Document:

exv4w24

Exhibit 4.24

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE 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 ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

COMMON STOCK PURCHASE WARRANT

To Purchase [                    ] Shares of Common Stock of

ARTES MEDICAL, INC.

     THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Empire
Asset Management Company (the “Holder”), is entitled, upon the terms and subject to the limitations
on exercise and the conditions hereinafter set forth, at any time on or after the sixth (6th) month
anniversary of the date hereof (the “Initial Exercise Date”) and on or prior to the close of
business on the fifth (5th) year anniversary of the date of issuance of this Warrant (the
“Termination Date”) but not thereafter, to subscribe for and purchase from Artes Medical, Inc., a
Delaware corporation (the “Company”), up to [                    ] shares (the “Warrant Shares”) of Common
Stock, par value $0.001 per share, of the Company (the “Common Stock”). The purchase price of one
share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in
Section 2(b).

     1. Definitions. The Holder and the Company are parties to that certain Placement
Agent Agreement, dated as of September 17, 2008 (the “Placement Agent Agreement”). Pursuant to the
Placement Agent Agreement, the Holder has acted as placement agent in connection with the
transactions contemplated by the Subscription Agreements (the “Subscription Agreements”), of even
date herewith, by and among the Company and the investors identified on the signature pages to the
Subscription Agreements. Capitalized terms used and not otherwise defined herein shall have the
meanings set forth in the Subscription Agreements.

     2. Exercise.

          (a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant
may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on
or before the Termination Date by delivery to the Company of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto (or such other office or agency of

 

 

the Company as it may designate by notice in writing to the registered Holder at the address
of such Holder appearing on the books of the Company); provided, however, within five (5) Trading
Days of the date said Notice of Exercise is delivered to the Company, the Holder shall have
surrendered this Warrant to the Company and the Company shall have received payment of the
aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn
on a United States bank.

          (b) Exercise Price. The exercise price of the Common Stock under this Warrant shall
be $[___1], subject to adjustment hereunder (the “Exercise Price”).

          (c) Cashless Exercise. This Warrant may be exercised at any time by means of a
“cashless exercise” in which the Holder shall be entitled to receive a certificate for the number
of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

	 	(A)	 	= the VWAP (as defined below) on the Trading Day immediately
preceding the date of such election;
	 
	 	(B)	 	= the Exercise Price of this Warrant, as adjusted; and
	 
	 	(X)	 	= the number of Warrant Shares issuable upon exercise of this
Warrant in accordance with the terms of this Warrant by means of a 

   cash
exercise rather than a cashless exercise.

               “VWAP” means, for any date, the price determined by the first of the following clauses that
applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume
weighted average price of the Common Stock for such date (or the nearest preceding date) on the
Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg
Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b)
if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common
Stock are then quoted on the OTC Bulletin Board, the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common
Stock is not then listed or quoted on the OTC Bulletin Board and if prices for the Common Stock are
then reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid price per share of the
Common Stock so reported; or (c) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Company.

          (d) Exercise Limitations. Holder shall not have the right to exercise any portion of
this Warrant, pursuant to Section 2(c) or otherwise, to the extent that after giving effect to such
issuance after exercise, Holder (together with Holder’s affiliates), as set forth on the applicable
Notice of Exercise, would beneficially own in excess of 4.99% of the number of shares of the Common
Stock outstanding immediately after giving effect to such issuance.  For

 

			
	1	 	There will two separate placement agent warrants with
different exercise prices. The placement agent warrant related to the common
stock will have an exercise price equal to the purchase price, and the
placement agent warrant related to shares of common stock underlying the
investor warrants will have an exercise price equal to the exercise price
contained in the investor warrants.

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purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by
Holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which the determination of such sentence is being made, but shall
exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the
remaining, nonexercised portion of this Warrant beneficially owned by Holder or any of its
affiliates and (B) exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other shares of Shares or Warrants)
subject to a limitation on conversion or exercise analogous to the limitation contained herein
beneficially owned by Holder or any of its affiliates.  Except as set forth in the preceding
sentence, for purposes of this Section 2(d), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act, it being acknowledged by Holder that the Company is not
representing to Holder that such calculation is in compliance with Section 13(d) of the Exchange
Act and Holder is solely responsible for any schedules required to be filed in accordance
therewith. To the extent that the limitation contained in this Section 2(d) applies, the
determination of whether this Warrant is exercisable (in relation to other securities owned by
Holder) and of which a portion of this Warrant is exercisable shall be in the sole discretion of
Holder, and the submission of a Notice of Exercise shall be deemed to be each Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by
Holder) and of which portion of this Warrant is exercisable, in each case subject to such aggregate
percentage limitation, and the Company shall have no obligation to verify or confirm the accuracy
of such determination. For purposes of this Section 2(d), in determining the number of outstanding
shares of Common Stock, Holder may rely on the number of outstanding shares of Common Stock as
reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more
recent public announcement by the Company or (z) any other notice by the Company or the Company’s
transfer agent setting forth the number of shares of Common Stock outstanding.  Upon the written or
oral request of Holder, the Company shall within two Trading Days confirm orally and in writing to
Holder the number of shares of Common Stock then outstanding.  In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by Holder or its affiliates since
the date as of which such number of outstanding shares of Common Stock was reported. The
provisions of this Section 2(d) may be waived by Holder, at the election of Holder, upon not less
than 61 days’ prior notice to the Company, and the provisions of this Section 2(d) shall continue
to apply until such 61st day (or such later date, as determined by Holder, as may be
specified in such notice of waiver).

          (e) Mechanics of Exercise.

               (i) Authorization of Warrant Shares. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon
exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges imposed by the Company in
respect of the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).

               (ii) Delivery of Certificates Upon Exercise. Certificates for shares purchased
hereunder shall be transmitted by the transfer agent of the Company to the Holder by crediting the
account of the Holder’s prime broker with the Depository Trust Company through

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its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is a participant in
such system, and otherwise by physical delivery to the address specified by the Holder in the
Notice of Exercise within three (3) Trading Days from the delivery to the Company of the Notice of
Exercise Form, surrender of this Warrant and payment of the aggregate Exercise Price as set forth
above (“Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on the
date the Exercise Price and completed Notice of Exercise are received by the Company. The Warrant
Shares shall be deemed to have been issued, and Holder or any other person so designated to be
named therein shall be deemed to have become a holder of record of such shares for all purposes, as
of the date the Warrant has been exercised by payment to the Company of the Exercise Price and all
taxes required to be paid by the Holder, if any, pursuant to Section 2(e)(vi) prior to the issuance
of such shares, have been paid.

               (iii) Delivery of New Warrants Upon Exercise. If this Warrant shall have been
exercised in part, the Company shall, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to
purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant.

               (iv) Buy-In Rights. In addition to any other rights available to a Holder, if the
Company fails to deliver to the Holder a certificate representing Warrant Shares by the fifth
Trading Day after the date on which delivery of such certificate is required by this Warrant, and
if after such fifth Trading Day the Holder purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares
that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within
five Trading Days after the Holder’s request, honor its obligation to deliver to the Holder a
certificate or certificates representing such Common Stock and pay cash to the Holder in an amount
equal to the excess (if any) of the amount equal to the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased 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.

               (v) No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share
which Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

               (vi) Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall
be made without charge to the Holder for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the
Company, and such certificates shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that in the event certificates for Warrant
Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered
for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the
Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

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               (vii) Closing of Books. The Company will not close its stockholder books or records
prior to the Termination Date in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

     3. Certain Adjustments.

          (a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding: (A) pays a stock dividend or otherwise make a distribution or distributions on shares
of its Common Stock or any other equity or equity equivalent securities payable in shares of Common
Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the
Company pursuant to this Warrant), (B) subdivides outstanding shares of Common Stock into a larger
number of shares, (C) combines (including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (D) issues by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding immediately after such event
and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted.
Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

          (b) Subsequent Placements. Subject to Section 3(i), if the Company, at any time during
the one year period following the date of this Warrant (the “Participation Right Period”), shall
complete a Subsequent Placement at an effective price per share less than the then effective
Exercise Price (such lower price, the “Base Share Price” and such issuances collectively, a
“Dilutive Issuance”), as adjusted hereunder (if the holder of the Equity Securities so issued shall
at any time, whether by operation of purchase price adjustments, reset provisions, floating
conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per
share which is issued in connection with such issuance, be entitled to receive shares of Common
Stock at an effective price per share which is less than the Exercise Price, such issuance shall be
deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance),
then, the Exercise Price shall be reduced and only reduced to equal the Base Share Price. Such
adjustment shall be made during the Participation Right Period whenever such Equity Securities are
issued. Notwithstanding the foregoing, no adjustments shall be made, paid or issued during the
Participation Right Period under this Section 3(b) in respect of Exempt Issuances. During the
Participation Right Period, the Company shall notify the Holder in writing as promptly as
reasonably possible following the issuance of any Equity Securities subject to this section,
indicating therein the applicable issuance price, or of applicable reset price, exchange price,
conversion price and other pricing terms (such notice the “Dilutive Issuance Notice”). For
purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant
to this Section 3(b), upon the occurrence of any Dilutive Issuance during the Participation Right
Period, after the date of such Dilutive Issuance the Holder is entitled to the Base Share Price
regardless of whether the Holder accurately refers to the Base Share Price in the Notice of
Exercise.

