Document:

EX-10.2

Exhibit 10.2

SUBSCRIPTION AGREEMENT

     This subscription agreement (this “Subscription Agreement”) is dated September 23,
2009, by and between the investor identified on the signature page hereto (“Investor”), and
Rentech, Inc., a Colorado corporation (the “Company”), whereby the parties agree as
follows:

1. Subscription.

	 	a)	 	Investor agrees to buy and the Company agrees to sell and issue to Investor
such number of shares of the Company’s common stock, $0.01 par value per share (the
“Common Stock”), set forth on the signature page hereto for the aggregate
purchase price set forth on the signature page hereto (the “Purchase Price”).
The shares of Common Stock to be issued to Investor are hereinafter referred to as the
“Shares”.
	 
	 	b)	 	The Shares have been registered on a Form S-3, File No. 333-158256, which
registration statement (the “Registration Statement”) has been declared
effective by the Securities and Exchange Commission, has remained effective since such
date and is effective on the date hereof. The Shares are being issued in connection
with an offering (the “Offering”) described in a Prospectus Supplement dated
September 23, 2009, which has been delivered to the Investor along with the base
Prospectus dated May 20, 2009 (collectively, the “Prospectus”).
	 
	 	c)	 	On September 28, 2009 (the “Closing Date”), in accordance with Rule
15c6-1 promulgated under the Securities Exchange Act of 1934, as amended, and subject
to the satisfaction or waiver of all of the closing conditions set forth in the
Placement Agency Agreement (the “Placement Agreement”), dated September 23,
2009, by and among the Company, Sellers and the placement agent named therein (the
“Placement Agent”), the Placement Agent will disburse, or cause to be
disbursed, to the Company an amount equal to the product of (x) the aggregate number of
Shares the Investor has agreed to purchase and (y) the Purchase Price for such Shares,
less its commissions and reimbursable expenses. Upon receipt of such disbursement by
the Company and the Placement Agent, the Company shall immediately cause the Shares to
be delivered directly to Investor. The transfer of the Shares shall be made through the
facilities of The Depository Trust Company’s DWAC system in accordance with the
instructions set forth on the signature page attached hereto under the heading “DWAC
Instructions.”

2. Company Representations and Warranties. The Placement Agreement contains representations,
warranties, covenants and agreements of the Company that may be relied upon by the Investor, which
shall be a third party beneficiary thereof. The Company confirms that neither it nor any other
person acting on its behalf has provided the Investor or their agents or counsel with any
information that constitutes or could reasonably be expected to constitute material, nonpublic
information, except as will be disclosed in the Prospectus and the Company’s press release in
connection with the Offering. The Company understands and confirms that the Investor will rely on
the foregoing in effecting transactions in securities of the

 

 

Company. In addition to and without limiting the foregoing, the Company represents and warrants
that: (a) it has full right, power and authority to enter into this Subscription Agreement and to
perform all of its obligations hereunder; (b) this Subscription Agreement has been duly authorized
and executed by and constitutes a valid and binding agreement of the Company enforceable in
accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights and remedies of creditors
generally; (c) the execution and delivery of this Subscription Agreement and the consummation of
the transactions contemplated hereby do not conflict with or result in a breach of (i) the
Company’s articles of incorporation or by-laws, or (ii) any material agreement or any law or
regulation to which the Company is a party or by which any of its property or assets is bound; (d)
the Shares have been duly authorized for sale and issuance, and when issued and delivered, will be
validly issued, fully paid and nonassessable; (e) the Registration Statement and any post-effective
amendment thereto filed pursuant to the Securities Act of 1933, as amended (the “Securities
Act”), at the time it became effective, 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
therein not misleading; (f) the Prospectus did not contain as of its respective date, and as of the
date hereof does not contain, any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading; and (g) all preemptive rights or rights of first refusal held by
stockholders of the Company and applicable to the transactions contemplated hereby, if any, have
been duly satisfied or waived in accordance with the terms of the agreements between the Company
and such stockholders conferring such rights.

3. Investor Representations, Warranties and Acknowledgments. Investor represents and
warrants that: (a) it has full right, power and authority to enter into this Subscription Agreement
and to perform all of its obligations hereunder; (b) this Subscription Agreement has been duly
authorized and executed by and constitutes a valid and binding agreement of Investor enforceable in
accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights and remedies of creditors
generally; (c) the execution and delivery of this Subscription Agreement and the consummation of
the transactions contemplated hereby do not conflict with or result in a breach of (i) Investor’s
certificate of incorporation or by-laws (or other similar governing documents), or (ii) any
material agreement or any law or regulation to which Investor is a party or by which any of its
property or assets is bound; and (d) prior to the execution hereof, Investor has had full access to
and relied only upon (i) the Base Prospectus, (ii) any prospectus supplements to the Base
Prospectus, including in each case information incorporated by reference therein, and (iii) the
pricing, placement agency and expense information contained in this Agreement. The Investor further
acknowledges that other investors (“Other Investors”) are concurrently entering into
subscription agreements in substantially the same form as this Subscription Agreement as part of
the Offering.

4. Company Covenants. The Company and the Investor agree that the Company shall, prior to
the opening of the financial markets in New York City the date hereof, issue a press release
announcing the Offering and disclosing all material information regarding the Offering, but in no
event will such press release be issued before the last Subscription Agreement relating to the
Offering has been executed by the Company and the applicable Other Investor.

-2-

 

5. Conditions to the Company’s Obligations. In addition to any other conditions set forth
herein, the Company’s obligation to issue and sell the Shares to the Investor shall be subject to:
(a) the receipt by the Company of the Purchase Price for the Shares being purchased hereunder as
set forth on the Signature Page and (b) the accuracy in all material respects of the
representations and warranties made by the Investor and the fulfillment of those undertakings of
the Investor to be fulfilled prior to the Closing Date.

6. Conditions to the Investor’s Obligations. In addition to any other conditions set forth
herein, the Investor’s obligation to purchase the Shares will be subject to (a) the condition that
the Placement Agent shall not have terminated the Placement Agreement pursuant to the terms
thereof, (b) the satisfaction in all material respects of the conditions to the Placement Agent’s
obligation to closing in the Placement Agreement, and (c) the accuracy in all material respects of
the representations and warranties made by the Company and the fulfillment of those undertakings of
the Company to be fulfilled prior to the Closing Date. The Investor’s obligations are not
conditioned on the purchase of Common Stock by the Other Investors in the Offering.

7. Miscellaneous.

	 	a)	 	Brean Murray, Carret & Co., LLC is serving as placement agent in this
transaction and consummation of the transaction is subject to the terms and conditions
of the Placement Agreement.
	 
	 	b)	 	Except as otherwise provided herein, this Subscription Agreement constitutes
the entire understanding and agreement between the parties with respect to its subject
matter and there are no agreements or understandings with respect to the subject matter
hereof which are not contained in this Subscription Agreement. This Subscription
Agreement may be modified only in writing signed by the parties hereto.
	 
	 	c)	 	In the event that the Placement Agreement is terminated by the Placement Agent
pursuant to the terms thereof, this Agreement shall terminate without any further
action or liability on the part of the parties hereto.
	 
	 	d)	 	This Subscription Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one and the same instrument and shall become
effective when counterparts have been signed by each party and delivered to the other
parties hereto, it being understood that all parties need not sign the same
counterpart. Execution may be made by delivery by facsimile or PDF.
	 
	 	e)	 	The provisions of this Subscription Agreement are severable and, in the event
that any court or officials of any regulatory agency of competent jurisdiction shall
determine that any one or more of the provisions or part of the provisions contained in
this Subscription shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability shall not
affect any other provision or part of a provision of this Subscription Agreement and
this Subscription Agreement shall be reformed and construed as if such invalid or
illegal or unenforceable provision, or part of such provision, had

-3-

 

	 	 	 	never been contained herein, so that such provisions would be valid, legal and
enforceable to the maximum extent possible, so long as such construction does not
materially adversely effect the economic rights of either party hereto.
	 
	 	f)	 	All communications hereunder shall be in writing and shall be mailed, hand
delivered, sent by a recognized overnight courier service such as Federal Express, or
sent via facsimile and confirmed by letter, to the party to whom it is addressed at the
following addresses or such other address as such party may advise the other in
writing:
	 
	 	 	 	To the Company: as set forth on the signature page hereto.
	 
	 	 	 	To the Investor: as set forth on the signature page hereto.
	 
	 	 	 	All notices hereunder shall be effective upon receipt by the party to which it is
addressed.
	 
	 	g)	 	This Agreement shall be governed by and interpreted in accordance with the laws
of the State of New York for contracts to be wholly performed in such state and without
giving effect to the principles thereof regarding the conflict of laws. To the extent
determined by such court, the prevailing party shall reimburse the other party for any
reasonable legal fees and disbursements incurred in enforcement of, or protection of
any of its rights under this Agreement.

*****

-4-

 

     If the foregoing correctly sets forth our agreement, please confirm this by signing and
returning to us the duplicate copy of this letter.

	 	 	 	 	 
	 	COMPANY:

RENTECH, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Its: 	 	 

Address for Notice:

Rentech, Inc.

10877 Wilshire Boulevard, Suite 710

Los Angeles, California 90024

Attention: Chief Executive Officer

Telephone: 310.571.9800

With a copy to:

Latham & Watkins LLP

140 Scott Drive

Menlo Park, CA 94025

Attention: Anthony J. Richmond

Telephone: (650) 463-2643

Wire Instructions:

-5-

 

	 	 	 	 	 
	Number of Shares: ____________ 	INVESTOR:

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	Purchase Price per Share: ______ 	 	Its: 	 	 
	 

Name and address for notice:

DWAC Instructions:

Name of DTC Participant:

DTC Participant Number:

Account Number:

-6-EX-10.1

Exhibit
10.1

SECURITIES PURCHASE AGREEMENT

     This Securities Purchase Agreement (this “Agreement”) is dated as of September ___, 2009, by
and among Solar Power, Inc., a California corporation (the “Company”), and each purchaser
identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser”
and collectively, the “Purchasers”).

RECITALS

          A. The Company and each Purchaser is 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 “Commission”) under the Securities Act.

          B. Each Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to
sell, upon the terms and conditions stated in this Agreement, that aggregate number of shares of
common stock, par value $0.0001 per share (the “Common Stock”), of the Company, set forth below
such Purchaser’s name on the signature page of this Agreement (which aggregate amount for all
Purchasers together shall be up to 20,000,000 shares of Common Stock and shall be collectively
referred to herein as the “Shares” and shall be for an aggregate purchase price of up to
$20,000,000).

          C. The Company has engaged Deutsche Bank Securities Inc. as its exclusive placement agent (the
“Placement Agent”) for the offering of the Shares on a “best efforts” basis.

          D. Contemporaneously with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement, substantially in the form attached hereto
as Exhibit A (the “Registration Rights Agreement”), pursuant to which, among other things,
the Company will agree to provide certain registration rights with respect to the Shares under the
Securities Act and the rules and regulations promulgated thereunder and applicable state securities
laws.

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

ARTICLE I.

DEFINITIONS

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

          “Acquiring Person” has the meaning set forth in Section 4.5.

          “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, Controls, is controlled by or is under common control with such
Person, as such terms are used in and construed under Rule 405 under the Securities Act. With
respect to a Purchaser, any investment fund or managed account that is managed on a discretionary
basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such
Purchaser.

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

          “Board of Directors ” means the board of directors of the Company.

 

 

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

          “Buy-In” has the meaning set forth in Section 4.1(f).

          “Buy-In Price” has the meaning set forth in Section 4.1(f).

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

          “Closing Bid Price” means, for any security as of any date, (a) the last reported closing bid
price per share of Common Stock for such security on the Principal Trading Market, as reported by
Bloomberg Financial Markets, or, (b) if the Principal Trading Market begins to operate on an
extended hours basis and does not designate the closing bid price then the last bid price of such
security prior to 4:00 P.M., New York City time, as reported by Bloomberg Financial Markets, or (c)
if the foregoing do not apply, the last closing price of such security in the over-the-counter
market on the electronic bulletin board for such security as reported by Bloomberg Financial
Markets, or (d) if no closing bid price is reported for such security by Bloomberg Financial
Markets, the average of the bid prices of any market makers for such security as reported in the
“pink sheets” by Pink Sheets LLC. If the Closing Bid Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid Price of such security on such date
shall be the fair market value as mutually determined by the Company and the holder of such
security. All such determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable calculation period.

