Certificates. In addition to any other rights available to a Holder,
if the Company fails to deliver or to cause to be delivered to such Holder a certificate
representing shares of Common Stock on the date on which delivery of such certificate is required
by any Transaction Document, and if after such date such Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such
Holder of the shares that such Holder anticipated receiving from the Company (a “Buy-In”), then the
Company shall, within three Trading Days after such Holder’s request (which request, to the extent
required pursuant to such Transaction Document, shall be accompanied by an opinion of counsel
reasonably satisfactory to the Company), and in such Holder’s discretion, either (i) pay cash to
such Holder in an amount equal to such Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which
point the Company’s obligation to deliver such certificate (and to issue such shares of Common
Stock) shall terminate, or (ii) promptly honor its obligation to

16

 

deliver to such Holder a certificate or certificates representing such shares of Common Stock
and pay cash to such Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Common Stock, times (B) the Closing Price on the date of
the event giving rise to the Company’s obligation to deliver such certificate.

          11. Assignment of Registration Rights. The rights to cause the Company to register
Registrable Securities pursuant to this Agreement may be assigned (but only with all related
obligations) by a Holder to any: (i) subsidiary, affiliate, parent, partner, limited partner,
retired partner or stockholder of such Holder; (ii) immediate family member (spouse or child) of,
or trust for the benefit of, such Holder (if such Holder is a natural person) or such Holder’s
immediate family member; or (iii) Person who, after such assignment or transfer, holds at least
50,000 Registrable Securities (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like occurring with respect to the Common Stock following the date of
this Agreement); provided, however, that it shall be a condition to the
effectiveness of such assignment that: (x) the Company is, within three (3) Trading Days after such
transfer, furnished with written notice of the name and address of such transferee or assignee and
the Registrable Securities with respect to which such registration rights are being assigned; and
(y) such transferee or assignee agrees in writing (a copy of which writing is provided to the
Company at the time of transfer) to be bound by and subject to all of the terms and conditions of
this Agreement.

          12. Additional Rights of Investors.

          (a) Transfer Restrictions.

               (i) Securities may only be disposed of pursuant to an effective registration statement under
the Securities Act or pursuant to an available exemption from the registration requirements of the
Securities Act, and in compliance with any applicable state securities laws. In connection with
any transfer of Securities other than pursuant to an effective registration statement or to the
Company or pursuant to Rule 144(k), except as otherwise set forth herein, the Company may require
the transferor to provide to the Company an opinion of counsel selected by the transferor, the form
and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that
such transfer does not require registration under the Securities Act. Notwithstanding the
foregoing, the Company hereby consents to and agrees to register on the books of the Company and
with its transfer agent, without any such legal opinion, any transfer of Securities by a Investor
to an Affiliate of such Investor, provided that the transferee certifies to the Company that it is
an “accredited investor” as defined in Rule 501(a) under the Securities Act.

               (ii) In addition to any legends required pursuant to any other Transaction Document, the
Investors agree to the imprinting, so long as is required by this Section 12(a)(ii), of the
following legend on any certificate evidencing Securities:

“Neither these securities nor the securities into which these
securities are convertible have been registered with the Securities and
Exchange Commission or the securities commission of any state in
reliance upon an exemption from 

17

 

registration under the Securities Act of 1933, as amended (the
“Securities Act”), and, accordingly, may not be offered or sold except
pursuant to an effective registration statement under the Securities Act
or pursuant to an available exemption therefrom, or in a transaction not
subject to, the registration requirements of the Securities Act and in
compliance with applicable state securities and blue sky laws.
Notwithstanding the foregoing, these securities and the securities
issuable upon conversion of these securities may be pledged to an
“accredited investor” within the meaning of Rule 501(a) under the
Securities Act in connection with a bona fide margin account or other
loan secured by such securities.”