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          (c) Additional Issuances of Equity Securities. Subject to Section 3(i), if the
Company, at any time after the Participation Right Period and while this Warrant is outstanding,
shall issue any Equity Securities (otherwise than as provided in the foregoing subsections (a)
through (b) of this Section 3 and other than Exempt Issuances) at a price per share less than the
then effective Exercise Price or without consideration, then the Exercise Price upon each such
issuance shall be adjusted to that price (rounded to the nearest cent) determined by multiplying
the Exercise Price then in effect by a fraction:

               (i) the numerator of which shall be equal to the sum of (x) the number of shares of
outstanding Common Stock immediately prior to the issuance of such Equity Securities plus (y) the
number of shares of Common Stock which the aggregate consideration for the total number of such
Equity Securities so issued would purchase at a price per share equal to the Exercise Price then in
effect, and

               (ii) the denominator of which shall be equal to the number of shares of outstanding Common
Stock immediately after the issuance of such Equity Securities.

     The provisions of Section 3(c) shall not apply to any issuance of Equity Securities for which
an adjustment is provided under Sections 3(a) or 3(b).

          (d) Warrant Shares. Subject to Section 3(i), simultaneously with any adjustment to
the Exercise Price pursuant to Section 3(c), the number of Warrant Shares that may be purchased
upon exercise of this Warrant shall be increased or decreased proportionately, as applicable, so
that after such adjustment the aggregate Exercise Price payable hereunder for the increased or
decreased, as applicable, number of Warrant Shares shall be the same as the aggregate Exercise
Price in effect immediately prior to such adjustment.

          (e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (A)
the Company effects any merger or consolidation of the Company with or into another Person (other
than a transaction effected solely to change the domicile of the Company), (B) the Company effects
any sale of all or substantially all of its assets in one or a series of related transactions, (C)
any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their shares for other
securities, cash or property, (D) consummate a stock purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with another Person whereby such other Person acquires more than the 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock held by the other
Person or other Persons making or party to, or associated or affiliated with the other Persons
making or party to, such stock purchase agreement or other business combination) or (E) the Company
effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which
the Common Stock is effectively converted into or exchanged for other securities, cash or property
(in any such case, a “Fundamental Transaction”), then, upon any subsequent exercise of this
Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been
issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction
upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration
(the

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“Alternate Consideration”) receivable upon or as a result of such Fundamental Transaction by a
Holder, of the number of shares of Common Stock for which this Warrant is exercisable immediately
prior to such event. For purposes of any such exercise, the determination of the Exercise Price
shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration
in a reasonable manner reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the securities, cash or
property to be received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any exercise of this Warrant following
such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any
successor to the Company or surviving entity in such Fundamental Transaction shall issue to the
Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to
exercise such warrant into Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such successor or surviving
entity to comply with the provisions of this Section 3(e) and insuring that this Warrant (or any
such replacement security) will be similarly adjusted upon any subsequent transaction analogous to
a Fundamental Transaction.

          (f) Calculations. All calculations under this Section 3 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the
number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be
the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and
outstanding.

          (g) Voluntary Adjustment By Company. Subject to Section 3(i), the Company may at any
time during the term of this Warrant reduce the then current Exercise Price to any amount and for
any period of time deemed appropriate by the board of directors of the Company.

          (h) Notice to Holders.

               (i) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to
this Section 3, the Company shall promptly as reasonably possible mail to each Holder a notice
setting forth the Exercise Price after such adjustment. If the Company issues a variable rate
security, the Company shall be deemed to have issued Equity Securities at the lowest possible
conversion or exercise price at which such securities may be converted or exercised in the case of
a Variable Rate Transaction (as defined in the following sentence). The term “Variable Rate
Transaction” shall mean a transaction in which the Company issues or sells (i) any debt or equity
securities that are convertible into, exchangeable or exercisable for, or include the right to
receive additional shares of Common Stock either (A) at a conversion, exercise or exchange rate or
other price that is based upon and/or varies with the trading prices of or quotations for the
shares of Common Stock at any time after the initial issuance of such debt or equity securities, or
(B) with a conversion, exercise or exchange price that is subject to being reset at some future
date after the initial issuance of such debt or equity security or upon the occurrence of specified
or contingent events directly or indirectly related to the business of the Company or the market
for the Common Stock or (ii) enters into any agreement, including, but

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not limited to, an equity line of credit, whereby the Company may sell securities at a future
determined price.

               (ii) Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend
(or any other distribution) on the Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize
the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, of any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property; (E) the Company shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company;
then, in each case, the Company shall cause to be mailed to the Holder at its last address as it
shall appear upon the Warrant Register of the Company, at least five (5) calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or
share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange; provided, that the failure to mail such notice or any
defect therein or in the mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice. The Holder is entitled to exercise this Warrant during
the 5-day period commencing on the date of such notice to the effective date of the event
triggering such notice.

          (i) Stockholder Approval. If the Company has not obtained such approval as may be
required by the applicable rules and regulations of the Nasdaq Global Market (or any successor
entity) from the stockholders of the Company with respect to the transactions contemplated by the
Transaction Documents, including the issuance of all of the Warrant Shares in excess of 19.99% of
the issued and outstanding Common Stock on the Closing Date (“Stockholder Approval”), then neither
the Exercise Price of this Warrant nor the number of Warrant Shares that may be purchased upon
exercise of this Warrant shall be adjusted as provided in Sections 3(b), 3(c), 3(d) and 3(g). The
Company shall hold a special meeting of stockholders at the earliest practical date following its
next annual meeting of stockholders, but in no event later than the Initial Exercise Date, for the
purpose of obtaining Stockholder Approval, with the recommendation of the Company’s Board of
Directors that such proposal be approved, and the Company shall solicit proxies from its
stockholders in connection therewith in the same manner as all other management proposals in such
proxy statement and all management-appointed proxyholders shall vote their proxies in favor of such
proposal. If the Company does not obtain Stockholder Approval at the meeting called for such
purpose, the Company shall include the proposal in the Company’s proxy statement for every meeting
thereafter to seek Stockholder Approval until the earlier of the date Stockholder Approval is
obtained or the Warrants are no longer outstanding.

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     4. Transfer of Warrant.

          (a) Transferability. Subject to compliance with any applicable securities laws and
the conditions set forth in Sections 5(a) and 4(d) hereof and to the provisions of the Subscription
Agreement, this Warrant and all rights hereunder are transferable, in whole or in part, upon
surrender of this Warrant at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or
its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of
such transfer. Upon such surrender and, if required, such payment, the Company shall execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be
cancelled. A Warrant, if properly assigned, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.

          (b) New Warrants. This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued, signed by the Holder
or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such
notice.

          (c) Warrant Register. The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the “Warrant Register”), in the name of the record
Holder hereof from time to time. The Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary.

          (d) Transfer Restrictions. If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered
pursuant to an effective registration statement under the Securities Act of 1933 (the “Securities
Act”) and under applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer (i) that the Holder or transferee of this Warrant, as the case
may be, furnish to the Company a written opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable transactions) to the effect
that such transfer may be made without registration under the Securities Act and under applicable
state securities or blue sky laws, (ii) that the holder or transferee execute and deliver to the
Company an investment letter in form and substance acceptable to the Company and (iii) that the
transferee be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or
(a)(8) promulgated under the Securities Act or a qualified institutional buyer as defined in Rule
144A(a) under the Securities Act.

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     5. Miscellaneous.

          (a) Title to Warrant. Prior to the Termination Date and subject to compliance with
applicable laws and Section 4 of this Warrant, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the Holder in person
or by duly authorized attorney, upon surrender of this Warrant together with the Assignment Form
annexed hereto properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.

          (b) No Rights as Shareholder Until Exercise. Except as may be specifically set forth
herein, this Warrant does not entitle the Holder to any voting rights or other rights as a
shareholder of the Company prior to the exercise hereof. Upon the surrender of this Warrant and
the payment of the aggregate Exercise Price (or by means of a cashless exercise), the Warrant
Shares so purchased shall be and be deemed to be issued to such Holder as the record owner of such
shares as of the close of business on the later of the date of such surrender or payment.

          (c) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon
receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the
case of the Warrant, shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver
a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such
Warrant or stock certificate.

          (d) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or
a legal holiday, then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.

          (e) Authorized Shares. The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of the Trading Market
upon which the Common Stock may be listed.

               Except and to the extent as waived or consented to by the Holder, the Company shall not by any
action, including, without limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the carrying out of all such
terms and in the taking of all such actions as may be

10

 

necessary or appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will (a) not increase
the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to
obtain all such authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its obligations under
this Warrant.

               Before taking any action which would result in an adjustment in the number of Warrant Shares
for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.

          (f) Jurisdiction. All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance with the provisions of the
Subscription Agreement.

          (g) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.

          (h) Nonwaiver. No course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice
Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate
on the Termination Date.

          (i) Notices. Any notice, request or other document required or permitted to be given
or delivered to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Subscription Agreement.

          (j) Limitation of Liability. No provision hereof, in the absence of any affirmative
action by Holder to exercise this Warrant or purchase Warrant Shares, and no enumeration herein of
the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.

          (k) Successors and Assigns. Subject to applicable securities laws, this Warrant and
the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of Holder. The provisions of
this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant Shares.

          (l) Amendment. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holder.

11

 

          (m) Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Warrant.

          (n) Headings. The headings used in this Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this Warrant.

[Remainder of page left intentionally blank]

12

 

          IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer
thereunto duly authorized as of the date first set forth above.