          “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
Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied or waived, as
the case may be, or such other date or dates as the parties may agree.

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

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

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

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

          “Company Counsel” means Weintraub Genshlea Chediak Law Corporation.

          “Company Deliverables” has the meaning set forth in Section 2.2(a).

          “Company’s Knowledge” means with respect to any statement made to the Company’s knowledge,
that the statement is based upon the actual knowledge of the executive officers of the Company
having responsibility for the matter or matters that are the subject of the statement.

          “Contingent Obligations” has the meaning set forth in Section 3.1(bb).

2

 

          “Control” (including the terms “controlling”, “controlled by” or “under common control with”)
means the possession, direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.

          “Deadline Date” has the meaning set forth in Section 4.1(f).

          “Disclosure Materials” has the meaning set forth in Section 3.1(g).

          “Disclosure Schedules” has the meaning set forth in Section 3.1.

          “DTC” has the meaning set forth in Section 4.1(c).

          “Effective Date” means the date on which the initial Registration Statement required by
Section 2(a) of the Registration Rights Agreement is first declared effective by the Commission.

          “Environmental Laws” has the meaning set forth in Section 3.1(ee).

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

          “GAAP” has the meaning set forth in Section 3.1(g).

          “Hazardous Materials” has the meaning set forth in Section 3.1(ee).

          “Indebtedness” has the meaning set forth in Section 3.1(bb).

          “Insolvent” has the meaning set forth in Section 3.1(h).

          “Intellectual Property Rights” has the meaning set forth in Section 3.1(u).

          “Irrevocable Transfer Agent Instructions” means, with respect to the Company, the Irrevocable
Transfer Agent Instructions, in the form of Exhibit D, executed by the Company and
delivered to and acknowledged in writing by the Transfer Agent.

          “Legend Removal Date” has the meaning set forth in Section 4.1(c).

          “Lien” means any lien, charge, claim, encumbrance, security interest, right of first refusal,
preemptive right or other restrictions of any kind.

          “Material Adverse Effect” means (i) a material adverse effect on the results of operations,
assets, business or financial condition of the Company and the Subsidiaries, taken as a whole on a
consolidated basis, or (ii) materially and adversely impair the Company’s ability to perform its
obligations under any of the Transaction Documents, provided, that none of the following alone
shall be deemed, in and of itself, to constitute a Material Adverse Effect: (i) a change in the
market price or trading volume of the Common Stock or (ii) changes in general economic conditions
or changes affecting the industry in which the Company operates generally (as opposed to
Company-specific changes) so long as such changes do not have a disproportionate effect on the
Company and its Subsidiaries taken as a whole.

          “Material Permits” has the meaning set forth in Section 3.1(w).

3

 

          “New York Courts” means the state and federal courts sitting in the City of New York, Borough
of Manhattan.

          “Outside Date” means the thirtieth day following the date of this Agreement.

          “Person” means an individual, corporation, partnership, limited liability company, trust,
business trust, association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.

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

          “Press Release” has the meaning set forth in Section 4.4.

          “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 OTC Bulletin Board.

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

          “Purchase Price” means $1.00 per Share.

          “Purchaser” or “Purchasers” has the meaning set forth in the Recitals.

          “Purchaser Deliverables” has the meaning set forth in Section 2.2(b).

          “Purchaser Party” has the meaning set forth in Section 4.8.

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

          “Registration Statement” means a registration statement meeting the requirements set forth in
the Registration Rights Agreement and covering the resale by the Purchasers of the Registrable
Securities (as defined in the Registration Rights Agreement).

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

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

          “SEC Reports” has the meaning set forth in Section 3.1(g).

          “Secretary’s Certificate” has the meaning set forth in Section 2.2(a)(viii).

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

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

          “Short Sales” include, without limitation, (i) all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act, whether or not against the box, and all
types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, short
sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and
similar arrangements

4

 

(including on a total return basis), and (ii) sales and other transactions through non-U.S.
broker dealers or foreign regulated brokers (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock).

          “Stock Certificates” has the meaning set forth in Section 2.2(a)(ii).

          “Subscription Amount” means, with respect to each Purchaser, the aggregate amount to be paid
for the Shares purchased hereunder as indicated on such Purchaser’s signature page to this
Agreement next to the heading “Aggregate Purchase Price (Subscription Amount)” in United States
dollars and in immediately available funds or the cancellation, evidenced in form and substance
reasonably acceptable to Company, of outstanding amounts owed by the Company to such Purchaser for
products previously received by Company from such Purchaser (which payment by cancellation shall be
noted on such Purchaser’s signature page).

          “Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a), and
shall, where applicable, include any subsidiary of the Company formed or acquired after the date
hereof.

          “Trading Affiliate” has the meaning set forth in Section 3.2(h).

          “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 NYSE Amex (formerly 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
Registration Rights Agreement, the Irrevocable Transfer Agent Instructions and any other documents
or agreements explicitly contemplated hereunder.

          “Transfer Agent” means Computershare Trust Co., Inc., the current transfer agent of the
Company, or any successor transfer agent for the Company.

ARTICLE II.

PURCHASE AND SALE

     2.1 Closing.

          (a) Amount. Subject to the terms and conditions set forth in this Agreement, at the
Closing or Closings, the Company shall issue and sell to each Purchaser, and each Purchaser shall,
severally and not jointly, purchase from the Company, such number of shares of Common Stock equal
to the quotient resulting from dividing (i) the Subscription Amount for such Purchaser by (ii) the
Purchase Price, rounded down to the nearest whole Share.

5

 

          (b) Closing. The Closing or Closings of the purchase and sale of the Shares shall
take place at the offices of Goodwin Procter LLP, The New York Times Building, 620 Eighth Avenue,
New York, New York on each Closing Date or at such other locations or remotely by facsimile
transmission or other electronic means as the parties may mutually agree.

          (c) Form of Payment. Except as may otherwise be agreed to among the Company and one
or more of the Purchasers, on or prior to the Business Day immediately prior to the Closing Date,
each Purchaser shall wire its Subscription Amount, to the extent to be paid in United States
dollars and in immediately available funds, to a non-interest bearing escrow account established by
the Company and the Placement Agent with JPMorgan Chase Bank, N.A. (the “Escrow Agent”) as set
forth on Exhibit G hereto (the aggregate amounts received being held in escrow by the
Escrow Agent are referred to herein as the “Escrow Amount”). On the Closing Date, (a) the Company
and the Placement Agent shall instruct the Escrow Agent to deliver, in immediately available funds,
the Escrow Amount constituting the aggregate purchase price as follows: (1) to the Placement Agent,
the fees and reimbursable expenses payable to the Placement Agent (which fees and expenses shall be
set forth in such instructions), and (2) the balance of the aggregate purchase price to the
Company, and (b) the Company shall irrevocably instruct the Transfer Agent to deliver to each
Purchaser one or more stock certificates, free and clear of all restrictive and other legends
(except as expressly provided in Section 4.1(b) hereof), evidencing the number of Shares
such Purchaser is purchasing as is set forth on such Purchaser’s signature page to this Agreement
next to the heading “Number of Shares to be Acquired”, within three (3) Trading Days after the
Closing.

     2.2 Closing Deliveries. (a) On or prior to the Closing or Closings, the Company
shall issue, deliver or cause to be delivered to each Purchaser the following (the “Company
Deliverables”):

               (i) this Agreement, duly executed by the Company;

               (ii) facsimile copies of one or more stock certificates, free and clear of all restrictive and
other legends (except as provided in Section 4.1(b) hereof), evidencing the Shares
subscribed for by such Purchaser hereunder, registered in the name of such Purchaser as set forth
on the Stock Certificate Questionnaire included as Exhibit B-2 hereto (the “Stock
Certificate”), with the original Stock Certificates delivered within three (3) Trading Days of
Closing;

               (iii) a legal opinion of Company Counsel, dated as of the Closing Date and in the form
attached hereto as Exhibit C-1, executed by such counsel and addressed to the Purchasers
and the Placement Agent;

               (iv) a legal opinion of Hylands Law Firm, PRC counsel for the Company, dated as of the Closing
Date and in the form attached hereto as Exhibit C-2, executed by such counsel and addressed
to the Purchasers and the Placement Agent;

               (v) a legal opinion of Boughton Peterson Yong Anderson, Hong Kong counsel for the Company,
dated as of the Closing Date and in the form attached hereto as Exhibit C-3, executed by
such counsel and addressed to the Purchasers and the Placement Agent;

               (vi) the Registration Rights Agreement, duly executed by the Company;

               (vii) duly executed Irrevocable Transfer Agent Instructions acknowledged in writing by the
Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis, a certificate
evidencing a number of Shares equal to such Purchaser’s Subscription Amount divided by the Purchase
Price, registered in the name of such Purchaser;

6

 

               (viii) a certificate of the Secretary of the Company (the “Secretary’s Certificate”), dated as
of the Closing Date, (a) certifying the resolutions adopted by the Board of Directors of the
Company or a duly authorized committee thereof approving the transactions contemplated by this
Agreement and the other Transaction Documents and the issuance of the Shares, (b) certifying the
current versions of the certificate or articles of incorporation, as amended, and by-laws of the
Company and (c) certifying as to the signatures and authority of persons signing the Transaction
Documents and related documents on behalf of the Company, in the form attached hereto as
Exhibit E;

               (ix) the Compliance Certificate referred to in Section 5.1(h); and

               (x) a copy of a certificate or other evidence of the formation and good standing of the
Company from the Secretary of State (or comparable office) of the State of California, as of a date
within three (3) Business Days of the Closing Date.

          (b) On or prior to the Closing, each Purchaser shall deliver or cause to be delivered to the
Company the following (the “Purchaser Deliverables”):

               (i) this Agreement, duly executed by such Purchaser;

               (ii) its Subscription Amount, in United States dollars and in immediately available funds, in
the amount set forth as the “Purchase Price” indicated below such Purchaser’s name on the
applicable signature page hereto under the heading “Aggregate Purchase Price (Subscription Amount)”
by wire transfer to the Escrow Account, as set forth on Exhibit G attached hereto;

               (iii) the Registration Rights Agreement, duly executed by such Purchaser;

               (iv) a fully completed and duly executed Selling Stockholder Questionnaire in the form
attached as Annex B to the Registration Rights Agreement; and

               (v) a fully completed and duly executed Accredited Investor Questionnaire, satisfactory to the
Company, and Stock Certificate Questionnaire in the forms attached hereto as Exhibits B-1
and B-2, respectively.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

     3.1 Representations and Warranties of the Company. Except (i) as set forth in the
schedules delivered herewith (the “Disclosure Schedules”), which Disclosure Schedules shall be
deemed a part hereof and shall qualify any representation made herein to the extent of the
disclosure contained in the corresponding section of the Disclosure Schedules, or (ii) disclosed in
the SEC Reports, the Company hereby represents and warrants as of the date hereof and the Closing
Date (except for the representations and warranties that speak as of a specific date, which shall
be made as of such date), to each of the Purchasers and to the Placement Agent:

          (a) Subsidiaries. The Company has no Subsidiaries other than those listed in
Schedule 3.1(a) hereto. Except as disclosed in Schedule 3.1(a) hereto, the Company
owns, directly or indirectly, all of the capital stock or comparable equity interests of each
Subsidiary free and clear of any Lien and all the issued and outstanding shares of capital stock or
comparable equity interest of each Subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights.