          Certificates evidencing Securities shall not be required to contain such legend or any other
legend (i) while a Registration Statement covering the resale of such Securities is effective under
the Securities Act, or (ii) following any sale of such Securities pursuant to Rule 144, or (iii) if
such Securities are eligible for sale under Rule 144(k), or (iv) if such legend is not required
under applicable requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the Staff of the Commission). At such time as a legend is no longer
required for certain Securities, the Company will, no later than three Trading Days following the
delivery by a Investor to the Company or the Company’s transfer agent of a legended certificate
representing such Securities and, if reasonably requested by the Company, a legal opinion
reasonably satisfactory to the Company regarding the removal of such legend, deliver or cause to be
delivered to such Investor a certificate representing such Securities that is free from all
restrictive and other legends. The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions on transfer set
forth in this Section 12(a). For so long as any Investor owns Securities, the Company will
not effect or publicly announce its intention to effect any exchange, recapitalization or other
transaction that effectively requires or rewards physical delivery of certificates evidencing the
Common Stock.

          (b) Furnishing of Information. As long as any Investor owns Registrable Securities
and is not eligible to sell all such Registrable Securities pursuant to paragraph (k) of Rule 144,
the Company covenants to timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. Upon the request of any such Person, the Company shall deliver to
such Person a written certification of a duly authorized officer as to whether it has complied with
the preceding sentence. As long as any Investor owns Securities, if the Company is not required to
file reports pursuant to such laws, it will prepare and furnish to the Investors and make publicly
available in accordance with paragraph (c) of Rule 144 such information as is required for the
Investors to sell the Securities under Rule 144. The Company further covenants that it will take
such further action as any holder of Securities may reasonably request, all to the extent required
from time to time to enable such Person to sell such Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144.

18

 

          (c) Access. The Company shall give each Investor that owns Registrable Securities and
its representatives, at the request of such Investor, access during reasonable business hours to
(i) all properties, assets, books, contracts, commitments, reports and records relating to the
Company and its subsidiaries, and (ii) the management, accountants, lenders, customers and
suppliers of the Company and its subsidiaries; provided, however, that the Company shall not be
required to provide such Investor access to any information or Persons if the Company reasonably
determines that access to such information or Persons cannot be provided to such Investor in a
manner that would avoid an adverse affect on the attorney-client privilege between the Company and
its counsel or the disclosure of trade secrets, material nonpublic information or other
confidential or proprietary information, as applicable.

          (d) State Securities Law Compliance — Resale. Beginning on the earlier of (x) six
months following the date of this Agreement and (y) the date which a registration statement is
effective and shares of Common Stock are available for trading pursuant to the terms of the this
Agreement, and continuing until either (i) the Investors have sold all of their Registrable
Securities under a registration statement pursuant to this Agreement or (ii) the Common Stock
becomes a “covered security” under Section 18(b)(1)(A) of the Securities Act, the Company shall
maintain within either Moody’s Industrial Manual or Standard and Poor’s Standard Corporation
Descriptions (or any successors to these manuals which are similarly qualified as “recognized
securities manuals” under state Blue Sky laws) an updated listing containing (i) the names of the
officers and directors of the Company, (ii) a balance sheet of the Company as of a date that is at
no time older than eighteen months and (iii) a profit and loss statement of the Company for either
the preceding fiscal year or the most recent year of operations.

          (e) Securities Laws Disclosure; Publicity.

               (i) From and after the filing of the 8-K Filing with the Commission, no Outside Investor shall
be in possession of any material, nonpublic information received from the Company, any of its
Subsidiaries or any of its respective officers, directors, employees or agents, that is not
disclosed in the 8-K Filing. The Company shall not, and shall cause each of its Subsidiaries and
each of their respective officers, directors, employees and agents, not to, provide any Outside
Investor with any material nonpublic information regarding the Company or any of its Subsidiaries
from and after the filing of the 8-K Filing with the Commission without the express written consent
of such Outside Investor.