	 	 	 	 	 
	 	 	ARTES MEDICAL, INC.
	 
	 	 	 	 
	 

	 	By: 	 	 
	 

	 	 	 
	 
	 	 	 	 
	 

	 	Print Name:  	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 

 

 

NOTICE OF EXERCISE

TO:      ARTES MEDICAL, INC.

          (1) The undersigned hereby elects to purchase                      Warrant Shares of the Company pursuant
to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.

          (2) Payment shall take the form of (check applicable box):

[ ] in lawful money of the United States; or

[ ] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection 2(c).

          (3) Please issue a certificate or certificates representing said Warrant Shares in the name of
the undersigned or in such other name as is specified below:

 

The Warrant Shares shall be delivered to the following:

 

 

 

          (4) Accredited Investor. The undersigned is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity:       
                    
                   
                   
                       
                   
                   
                        
 

Signature of Authorized Signatory of Investing Entity: 
                    
                   
                   
                   
                         
     

Name of Authorized Signatory:     
                     
                   
                   
                   
                   
                   
        
            

Title of Authorized Signatory:      
                     
                   
                   
                   
                   
                   
                   
  

Date:         
                     
                  
  
            
                    
                    
                                        
                    
                   

 

 

ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

          FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned
to

          
                   
                   
                   
                       
           whose address is

          
                   
                   
                   
                   
    
                   
                   
                   
                   
     
                .

          
                   
                 
                   
                        
                   
                   
                   
                   
    
               
   

Dated:                                         ,                     

	 	 	 	 	 	 	 
	 

	 	Holder’s Signature:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Holder’s Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 

	 	 

Signature Guaranteed:       
                   
                   
                   
                   
     
                   
              

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the
face of the Warrant, without alteration or enlargement or any change whatsoever, and must be
guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign the foregoing
Warrant.exv10w50

Exhibit 10.50

SUBSCRIPTION AGREEMENT

FOR SECURITIES

OF

ARTES MEDICAL, INC.

SEPTEMBER [___], 2008

 

 

SUBSCRIPTION AGREEMENT

     THIS SUBSCRIPTION AGREEMENT (the “Agreement”) is made and entered into as of September [___],
2008, by and between Artes Medical, Inc., a Delaware corporation (the “Company”), and the person or
entity listed on the signature page hereof (“Investor”).

RECITALS

     A. The Company and Investor are executing and delivering this Agreement in reliance upon the
exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as
amended (the “Securities Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the
United States Securities and Exchange Commission (the “SEC”) under the Securities Act.

     B. Investor wishes to purchase, and the Company wishes to sell, upon the terms and conditions
stated in this Agreement, that aggregate number of (i) shares of common stock, par value $0.001 per
share (“Common Stock”), of the Company, set forth below Investor’s name on the signature page of
this Agreement (which aggregate amount for all investors in this offering (the “Offering”) together
shall be [                    ] shares of Common Stock and shall be collectively referred to herein as the
“Shares”) and (ii) warrants, in substantially the form attached hereto as Exhibit A (the
“Warrants”), to acquire up to that number of additional shares of Common Stock equal to 50% of the
number of Shares purchased by Investor (rounded up to the nearest whole share).

     C. The Company has engaged Empire Asset Management Company as its exclusive placement agent
(the “Placement Agent”) for the Offering on a “reasonable efforts, no minimum” basis.

     D. In connection with the Offering, the Company will agree to provide certain registration
rights (the “Registration Rights”) as set forth in Section 4 of this Agreement with respect to the
Shares and Warrant Shares under the Securities Act and the rules and regulations promulgated
thereunder and applicable state securities laws.

     In consideration of the above recitals and the mutual covenants made herein, and for other
good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the
Company and Investor hereby agree as follows:

SECTION 1.

DEFINITIONS

     In addition to the terms defined elsewhere in this Agreement, for all purposes of this
Agreement, the following terms shall have the meanings indicated in this Section 1:

     “Agreement” has the meaning set forth in the Preamble.

1

 

     “Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City
are open for the general transaction of business.

     “Closing” means the closing of the purchase and sale of the Shares and the Warrants pursuant
to this Agreement.

     “Closing Date” means the Trading Day when all of the Transaction Documents have been executed
and delivered by the applicable parties thereto, and all of the conditions set forth in Section 6
hereof are satisfied, or such other date as the parties may agree.

     “Common Stock” has the meaning set forth in the Recitals, and also includes any securities
into which the Common Stock may be hereafter reclassified or changed.

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

     “Company” has the meaning set forth in the Preamble.

     “Company Permits” has the meaning set forth in Section 3.2(i).

     “Default Event” has the meaning set forth in Section 4.5.

     “Dilutive Issuance” has the meaning set forth in Section 5.2(a).

     “Discussion Time” means the period commencing from the time that Investor first received a
term sheet or any other document from the Company or other person setting forth the material terms
of the transactions contemplated hereunder until the date hereof.

     “Equity Securities” means (i) Common Stock and (ii) Common Stock Equivalents.

     “Event Date” has the meaning set forth in Section 4.5.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.

     “Exempt Issuance” means (i) any Equity Securities issued or issuable pursuant to options,
warrants or other rights issued or issuable to employees, officers or directors of, or consultants
or advisors to the Company or any subsidiary, pursuant to equity incentive plans or other employee
benefit arrangements; (ii) any Equity Securities issued or issuable pursuant to any rights or
agreements, options, warrants or convertible securities outstanding as of the Closing Date; (iii)
any Equity Securities issued or issuable for consideration other than cash pursuant to a merger,
consolidation, strategic alliance, acquisition or similar business combination; (iv) any Equity
Securities issued or issuable in connection with any stock split, stock dividend or
recapitalization
by the Company; (v) any Equity Securities issued or issuable pursuant to any equipment loan or
leasing arrangement, real property leasing arrangement, or

2

 

debt financing from a bank or similar
financial or lending institution; (vi) any Equity Securities issued or issuable in connection with
strategic transactions involving the Company and other entities, including joint ventures,
manufacturing, marketing or distribution arrangements or technology transfer or development
arrangements; and (vii) any Equity Securities issued or issuable to the Placement Agent or its
affiliates.

     “Holding Period” has the meaning set fort in Section 4.5.

     “Investor” has the meaning set forth in the Preamble.

     “Intellectual Property” means the Company’s and each of its Subsidiaries’ patents, patent
applications, provisional patents, trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights, licenses, formulae, mask works, customer lists, internet
domain names, know-how and other intellectual property, including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems, procedures or
registrations or applications relating to the same.

     “Investment Summary” means the Investment Summary, dated September 17, 2008, with respect to
the Offering.

     “Issuable Maximum” has the meaning set forth in Section 5.2(b).

     “Liens” means any mortgage, lien, title claim, assignment, encumbrance, security interest,
adverse claim, contract of sale, restriction on use or transfer or other defect of title of any
kind.

     “Material Adverse Effect” means a material adverse effect on (i) the assets, liabilities,
results of operations, condition (financial or otherwise), business, or prospects of the Company
and its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform its
obligations under this Agreement; provided, however, a “Material Adverse Effect” with respect to
Company shall not include any of the following or any combination of the following: (i) any event,
change, condition, effect or circumstance that results from or is attributable to the announcement,
pendency or consummation of this Agreement or the transactions contemplated hereby; (ii) any change
in the market price or trading volume of Company’s common stock after the date hereof; or (iii) any
event, change, condition, effect or circumstance resulting primarily from changes in general
economic, regulatory or political conditions, conditions in the United States or worldwide capital
markets, any act of terrorism, or any outbreak or continuation of hostilities or war, except to the
extent that any such event, change, condition, effect or circumstance has a disproportionately
adverse effect on Company as compared to other comparable businesses.

     “New Purchase Price” has the meaning set forth in Section 5.2(a).

     “Notice of Acceptance” has the meaning set forth in Section 5.1(d).

     “Offer” has the meaning set forth in Section 5.1(b).

     “Offer Notice” has the meaning set forth in Section 5.1(b).

3

 

     “Offer Period” has the meaning set forth in Section 5.1(d).

     “Offered Securities” has the meaning set forth in Section 5.1(b).

     “Offering” has the meaning set forth in the Preamble.

     “Participation Right Period” has the meaning set forth in Section 5.1.

     “Permitted Transferee” has the meaning set forth in Section 7.3.

     “Placement Agent” has the meaning set forth in the Recitals.

     “Principal Trading Market” means the Trading Market on which the Common Stock is primarily
listed on and quoted for trading, which, as of the date of this Agreement and the Closing Date,
shall be the Nasdaq Global Market.

     “Purchase Price” means $[                    1] per share of Common Stock.

     “Refused Securities” has the meaning set forth in Section 5.1(e).

     “Registrable Securities” means all shares of Common Stock of the Company issued to Investor
under this Agreement, including all shares of Common Stock issued to Investor upon exercise of the
Warrants, excluding in all cases, however, all Registrable Securities sold pursuant to Rule 144 and
any shares of capital stock issued or issuable from time to time (with any adjustments) in
replacement of, in exchange for or otherwise in respect of the Shares or the Warrant Shares.

     “Registration Rights” has the meaning set forth in the Recitals.

     “Regulation D” has the meaning set forth in the Recitals.

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

     “Rule 145” means Rule 145 promulgated by the SEC pursuant to the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC
having substantially the same effect as such Rule.

     “Schedule of Exceptions” has the meaning set forth in Section 3.2.