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          (b) Organization and Qualification. Each of the Company and the Subsidiaries is an
entity duly organized, validly existing and in good standing under the laws of the jurisdiction of
its incorporation or organization (as applicable), with the requisite corporate or other legal
authority to own and use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other organizational or charter
documents. Each of the Company and the Subsidiaries is duly qualified to do business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

          (c) Authorization; Enforcement. The Company has the requisite corporate authority to
enter into and to consummate the transactions contemplated by each of the Transaction Documents to
which it is a party and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of each of the Transaction Documents to which it is a party by the Company
and the consummation by it of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of the Company and no further consent or
action is required by the Company, its Board of Directors or its stockholders. Each of the
Transaction Documents to which it is a party has been (or upon delivery will be) duly executed by
the Company and is, or when delivered in accordance with the terms hereof, will constitute, the
valid and binding obligation of the Company enforceable against the Company in accordance with its
terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of creditors rights generally,
and (ii) the effect of rules of law governing the availability of specific performance and other
equitable remedies.

          (d) No Conflicts. The execution, delivery and performance by the Company of the
Transaction Documents to which it is a party and the consummation by the Company of the
transactions contemplated hereby and thereby do not, and will not, (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or
other organizational or charter documents, (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of
time or both) of, any credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound, or affected, except to the
extent that such conflict, default or rights would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect, or to the Company’ Knowledge (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company or a Subsidiary is subject (including,
assuming the accuracy of the representations and warranties of the Purchasers in this Agreement,
federal and state securities laws and regulations and the rules and regulations of any
self-regulatory organization to which the Company or its securities are subject, including all
applicable Trading Markets), or by which any property or asset of the Company or a Subsidiary is
bound or affected, except to the extent that such violation would not reasonably be expected to
have a Material Adverse Effect.

          (e) Issuance of the Shares. The Shares have been duly authorized and, when issued and
paid for in accordance with the terms of the Transaction Documents, will be duly and validly
issued, fully paid and nonassessable and free and clear of all Liens, other than restrictions on
transfer provided for in the Transaction Documents or imposed by applicable securities laws, and
shall not be subject to preemptive or similar rights. Assuming the accuracy of the representations
and warranties of the Purchasers in this Agreement, the Shares will be issued in compliance with
all applicable federal and state securities laws.

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          (f) Capitalization. The aggregate number of shares and type of all authorized, issued
and outstanding classes of capital stock, options and other securities of the Company (whether or
not presently convertible into or exercisable or exchangeable for shares of capital stock of the
Company) is set forth in Schedule 3.1(f) hereto. All outstanding shares of capital stock
are duly authorized, validly issued, fully paid and nonassessable and have been issued in
compliance with all applicable securities laws. Except as disclosed in Schedule 3.1(f)
hereto, the Company does not have outstanding any other options, warrants, script rights to
subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights
or obligations convertible into or exercisable or exchangeable for, or entered into any agreement
giving any Person any right to subscribe for or acquire, any shares of Common Stock, or securities
or rights convertible or exchangeable into shares of Common Stock. Except as set forth on
Schedule 3.1(f) hereto, and except for customary adjustments as a result of stock
dividends, stock splits, combinations of shares, reorganizations, recapitalizations,
reclassifications or other similar events, there are no anti-dilution or price adjustment
provisions contained in any security issued by the Company (or in any agreement providing rights to
security holders) and the issuance and sale of the Shares will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other than the Purchasers) and will not
result in a right of any holder of securities to adjust the exercise, conversion, exchange or reset
price under such securities. To the Company’s Knowledge, except as disclosed in the SEC Reports and
any schedules filed with the SEC pursuant to Rule 13d-1 of the Exchange Act by reporting persons or
in Schedule 3.1(f) hereto, no Person or group of related Persons beneficially owns (as
determined pursuant to Rule 13d-3 under the Exchange Act), or has the right to acquire, by
agreement with or by obligation binding upon the Company, beneficial ownership of in excess of 5%
of the outstanding Common Stock.

          (g) SEC Reports; Financial Statements. The Company has filed all reports required to
be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof. Such
reports required to be filed by the Company under the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, together with any materials filed or furnished by the Company under the
Exchange Act, whether or not any such reports were required being collectively referred to herein
as the “SEC Reports” and, together with this Agreement and the Disclosure Schedules to this
Agreement, the “Disclosure Materials”, on a timely basis or has received a valid extension of such
time of filing for any of the SEC Reports and has filed any such SEC Reports prior to the
expiration of any such extension. The Company has made available to the Purchasers or their
respective representatives true, correct and complete copies of the SEC Reports not available on
the SEC’s EDGAR system. As of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the SEC promulgated thereunder, and none of the SEC Reports contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at the time of filing. Such financial
statements have been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), and fairly present
in all material respects the consolidated financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal, year-end audit
adjustments. All material agreements to which the Company or any Subsidiary is a party or to which
the property or assets of the Company or any Subsidiary are subject are included as part of or
identified in the SEC Reports, to the extent such agreements are required to be included or
identified pursuant to the rules and regulations of the SEC.

          (h) Material Adverse Effect. Since the date of the latest audited financial
statements included within the SEC Reports, except as disclosed in Schedule 3.1(h) hereto,
(i) there has been no event, occurrence or development that, individually or in the aggregate, has
had or that could result in a Material Adverse Effect, (ii) neither the Company nor any Subsidiary
has incurred any material liabilities other than

9

 

(A) trade payables and accrued expenses incurred in the ordinary course of business consistent
with past practice and (B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii)
the Company has not altered its method of accounting or changed its auditors, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to its stockholders, in
their capacities as such, or purchased, redeemed or made any agreements to purchase or redeem any
shares of its capital stock (except for repurchases by the Company of shares of capital stock held
by employees, officers, directors, or consultants pursuant to an option to repurchase such shares
upon the termination of employment or services), and (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except pursuant to current or previously existing
Company stock-based plans. The Company has not taken any steps to seek protection pursuant to any
bankruptcy law nor does the Company have any knowledge or reason to believe that its creditors
intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which
would reasonably lead a creditor to do so. The Company is not as of the date hereof, and after
giving effect to the transactions contemplated hereby to occur at the applicable Closing, will not
be Insolvent (as defined below). For purposes of this Section 3.1(h), “Insolvent” means (i)
the present fair saleable value of the Company’s assets is less than the amount required to pay
the Company’s total Indebtedness (as defined in Section 3.1(bb)), (ii) the Company is
unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, or (iii) the Company intends to incur or believes that it
will incur debts that would be beyond its ability to pay as such debts mature.

          (i) Absence of Litigation. Except as disclosed in Schedule 3.1(i), there is
no action, suit, claim, or Proceeding, or, to the Company’s Knowledge, inquiry or investigation,
before or by any court, public board, government agency, or self-regulatory organization pending
or, to the Company’s Knowledge, threatened against or affecting the Company or any of its
Subsidiaries that could, individually or in the aggregate, have a Material Adverse Effect.

          (j) Compliance. Except as described in Schedule 3.1(j), neither the Company
nor any Subsidiary, except in each case as would not, individually or in the aggregate, reasonably
be expected to have or result in a Material Adverse Effect, (i) is in default under or in violation
of (and no event has occurred that has not been waived that, with notice or lapse of time or both,
would result in a default by the Company or any Subsidiary under), nor has the Company or any
Subsidiary received written notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or instrument to which
it is a party or by which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order of any court, arbitrator or
governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any
governmental authority.

          (k) Title to Assets. Neither the Company nor any Subsidiary owns any real property.
The Company and the personal property owned by them that is used in the business of the Company and
the Subsidiaries, in each case free and clear of all Liens, except for Liens that do not,
individually or in the aggregate, have or result in a Material Adverse Effect. Any real property
and facilities held under lease by the Company and the Subsidiaries are held by them under valid
and subsisting leases of which the Company and the Subsidiaries and, to the Company’s Knowledge,
the other parties thereto, are in material compliance.

          (l) No General Solicitation; Placement Agent Fees. Neither the Company, nor any of
its Affiliates, nor any Person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in connection with the
offer or sale of the Shares. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or brokers’ commission (other than for persons engaged by
any Purchaser or its investment advisor) relating to or arising out of the issuance of the Shares
pursuant to this Agreement. The Company acknowledges that it has engaged Deutsche Bank Securities
Inc. as its exclusive Placement Agent for the offering of the Shares.

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Other than the Placement Agent, and except as disclosed in Schedule 3.1(l) hereto, the
Company has not engaged any placement agent or other agent in connection with the sale of the
Shares.

          (m) No Integration. Neither the Company nor to the Company’s Knowledge any of its
Affiliates nor, any Person acting on the Company’s behalf has, directly or indirectly, at any time
within the past six months, made any offer or sale of any security or solicitation of any offer to
buy any security under circumstances that would (i) eliminate the availability of the exemption
from registration under Regulation D under the Securities Act in connection with the offer and sale
by the Company of the Shares as contemplated hereby or (ii) cause the offering of the Shares
pursuant to the Transaction Documents to be integrated with prior offerings by the Company for
purposes of any applicable stockholder approval provisions, including, without limitation, under
the rules and regulations of any Trading Market. The Company is not required to be registered as,
and is not an Affiliate of, an “investment company” within the meaning of the Investment Company
Act of 1940, as amended. The Company is not required to be registered as, a United States real
property holding corporation within the meaning of the Foreign Investment in Real Property Tax Act
of 1980.

          (n) Private Placement. Assuming the accuracy of the representations and warranties of
the Purchasers contained in this Agreement and the compliance by the Purchasers with the provisions
set forth herein, it is not necessary, in connection with the issuance and sale of any Shares, in
the manner contemplated by the Transaction Documents, to register any Shares under the Securities
Act.

          (o) Eligibility for Registration. The Company is eligible to register the Shares for
resale by the Purchasers using Form S-1 promulgated under the Securities Act, as provided in the
Registration Rights Agreement.

          (p) Listing and Maintenance Requirements. The Company has not, in the twelve months
preceding the date hereof, received written notice from any Trading Market on which the Common
Stock is or has been listed or quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market. The Company is in compliance, in all
material respects, with all such listing and maintenance requirements.

          (q) Registration Rights. Except as provided in the Transaction Documents, the Company
has not granted or agreed to grant to any Person any rights (including “piggy-back” registration
rights) to have any securities of the Company registered with the Commission or any other
governmental authority that have not been satisfied or waived.

          (r) Application of Takeover Protections. Except as described in Schedule
3.1(r), there is no control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision under the Company’s
charter documents or the laws of its state of incorporation that is or could become applicable to
any of the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including, without limitation, as a result
of the Company’s issuance of the Shares and the Purchasers’ ownership of the Shares.

          (s) Disclosure. The Company confirms that neither it nor any of its officers,
directors or Affiliates, has provided any of the Purchasers or their agents or counsel with any
information that constitutes or might constitute material, nonpublic information (other than the
existence and terms of the issuance of Shares, as contemplated by this Agreement). The Company
understands and confirms that each of the Purchasers will rely on the foregoing representations in
effecting transactions in securities of the Company. All disclosure provided by the Company to the
Purchasers regarding the Company, its business and the transactions contemplated hereby, including
the Disclosure Schedules to this Agreement, furnished

11

 

by or on the behalf of the Company are true and correct in all material respects and do not
contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances under which they were
made, not misleading. To the Company’s Knowledge, no event or circumstance has occurred or
information exists with respect to the Company or any of the Subsidiaries or its or their business,
properties, operations or financial conditions, which, under applicable law, rule or regulation,
requires public disclosure or announcement by the Company but which has not been so publicly
announced or disclosed. The Company acknowledges and agrees that no Purchaser makes or has made
any representations or warranties with respect to the transactions contemplated hereby other than
those set forth in the Transaction Documents.

          (t) Acknowledgment Regarding Purchasers’ Purchase of Shares. Based upon the
assumption that the transactions contemplated by this Agreement are consummated in all material
respects in conformity with the Transaction Documents, the Company acknowledges and agrees that
each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect
to the Transaction Documents and the transactions contemplated hereby and thereby. The Company
further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to this Agreement and the transactions contemplated
hereby and any advice given by any Purchaser or any of their respective representatives or agents
in connection with the Transaction Documents and the transactions contemplated hereby and thereby
is merely incidental to the Purchasers’ purchase of the Shares. The Company further represents to
each Purchaser that the Company’s decision to enter into this Agreement has been based solely on
the independent evaluation of the transactions contemplated hereby by the Company and its
representatives.