               (ii) Subject to the foregoing, neither the Company nor the Investors shall issue any press
releases or any other public statements with respect to the transactions contemplated hereby
without the consent of the other; provided, however, that the Company shall be
entitled, without the prior approval of a majority in interest of the Investors, to make any press
release or other public disclosure with respect to such transactions (x) in substantial conformity
with the 8-K Filing and contemporaneously therewith and (y) as is required by applicable law and
regulations (provided that in the case of clause (x) the Investors shall be consulted by the
Company in connection with any such press release or other public disclosure prior to its release).
Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Investor,
or include the name of any Investor in any filing with the Commission or any regulatory agency or
Trading Market, without the prior written consent of such Investor, except to the extent such
disclosure (but not any disclosure as to the controlling Persons thereof)

19

 

is required by law or Trading Market regulations, in which case the Company shall provide such
Investor with reasonable prior notice of such disclosure.

          13. Miscellaneous.

          (a) Remedies. In the event of a breach by the Company or by a Holder of any of their
obligations under this Agreement, each Holder or the Company, as the case may be, in addition to
being entitled to exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in respect of such breach,
it shall waive the defense that a remedy at law would be adequate.

          (b) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and the Holders of at least a majority of the Registrable Securities then
outstanding or deemed to be outstanding. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates exclusively to the rights
of Holders and that does not directly or indirectly affect the rights of other Holders may be given
by Holders of at least a majority of the Registrable Securities to which such waiver or consent
relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of the immediately
preceding sentence.

          (c) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has
entered, as of the date hereof, nor shall the Company or any of its subsidiaries, on or after the
date of this Agreement, enter into any agreement with respect to its securities that would have the
effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with
the provisions hereof. Neither the Company nor any Subsidiary has previously entered into any
agreement granting any registration rights with respect to any of its securities to any Person that
have not been satisfied in full.

          (d) No Piggyback on Registrations. None of the security holders of the Company (other
than the Holders in such capacity pursuant hereto) may include securities of the Company in a
Registration Statement other than the Registrable Securities, and the Company shall not after the
date hereof enter into any agreement providing any such right to any of its security holders.

          (e) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to a Registration Statement.

          (f) Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any
event of the kind described in Sections 5(c)(v), 5(c)(vi), or 5(c)(vii),
such Holder will forthwith

20

 

discontinue disposition of such Registrable Securities under a Registration Statement until
such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement contemplated by Section 5(a), or until it is advised in writing (the “Advice”) by
the Company that the use of the applicable Prospectus may be resumed, and, in either case, has
received copies of any additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The Company may provide
appropriate stop orders to enforce the provisions of this paragraph.

          (g) Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (a) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section 13(g) prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile telephone
number specified in this Agreement on a day that is not a Trading Day or later than 5:30 p.m. (New
York City time) and earlier than 11:59 p.m. (New York City time) on any Trading Day, (c) the
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt by the party to whom such notice is required to be given.

          (h) Successors and Assigns. Subject to the express limitations contained herein, this
Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of
each of the parties and shall inure to the benefit of each Holder. The Company may not assign its
rights or obligations hereunder without the prior written consent of each Holder.

          (i) Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and all of which together shall constitute one and the same
instrument. The exchange of copies of this Agreement or amendments thereto and of signature pages
by facsimile transmission or by email transmission in portable digital format, or similar format,
shall constitute effective execution and delivery of such instrument(s) as to the parties and may
be used in lieu of the original Agreement or amendment for all purposes. Signatures of the parties
transmitted by facsimile or by email transmission in portable digital format, or similar format,
shall be deemed to be their original signatures for all purposes.

          (j) Governing law; venue; waiver of jury trial. The corporate laws of
the State of Delaware shall govern all issues concerning the relative rights of the Company and its
stockholders. All questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance with the internal
laws of the State of New York. Each party agrees that all legal proceedings concerning the
interpretation, enforcement and defense of the transactions contemplated by this Agreement (whether
brought against a party hereto or its respective Affiliates, directors, officers, stockholders,
employees or agents) shall be commenced exclusively in the State and U.S. Federal courts sitting in
the City of New York, Borough of Manhattan. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the State and U.S. Federal courts sitting in the City of New York,
Borough of Manhattan and the U.S. Federal courts sitting in the State of Florida for the
adjudication of any dispute hereunder or in connection herewith or with any 

21

 

transaction contemplated hereby or discussed herein (including with respect to the
enforcement of any of this Agreement), and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is improper. Each party hereto hereby
irrevocably waives personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or any of the transactions contemplated
hereby. If either party shall commence an action or proceeding to enforce any provisions of this
Agreement or any transaction document, then the prevailing party in such action or proceeding shall
be reimbursed by the other party for its reasonable attorneys fees and other reasonable costs and
expenses incurred with the investigation, preparation and prosecution of such action or
proceeding.