     “SEC Documents” means the Company’s annual report on Form 10-K (excluding exhibits) for the
fiscal year ended December 31, 2007, as filed with the SEC on March 14, 2008,
and the Amendment No. 1 to the Company’s annual report on Form 10-K/A for the fiscal year ended
December 31, 2007 (excluding exhibits), as filed with the SEC on April 22, 2008; and (ii)

 

			
	1	 	Final Agreement shall include actual Purchase Price
which shall be a 10% discount to the average closing price of the Common Stock
for the five Trading Day period prior to the Closing.

4

 

the
Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2008 (excluding exhibits),
as filed with the SEC on August 11, 2008.

     “SEC Filings” means the SEC Documents, along with all other reports, schedules, forms,
statements and other documents that the Company is required to file with the SEC pursuant to the
reporting requirements of the Exchange Act.

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

     “Securities Act” has the meaning set forth in the Recitals.

     “Shares” has the meaning set forth in the Recitals.

     “Stockholder Approval” has the meaning set forth in Section 5.2(b).

     “Subscription Amount” means the aggregate amount to be paid for the Shares and the Warrants
purchased hereunder as indicated on Investor’s signature page to this Agreement next to the heading
“Aggregate Purchase Price (Subscription Amount).”

     “Subsequent Placement” has the meaning set forth in Section 5.1(a).

     “Subsidiaries” shall mean any corporation or other entity or organization, whether
incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or
other ownership interest.

     “Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its
Principal Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not
listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is
traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported in the “pink sheets” by Pink Sheets LLC (or any similar
organization or agency succeeding to its functions of reporting prices); provided , that in the
event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof,
then Trading Day shall mean a Business Day.

     “Trading Market” means whichever of the New York Stock Exchange, the American Stock Exchange,
the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or the OTC
Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

     “Transaction Documents” means this Agreement, the schedules and exhibits attached hereto, the
Warrants and any other documents or agreements executed in connection with the transactions
contemplated hereunder.

     “Violation” means (i) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto; (ii) the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary to

5

 

make the statements
therein not misleading; or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any federal or state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any federal or state securities law in
connection with the offering covered by such registration statement.

     “Warrants” has the meaning set forth in the Recitals.

     “Warrant Shares” means the shares of Common Stock issuable upon exercise of or otherwise
pursuant to the Warrants.

SECTION 2.

PURCHASE AND SALE

     2.1 Purchase and Sale of Securities. Subject to the terms and conditions hereof, the
Company hereby agrees to issue and sell to Investor, and Investor hereby agrees to purchase from
the Company, at the Closing the number of Shares equal to the quotient resulting from dividing (a)
the Subscription Amount by (b) the Purchase Price, rounded down to the nearest whole Share. In
addition, Investor shall receive a Warrant to acquire up to that number of additional shares of
Common Stock equal to 50% of the number of Shares purchased by Investor (rounded up to the nearest
whole share). The Warrants shall have an exercise price equal to $[                    ]2 per Warrant
Share.

     2.2 Closing. The Closing of the purchase and sale of the Shares and Warrants shall
take place at the offices of the Company at 5870 Pacific Center Boulevard, San Diego, California
92121 at 9:00 a.m., Pacific Time, on the Closing Date or at such other locations or remotely by
facsimile transmission or other electronic means as the parties may mutually agree.

     2.3 Form of Payment. Unless otherwise agreed to by the Company and Investor, on or
prior to the Business Day immediately prior to the Closing Date, Investor shall wire its
Subscription Amount, in United States dollars and in immediately available funds as follows:

	 	 	 
	Bank:

	 	Signature Bank
	Address:

	 	261 Madison Avenue, New York, New York 10016
	ABA #:

	 	[____]
	Account Name:

	 	Signature Bank, as Escrow Agent to Artes Medical, Inc.

     2.4 Delivery. Unless otherwise agreed to by the Company and Investor, on the Closing
Date (a) the Company shall irrevocably instruct the Transfer Agent to deliver to each
Investor one or more stock certificates, free and clear of all restrictive and other legends
(except as expressly provided in Section 3 hereof), evidencing the number of Shares Investor is
purchasing as is set forth on Investor’s signature page to this Agreement next to the heading
“Number of Shares to be Acquired,” within three (3) Business Days after the Closing and (b) the
Company shall issue to Investor a Warrant pursuant to which Investor shall have the right to

 

			
	2	 	Final Agreement shall include actual exercise price
which shall be equal to the consolidated closing bid price of the Common Stock
on the Nasdaq Global Market immediately preceding the Closing.

6

 

acquire such number of Warrant Shares as is set forth on Investor’s signature page to this
Agreement next to the heading “Warrants Issued,” duly executed on behalf of the Company and
registered in the name of Investor.

SECTION 3.

REPRESENTATIONS AND WARRANTIES

     3.1 Representations and Warranties of Investor. Investor represents and warrants to
the Company that:

          (a) Authorization. This Agreement constitutes the valid and legally binding
obligation of Investor, enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency and similar laws affecting the enforcement of creditors’ rights
generally and equitable remedies, and except as indemnity provisions in the enforcement of Section
4 of this Agreement (relating to the Registration Rights) may be limited by law, and Investor has
full legal capacity, power and authority to enter into and be bound by this Agreement.

          (b) Purchase for Own Account for Investment. Investor is purchasing the Securities
for investment purposes only and not with a view to, or for sale in connection with, a distribution
of the Securities within the meaning of the Securities Act. Investor has no present intention of
distributing any of such Securities in violation of the Securities Act or any applicable state
securities law and has no arrangement or understanding with any other persons regarding the
distribution of such Securities (this representation and warranty not limiting Investor’s right to
sell the Securities pursuant to a registration statement or otherwise in compliance with applicable
federal and state securities laws) in violation of the Securities Act or any applicable state
securities law. Investor is acquiring the Securities hereunder in the ordinary course of its
business. Investor does not have any agreement or understanding, directly or indirectly, with any
person to distribute any of the Securities.

          (c) Access to Information. Investor has had an opportunity to ask questions of the
Company’s representatives concerning the Company, its present and prospective business, assets,
liabilities and financial condition that Investor reasonably considers important in making the
decision to purchase the Securities. Neither such information nor any other investigation
conducted by Investor or any of its representatives shall modify, amend or otherwise affect
Investor’s right to rely on the Company’s representations and warranties contained in this
Agreement. Investor acknowledges that it has received and reviewed the Investment Summary.
Investor acknowledges receipt of copies of the SEC Documents.

          (d)  Understanding of Risks. Investor is fully aware of: (i) the highly speculative
nature of the investment in the Securities; (ii) the financial hazards involved; (iii) the
lack of liquidity of the Securities and the restrictions on the transferability of the
Securities (e.g., that Investor may not be able to sell or dispose of the Securities); (iv) the tax
consequences of investment in the Securities and (v) the risks described in the Investment Summary,
as well as in the SEC Documents, under the heading “Risk Factors.”

7

 

          (e) Investor’s Qualifications. Investor is an “accredited” investor as defined under
Rule 501 of Regulation D promulgated under the Securities Act. Investor acknowledges that the
purchase of the Securities is a speculative investment and that it can bear the economic risk and
complete loss of its investment in the Securities and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and risks of the
investment contemplated hereby.

          (f) Compliance with Securities Laws. Investor understands and acknowledges that, in
reliance upon the representations and warranties made by Investor herein, the sale of the
Securities to Investor will not be registered with the SEC under the Securities Act or qualified
under any state securities laws, but instead are being issued under an exemption or exemptions from
the registration and qualification requirements of the Securities Act or applicable state
securities laws which impose certain restrictions on Investor’s ability to transfer the Securities.

          (g) Restrictions on Transfer. Investor understands that Investor may not transfer any
of the Securities unless such Securities are registered under the Securities Act unless, in the
reasonable opinion of counsel to the Company, exemptions from such registration and qualification
requirements are available. Investor understands that only the Company may file a registration
statement with the SEC. Investor has also been advised that exemptions from registration and
qualification may not be available or may not permit Investor to transfer all or any of the
Securities in the amounts or at the times proposed by Investor.

          (h) Rule 144. In addition, Investor has been advised that Rule 144, which permits
certain limited sales of unregistered securities, is not presently available with respect to the
Shares and the Warrants, and, if issued, the Warrant Shares, solely due to the holding periods
required thereunder and, in any event, requires that the Shares and the Warrants, and, if issued,
the Warrant Shares, be held for a minimum of six months, and in certain cases one year, after they
have been purchased and paid for (within the meaning of Rule 144), before they may be resold under
Rule 144. Investor understands that Rule 144 may indefinitely restrict transfer of the Shares and
the Warrants, and, if issued, the Warrant Shares, if Investor is an “affiliate” of the Company and
“current public information” about the Company (as defined in Rule 144) is not publicly available.

          (i)  Legends and Stop-Transfer Orders. Investor understands that certificates or
other instruments representing any of the Securities acquired by Investor may bear legends
substantially similar to the following, in addition to any other legends required by federal or
state laws:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”), OR
UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE

8

 

AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT
THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS UNLESS SOLD PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT.