          (u) Patents and Trademarks. To the Company’s Knowledge, the Company and its
Subsidiaries own, or possess adequate rights or licenses to use, all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent applications, patent
rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and
other intellectual property rights (“Intellectual Property Rights”) necessary to conduct their
respective businesses as now conducted. Except as set forth in Schedule 3.1(u), none of the
Company’s Intellectual Property Rights have expired or terminated, or are expected to expire or
terminate, within three years from the date of this Agreement. To the Company’s Knowledge, neither
the Company nor any of its Subsidiaries is infringing the Intellectual Property Rights of others.
Except as disclosed in Schedule 3.1(u), there is no claim, action or proceeding being made
or brought, or to the Company’s Knowledge, being threatened, against the Company or its
Subsidiaries regarding its Intellectual Property Rights.

          (v) Insurance. The Company and the Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as are prudent and
customary in the businesses and location in which the Company and the Subsidiaries are engaged.

          (w) Regulatory Permits. The Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses as described in the SEC Reports
(“Material Permits”), except where the failure to possess such Material Permits does not have or
could not reasonably be expected to result in, individually or in the aggregate, a Material Adverse
Effect, and neither the Company nor any Subsidiary has received any written notice of proceedings
relating to the revocation or modification of any Material Permit.

          (x) Transactions with Affiliates. Except as set forth on Schedule 3.1(x) and
in the Company’s SEC Reports, none of the officers or directors of the Company is presently a party
to any transaction with the Company or any of its Subsidiaries that would be required to be
disclosed pursuant to Item 404 of Regulation S-K (other than for ordinary course services as
officers or directors), including any

12

 

contract, agreement or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise requiring payments to or
from any such officer or director or, to the Company’s Knowledge, any corporation, partnership,
trust or other entity in which any such officer or director has a substantial interest or is an
officer, director, trustee or partner.

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

          (z) Sarbanes-Oxley Act. The Company is in compliance in all respects with applicable
requirements of the Sarbanes-Oxley Act of 2002 and applicable rules and regulations promulgated by
the Commission thereunder, except where such noncompliance would not have, individually or in the
aggregate, a Material Adverse Effect.

          (aa) Foreign Corrupt Practices. Neither the Company nor any of its Subsidiaries nor,
to the Company’s Knowledge, any director, officer, agent, employee or other Person acting on behalf
of the Company or any of its Subsidiaries has, in the course of its 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 unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.

          (bb) Indebtedness. Except as disclosed in Schedule 3.1(bb), neither the
Company nor any of its Subsidiaries (i) has any outstanding Indebtedness (as defined below) or (ii)
is a party to any contract, agreement or instrument relating to any Indebtedness. For purposes of
this Agreement: (x) “Indebtedness” of any Person means, without duplication (A) all indebtedness
for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase
price of property or services (other than trade payables entered into in the ordinary course of
business), (C) all reimbursement or payment obligations with respect to letters of credit, surety
bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising under any conditional
sale or other title retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even though the rights and
remedies of the seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (F) all monetary obligations under any leasing or similar
arrangement which, in connection with generally accepted accounting principles, consistently
applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness
referred to in clauses (A) through (F) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien,
pledge, charge, security interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which owns such assets or
property has not assumed or become liable for the payment of such indebtedness, and (H) all
Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to
in clauses (A) through (G) above; and (y) “Contingent Obligation” means, as to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the primary purpose or
intent of the Person incurring such liability, or the primary effect

13

 

thereof, is to provide assurance to the obligee of such liability that such liability will be
paid or discharged, or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss with respect
thereto.

          (cc) Employee Relations. Neither the Company nor any of its Subsidiaries is a party
to any collective bargaining agreement or, to the Company’s Knowledge, employs any member of a
union. The Company believes that its relations with its employees are as disclosed in the SEC
Reports and no disturbance by the Company’s employees exists or, to the Company’s Knowledge, is
imminent. Except as disclosed in Schedule 3.1(cc), no current executive officer of the
Company or any of its Subsidiaries (as defined in Rule 501(f) of the Securities Act) has notified
in writing the Company or any such Subsidiary that such officer intends to leave the Company or any
such Subsidiary or otherwise terminate such officer’s employment with the Company or any such
Subsidiary. To the Company’s Knowledge, no executive officer of the Company or any of its
Subsidiaries is in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or any other contract
or agreement or any restrictive covenant, and the continued employment of each such executive
officer does not subject the Company or any such Subsidiary to any liability with respect to any of
the foregoing matters.

          (dd) Labor Matters. The Company and its Subsidiaries are in compliance in all material
respects with all federal, state, local and foreign laws and regulations respecting labor,
employment and employment practices and benefits, terms and conditions of employment and wages and
hours, except where failure to be in compliance would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.

          (ee) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with
any and all Environmental Laws (as hereinafter defined), (ii) have received all permits, licenses
or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such permit, license or
approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply
could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution
or protection of human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including, without limitation, laws
relating to emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into
the environment, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or
approved thereunder.

          (ff) Subsidiary Rights. Except as set forth in Schedule 3.1(ff), the Company
or its Subsidiaries have the unrestricted right to vote, and (subject to limitations imposed by
applicable law) to receive dividends and distributions on, all capital securities or ownership
interest of the Subsidiaries as owned by the Company or such Subsidiary.

          (gg) Tax Status. The Company and each of its Subsidiaries (i) has made or filed all
foreign, federal and state income and all other material tax returns, reports and declarations
required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns,
reports and declarations, and (iii) has set aside on its books provision reasonably adequate for
the payment of all taxes for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.

14

 

          (hh) Regulation M Compliance. The Company has not, and to the Company’s Knowledge no
one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to
result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or, paid any
compensation for soliciting purchases of, any of the Shares, or (iii) paid or agreed to pay to any
Person any compensation for soliciting another to purchase any other securities of the Company,
other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in
connection with the placement of the Shares.

          (ii) Disclosure Controls and Procedures. The Company maintains disclosure controls
and procedures (as such term is defined in Rule 13a-15 of the General Rules and Regulations under
the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls
and procedures have been designed to ensure that information required to be disclosed by the
Company and its Subsidiaries is accumulated and communicated to the Company’s management, including
the Company’s principal executive officer and principal financial officer by others within those
entities, such disclosure controls and procedures are effective.

     3.2 Representations and Warranties of the Purchasers. Each Purchaser hereby, for
itself and for no other Purchaser, represents and warrants as of the date hereof and as of the
Closing Date to the Company and the Placement Agent as follows:

          (a) Organization; Authority. Such Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization with the
requisite corporate or partnership power and authority to enter into and to consummate the
transactions contemplated by the applicable Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of this Agreement by such
Purchaser and performance by such Purchaser of the transactions contemplated by this Agreement have
been duly authorized by all necessary corporate or, if such Purchaser is not a corporation, such
partnership, limited liability company or other applicable like action, on the part of such
Purchaser. Each Transaction document to which it is a party has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting
generally the enforcement of, creditors’ rights and remedies or by other equitable principles of
general application.

          (b) No Conflicts. The execution, delivery and performance by such Purchaser of this
Agreement and the Registration Rights Agreement and the consummation by such Purchaser of the
transactions contemplated hereby and thereby will not (i) result in a violation of the
organizational documents of such Purchaser, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Purchaser is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities laws) applicable to
such Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of such Purchaser to perform its obligations
hereunder.

          (c) Investment Intent. Such Purchaser understands that the Shares are “restricted
securities” and have not been registered under the Securities Act or any applicable state
securities law and is

15

 

acquiring the Shares as principal for its own account and not with a view to, or for
distributing or reselling such Shares or any part thereof in violation of the Securities Act or any
applicable state securities laws, provided, however, that by making the representations herein,
such Purchaser does not agree to hold any of the Shares for any minimum period of time and reserves
the right, subject to the provisions of this Agreement and the Registration Rights Agreement, at
all times to sell or otherwise dispose of all or any part of such Shares pursuant to an effective
registration statement under the Securities Act or under an exemption from such registration and in
compliance with applicable federal and state securities laws. Such Purchaser is acquiring the
Shares hereunder in the ordinary course of its business. Such Purchaser does not presently have any
agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect
any distribution of any of the Shares (or any securities which are derivatives thereof) to or
through any person or entity; such Purchaser is not a registered broker-dealer under Section 15 of
the Exchange Act or an entity engaged in a business that would require it to be so registered as a
broker-dealer.

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

          (e) General Solicitation. Such Purchaser is not purchasing the Shares as a result of
any advertisement, article, notice or other communication regarding the Shares published in any
newspaper, magazine or similar media or broadcast over television or radio or presented at any
seminar or any other general advertisement.

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

          (g) Access to Information. Such Purchaser acknowledges that it has had the
opportunity to review the Disclosure Materials and has been afforded (i) the opportunity to ask
such questions as it has deemed necessary of, and to receive answers from, representatives of the
Company concerning the terms and conditions of the offering of the Shares and the merits and risks
of investing in the Shares; (ii) access to information about the Company and the Subsidiaries and
their respective financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain
such additional information that the Company possesses or can acquire without unreasonable effort
or expense that is necessary to make an informed investment decision with respect to the
investment. Neither such inquiries nor any other investigation conducted by or on behalf of such
Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser’s right to
rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s
representations and warranties contained in the Transaction Documents. Such Purchaser has sought
such accounting, legal and tax advice as it has considered necessary to make an informed decision
with respect to its acquisition of the Shares.

          (h) Certain Trading Activities. Other than with respect to the transactions
contemplated herein, since the time that such Purchaser was first contacted by the Company, the
Placement Agent or any other Person regarding the transactions contemplated hereby, neither the
Purchaser nor any Affiliate of such Purchaser which (x) had knowledge of the transactions
contemplated hereby, (y) has or shares discretion relating to such Purchaser’s investments or
trading or information concerning such Purchaser’s investments, including in respect of the Shares,
and (z) is subject to such Purchaser’s review or input concerning such Affiliate’s investments or
trading (collectively, “Trading Affiliates”) has directly or indirectly, nor has any Person acting
on behalf of or pursuant to any understanding with such Purchaser or Trading Affiliate, effected or
agreed to effect any purchases or sales of the securities of the Company (including, without

16

 

limitation, any Short Sales involving the Company’s securities). Notwithstanding the
foregoing, in the case of a Purchaser and/or Trading Affiliate that is, individually or
collectively, a multi-managed investment bank or vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s or Trading Affiliate’s assets and the portfolio managers have
no direct knowledge of the investment decisions made by the portfolio managers managing other
portions of such Purchaser’s or Trading Affiliate’s assets, the representation set forth above
shall apply only with respect to the portion of assets managed by the portfolio manager that have
knowledge about the financing transaction contemplated by this Agreement. Other than to other
Persons party to this Agreement, such Purchaser has maintained the confidentiality of all
disclosures made to it in connection with this transaction (including the existence and terms of
this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein
shall constitute a representation or warranty, or preclude any actions, with respect to the
identification of the availability of, or securing of, available shares to borrow in order to
effect short sales or similar transactions in the future.

          (i) Brokers and Finders. No Person will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or upon the Company or
any Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of the Purchaser.

          (j) Independent Investment Decision. Such Purchaser has independently evaluated the
merits of its decision to purchase Shares pursuant to the Transaction Documents, and such Purchaser
confirms that it has not relied on the advice of any other Purchaser’s business and/or legal
counsel in making such decision. Such Purchaser understands that nothing in this Agreement or any
other materials presented by or on behalf of the Company to the Purchaser in connection with the
purchase of the Shares constitutes legal, tax or investment advice. Such Purchaser has consulted
such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Shares. Such Purchaser understands that the
Placement Agent has acted solely as the agent of the Company in this placement of the Shares and
such Purchaser has not relied on the business or legal advice of the Placement Agent or any of its
agents, counsel or Affiliates in making its investment decision hereunder, and confirms that none
of such Persons has made any representations or warranties to such Purchaser in connection with the
transactions contemplated by the Transaction Documents.

          (k) Reliance on Exemptions. Such Purchaser understands that the Shares being offered
and sold to it in reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying in part upon the truth and
accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgements and understandings of such Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of such Purchaser to acquire the Shares.