          (k) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

          (l) Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void or unenforceable.

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

[Remainder of page intentionally left blank. Signature pages follow.]

22

 

     IN WITNESS WHEREOF, the parties have executed this Investors’ Rights Agreement as of the date
first written above.

	 	 	 	 	 
	 	 	TENBY PHARMA INC.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Barry Butler 
	 

	 	 	 	 
	 

	 	 	 	Name:

	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	Address for Notice:
	 
	 	 	 	 
	 	 	3110 Cherry Palm Drive, Suite 340

Tampa, Florida 33619

Facsimile No.: (813) 496-7328

Telephone No.: (813) 496-7325

Attn: Barry Butler
	 
	 	 	 	 
	 	 	with a copy (which shall not constitute notice) to:
	 
	 	 	 	 
	 	 	Hill, Ward and Henderson, P.A.

101 East Kennedy Boulevard, Suite 3700

Tampa, Florida 33602

Facsimile No.: (813) 221-2900

Telephone No.: (813) 222-8705

Attn: Reid Haney, Esq.

[Remainder of page intentionally left blank.

Signature pages for the Investors follow.]

23

 

	 	 	 	 	 
	 	 	NORTH SOUND LEGACY INSTITUTIONAL FUND LLC
	 
	 	 	 	 
	 	 	By: North Sound Capital LLC; Manager
	 
	 	 	 	 
	 

	 	By:	 	/s/ Thomas E. McAuley
	 

	 	 	 	 
	 

	 	 	 	Name:  Thomas E. McAuley

Title:  Chief Investment Officer
	 
	 	 	 	 
	 	 	Address for Notice:
	 
	 	 	 	 
	 	 	20 Horseneck Lane

Greenwich, Connecticut 06830

Facsimile No.: (203) 340-5701

Telephone No.: (203) 340-5784

Attn: Andrew B. David, Esq.
	 
	 	 	 	 
	 	 	with a copy (which shall not constitute notice) to:
	 
	 	 	 	 
	 	 	Proskauer Rose LLP

1585 Broadway

New York, New York 10036

Facsimile No.: (212) 969-2900

Telephone No.: (212) 969-3000

Attn: Adam J. Kansler, Esq.

[Remainder of page intentionally left blank.

Signature pages of other Investors to follow.]

24

 

	 	 	 	 	 
	 	 	NORTH SOUND LEGACY

   INTERNATIONAL LTD.
	 
	 	 	 	 
	 	 	By: North Sound Capital LLC; Investment Advisor
	 
	 	 	 	 
	 

	 	By:	 	/s/ Thomas E. McAuley
	 

	 	 	 	 
	 

	 	 	 	Name:  Thomas E. McAuley

Title:  Chief Investment Officer
	 
	 	 	 	 
	 	 	Address for Notice:
	 
	 	 	 	 
	 	 	20 Horseneck Lane

Greenwich, Connecticut 06830

Facsimile No.: (203) 340-5701

Telephone No.: (203) 340-5784

Attn: Andrew B. David, Esq.
	 
	 	 	 	 
	 	 	with a copy (which shall not constitute notice) to:
	 
	 	 	 	 
	 	 	Proskauer Rose LLP

1585 Broadway

New York, New York 10036

Facsimile No.: (212) 969-2900

Telephone No.: (212) 969-3000

Attn: Adam J. Kansler, Esq.

[Remainder of page intentionally left blank.

Signature pages of other Investors to follow.]