     In order to ensure and enforce compliance with the restrictions imposed by applicable law and
those referred to in the foregoing legend, or elsewhere herein, the Company may issue appropriate
“stop transfer” instructions to its transfer agent, if any, with respect to any certificate or
other instrument representing the Securities, or if the Company transfers its own securities, it
may make appropriate notations to the same effect in the Company’s records. Any legend endorsed on
a certificate pursuant to this subsection (i) and the related stop transfer instructions with
respect to such securities shall be removed, and the Company shall issue a certificate without such
legend to the holder thereof, if such securities are registered under the Securities Act and a
prospectus meeting the requirements of Section 10 of the Securities Act is available, if such
legend may be properly removed under the terms of Rule 144 promulgated under the Securities Act or
if such holder provides the Company with an opinion of counsel for such holder, reasonably
satisfactory to legal counsel for the Company, to the effect that a sale, transfer or assignment of
such securities may be made without registration.

          (j) No General Solicitation. Investor did not learn of the investment in the
Securities as a result of any public advertising or general solicitation.

          (k) Brokers and Finders. Investor has not employed any broker or finder or incurred
any liability for any brokerage or investment banking fees, commissions, finders’ structuring fees,
financial advisory fees or other similar fees in connection with the Transaction Documents.
Investor acknowledges that it is aware that the Company will be required to pay compensation to the
Placement Agent as described in the Schedule of Exceptions.

     3.2 Representations and Warranties of the Company. The Company hereby represents and
warrants to Investor that, except as set forth in this Section, or on the Schedule of Exceptions
attached hereto as Exhibit B (the “Schedule of Exceptions”), with any disclosure thereon
being deemed disclosure for all purposes and all relevant subsections hereof, which exceptions will
be deemed to be representations and warranties as if made hereunder:

          (a) Organization and Good Standing. The Company and each of its Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable). The Company has all necessary
corporate power and authority to own, lease, use and operate its properties and to carry
on its business as now being conducted and presently proposed to be conducted. All
Subsidiaries are set forth on Schedule 3.2(a). The Company and each of its Subsidiaries is duly
qualified to do business as a foreign corporation and is in good standing in each jurisdiction in
which its ownership or leasing of assets, or the conduct of its business, makes such qualification

9

 

necessary, except where the failure to be so qualified or in good standing could not reasonably be
expected to have a Material Adverse Effect.

          (b)  Requisite Power and Authorization. The Company has all necessary corporate power
and authority to execute and deliver this Agreement, to issue the Shares and the Warrants and to
carry out the provisions of this Agreement. All corporate action on the part of the Company
required for the lawful execution and delivery of this Agreement, issuance and delivery of the
Shares and the Warrants and the performance by the Company of its obligations hereunder has been
taken. Upon execution and delivery, this Agreement constitutes valid and binding obligations of
the Company enforceable in accordance with their respective terms, except as enforcement may be
limited by insolvency and similar laws affecting the enforcement of creditors’ rights generally and
equitable remedies, and except as the indemnity provisions of Section 4 of this Agreement (relating
to registration rights) may be limited by law. The Shares, when issued in compliance with the
provisions of this Agreement, and the Warrant Shares, if issued, when issued in compliance with the
provisions of the Warrants, will be duly authorized and validly issued, fully paid, non-assessable,
subject to no lien, claim or encumbrance and issued in compliance with federal securities laws and
applicable state securities laws. No stockholder of the Company or other person has any
preemptive, anti-dilution, “poison-pill” or similar right with respect to the Shares and the
Warrants and, if issued, the Warrant Shares. The Company has reserved such number of shares of its
Common Stock necessary for issuance of the Shares and the Warrant Shares.

          (c) SEC Documents. The Company has furnished the SEC Documents to Investor with the
Investment Summary. The Company has filed all of its SEC Filings for the two year period preceding
the date hereof. As of their respective filing dates, or such later date on which such reports
were amended, the SEC Filings complied in all material respects with the requirements of the
Exchange Act. The SEC Filings as of their respective dates, or such later date on which such
reports were amended, when issued did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not misleading. The financial
statements included in the SEC Filings comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC with respect
thereto. Except as may be indicated in the notes to the financial statements included in the SEC
Filings or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC, such
financial statements have been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the consolidated financial position of the Company and any
subsidiaries at the dates thereof and the consolidated results of their operations and consolidated
cash flows for the periods then ended (subject, in the case of unaudited statements, to normal,
recurring adjustments). The shares of Common Stock are currently listed on the Nasdaq Global
Market. The Company has not received notice (written or oral) from Nasdaq to the effect that the
Company is not in compliance with the continued listing and maintenance requirements of such
Trading Market.

          (d) Capital Stock. The authorized capital stock of the Company consists of
200,000,000 shares of Common Stock, par value of $0.001 per share, and 10,000,000 shares of
Preferred Stock, par value of $0.001 per share. As of September 15, 2008, there were

10

 

16,514,163
shares of Common Stock issued and outstanding and there was no issued and outstanding Preferred
Stock. All outstanding shares of Common Stock have been duly authorized and validly issued and are
fully paid and non-assessable. As of September 15, 2008, none of the authorized Common Stock is
reserved for issuance, other than (a) 3,145,099 shares of Common Stock reserved for future issuance
pursuant to options granted and outstanding under the Company’s stock option plans, (b) 1,930,451
shares of Common Stock reserved for future issuance pursuant to options and awards which may be
granted under the Company’s stock option plans, and (c) 3,580,603 shares of Common Stock reserved
for future issuance pursuant to outstanding warrants. Except as set forth above, the Company has
no outstanding securities convertible into or exchangeable for Common Stock and no contracts,
rights, options or warrants to purchase or otherwise acquire Common Stock or securities convertible
into or exchangeable for Common Stock.

          (e) No Conflicts. The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated hereby (including,
without limitation, the issuance and reservation for issuance of the Warrant Shares) will not: (i)
conflict with or result in a violation of any provision of the Company’s certificate of
incorporation or bylaws or (ii) violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which with notice or lapse of time or both could become a
default) under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture, patent, patent license or instrument to which the
Company or any of its Subsidiaries is a party, except for possible violations, conflicts or
defaults as could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, or (iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations and regulations of any
self-regulatory organizations to which the Company or its securities are subject) applicable to the
Company or any of its Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected, except for any violations that could not reasonably be expected
to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is in default
(and no event has occurred which with notice or lapse of time or both could put the Company or any
of its Subsidiaries in default) under, and, to the knowledge of the Company, neither the Company
nor any of its Subsidiaries has taken any action or failed to take any action that would give to
others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any
property or assets of the Company or any of its Subsidiaries is bound or affected, except for
possible defaults as could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Neither the Company nor its Subsidiaries is in violation of any law, rule
ordinance or regulation of any governmental entity, except for possible violations which could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except
as required under federal securities laws and any applicable state securities laws, rules or
regulations, by the terms of this Agreement, or by any applicable Trading Market, the Company is
not required to obtain any consent, authorization or order of, or make any filing or registration
with, any court,
governmental agency, regulatory agency, self regulatory organization or stock market or any
third party in order for it to execute, deliver or perform any of its obligations under this
Agreement or the Warrants in accordance with the terms hereof or thereof or to issue and sell the
Shares and Warrants in accordance with the terms

11

 

hereof and to issue the Warrant Shares upon
exercise of the Warrants in accordance with the terms thereof.

          (f) No Material Adverse Change. Since the date of the latest financial statements
included in the SEC Documents, except as set forth in the SEC Documents or the Schedule of
Exceptions, there has not been:

               (i) any changes in the assets, liabilities, financial condition, prospects or operations of
the Company from that reflected in the financial statements except changes in the ordinary course
of business which have not been, either in any individual case or in the aggregate, materially
adverse to the Company and its subsidiaries taken as a whole;

               (ii) any material change, except in the ordinary course of business, in the contingent
obligations of the Company whether by way of guarantee, endorsement, indemnity, warranty or
otherwise; or

               (iii) any damage, destruction or loss, whether or not covered by insurance, materially and
adversely affecting the properties or business of the Company.

          (g) Litigation. Except as described in the SEC Documents, there is no action, suit,
claim, proceeding, inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending, or, to the Company’s knowledge, threatened or
contemplated, against the Company or any of its Subsidiaries, or against any officer, director or
employee of the Company or any such Subsidiary in connection with such person’s employment
therewith that, individually or in the aggregate, could reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any of its subsidiaries is a party to or subject to the
provisions of, any order, writ, injunction, judgment or decree of any court or government agency or
instrumentality which could reasonably be expected to have a Material Adverse Effect.

          (h) Intellectual Property The Company owns valid title, free and clear of any Liens,
or possesses the requisite valid and current licenses or rights, free and clear of any Liens, to
use all Intellectual Property in connection with the conduct its business as now operated (and, to
the best of the Company’s knowledge, as presently contemplated to be operated in the future). There
is no claim or action by any person pertaining to, or proceeding pending, or to the Company’s
knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect to
any Intellectual Property necessary to enable it to conduct its business as now operated (and, to
the best of the Company’s knowledge, as presently contemplated to be operated in the future). To
the best of the Company’s knowledge, the Company’s or its Subsidiaries’ current and intended
products, services and processes do not infringe on any Intellectual Property or other rights held
by any person, and the Company is unaware of any facts or circumstances which might give rise to
any of the foregoing. The Company has not received any notice of infringement of, or conflict with,
the asserted rights of others with respect to the Intellectual
Property. The Company and each of its Subsidiaries have taken reasonable security measures to
protect the secrecy, confidentiality and value of their Intellectual Property.