          (l) No Governmental Review. Such Purchaser understands that no United States federal
or state agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Shares or the fairness or suitability of the investment in the
Shares nor have such authorities passed upon or endorsed the merits of the offering of the Shares.

          (m) Regulation M. Such Purchaser is aware that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of Common Stock and other activities with
respect to the Common Stock by the Purchasers.

          (n) Residency. Such Purchaser’s residence (if an individual) or offices in which its
investment decision with respect to the Shares was made (if an entity) are located at the address
immediately below such Purchaser’s name on its signature page hereto.

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The Company and each of the Purchasers acknowledge and agree that no party to this Agreement has
made or makes any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Article III and the Transaction
Documents.

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

     4.1 Transfer Restrictions.

          (a) Compliance with Laws. Notwithstanding any other provision of this Article
IV, each Purchaser covenants that the Shares may be disposed of only pursuant to an effective
registration statement under, and in compliance with the requirements of, the Securities Act, or
pursuant to an available exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act, and in compliance with any applicable state and federal
securities laws. In connection with any transfer of the Shares other than (i) pursuant to an
effective registration statement, (ii) to the Company, (iii) pursuant to Rule 144 (provided that
the Purchaser provides the Company with reasonable assurances (in the form of seller and, if
applicable, broker representation letters) that the securities may be sold pursuant to such rule)
or (iv) in connection with a bona fide pledge as contemplated in Section 4.1(b), the
Company may require the transferor thereof to provide to the Company an opinion of counsel selected
by the transferor and reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Shares under the Securities Act. As a condition of transfer, any
such transferee shall agree in writing to be bound by the terms of this Agreement and the
Registration Rights Agreement and shall have the rights of a Purchaser under this Agreement and the
Registration Rights Agreement with respect to such transferred Shares.

          (b) Legends. Certificates evidencing the Shares shall bear any legend as required by
the “blue sky” laws of any state and a restrictive legend in substantially the following form,
until such time as they are not required under Section 4.1(c):

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OR (B) 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
OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD
PURSUANT TO RULE 144 UNDER THE SECURITIES ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

          The Company acknowledges and agrees that a Purchaser may from time to time pledge, and/or
grant a security interest in, some or all of the legended Shares in connection with applicable
securities laws, pursuant to a bona fide margin agreement in compliance with a bona fide margin
loan. Such a pledge would not be subject to approval or consent of the Company and no legal
opinion of legal counsel to the

18

 

pledgee, secured party or pledgor shall be required in connection with the pledge, but such legal
opinion shall be required in connection with a subsequent transfer or foreclosure following default
by the Purchaser transferee of the pledge. No notice shall be required of such pledge, but
Purchaser’s transferee shall promptly notify the Company of any such subsequent transfer or
foreclosure. Each Purchaser acknowledges that the Company shall not be responsible for any pledges
relating to, or the grant of any security interest in, any of the Shares or for any agreement,
understanding or arrangement between any Purchaser and its pledgee or secured party. At the
appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation
as a pledgee or secured party of Shares may reasonably request in connection with a pledge or
transfer of the Shares, including the preparation and filing of any required prospectus supplement
under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of Selling Stockholders thereunder. Each Purchaser acknowledges and
agrees that, except as otherwise provided in Section 4.1(c), any Shares subject to a pledge
or security interest as contemplated by this Section 4.1(b) shall continue to bear the
legend set forth in this Section 4.1(b) and be subject to the restrictions on transfer set
forth in Section 4.1(a).

          (c) Removal of Legends. The legend set forth in Section 4.1(b) above shall be
removed and the Company shall issue a certificate without such legend or any other legend to the
holder of the applicable Shares upon which it is stamped or issue to such holder by electronic
delivery at the applicable balance account at the Depository Trust Company (“DTC”), if (i) such
Shares are registered for resale under the Securities Act (provided that, if the Purchaser is
selling pursuant to the effective registration statement registering the Shares for resale, the
Purchaser agrees to only sell such Shares during such time that such registration statement is
effective and not withdrawn or suspended, and only as permitted by such registration statement),
(ii) such Shares are sold or transferred pursuant to Rule 144 (if the transferor is not an
Affiliate of the Company), or (iii) such Shares are eligible for sale under Rule 144, without the
requirement for the Company to be in compliance with the current public information required under
Rule 144 as to such securities and without volume or manner-of-sale restrictions. Following the
earlier of (i) the Effective Date or (ii) Rule 144 becoming available for the resale of Shares,
without the requirement for the Company to be in compliance with the current public information
required under Rule 144 as to such securities and without volume or manner-of-sale restrictions,
the Company shall cause Company Counsel to issue to the Transfer Agent the legal opinion referred
to in the Irrevocable Transfer Agent Instructions. Any fees (with respect to the Transfer Agent,
Company Counsel or otherwise) associated with the issuance of such opinion or the removal of such
legend shall be borne by the Company. Following the Effective Date, or at such earlier time as a
legend is no longer required for certain Shares, the Company will no later than three (3) Trading
Days following the delivery by a Purchaser to the Transfer Agent (with notice to the Company) of a
legended certificate representing Shares (endorsed or with stock powers attached, signatures
guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer), and an
opinion of counsel to the extent required by Section 4.1(a) (such third (3rd)
Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a
certificate representing such Shares that is free from all restrictive and other legends. The
Company may not make any notation on its records or give instructions to the Transfer Agent that
enlarge the restrictions on transfer set forth in this Section 4.1(c). Certificates for
Shares subject to legend removal hereunder may be transmitted by the Transfer Agent to the
Purchasers by crediting the account of the Purchaser’s prime broker with DTC as directed by such
Purchaser.

          (d) Irrevocable Transfer Agent Instructions. The Company shall issue irrevocable
instructions to its transfer agent, and any subsequent transfer agent, in the form of Exhibit
D attached hereto (the “Irrevocable Transfer Agent Instructions”). The Company represents and
warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in
this Section 4.1(d) (or instructions that are consistent therewith) will be given by the
Company to its transfer agent in connection with this Agreement, and that the Shares shall
otherwise be freely transferable on the books and records of the Company as and to the extent
provided in this Agreement and the other Transaction Documents and applicable law. The Company
acknowledges that a breach by it of its obligations under this Section 4.1(d)

19

 

will cause irreparable harm to a Purchaser. Accordingly, the Company acknowledges that the remedy
at law for a breach of its obligations under this Section 4.1(d) will be inadequate and
agrees, in the event of a breach or threatened breach by the Company of the provisions of this
Section 4.1(d), that a Purchaser shall be entitled, in addition to all other available
remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and
transfer, without the necessity of showing economic loss and without any bond or other security
being required.

          (e) Acknowledgement. Each Purchaser hereunder acknowledges its primary
responsibilities under the Securities Act and accordingly will not sell or otherwise transfer the
Shares or any interest therein without complying with the requirements of the Securities Act.
While the Registration Statement remains effective, each Purchaser hereunder may sell the Shares in
accordance with the plan of distribution contained in the Registration Statement and if it does so
it will comply therewith and with the related prospectus delivery requirements unless an exemption
therefrom is available. Each Purchaser, severally and not jointly with the other Purchasers,
agrees that if it is notified by the Company in writing at any time that the Registration Statement
registering the resale of the Shares is not effective or that the prospectus included in such
Registration Statement no longer complies with the requirements of Section 10 of the Securities
Act, the Purchaser will refrain from selling such Shares until such time as the Purchaser is
notified by the Company that such Registration Statement is effective or such prospectus is
compliant with Section 10 of the Securities Act, unless such Purchaser is able to, and does, sell
such Shares pursuant to an available exemption from the registration requirements of Section 5 of
the Securities Act. Both the Company and its Transfer Agent, and their respective directors,
officers, employees and agents, may rely on this Section 4.1(e) and each Purchaser
hereunder will indemnify and hold harmless each of such persons from any breaches or violations of
this Section 4.1(e).

          (f) Buy-In. If the Transfer Agent shall fail for any reason or for no reason to issue
to a Purchaser unlegended certificates within three (3) Trading Days of receipt by Transfer Agent
of all documents necessary for the removal of the legend set forth above (the “Deadline Date”),
then, in addition to all other remedies available to such Purchaser, if on or after the Trading Day
immediately following such three (3) Trading Day period, such Purchaser purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
holder of shares of Common Stock that such Purchaser anticipated receiving from the Transfer Agent
without any restrictive legend (a “Buy-In”), then the Company shall, within three (3) Trading Days
after of receipt by Transfer Agent of all documents necessary for the removal of the legend set
forth above and in such Purchaser’s sole discretion, either (i) pay cash to the Purchaser in an
amount equal to such Purchaser’s total purchase price (including brokerage commissions, if any) for
the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s
obligation to deliver such certificate (and to issue such shares of Common Stock) shall terminate,
or (ii) promptly honor its obligation to deliver to such Purchaser a certificate or certificates
representing such shares of Common Stock and pay cash to the Purchaser in an amount equal to the
excess (if any) of the Buy-In Price over the product of (a) such number of shares of Common Stock,
times (b) the Closing Bid Price on the Deadline Date.

     4.2 Furnishing of Information. In order to enable the Purchasers to sell the Shares
under Rule 144, for a period of twelve (12) months from the Closing, the Company shall use its
commercially reasonable efforts to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act. During such twelve (12) month period, if the Company is not
required to file reports pursuant to the Exchange Act, it will prepare and furnish to the
Purchasers and make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Shares under Rule 144.

     4.3 Integration. The Company shall not, and shall use its commercially reasonable
efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to
buy or otherwise

20

 

negotiate in respect of any security (as defined in Section 2 of the Securities Act) that will
be integrated with the offer or sale of the Shares in a manner that would require the registration
under the Securities Act of the sale of the Shares to the Purchasers, or that will be integrated
with the offer or sale of the Shares for purposes of the rules and regulations of any Trading
Market such that it would require stockholder approval prior to the closing of such other
transaction unless stockholder approval is obtained before the closing of such subsequent
transaction.

     4.4 Securities Laws Disclosure; Publicity. By 9:00 A.M., New York City time, on the
Trading Day immediately following the date hereof, the Company shall issue a press release (the
“Press Release”) reasonably acceptable to the Placement Agent disclosing all material terms of the
transactions contemplated hereby. On or before 9:00 A.M., New York City time, on the second
(2nd) Trading Day immediately following the execution of this Agreement, the Company
will file a Current Report on Form 8-K with the Commission describing the terms of the Transaction
Documents (and including as exhibits to such Current Report on Form 8-K the material Transaction
Documents (including, without limitation, this Agreement and the Registration Rights Agreement)).
Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser or
an Affiliate of any Purchaser, or include the name of any Purchaser or an Affiliate of any
Purchaser in any press release or filing with the Commission (other than the Registration
Statement) or any regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (i) as required by federal securities law in connection with (A) any registration
statement contemplated by the Registration Rights Agreement and (B) the filing of final Transaction
Documents (including signature pages thereto) with the Commission and (ii) to the extent such
disclosure is required by law, request of the Staff of the Commission or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior written notice of
such disclosure permitted under this subclause (ii). From and after the issuance of the Press
Release, no Purchaser shall be in possession of any material, non-public information received from
the Company, any Subsidiary or any of their respective officers, directors, employees or agents,
that is not disclosed in the Press Release unless a Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information. Each Purchaser, severally and
not jointly with the other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are required to be publicly disclosed by the Company as described in
this Section 4.4, such Purchaser will maintain the confidentiality of all disclosures made
to it in connection with this transaction (including the existence and terms of this transaction).

     4.5 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with
the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any
control share acquisition, business combination, poison pill (including any distribution under a
rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or
arrangement, in either case solely by virtue of receiving Shares under the Transaction Documents or
under any other written agreement between the Company and the Purchasers; provided, however, that
no such Purchaser owns any equity in the Company prior to its purchase of the Shares hereunder.

     4.6 Non-Public Information. Except with respect to the material terms and conditions
of the transactions contemplated by the Transaction Documents, including this Agreement, or as
expressly required by any applicable securities law, the Company covenants and agrees that neither
it, nor any other Person acting on its behalf, will provide any Purchaser or its agents or counsel
with any information regarding the Company that the Company believes constitutes material
non-public information without the express written consent of such Purchaser, unless prior thereto
such Purchaser shall have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that each Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the Company.