IRA —
Signature Page

 

 

	 	 	 	 	 
	 	 	AVALON VENTURES VI, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	Avalon Ventures GP, LLC

its General Partner
	 
	 	 	 	 
	 

	 	By:	 	/s/ Kevin J. Kinsella 
	 

	 	 	 	 
	 

	 	 	 	Name:

Title: Managing Member
	 
	 	 	 	 
	 	 	Address for Notice:
	 
	 	 	 	 
	 	 	c/o Sytera II, Inc.

888 Prospect Street, Suite 320

La Jolla, CA 92037

Facsimile No.: (858) 348-2183

Telephone No.:

Attn:

[Remainder of page intentionally left blank.

Signature pages of other Investors to follow.]

IRA —
Signature Page

 

 

	 	 	 	 	 
	 	 	AVALON VENTURES VI GP FUND, LLC
	 
	 	 	 	 
	 

	 	By:
	 	Avalon Ventures GP, LLC

its General Partner
	 
	 	 	 	 
	 

	 	By:	 	/s/ Kevin J. Kinsella 
	 

	 	 	 	 
	 

	 	 	 	Name:

Title: Managing Member
	 
	 	 	 	 
	 	 	Address for Notice:
	 
	 	 	 	 
	 	 	c/o Sytera II, Inc.

888 Prospect Street, Suite 320

La Jolla, CA 92037

Facsimile No.: (858) 348-2183

Telephone No.:

Attn:

[Remainder of page intentionally left blank.

Signature pages of other Investors to follow.]

IRA —
Signature Page

 

 

	 	 	 	 	 
	 	 	AVALON VENTURES VII, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	Avalon Ventures VII GP, LLC

its General Partner
	 
	 	 	 	 
	 

	 	By:	 	/s/ Kevin J. Kinsella 
	 

	 	 	 	 
	 

	 	 	 	Name:

Title: Managing Member
	 
	 	 	 	 
	 	 	Address for Notice:
	 
	 	 	 	 
	 	 	c/o Sytera II, Inc.

888 Prospect Street, Suite 320

La Jolla, CA 92037

Facsimile No.: (858) 348-2183

Telephone No.:

Attn:

[Remainder of page intentionally left blank.

Signature pages of other Investors to follow.]

IRA —
Signature Page

 

 

	 	 	 	 	 
	 	 	WIDDER FAMILY LIMITED PARTNERSHIP
	 
	 	 	 	 
	 

	 	By:	 	/s/ Kenneth J. Widder 
	 

	 	 	 	 
	 

	 	 	 	Name: Kenneth J. Widder, M.D.

Title: Partner
	 
	 	 	 	 
	 	 	Address for Notice:
	 
	 	 	 	 
	 	 	c/o Sytera II, Inc.

888 Prospect Street, Suite 320

La Jolla, CA 92037

Facsimile No.: (858) 348-2183

Telephone No.:

Attn: Kenneth J. Widder, M.D.

[Remainder of page intentionally left blank.

Signature pages of other Investors to follow.]

IRA —
Signature Page

 

 

	 	 	 	 	 
	 	 	THE LICHTER FAMILY TRUST
	 
	 	 	 	 
	 

	 	By:	 	/s/ Jay Lichter 
	 

	 	 	 	 
	 

	 	 	 	Name: Jay Lichter, Ph.D.

Title: Trustee
	 
	 	 	 	 
	 	 	Address for Notice:
	 
	 	 	 	 
	 	 	c/o Sytera II, Inc.

888 Prospect Street, Suite 320

La Jolla, CA 92037

Facsimile No.: (858) 348-2183

Telephone No.:

Attn: Jay Lichter, Ph.D.

[Remainder of page intentionally left blank.

Signature pages of other Investors to follow.]

IRA —
Signature Page

 

 

	 	 	 
	 

	 	/s Nathan L. Mata 
	 

	 	Nathan L. Mata, M.D.
	 
	 	 
	 

	 	Address for Notice:
	 
	 	 
	 

	 	c/o Sytera II, Inc.
	 