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          (i) Permits; Compliance. The Company and each of its Subsidiaries is in possession of
all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions,
consents, certificates, approvals and orders issued by the appropriate federal, state local or
foreign regulatory authorities necessary to own, lease and operate its properties and to carry on
its business as it is now being conducted, except where the failure to possess such franchises,
grants, authorization, licenses, permits, easements, variances, exemptions, consents, certificates,
approvals or orders could not reasonably be expected to have a Material Adverse Effect
(collectively, the “Company Permits”), and there is no action pending or, to the knowledge of the
Company, threatened regarding suspension or cancellation of any of the Company Permits. Neither the
Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the
Company Permits, except for any such conflicts, defaults or violations which, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse Effect.

          (j) Certain Transactions. Except as set forth in the SEC Filings, to the knowledge of
the Company there are no loans, leases, royalty agreements or other transactions between: (i) the
Company or any of its Subsidiaries or any of their respective customers or suppliers, and (ii) any
officer, employee, consultant or director of the Company or any person owning five percent (5%) or
more of the capital stock of the Company or five percent (5%) or more of the ownership interests of
the Company or any of its Subsidiaries or any member of the immediate family of such officer,
employee, consultant, director, stockholder or owner or any corporation or other entity controlled
by such officer, employee, consultant, director, stockholder or owner, or a member of the immediate
family of such officer, employee, consultant, director, stockholder or owner.

          (k) No General Solicitation. Assuming the accuracy of Investor’s representations and
warranties set forth in Section 3.1, to the knowledge of the Company neither the Company nor any
person participating on the Company’s behalf in the transactions contemplated hereby has conducted
any “general solicitation,” as such term is defined in Regulation D.

          (l) No Integrated Offering. Assuming the accuracy of Investor’s representations and
warranties set forth in Section 3.1, to the knowledge of the Company neither the Company, nor any
of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made
any offers or sales in any security or solicited any offers to buy any security under circumstances
that would require registration under the Securities Act of the issuance of the Securities to
Investor or that would cause this Offering to be integrated with any prior offering by the Company
for purposes of any stockholder approval provisions applicable to the Company or its securities.

          (m) No Brokers. Except as set forth in Schedule 3.2(m), no brokerage or
finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor
or consultant, finder, placement agent, investment banker, bank or other person with
respect to the transactions contemplated by the Transaction Documents. To the knowledge of the
Company, Investor shall have no obligation with respect to any fees or with respect to any

13

 

claims
made by or on behalf of other persons for fees of a type contemplated herein that may be due in
connection with the transactions contemplated by the Transaction Documents.

          (n) Internal Controls. The Company is in material compliance with the provisions of
the Sarbanes-Oxley Act of 2002 currently applicable to the Company.

          (o) FCPA Matters. Neither the Company, nor any of its Subsidiaries, nor, to the
knowledge of the Company, any director, officer, agent, employee or other person acting on behalf
of the Company or any Subsidiary has, in the course of his or her actions for, or on behalf of, the
Company: (i) used any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity, (ii) made any direct or indirect unlawful payment
to any foreign or domestic government official or employee from corporate funds, (iii) violated or
is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or
(iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any
foreign or domestic governmental or private official or person.

          (p) Form D; Blue Sky Laws. The Company agrees to file a Form D with respect to the
Securities as required under Regulation D and to provide a copy thereof to the Placement Agent
promptly after such filing. The Company shall, on or before the Closing Date, take such action as
the Company shall reasonably determine is necessary to be taken on or prior to the Closing Date to
qualify the Securities for sale to Investor in the applicable closing pursuant to this Agreement
under applicable securities or “blue sky” laws of the states of the United States (or to obtain an
exemption from such qualification), and shall provide evidence of any such action so taken to the
Placement Agent on or prior to the Closing Date.

SECTION 4.

REGISTRATION RIGHTS

     4.1 Company Registration. If (but without any obligation to do so) the Company
proposes to register any of its stock or other securities under the Securities Act, whether for its
own account or for the account of another stockholder (other than a registration relating solely to
the sale of securities to participants in a Company stock plan for employees, consultants or
directors on Form S-8, a registration relating to a corporate reorganization or other transaction
under Rule 145, the Company shall, at such time, promptly give Investor written notice of such
registration. Upon the written request of Investor given within twenty (20) days after mailing of
such notice by the Company in accordance with Section 9(f), the Company shall, subject to the
provisions of this Section 4, use commercially reasonable efforts to cause to be registered under
the Securities Act all of the Registrable Securities that Investor has requested to be registered.

          (a) The Company shall have the right to terminate or withdraw any registration initiated by it
under this Section 4 prior to the effectiveness of such registration whether or not Investor has
elected to include securities in such registration.

          (b) In connection with any offering involving an underwriting of shares of the Company’s
capital stock, the Company shall not be required under this Section 4 to include any of Investor’s
securities in such underwriting unless they accept the terms of the underwriting as

14

 

agreed upon
between the Company and the underwriters selected by it and enter into an underwriting agreement in
customary form with an underwriter or underwriters selected by the Company, and then only in such
quantity as the underwriters determine in their sole discretion will not jeopardize the success of
the offering by the Company. If the total amount of securities, including Registrable Securities,
requested by stockholders of the Company to be included in such offering exceeds the amount of
securities sold other than by the Company that the underwriters determine in their sole discretion
is compatible with the success of the offering, then the Company shall be required to include in
the offering only that number of such securities, including Registrable Securities, that the
underwriters determine in their sole discretion will not jeopardize the success of the offering
(the securities so included to be allocated first, to the Company, and second, pro rata among the
selling stockholders of the Company according to the total amount of securities held by such
selling stockholders entitled to be included therein pursuant to registration rights held by such
selling stockholders or in such other proportions as shall mutually be agreed to by such selling
stockholders). For purposes of the preceding parenthetical concerning apportionment, for any
selling stockholder that is a partnership or corporation, the partners, retired partners and
stockholders of such selling stockholder, or the estates and family members of any such partners
and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed
to be a single “selling stockholder,” and any pro rata reduction with respect to such “selling
stockholder” shall be based upon the aggregate amount of Registrable Securities owned by all such
related entities and individuals.

     4.2 Furnish Information. It will be a condition precedent to the obligations of the
Company to take any action pursuant to Section 4.1 hereof that Investor will furnish to the Company
such information regarding themselves, the Registrable Securities held by them, and the intended
method of disposition of such securities as will be required to effect the registration of their
Registrable Securities. Investor covenants that it will promptly notify the Company of any changes
in the information set forth in the registration statement regarding Investor or Investor’s “Plan
of Distribution.”

     4.3 Indemnification. In the event any Registrable Securities are included in a
registration statement under Section 4.1 hereof:

          (a) To the extent permitted by law, the Company will indemnify and hold harmless Investor, the
partners, stockholders, officers and directors of Investor, any underwriter (as defined in the
Securities Act) for Investor and each person, if any, who controls Investor or underwriter within
the meaning of the Securities Act or the Exchange Act against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon a Violation, and the Company will
reimburse Investor, partner, stockholder, officer or director, underwriter or controlling person
for any legal or other expenses reasonably incurred by them, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability or action; provided however,
that the indemnity agreement contained in this Section 4.3(a) will not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent will not be unreasonably

15

 

withheld), nor will the Company be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon a Violation which occurs
in reliance upon and in conformity with written information furnished expressly for use in
connection with such registration by Investor or partner, stockholder, officer, director,
underwriter or controlling person of Investor.

          (b) To the extent permitted by law, Investor will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the registration statement, each
person, if any, who controls the Company within the meaning of the Securities Act, any underwriter
and any other investor purchasing shares of Common Stock and warrants to purchase shares of Common
Stock at the Closing that is selling securities under such registration statement or any of such
other investor’s partners, directors, officers, stockholders or any person who controls such
investor within the meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities (joint or several) to which the Company or any such director, officer,
controlling person, underwriter or other such investor, partner or director, officer, stockholder
or controlling person of such other investor may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation that arises solely as
a result of written information furnished by Investor expressly for use in connection with such
registration; and Investor will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, underwriter or other investor, partner,
officer, director, stockholder or controlling person of such other investor in connection with
investigating or defending any such loss, claim, damage, liability or action: provided, however,
that the indemnity agreement contained in this Section 4.3(b) will not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such settlement is effected
without the consent of Investor, which consent will not be unreasonably withheld; and provided
further, that the total amounts payable in indemnity by Investor under this Section 4.3(b) in
respect of any Violation will not exceed the aggregate proceeds received by Investor upon the sale
of the Registrable Securities.

          (c) Promptly after receipt by an indemnified party under this Section 4.3 of notice of the
commencement of any action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this Section 4.3,
deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying
party will have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an indemnified party will
have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying
party, if (i) representation of such indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such proceeding or (ii) the
indemnifying party shall have failed to assume the defense of such claim and employ counsel
reasonably satisfactory to the indemnified party. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such action will relieve
such indemnifying party of liability, but only to

16

 

the extent that the failure to give notice
shall materially adversely affect the indemnifying party in the defense of such claim.

          (d) If the indemnification provided for in Sections 4.3(a) or 4.3(b) hereof shall be
unavailable to hold harmless an indemnified party in respect of any liability under the Securities
Act, then, and in each such case, the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the indemnified party
on the other in connection with the statement or omission that resulted in such loss, liability,
claim, damage or expense as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission; provided that in no event shall any
contribution under this subsection (v) by Investor exceed the dollar amount of the proceeds (net of
all expenses paid by such holder in connection with any claim relating to this Section 4.3)
received by it upon the sale of the Registrable Securities giving rise to such contribution. No
person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person or entity that was not guilty of
such fraudulent misrepresentation.