21

 

     4.7 Use of Proceeds. The Company shall use the net proceeds from the sale of the
Shares hereunder for working capital for photovoltaic projects and general corporate purposes and
shall not use such proceeds for: (a) the satisfaction of any portion of the Company’s debt (other
than payment of trade payables in the ordinary course of the Company’s business and prior
practices), (b) the redemption of any Common Stock or Common Stock Equivalents or (c) the
settlement of any outstanding litigation.

     4.8 Indemnification of Purchasers. Subject to the provisions of this Section
4.8, the Company will indemnify and hold each Purchaser and its directors, officers,
shareholders, members, partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other
title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents,
members, partners or employees (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title) of such
controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities,
obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any
such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against a Purchaser in any capacity,
or any of them or their respective Affiliates, by any stockholder of the Company who is not an
Affiliate of such Purchaser, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of such Purchaser’s
representations, warranties or covenants under the Transaction Documents or any agreements or
understandings such Purchaser may have with any such stockholder or any violations by the Purchaser
of state or federal securities laws or any conduct by such Purchaser which constitutes fraud, gross
negligence, willful misconduct or malfeasance). Promptly after receipt by any Person (the
“Indemnified Person”) of notice of any demand, claim or circumstances which would or might give
rise to a claim or the commencement of any action, proceeding or investigation in respect of which
indemnity may be sought pursuant to this Section 4.8, such Indemnified Person shall
promptly notify the Company in writing and the Company shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume the
payment of all fees and expenses; provided, however, that the failure of any Indemnified Person so
to notify the Company shall not relieve the Company of its obligations hereunder except to the
extent that the Company is actually and materially prejudiced by such failure to notify. In any
such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i)
the Company and the Indemnified Person shall have mutually agreed to the retention of such counsel;
(ii) the Company shall have failed promptly to assume the defense of such proceeding and to employ
counsel reasonably satisfactory to such Indemnified Person in such proceeding; or (iii) in the
reasonable judgment of counsel to such Indemnified Person, representation of both parties by the
same counsel would be inappropriate due to actual or potential differing interests between them.
The Company shall not be liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, delayed or conditioned. Without the
prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld,
delayed or conditioned, the Company shall not effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Person from all liability arising out of such proceeding.

     4.9 Principal Trading Market Listing. In the time and manner required by the
Principal Trading Market, the Company shall prepare and file with such Principal Trading Market an
additional shares listing application covering all of the Shares and shall use its commercially
reasonable efforts to take all steps
necessary to cause all of the Shares to be approved for listing on the Principal Trading
Market as promptly as possible thereafter.

22

 

     4.10 Form D; Blue Sky. The Company agrees to timely file a Form D with respect to the
Shares as required under Regulation D and to provide a copy thereof, promptly upon the written
request of any Purchaser. The Company, on or before the Closing Date, shall take such action as
the Company shall reasonably determine is necessary in order to obtain an exemption for or to
qualify the Shares for sale to the Purchasers 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 such actions promptly upon the written request of any Purchaser.

     4.11 Delivery of Shares After Closing. The Company shall deliver, or cause to be
delivered, the respective Shares purchased by each Purchaser to such Purchaser within three (3)
Trading Days of the Closing Date.  

     4.12 Short Sales and Confidentiality After The Date Hereof. Such Purchaser shall not,
and shall cause its Trading Affiliates not to, engage, directly or indirectly, in any transactions
in the Company’s securities (including, without limitation, any Short Sales involving the Company’s
securities) during the period from the date hereof until the earlier of such time as (i) the
transactions contemplated by this Agreement are first publicly announced as required by and
described in Section 4.4 or (ii) this Agreement is terminated in full pursuant to
Section 6.18. Each Purchaser, severally and not jointly with the other Purchasers,
covenants that until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in Section 4.4, such Purchaser will maintain the
confidentiality of the existence and terms of this transaction and the information included in the
Transaction Documents and Disclosure Schedules. Notwithstanding the foregoing, no Purchaser makes
any representation, warranty or covenant hereby that it will not engage in Short Sales in the
securities of the Company after the time that the transactions contemplated by this Agreement are
first publicly announced as described in Section 4.4; provided, however, each Purchaser
agrees, severally and not jointly with any Purchasers, that they will not enter into any Net Short
Sales (as hereinafter defined) from the period commencing on the Closing Date and ending on the
earliest of (x) the Effective Date of the initial Registration Statement, (y) the twenty-four (24)
month anniversary of the Closing Date or (z) the date that such Purchaser no longer holds any
Shares. For purposes of this Section 4.12, a “Net Short Sale” by any Purchaser shall mean
a sale of Common Stock by such Purchaser that is marked as a short sale and that is made at a time
when there is no equivalent offsetting long position in Common Stock held by such Purchaser.
Notwithstanding the foregoing, in the event that a Purchaser is a multi-managed investment vehicle
whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the
portfolio managers have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s assets, the representation set forth above
shall apply only with respect to the portion of assets managed by the portfolio manager that have
knowledge about the financing transaction contemplated by this Agreement. Moreover,
notwithstanding the foregoing, in the event that a Purchaser has sold Shares pursuant to Rule 144
prior to the Effective Date of the initial Registration Statement and the Company has failed to
deliver certificates without legends prior to the settlement date for such sale (assuming that such
certificates meet the requirements set forth in Section 4.1(c) for the removal of legends),
the provisions of this Section 4.12 shall not prohibit the Purchaser from entering into Net
Short Sales for the purpose of delivering shares of Common Stock in settlement of such sale. Each
Purchaser understands and acknowledges, severally and not jointly with any other Purchaser, that
the Commission currently takes the position that covering a short position established prior to
effectiveness of a resale registration statement with shares included in such registration
statement would be a 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.

23

 

     4.13 Subsequent Equity Sales. From the date hereof until the earlier of (i) one
hundred eighty (180) days following the Closing Date or (ii) thirty (30) days after the Effective
Date, neither the Company nor any Subsidiary shall issue shares of Common Stock or Common Stock
Equivalents, except that the Company and its Subsidiaries may issue Excluded Securities, as defined
in Section 4.14 below; provided, however, the thirty (30) day period set forth in this Section
4.13 shall be extended for the number of Trading Days during such period in which (i) trading
in the Common Stock is suspended by any Trading Market, or (ii) following the Effective Date, the
Registration Statement is not effective or the prospectus included in the Registration Statement
may not be used by the Purchasers for the resale of the Shares.

     4.14 Additional Issuances of Securities. (i) For purposes of this Section
4.14, the following definitions shall apply.

               (1) “Approved Stock Plan” means any employee benefit plan which has been approved by the Board
of Directors of the Company, pursuant to which the Company’s securities may be issued to any
employee, officer, director or consultant for services provided to the Company.

               (2) “Convertible Securities” means any stock or securities (other than Options) of the Company
convertible into or exercisable or exchangeable for Common Stock.

               (3) “Excluded Securities” means Common Stock issued or issuable: (i) in connection with any
Approved Stock Plan; (ii) upon conversion of any Options or Convertible Securities which are
outstanding on the day immediately preceding the Closing Date, provided that the terms of such
Options or Convertible Securities are not amended, modified or changed on or after the Closing
Date; (iii) pursuant to a bona fide firm commitment underwritten public offering with a nationally
recognized underwriter which generates gross proceeds to the Company in excess of $20,000,000
(other than “equity lines”); or (iv) in connection with any acquisition by the Company, whether
through an acquisition of stock or a merger of any business, assets or technologies the primary
purpose of which is not to raise equity capital in an amount not to exceed, in the aggregate, 10%
of the outstanding shares of Common Stock in any calendar year.

               (4) “Options” means any rights, warrants or options to subscribe for or purchase Common Stock
or Convertible Securities.

          (ii) From the date hereof until the one (1) year anniversary following the Effective Date, the
Company will not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise
dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of)
any of its or its Subsidiaries’ equity or equity equivalent securities, including without
limitation any debt, preferred stock or other instrument or security that is, at any time during
its life and under any circumstances, convertible into or exchangeable or exercisable for shares of
Common Stock or Common Stock Equivalents (any such offer, sale, grant, disposition or announcement
being referred to as a “Subsequent Placement”) unless the Company shall have first complied with
this Section 4.14(ii).

               (1) The Company shall deliver to each Purchaser an irrevocable 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 (w)
identify and describe the Offered Securities, (x) describe the price and other 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, (y) identify the persons or entities (if known) to which or with which
the Offered Securities are to be offered, issued, sold or exchanged and (z) offer to issue and sell
to or exchange with such Purchaser a pro rata portion of the Offered Securities, allocated among
such Purchaser (a) based on such Purchaser’s pro rata portion of the aggregate shares of Common
Stock purchased hereunder (the “Basic Amount”), and (b) with respect to each Purchaser that elects
to purchase its Basic Amount, any additional portion of the Offered Securities

24

 

attributable to the Basic Amounts of other Purchasers as such Purchaser shall indicate it will
purchase or acquire should the other Purchasers subscribe for less than their Basic Amounts (the
“Undersubscription Amount”).

               (2) To accept an Offer, in whole or in part, such Purchaser must deliver a written notice to
the Company prior to the end of the tenth (10th) Business Day after such Purchaser’s receipt of the
Offer Notice (the “Offer Period”), setting forth the portion of such Purchaser’s Basic Amount that
such Purchaser elects to purchase and, if such Purchaser shall elect to purchase all of its Basic
Amount, the Undersubscription Amount, if any, that such Purchaser elects to purchase (in either
case, the “Notice of Acceptance”). If the Basic Amounts subscribed for by all Purchasers are less
than the total of all of the Basic Amounts, then each Purchaser who has set forth an
Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to
the Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided,
however, that if the Undersubscription Amounts subscribed for exceed the difference between the
total of all the Basic Amounts and the Basic Amounts subscribed for (the “Available
Undersubscription Amount”), each Purchaser who has subscribed for any Undersubscription Amount
shall be entitled to purchase only that portion of the Available Undersubscription Amount as the
Basic Amount of such Purchaser bears to the total Basic Amounts of all Purchasers that have
subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent its
deems reasonably necessary.

               (3) The Company shall have ten (10) Business 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 the eligible Purchasers (the “Refused Securities”), but
only to the offerees described in the Offer Notice (if so described therein) and only upon terms
and conditions (including, without limitation, unit prices and interest rates) 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.

               (4) In the event the Company shall propose to sell less than all the Refused Securities (any
such sale to be in the manner and on the terms specified in Section 4.14(ii)(3) above),
then each Purchaser may, at its sole option and in its sole discretion, reduce the number or amount
of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less
than the number or amount of the Offered Securities that such Purchaser elected to purchase
pursuant to Section 4.14(ii)(2) above multiplied by a fraction, (i) the numerator of which
shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or
exchange (including Offered Securities to be issued or sold to Purchasers pursuant to Section
4.14(ii)(3) above prior to such reduction) and (ii) the denominator of which shall be the
original amount of the Offered Securities. In the event that any Purchaser so elects to reduce the
number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not
issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and
until such securities have again been offered to the Purchasers in accordance with Section
4.14(ii)(1) above.

               (5) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused
Securities, the Purchasers shall acquire from the Company, and the Company shall issue to the
Purchasers, the number or amount of Offered Securities specified in the Notices of Acceptance, as
reduced pursuant to Section 4.14(ii)(3) above if the Purchasers have so elected, upon the
terms and conditions specified in the Offer. Notwithstanding anything to the contrary contained in
this Agreement, if the Company does not consummate the closing of the issuance, sale or exchange of
all or less than all of the Refused Securities within ten (10) Business Days of the expiration of
the Offer Period, the Company shall issue to the Purchasers the number or amount of Offered
Securities specified in the Notices of Acceptance, as reduced pursuant to Section
4.14(ii)(4) above if the Purchasers have so elected, upon the terms and conditions specified in
the Offer. The purchase by the Purchasers of any Offered Securities is subject in all cases to the
preparation, execution and delivery by the Company and the Purchasers of a purchase agreement
relating to such Offered Securities reasonably satisfactory in form and substance to the
Purchasers and their respective counsel.