	 	888 Prospect Street, Suite 320
	 

	 	La Jolla, CA 92037
	 

	 	Facsimile No.: (858) 348-2183
	 

	 	Telephone No.:
	 

	 	Attn: Nathan L. Mata, M.D.

[Remainder of page intentionally left blank.

Signature pages of other Investors to follow.]

IRA —
Signature Page

 

 

	 	 	 
	 

	 	/s/ Gabriel Travis 
	 

	 	Gabriel Travis, M.D.
	 
	 	 
	 

	 	Address for Notice:
	 
	 	 
	 

	 	Jules Stein Eye Institute/UCLA School of Medicine
	 

	 	100 Stein Plaza, Room BH-667
	 

	 	Los Angeles, CA 90095
	 

	 	Facsimile No.:
	 

	 	Telephone No.:
	 

	 	Attn: Gabriel Travis, M.D.

[Remainder of page intentionally left blank.

Signature pages of other Investors to follow.]

IRA —
Signature Page

 

 

	 	 	 
	 

	 	/s/ Susan Benton 
	 

	 	Susan Benton
	 
	 	 
	 

	 	Address for Notice:
	 
	 	 
	 

	 	c/o Tenby Pharma Inc.
	 

	 	3110 Cherry Palm Drive, Suite 340
	 

	 	Tampa, FL 33619
	 

	 	Facsimile No.: (813) 496-7328
	 

	 	Telephone No.:
	 

	 	Attn: Susan Benton

[Remainder of page intentionally left blank.

Signature pages of other Investors to follow.]

IRA —
Signature Page

 

 

	 	 	 
	 

	 	/s/ Philippe Boulangeat 
	 

	 	Philippe Boulangeat
	 
	 	 
	 

	 	Address for Notice:
	 
	 	 
	 

	 	c/o Tenby Pharma Inc.
	 

	 	3110 Cherry Palm Drive, Suite 340
	 

	 	Tampa, FL 33619
	 

	 	Facsimile No.: (813) 496-7328
	 

	 	Telephone No.:
	 

	 	Attn: Philippe Boulangeat

[Remainder of page intentionally left blank.

Signature pages of other Investors to follow.]

IRA —
Signature Page

 

 

	 	 	 
	 

	 	/s/ Barry Butler 
	 

	 	Barry Butler
	 
	 	 
	 

	 	Address for Notice:
	 
	 	 
	 

	 	c/o Tenby Pharma Inc.
	 

	 	3110 Cherry Palm Drive, Suite 340
	 

	 	Tampa, FL 33619
	 

	 	Facsimile No.: (813) 496-7328
	 

	 	Telephone No.: (813) 496-7325
	 

	 	Attn: Barry Butler
	 
	 	 
	 

	 	with a copy (which shall not constitute notice) to:
	 
	 	 
	 

	 	Hill, Ward and Henderson, P.A.
	 

	 	101 East Kennedy Boulevard, Suite 3700
	 

	 	Tampa, FL 33602
	 

	 	Facsimile No.: (813) 221-2900
	 

	 	Telephone No.: (813) 222-8705
	 

	 	Attn: Reid Haney, Esq.

[Remainder of page intentionally left blank.

Signature pages of other Investors to follow.]

IRA —
Signature Page

 

 

	 	 	 
	 

	 	/s/ Roger Vogel 
	 

	 	Roger Vogel
	 
	 	 
	 

	 	Address for Notice:
	 
	 	 
	 

	 	c/o Tenby Pharma Inc.
	 

	 	3110 Cherry Palm Drive, Suite 340
	 

	 	Tampa, FL 33619
	 

	 	Facsimile No.: (813) 496-7328
	 

	 	Telephone No.: (813) 496-7325
	 

	 	Attn: Roger Vogel

[Remainder of page intentionally left blank.

Signature pages of other Investors to follow.]

IRA —
Signature Page

 

 

	 	 	 	 	 
	 	 	/s/ Randy Milby
	 	 	Randy Milby
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	Address for Notice:
	 
	 	 	 	 
	 	 	270 Presidential Drive

Wilmington, DE 19807

Facsimile No.: (302) 338-8067

Telephone No.: 

Attn: Randy Milby
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 

[Remainder of page intentionally left blank.