          (e) The obligations of the Company and Investor under this Section 4.3 will survive the
completion of any offering of Registrable Securities in a registration statement, and otherwise.

     4.4 Rule 144 Reporting. With a view to making available the benefits of certain rules
and regulations of the SEC which may at any time permit the sale of the Registrable Securities to
the public without registration, while a public market exists for the Common Stock of the Company,
the Company will:

          (a) Make and keep public information available, as those terms are understood and defined in
Rule 144, at all times while Registrable Securities are outstanding;

          (b) Use its best efforts to file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act (at any time it is
subject to such reporting requirements); and

          (c) So long as Investor owns any Registrable Securities, furnish to Investor forthwith upon
request a written statement by Investor to the Company as to its compliance with the reporting
requirements of Rule 144, and of the Securities Act and the Exchange Act (at any time it is subject
to the reporting requirements of the Exchange Act), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents of the Company as Investor may
reasonably request in availing itself of any rule or regulation of the SEC
allowing Investor to sell any such securities without registration (at any time the Company is
subject to the reporting requirements of the Exchange Act).

17

 

     4.5 Expenses. All fees and expenses incident to the performance of or compliance with
this Section 4 by the Company shall be borne by the Company whether or not any Registrable
Securities are sold by Investor pursuant to a registration statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (A) with respect to filings required
to be made with the Trading Market on which the Common Stock is then listed for trading, and (B) in
compliance with applicable state securities or Blue Sky laws, (ii) printing expenses, (iii)
messenger, telephone and delivery expenses, and (iv) fees and disbursements of counsel and
independent public accountants for the Company, (v) fees and disbursements of one counsel to
Investors not to exceed $5,000 and (vi) filing fees and counsel fees of the Placement Agent
(counsel fees not to exceed $5,000) if a determination is made that a NASD Rule 2710 filing is
required to be made with respect to such registration statement.

     4.6 Default Event. If at any time during the period beginning on the six month
anniversary of the Closing Date and ending on such date that all Registrable Securities held by
Investor may be resold under Rule 144(b)(1)(i) without the requirements of paragraph (c)(1) of Rule
144 applying to such sale or otherwise without restriction or limitation pursuant to Rule 144 (the
“Holding Period”), if the Company shall fail for any reason to satisfy the current public
information requirements under Rule 144(c) (a “Default Event”) causing Investor to be unable to
utilize Rule 144 for resales of Registrable Securities for a period of ten (10) consecutive
calendar days (the date on which such 10-day period is exceeded being referred to as an “Event
Date”), then the Company shall pay to Investor an amount in cash, as partial liquidated damages and
not as a penalty, equal to two percent (2.0%) of the aggregated Purchase Price paid by Investor
pursuant to this Agreement (and cash exercise price actually paid by Investor with respect to
Warrants) for any Registrable Securities then held by Investor for each thirty (30) calendar day
period following the applicable Event Date (prorated for any period of less than thirty calendar
days) until the applicable Default Event is cured; provided, that the Company shall not incur
liquidated damages under this Section 4.6 if such Default Event occurs after the expiration of the
Holding Period; provided, further, that notwithstanding anything to the contrary in this Agreement,
the Company shall not incur liquidated damages under this Section 4.6 in excess of eight percent
(8%) of the aggregate Purchase Price paid by Investor pursuant to this Agreement for any Shares
then held by Investor. Payments of such amounts pursuant to this Section 4.6 shall be made in
immediately available funds within five (5) business days after the end of each period that gives
rise to such obligation, provided that if any such period extends for more than thirty (30) days
payments shall be made at the end of each thirty-day period.

SECTION 5.

OTHER AGREEMENTS

     5.1 Participation in Future Financings.

          (a) Until the sixth (6) month anniversary of the Closing Date, the Company will not, directly
or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of
any of its Equity Securities (any such offer, sale, grant or disposition being referred to as
a “Subsequent Placement”), unless the Company shall have first complied with this Section 5.1.

18

 

          (b) The Company shall deliver to Investor a written notice (the “Offer Notice”) of any
proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered
(the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (i) identify and
describe the Offered Securities, (ii) describe the price and other material terms upon which they
are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be
issued, sold or exchanged, and (iii) offer to issue and sell to or exchange with Investor up to
Investor’s pro rata percentage of the Offered Securities.

          (c) For purposes of this Section 5.1, Investor’s pro rata percentage is equal to the ratio of
(i) the number of shares of the Company’s Common Stock (including all shares of Common Stock
issuable or issued upon exercise of outstanding warrants or options) held by Investor immediately
prior to the issuance of the Offered Securities to (ii) the total number of outstanding shares of
Common Stock (including all shares of Common Stock issued or issuable upon conversion of all
convertible securities of the Company or upon the exercise of any outstanding warrants or options
to purchase Company securities) immediately prior to the issuance of the Offered Securities.

          (d) To accept an Offer, in whole or in part, Investor must deliver a written notice to the
Company prior to the end of the tenth (10th) Trading Day after Investor’s receipt of the Offer
Notice (the “Offer Period”), setting forth the portion of Investor’s pro rata percentage that
Investor elects to purchase (the “Notice of Acceptance”).

          (e) The Company shall have twenty (20) Trading Days from the expiration of the Offer Period
above to offer, issue, sell or exchange all or any part of such Offered Securities as to which a
Notice of Acceptance has not been given by Investor (the “Refused Securities”), but only upon terms
and conditions that are not more favorable to the acquiring person or persons or less favorable to
the Company than those set forth in the Offer Notice.

          (f) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused
Securities, Investor shall acquire from the Company, and the Company shall issue to Investor, the
number or amount of Offered Securities specified in the Notices of Acceptance upon the terms and
conditions specified in the Offer. The purchase by Investor of any Offered Securities is subject in
all cases to the preparation, execution and delivery by the Company and Investor of a purchase
agreement relating to such Offered Securities reasonably satisfactory in form and substance to
Investor and its counsel and compliance with applicable federal and state securities laws. 

          (g) The restrictions contained in this Section 5.1 shall not apply in connection with any
Exempt Issuance.

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     5.2 Anti-Dilution Adjustment.

          (a) In the event that prior to the one year anniversary of the Closing Date the Company shall
complete one or more Subsequent Placements at an effective price per share less than the Purchase
Price (such lower price, the “New Purchase Price” and such issuances collectively, a “Dilutive
Issuance”), as adjusted hereunder (if the holder of the Equity Securities so issued shall at any
time, whether by operation of purchase price adjustments, reset provisions, floating conversion,
exercise or exchange prices or otherwise, or due to warrants, options or rights per share which is
issued in connection with such issuance, be entitled to receive shares of Common Stock at an
effective price per share which is less than the Purchase Price, such issuance shall be deemed to
have occurred for less than the Purchase Price on such date of the Dilutive Issuance), then the
Purchase Price shall be deemed to be equal to the New Purchase Price and the Company shall issue to
Investor without receipt of additional consideration from Investor an additional number of shares
of Common Stock equal to (i) such number of shares determined by dividing the aggregate Purchase
Price paid by Investor by the New Purchase Price, less (ii) the number of Shares previously
issued to Investor. Notwithstanding the foregoing, no adjustments shall be made, paid or issued
under this Section 5.2 in respect of Exempt Issuances.

          (b) Notwithstanding anything to the contrary in Section 5.2(a), if the Company has not
obtained Stockholder Approval (as defined below), then the Company may not issue as a result of the
adjustment of the Purchase Price in connection with a Dilutive Issuance a number of shares of
Common Stock, which, when aggregated with any shares of Common Stock issued in the Offering
pursuant to the Subscription Agreements, would exceed 19.99% of the number of shares of Common
Stock outstanding on the Trading Day immediately preceding the Closing Date (such number of shares,
the “Issuable Maximum”). If on any adjustment of the Purchase Price in connection with a Dilutive
Issuance, the number of shares of Common Stock issuable to Investor would exceed the Issuable
Maximum and the Company shall not have previously obtained the vote of stockholders to approve the
issuance of shares of Common Stock in excess of the Issuable Maximum (the “Stockholder Approval”),
then the Company shall issue to Investor such number of shares of Common Stock equal to such
Investor’s pro-portion of the Issuable Maximum and, with respect to the remainder of the aggregate
number of shares of Common Stock issuable upon the adjustment of the Purchase Price in connection
with a Dilutive Issuance, the Company shall be prohibited from issuing such shares of Common Stock
until and unless Stockholder Approval has been obtained.

     5.3 Short Sales and Confidentiality After The Date Hereof. Investor covenants that
neither it nor any affiliates acting on its behalf or pursuant to any understanding with it will
execute any short sales of shares of Common Stock during the period after the Discussion Time and
ending at the time that the transactions contemplated by this Agreement are first publicly
disclosed by the Company. Investor covenants that until such time as the transactions contemplated
by this Agreement are publicly disclosed by the Company, Investor will maintain the confidentiality
of all disclosures made to it in connection with this transaction (including the existence and
terms of this transaction). Investor understands and acknowledges that the SEC currently takes the
position that coverage of short sales of shares of Common Stock “against the box” prior to the
effective date of a registration statement with respect to the Securities is a

20

 

violation of Section
5 of the Securities Act, as set forth in Item 65, Section 5 under Section A, of
the Manual of Publicly Available Telephone Interpretations, dated July 1997, compiled by the
Office of Chief Counsel, Division of Corporation Finance.