25

 

               (6) Any Offered Securities not acquired by the Purchasers or other persons in accordance with
Section 4.14(ii)(3) above may not be issued, sold or exchanged until they are again offered
to the Purchasers under the procedures specified in this Agreement.

          (iii) The restrictions contained in subsection (ii) of this Section 4.14 shall not
apply in connection with any Excluded Securities.

     4.15 Board Appointment. Within ten (10) business days of the Closing, Company shall
have taken all action necessary to cause Francis Chen, as the designee of WI Harper, to be
appointed to the Board of Directors.

ARTICLE V.

CONDITIONS PRECEDENT TO CLOSING

     5.1 Conditions Precedent to the Obligations of the Purchasers to Purchase Shares. The
obligation of each Purchaser to acquire Shares at the Closing is subject to the fulfillment to such
Purchaser’s satisfaction, on or prior to the Closing Date, of each of the following conditions, any
of which may be waived by such Purchaser (as to itself only):

          (a) Representations and Warranties. The representations and warranties of 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.

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

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

          (d) Consents. The Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary for consummation of the purchase
and sale of the Shares, all of which shall be and remain so long as necessary in full force and
effect.

          (e) Adverse Changes. Since the date of execution of this Agreement, no event or
series of events shall have occurred that has had or would reasonably be expected to have a
Material Adverse Effect.

          (f) Listing. The OTC Bulletin Board shall have approved the listing of additional
shares application for the Shares.

          (g) No Suspensions of Trading in Common Stock. The Common Stock shall not have been
suspended, as of the Closing Date, by the Commission or the Principal Trading Market from trading
on the Principal Trading Market nor shall suspension by the Commission or the Principal Trading
Market have

26

 

been threatened, as of the Closing Date, either (A) in writing by the Commission or the
Principal Trading Market or (B) by falling below the minimum listing maintenance requirements of
the Principal Trading Market.

          (h) Company Deliverables. The Company shall have delivered the Company Deliverables
in accordance with Section 2.2(a).

          (i) Compliance Certificate. The Company shall have delivered to each Purchaser a
certificate, dated as of the Closing Date and signed 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 Sections 5.1(a) and (b) in the form attached hereto as Exhibit
F.

          (j) Termination. This Agreement shall not have been terminated as to such Purchaser
in accordance with Section 6.18 herein.

     5.2 Conditions Precedent to the Obligations of the Company to sell Shares. The
Company’s obligation to sell and issue the Shares at the Closing to the Purchasers is subject to
the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following
conditions, any of which may be waived by the Company:

          (a) Representations and Warranties. The representations and warranties made by the
Purchasers in Section 3.2 hereof 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 representations and
warranties that speak as of a specific date.

          (b) Performance. Such Purchaser shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such Purchaser at or prior to the Closing
Date.

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

          (d) Consents. The Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary for consummation of the purchase
and sale of the Shares, all of which shall be and remain so long as necessary in full force and
effect.

          (e) Purchasers Deliverables. Such Purchaser shall have delivered its Purchaser
Deliverables in accordance with Section 2.2(b).

          (f) Listing. The OTC Bulletin Board shall have approved the listing of additional
shares application for the Shares.

          (g) Termination. This Agreement shall not have been terminated as to such Purchaser in
accordance with Section 6.18 herein.

27

 

ARTICLE VI.

MISCELLANEOUS

     6.1 Fees and Expenses. The Company and the Purchasers shall each pay the fees and
expenses of their respective advisers, counsel, accountants and other experts, if any, and all
other expenses incurred by such party in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement, except that the Company shall reimburse WI Harper for
its legal and due diligence expenses in an amount not to exceed $20,000. The Company shall pay all
Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the sale and
issuance of the Shares to the Purchasers.

     6.2 Entire Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements, understandings, discussions and representations,
oral or written, with respect to such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules. At or after the Closing, and without further
consideration, the Company and the Purchasers will execute and deliver to the other such further
documents as may be reasonably requested in order to give practical effect to the intention of the
parties under the Transaction Documents.

     6.3 Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (a) the date of transmission, if such notice or communication is delivered via
facsimile (provided the sender receives a machine-generated confirmation of successful
transmission) at the facsimile number specified in this Section 6.3 prior to 5:00 P.M., New
York City time, on a Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number specified in this
Section 6.3 on a day that is not a Trading Day or later than 5:00 P.M., New York City time,
on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service with next day delivery specified, or (d) upon actual receipt
by the party to whom such notice is required to be given. The address for such notices and
communications shall be as follows:

	 	 	 	 	 
	 

	 	If to the Company:
	 	Solar Power, Inc.
	 

	 	 	 	1115 Orlando Avenue
	 

	 	 	 	Roseville, California 95661
	 

	 	 	 	Telephone No.: (916) 745-0900
	 

	 	 	 	Facsimile No.: (916) 745-0999
	 

	 	 	 	Attention: Stephen C. Kircher
	 

	 	 	 	E-mail: skircher@solarpowerinc.net
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Weintraub Genshlea Chediak Law Corporation
	 

	 	 	 	400 Capitol Mall, Suite 1100
	 

	 	 	 	Sacramento, California 95814
	 

	 	 	 	Telephone No.: (916) 558-6028
	 

	 	 	 	Facsimile No.: (916) 446-1611
	 

	 	 	 	Attention: David C. Adams, Esq.
	 

	 	 	 	E-mail: dadams@weintraub.com
	 
	 	 	 	 
	 

	 	If to a Purchaser:
	 	To the address set forth under such Purchaser’s name on the signature page
hereof;

or such other address as may be designated in writing hereafter, in the same manner, by such
Person.

     6.4 Amendments; Waivers; No Additional Consideration. No provision of this Agreement
may be waived, modified, supplemented or amended except in a written instrument signed, in the case
of an

28

 

amendment, by the Company and the Purchasers of at least a majority in interest of the Shares
still held by Purchasers or, in the case of a waiver, by the party against whom enforcement of any
such waiver is sought. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right. No consideration shall be offered or paid to any Purchaser to
amend or consent to a waiver or modification of any provision of any Transaction Document unless
the same consideration is also offered to all Purchasers who then hold Shares.

     6.5 Construction. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
The language used in this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied against any party.
This Agreement shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement or any of the Transaction Documents.

     6.6 Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of and be binding upon the parties and their successors and permitted assigns. This
Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the
prior written consent of each Purchaser. Any Purchaser may assign its rights hereunder in whole or
in part to any Person to whom such Purchaser assigns or transfers any Shares in compliance with the
Transaction Documents and applicable law, provided such transferee shall agree in writing to be
bound, with respect to the transferred Shares, by the terms and conditions of this Agreement that
apply to the “Purchasers”.

     6.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not for the benefit of,
nor may any provision hereof be enforced by, any other Person, except (i) the Placement Agent is
an intended third party beneficiary of Article III hereof and (ii) each Purchaser Party is
an intended third party beneficiary of Section 4.8.

     6.8 Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the principles of conflicts of
law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective Affiliates, employees or agents) shall be
commenced exclusively in the New York Courts. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and
agrees not to assert in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper
or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and
consents to process being served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

29

 

     6.9 Survival. Subject to applicable statute of limitations, the representations,
warranties, agreements and covenants contained herein shall survive the Closing and the delivery of
the Shares.

     6.10 Execution. This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission, 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 signature page were
an original thereof.

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

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

     6.13 Replacement of Shares. If any certificate or instrument evidencing any Shares is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company
and the Transfer Agent of such loss, theft or destruction and the execution by the holder thereof
of a customary lost certificate affidavit of that fact and an agreement to indemnify and hold
harmless the Company and the Transfer Agent for any losses in connection therewith or, if required
by the Transfer Agent, a bond in such form and amount as is required by the Transfer Agent. The
applicants for a new certificate or instrument under such circumstances shall also pay any
reasonable third-party costs associated with the issuance of such replacement Shares. If a
replacement certificate or instrument evidencing any Shares is requested due to a mutilation
thereof, the Company may require delivery of such mutilated certificate or instrument as a
condition precedent to any issuance of a replacement.

     6.14 Remedies. In addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, each of the Purchasers and the Company will be
entitled to specific performance under the Transaction Documents. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agree to waive in any action for
specific performance of any such obligation (other than in connection with any action for a
temporary restraining order) the defense that a remedy at law would be adequate.

     6.15 Payment Set Aside. To the extent that the Company makes a payment or payments to
any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights
thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any
part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the
Company, a trustee, receiver or any other person under any law (including, without limitation, any
bankruptcy law, state or federal law, common law

30

 

or equitable cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or setoff had not occurred.

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

     6.17 Independent Nature of Purchasers’ Obligations and Rights. The obligations of
each Purchaser under any Transaction Document are several and not joint with the obligations of any
other Purchaser, and no Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser
to purchase Shares pursuant to the Transaction Documents has been made by such Purchaser
independently of any other Purchaser and independently of any information, materials, statements or
opinions as to the business, affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary which
may have been made or given by any other Purchaser or by any agent or employee of any other
Purchaser, and no Purchaser and any of its agents or employees shall have any liability to any
other Purchaser (or any other Person) relating to or arising from any such information, materials,
statement or opinions. Nothing contained herein or in any Transaction Document, and no action
taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Purchasers are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by the Transaction Documents. Each Purchaser acknowledges that no
other Purchaser has acted as agent for such Purchaser in connection with making its investment
hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with
monitoring its investment in the Shares or enforcing its rights under the Transaction Documents.
Each Purchaser shall be entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement or out of the other Transaction Documents, and
it shall not be necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel
in its review and negotiation of the Transaction Documents. For reasons of administrative
convenience only, Purchasers and their respective counsels have chosen to communicate with the
Company through Goodwin Procter LLP, counsel to the Placement Agent. Each Purchaser acknowledges
that Goodwin Procter LLP has rendered legal advice to the Placement Agent and not to such Purchaser
in connection with the transactions contemplated hereby, and that each such Purchaser has relied
for such matters on the advice of its own respective counsel. The Company has elected to provide
all Purchasers with the same terms and Transaction Documents for the convenience of the Company and
not because it was required or requested to do so by any Purchaser.

     6.18 Termination. This Agreement may be terminated and the sale and purchase of the
Shares abandoned at any time prior to the Closing by either the Company or any Purchaser (with
respect to itself only) upon written notice to the other, if the Closing has not been consummated
on or prior to 5:00 P.M., New York City time, on the Outside Date; provided, however, that the
right to terminate this Agreement under this Section 6.18 shall not be available to any
Person whose failure to comply with its obligations under this Agreement has been the cause of or
resulted in the failure of the Closing to occur on or before such time. Nothing in this
Section 6.18 shall be deemed to release any party from any liability for any breach by such
party of the terms and provisions of this Agreement or the other Transaction Documents or to impair
the right of any party to compel specific performance by any other party of its obligations under
this Agreement or the other Transaction Documents. In the event of a termination pursuant to this
Section 6.18,

31

 

the Company shall promptly notify all non-terminating Purchasers. Upon a termination in
accordance with this Section 6.18, the Company and the terminating Purchaser(s) shall not
have any further obligation or liability (including arising from such termination) to the other,
and no Purchaser will have any liability to any other Purchaser under the Transaction Documents as
a result therefrom.