Signature pages of other Investors to follow.]

 

	 	 	 	 	 
	 	 	PHARMABIO DEVELOPMENT INC.

    (D/B/A NOVAQUEST)
	 
	 	 	 	 
	 

	 	By:	 	/s/ Kerry E. Zook 
	 

	 	 	 	 
	 

	 	 	 	Name: Kerry E. Zook

Title: Vice President
	 
	 	 	 	 
	 	 	Address for Notice:
	 
	 	 	 	 
	 	 	4709 Creekstone Drive

Riverbirch Building, Suite 200

Durham, NC 27703

Facsimile No.: (919) 998-2090

Telephone No.: (919) 998-2000

Attn: President

[Remainder of page intentionally left blank.]

IRA —
Signature Page

 

 

Annex A

Plan of Distribution

     The selling stockholders may, from time to time, sell any or all of their shares of common
stock on any stock exchange, market or trading facility on which the shares are traded or in
private transactions. These sales may be at fixed or negotiated prices. The selling stockholders
may use any one or more of the following methods when selling shares:

	 	•	 	ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
	 
	 	•	 	block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to facilitate the
transaction;
	 
	 	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
	 
	 	•	 	an exchange distribution in accordance with the rules of the applicable
exchange;
	 
	 	•	 	privately negotiated transactions;
	 
	 	•	 	short sales;
	 
	 	•	 	broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;
	 
	 	•	 	a combination of any such methods of sale; and
	 
	 	•	 	any other method permitted pursuant to applicable law.

     The selling stockholders may also sell shares under Rule 144 under the Securities Act, if
available, rather than under this prospectus.

     The selling stockholders may also engage in short sales against the box, puts and calls and
other transactions in our securities or derivatives of our securities and may sell or deliver
shares in connection with these trades.

     Broker-dealers engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the selling
stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated. The selling stockholders do not expect these commissions
and discounts to exceed what is customary in the types of transactions involved. Any profits on
the resale of shares of common stock by a broker-dealer acting as principal might be deemed to be
underwriting discounts or commissions under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, attributable to the sale of shares

 

 

will be borne by a selling stockholder. The selling stockholders may agree to indemnify any agent,
dealer or broker-dealer that participates in transactions involving sales of the shares if
liabilities are imposed on that person under the Securities Act.

     The selling stockholders may from time to time pledge or grant a security interest in some or
all of the shares of common stock owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the shares of common stock
from time to time under this prospectus after we have filed an amendment to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of
selling stockholders to include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus.

     The selling stockholders also may transfer the shares of common stock in other circumstances,
in which case the transferees, pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus and may sell the shares of common stock from time
to time under this prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus.

     The selling stockholders and any broker-dealers or agents that are involved in selling the
shares of common stock may be deemed to be “underwriters” within the meaning of the Securities Act
in connection with such sales. In such event, any commissions received by such broker-dealers or
agents and any profit on the resale of the shares of common stock purchased by them may be deemed
to be underwriting commissions or discounts under the Securities Act.

     We are required to pay all fees and expenses incident to the registration of the shares of
common stock, including up to $30,000 in fees and disbursements of counsel to the selling
stockholders. We have agreed to indemnify the selling stockholders against certain losses, claims,
damages and liabilities, including liabilities under the Securities Act.

     The selling stockholders have advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding the sale of their
shares of common stock, nor is there an underwriter or coordinating broker acting in connection
with a proposed sale of shares of common stock by any selling stockholder. If we are notified by
any selling stockholder that any material arrangement has been entered into with a broker-dealer
for the sale of shares of common stock, if required, we will file a supplement to this prospectus.
If the selling stockholders use this prospectus for any sale of the shares of common stock, they
will be subject to the prospectus delivery requirements of the Securities Act.

     The anti-manipulation rules of Regulation M under the Securities Exchange Act of 1934 may
apply to sales of our common stock and activities of the selling stockholders.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]