SECTION 6.

CONDITIONS PRECEDENT TO CLOSING

     6.1 Conditions to Obligations of Investor. The obligation of Investor to purchase the
Shares and the Warrants at the Closing is subject to the fulfillment on or prior to the Closing
Date of the following conditions, any of which may be waived by Investor:

          (a) Representations and Warranties Correct; Performance of Obligations. The
representations and warranties made by the Company contained herein shall be true and correct in
all material respects (except for those representations and warranties which are qualified as to
materiality, in which case such representations and warranties shall be true and correct in all
respects) as of the date when made and as of the Closing Date, as though made on and as of such
date, except for such representations and warranties that speak as of a specific date, and the
Company shall have performed, satisfied and complied in all material respects with all covenants,
agreements and conditions herein required to be performed, satisfied or complied with by it at or
prior to the Closing.

          (b) Consents and Waivers. The Company shall have obtained any and all consents
(including all governmental or regulatory consents, approvals or authorizations required in
connection with the valid execution and delivery of this Agreement), permits and waivers necessary
or appropriate for consummation of the transactions contemplated by this Agreement.

          (c) Judgments. No judgment, writ, order, injunction, award or decree of or by any
court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or
by any governmental authority, shall have been issued, and no action or proceeding shall have been
instituted by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated in this Agreement.

          (d) Stop Orders. No stop order or suspension of trading shall have been imposed by
the SEC or any other governmental or regulatory body with respect to public trading in the Common
Stock.

          (e) CEO/CFO Certificate. The Company shall have delivered a Certificate, executed on
behalf of the Company by its Chief Executive Officer or its Chief Financial Officer, dated as of
the Closing Date, certifying to the fulfillment of the conditions specified in subsections (a),
(b), (c) and (d) above.

          (f) Secretary Certificate. The Company shall have delivered a Certificate, executed
on behalf of the Company by its Secretary, dated as of the Closing Date, certifying the resolutions
adopted by the Board of Directors of the Company approving the transactions contemplated by this
Agreement and the other Transaction Documents and the issuance of the Securities, certifying the
current versions of the Articles of Incorporation and Bylaws of the

21

 

Company and certifying as to the signatures and authority of persons signing the Transaction
Documents and related documents on behalf of the Company.

          (g) Opinion of Company’s Counsel. Investor shall have received from DLA Piper LLP
(US), counsel to the Company, an opinion dated the Closing Date and in substantially the form
attached hereto as Exhibit C.

     6.2 Conditions to Obligations of the Company. The obligation of the Company to sell
and issue the Shares and the Warrants to Investor at the Closing is subject to the fulfillment on
or prior to the Closing Date of the following conditions, any of which may be waived by the
Company:

          (a) Representations and Warranties; Performance of Obligations. The representations
and warranties made by Investor contained herein shall be true and correct in all material respects
(except for those representations and warranties which are qualified as to materiality, in which
case such representations and warranties shall be true and correct in all respects) as of the date
when made and as of the Closing Date, as though made on and as of such date, except for such
representations and warranties that speak as of a specific date, and Investor shall have performed,
satisfied and complied in all material respects with all covenants, agreements and conditions
herein required to be performed, satisfied or complied with by it at or prior to the Closing.

          (b) Consents and Waivers. The Company shall have obtained any and all consents
(including all governmental or regulatory consents, approvals or authorizations required in
connection with the valid execution and delivery of this Agreement), permits and waivers necessary
or appropriate for consummation of the transactions contemplated by this Agreement.

          (c) Payment of Purchase Price. Investor shall have wired its Subscription Amount, in
United States dollars and in immediately available funds, to Signature Bank in accordance with
Section 2.3.

SECTION 7.

MISCELLANEOUS

     7.1 Governing Law. This Agreement will be governed by and construed in accordance
with the internal laws of the State of New York applicable to contracts made among residents of,
and wholly to be performed within, the State of New York, without regard to principles of conflict
of laws or choice of laws. The parties hereto irrevocably submit to the exclusive jurisdiction of
the United States District Court for the Southern District of New York, or, if jurisdiction in such
court is lacking, the Supreme Court of the State of New York, New York County, in respect of any
dispute or matter arising out of or connected with this Agreement.

     7.2 Further Instruments. From time to time, each party hereto will execute and
deliver such instruments and documents as may be reasonably necessary to carry out the purposes and
intent of this Agreement.

22

 

     7.3 Successors; No Other Beneficiaries. This Agreement will be binding upon and will
inure to the benefit of the executors, administrators, legal representatives, heirs, successors,
and assigns of the parties hereto; provided, however, that (i) rights of Investor hereunder may be
transferred only in connection with (and to the transferee of) Common Stock of the Company
purchased by Investor hereunder, but the Company may prohibit such transfer of rights if the
transfer to a particular transferee would not, in the good faith judgment of the Company’s Board of
Directors, be in the Company’s best interests, and (ii) any transferee of any shares of stock of
the Company affected by this Agreement to whom rights are so transferred (a “Permitted Transferee”)
will be required, as a condition precedent to acquiring such shares, to agree in writing to be
bound by all the terms and conditions of this Agreement applicable to such Permitted Transferee’s
transferor, and (iii) upon and after such transfer the Permitted Transferee will be deemed to be an
Investor for purposes of this Agreement. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.

     7.4 Counterparts; Facsimile. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which together will constitute
one and the same instrument. This Agreement will be effective following the parties signatory
hereto upon such counterpart signature by all initial parties hereto. In the event that any
signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data
file, such signature shall create a valid and binding obligation of the party executing (or on
whose behalf such signature is executed) with the same force and effect as if such facsimile or
”.pdf” signature page were an original thereof.

     7.5 Entire Agreement. This Agreement, including and incorporating the Schedule of
Exceptions and all Exhibits attached hereto and referred to herein, constitutes and contains the
entire agreement and understanding of the parties regarding the subject matter of this Agreement
and supersedes in its entirety any and all prior negotiations, correspondence, understandings and
agreements among the parties respecting the subject matter hereof.

     7.6 Notices. Any notice required to be given or delivered to the Company under the
terms of this Agreement shall be addressed to the Senior Vice President and Secretary of the
Company at its principal corporate offices. Any notice required to be given or delivered to
Investor shall be addressed to Investor at the address indicated on the signature page hereto or to
such other address as such party may designate in writing from time to time to the Company. Unless
otherwise provided, notice required or permitted to be given to a party pursuant to the provisions
of this Agreement will be in writing and will be effective and deemed given under this Agreement on
the earliest of (i) the date of personal delivery, or (ii) the date of delivery by facsimile, or
(iii) the business day after deposit with a nationally-recognized courier or overnight service,
including Federal Express or Express Mail, for United States deliveries or three (3) business days
after such deposit for deliveries outside of the United States, or (iv) three (3) business days
after deposit in the United States mail by registered or certified mail for United States
deliveries. All notices not delivered personally or by facsimile will be sent with postage and
other charges prepaid and properly addressed to the party to be notified at the address set forth
on the signature page, or at such other address as such party may designate by ten (10)

23

 

days’ advance written notice to the other parties hereto. All notices for delivery outside the
United States will be sent by facsimile, or by nationally recognized courier or overnight service,
including Express Mail. Any notice given hereunder to more than one person will be deemed to have
been given, for purposes of counting time periods hereunder, on the date given to the last party
required to be given such notice.

     7.7 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of the Agreement may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the Company and the
investors in the Offering holding or having the right to acquire at least a majority of the
Securities on a fully-diluted basis. Any amendment or waiver effected in accordance with this
Section 7.7 will be binding upon the Company, Investor, and their permitted transferees and
assignees. Notwithstanding the foregoing, the Company may, at any time prior to the Closing,
modify the anti-dilution provisions contained in this Subscription Agreement and the Warrants to
comply with Nasdaq Rule 4350 without first providing notice or obtaining prior consent of Investor.

     7.8 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provisions will be excluded from this Agreement to the
extent unenforceable and the balance of such provisions, and of this Agreement, will be interpreted
as if such provision or part and hereof were so excluded and will be enforceable in accordance with
its terms.

     7.9 Expenses. The Company and Investor will bear its own costs and expenses incurred
on its behalf with respect to the Agreement and the transactions contemplated hereby, including
fees of legal counsel.

     7.10 Representation. Investor has been represented by its own separate legal counsel
in their review and negotiation of this Agreement and the Warrants. For reasons of administrative
convenience only, Investor and its counsel have the option to communicate with the Company through
Littman Krooks LLP, who is serving as counsel to the Placement Agent only.

[Remainder of page left intentionally blank]

24

 

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

INVESTOR

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Shares Subscribed:                                         	 	 
	 	 	 	 	 	 	 
	(Print Name of Individual or Entity)	 	Share Purchase Price:                                         	 	 
	 	 	 	 	Aggregate Purchase
Price (Subscription Amount):                                                       
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 	 	 
	 

	 	 

(Signature)
	 	 	 	 

(Signature of Co-Investor)
	 	 
	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 	 	 	 	(Co-Investor)	 	 
	 
	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Address:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Social Security No./ Tax ID No.:                     	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	COMPANY	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	ARTES MEDICAL, INC.	 	Shares Issued:                                                             	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Warrants Issued:                                         	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Address:
	 	 	 	 	 	 	 	 
	 

	 	5870 Pacific Center Boulevard,	 	 	 	 	 	 
	 

	 	San Diego, California 92121

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