32

 

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

	 	 	 	 	 
	 	SOLAR POWER, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

	 	 	 	 	 	 	 
	 
	 	NAME OF PURCHASER:	 	 	 	 
	 	 	 
	 	 
	 
	 
	 	By:	 	 	 	 
	 	 	 
	 	 
	 
	 	Name:	 	 
	 
	 	Title:	 	 
	 
	 
	 	Aggregate Purchase Price (Subscription Amount): $	 	 
	 	 
	 
	 
	 	Number of Shares to be Acquired:	 	 	 	 
	 	 	 
	 	 
	 
	 
	 	Tax ID No.:	 	 	 	 
	 	 	 
	 	 
	 
	 	 	 	 	 	 
	 
	 	Address for Notice:
	 
	 
	 	 
	 	 
	 
	 	 	 	 
	 
	 	 
	 	 
	 
	 	 	 	 
	 
	 	 
	 	 
	 
	 
	 	Telephone No.:	 	 	 	 
	 	 	 
	 	 
	 
	 	 	 	 	 	 
	 
	 	Facsimile No.:	 	 	 	 
	 	 	 
	 	 
	 
	 	 	 	 	 	 
	 
	 	E-mail Address:	 	 	 	 
	 	 	 
	 	 
	 
	 
	 	Attention:	 	 	 	 
	 	 	 
	 	 

	 	 	 	 	 
	Delivery Instructions:	 	 
	(if different than above)	 	 
	 
	 	 	 	 
	c/o
	 	 	 	 
	 
	 	 
	 	 

	 	 	 	 	 
	Street:
	 	 	 	 
	 
	 	 
	 	 

	 	 	 	 	 
	City/State/Zip:
	 	 	 	 
	 
	 	 
	 	 

	 	 	 	 	 
	Attention:
	 	 	 	 
	 
	 	 
	 	 

	 	 	 	 	 
	Telephone No.:
	 	 	 	 
	 
	 	 
	 	 

 

 

EXHIBITS:

	 	 	 
	A:
	 	Form of Registration Rights Agreement
	B-1:
	 	Accredited Investor Questionnaire
	B-2:
	 	Stock Certificate Questionnaire
	C-1:
	 	Form of Opinion of Company Counsel
	C-2:
	 	Form of Opinion of PRC Counsel
	C-3:
	 	Form of Opinion of Hong Kong Counsel
	D:
	 	Form of Irrevocable Transfer Agent Instructions
	E:
	 	Form of Secretary’s Certificate
	F:
	 	Form of Officer’s Certificate
	G:
	 	Wire Instructions

 

 

EXHIBIT A

FORM OF REGISTRATION RIGHTS AGREEMENT

 

 

INSTRUCTION SHEET

(to be read in conjunction with the entire Securities Purchase Agreement and Registration Rights
Agreement)

	A.	 	Complete the following items in the Securities Purchase Agreement and/or Registration Rights
Agreement:

	 	1.	 	Provide the information regarding the Purchaser requested on the signature
page. The Securities Purchase Agreement and the Registration Rights Agreement must be
executed by an individual authorized to bind the Purchaser.
	 
	 	2.	 	Exhibit B-1 — Accredited Investor Questionnaire:
	 
	 	 	 	Provide the information requested by the Accredited Investor Questionnaire
	 
	 	3.	 	Exhibit B-2 Stock Certificate Questionnaire:
	 
	 	 	 	Provide the information requested by the Stock Certificate Questionnaire
	 
	 	4.	 	Annex B to the Registration Rights Agreement — Selling Securityholder
Notice and Questionnaire
	 
	 	 	 	Provide the information requested by the Selling Securityholder Notice and
Questionnaire
	 
	 	5.	 	Return the signed Securities Purchase Agreement and Registration Rights
Agreement to:

Jeff Lassiter

Deutsche Bank Securities Inc.

101 California Street

48th Floor

San Francisco, CA 94111

Tel: (415) 617-3050

Fax: (415) 617-3014

Email: jeffrey.lassiter@db.com

	B.	 	Instructions regarding the transfer of funds for the purchase of Shares is set forth on
Exhibit G to the Securities Purchase Agreement.

 

 

EXHIBIT B-1

ACCREDITED INVESTOR QUESTIONNAIRE

(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)

To:     Solar Power, Inc.

This Investor Questionnaire
(“Questionnaire”) must be completed by each potential investor in
connection with the offer and sale of the shares of the common stock, par value $0.0001 per share
(the “Securities”), of Solar Power, Inc., a California corporation
(the “Corporation”). The
Securities are being offered and sold by the Corporation without registration under the Securities
Act of 1933, as amended (the “Act”), and the securities laws of certain states, in reliance on the
exemptions contained in Section 4(2) of the Act and on Regulation D promulgated thereunder and in
reliance on similar exemptions under applicable state laws. The Corporation must determine that a
potential investor meets certain suitability requirements before offering or selling Securities to
such investor. The purpose of this Questionnaire is to assure the Corporation that each investor
will meet the applicable suitability requirements. The information supplied by you will be used
in determining whether you meet such criteria, and reliance upon the private offering exemptions
from registration is based in part on the information herein supplied.

This Questionnaire does not constitute an offer to sell
 or a solicitation of an offer to buy any
security. Your answers will be kept strictly confidential. However, by signing this
Questionnaire, you will be authorizing the Corporation to provide a completed copy of this
Questionnaire to such parties as the Corporation deems appropriate in order to ensure that the
offer and sale of the Securities will not result in a violation of the Act or the securities laws
of any state and that you otherwise satisfy the suitability standards applicable to purchasers of
the Securities. All potential investors must answer all applicable questions and complete, date
and sign this Questionnaire. Please print or type your responses and attach additional sheets of
paper if necessary to complete your answers to any item.

PART A. BACKGROUND INFORMATION

	 	 	 
	Name of Beneficial Owner of the Securities:
	 	 
	 
	 	 

	 	 	 
	Business Address:
	 	 
	 
	 	 

	 	 	 	 	 
	 
	 	(Number and Street)

	 	 
	 
	(City)
	 	(State)
	 	(Zip Code)

	 	 	 
	Telephone Number: (                    )
	 	 
	 
	 	 

If a corporation, partnership, limited liability company, trust or other entity:

	 	 	 
	Type of entity:
	 	 
	 
	 	 

	 	 	 
	State of formation:                                        
	 	Approximate Date of formation:                                          

Were you formed for the purpose of investing in the securities being offered?

     Yes                               No                     

 

 

If an individual:

	 	 	 
	Residence Address:
	 	 
	 
	 	 

	 	 	 	 	 
	 
	 	(Number and Street)

	 	 
	 
	(City)
	 	(State)
	 	(Zip Code)

	 	 	 
	Telephone Number:
(                  
  )
	 	 
	 
	 	 

	 	 	 	 	 
	Age:       
              
	 	Citizenship:           
          
	 	Where registered to vote:          
           

Set forth in the space provided below the state(s), if any, in the United States in which you
maintained your residence during the past two years and the dates during which you resided in each
state:

Are you a director or executive officer of the Corporation?

     Yes                               No                     

	Social Security or Taxpayer Identification No.	 	 

PART B. ACCREDITED INVESTOR QUESTIONNAIRE

     In order for the Company to offer and sell the Securities in conformance with state and
federal securities laws, the following information must be obtained regarding your investor status.
Please initial each category applicable to you as a Purchaser of Securities of the Company.

	 	 	 
	___(1)
	 	A bank as defined in Section 3(a)(2) of the Securities Act,
or any savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity;
	 
	 	 
	___ (2)
	 	A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934;
	 
	 	 
	___ (3)
	 	An insurance company as defined in Section 2(13) of the
Securities Act;
	 
	 	 
	___ (4)
	 	An investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that Act;
	 
	 	 
	___ (5)
	 	A Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958;
	 
	 	 
	___ (6)
	 	A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000;
	 
	 	 
	___ (7)
	 	An employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such act, which is either a bank,
savings and loan

 

 

	 	 	 
	 
	 	association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are
accredited investors;
	 
	 	 
	___ (8)
	 	A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
	 
	 	 
	___ (9)
	 	An organization described in Section 501(c)(3) of the
Internal Revenue Code, a corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose of acquiring the Securities,
with total assets in excess of $5,000,000;
	 
	 	 
	___ (10)
	 	A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Securities, whose purchase is
directed by a sophisticated person who has such knowledge and experience in
financial and business matters that such person is capable of evaluating the
merits and risks of investing in the Company;
	 
	 	 
	___(11)
	 	A natural person whose individual net worth, or joint net worth with that person’s
spouse, at the time of his purchase exceeds $1,000,000;
	 
	 	 
	___(12)
	 	A natural person who had an individual income in excess of $200,000 in each
of the two most recent years, or joint income with that person’s spouse in
excess of $300,000, in each of those years, and has a reasonable expectation of
reaching the same income level in the current year;
	 
	 	 
	___(13)
	 	An executive officer or director of the Company;
	 
	 	 
	___(14)
	 	An entity in which all of the equity owners qualify under any of the above
subparagraphs. If the undersigned belongs to this investor category only, list
the equity owners of the undersigned, and the investor category which each such
equity owner satisfies.

A. FOR EXECUTION BY AN INDIVIDUAL:

	 	 	 	 	 	 	 
	                    
	 	By	 	 	 	 
	 	 	 
	 	 
	Date
	 	 	 	 
	 	 
	 
	 	Print Name:	 	 	 	 
	 
	 	 	 	 
	 	 
	B. FOR EXECUTION BY AN ENTITY:
	 
	Entity Name:	 		 	 	 	 
	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	                    
	 	By	 	 	 	 
	 	 	 
	 	 
	Date
	 	 	 	 	 	 
	 
	 	Print Name:	 	 	 	 
	 	 	 
	 	 
	 
	 	Title:	 	 	 	 
	 	 	 
	 	 

 

 

C. ADDITIONAL SIGNATURES (if required by partnership, corporation or trust document):

	 	 	 	 	 	 	 
	Entity Name:	 		 	 	 	 
	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	                    
	 	By	 	 	 	 
	 	 	 
	 	 
	Date
	 	 	 	 
	 	 
	 
	 	Print Name:	 	 	 	 
	 
	 	 	 	 
	 	 
	 
	 	Title:	 	 	 	 
	 	 	 
	 	 
	 
	Entity Name:	 		 	 	 	 
	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	                    
	 	By	 	 	 	 
	 	 	 
	 	 
	Date
	 	 	 	 
	 	 
	 
	 	Print Name:	 	 	 	 
	 
	 	 	 	 
	 	 
	 
	 	Title:	 	 	 	 
	 	 	 
	 	 
	 
	 	 	 	 
	 	 

 

 

EXHIBIT B-2

STOCK CERTIFICATE QUESTIONNAIRE

Pursuant
to Section 2.2(b) of the Agreement, please provide us with the following information:

	 	 	 	 	 
	1.
	 	The exact name that the Shares are to be registered in (this is the
name that will appear on the stock certificate(s)). You may use a
nominee name if appropriate:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	2.
	 	Number of stock certificates to be issued:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	3.
	 	The relationship between the Purchaser of the Shares and the
Registered Holder listed in response to Item 1 above:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	4.
	 	The mailing address, telephone and telecopy number of the Registered
Holder listed in response to Item 1 above:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	5.
	 	The Tax Identification Number (or, if an individual, the Social
Security Number) of the Registered Holder listed in response to Item 1
above:	 	 
	 
	 	 	 	 

 

 

EXHIBIT C-1

FORM OF OPINION OF COMPANY COUNSEL

	1.	 	The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of California, with corporate power and authority
to own, lease and operate its properties and to carry on its business as, to our
knowledge, it is now conducted.
	 
	2.	 	Each of Yes! Solar Inc., and Yes! Construction Services, Inc., and SPIC, Inc.
(the “U.S. Subsidiaries”) is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of California, with corporate power
and authority to own, lease and operate its properties and to carry on its business as,
to our knowledge, it is now conducted.
	 
	3.	 	The Company has all necessary corporate power and authority to execute and
deliver the Transaction Documents, to perform its obligations thereunder, to issue the
Shares and to consummate the other transactions contemplated thereby.
	 
	4.	 	Each of the Transaction Documents has been duly authorized, executed and
delivered by the Company and, assuming the due authorization, execution and delivery
thereof by all parties thereto other than the Company, constitutes a valid and binding
agreement of the Company, enforceable against the Company in accordance with its terms.
	 
	5.	 	The Company has all necessary corporate power and authority to issue and
deliver the Shares. The Shares have been duly authorized, and, when issued and
delivered to the Purchasers and paid for by the Purchasers in accordance with the terms
of the Purchase Agreement, and assuming that the representations made by each of the
Purchasers in the Transaction Documents are true and correct as of the dates thereof
and the date of issuance of the Shares, the Shares will be duly and validly issued,
fully paid and nonassessable. Except as set forth in Schedule ___ to the
Disclosure Schedules of the Purchase Agreement, none of the Shares will be issued in
violation of any statutory or, to our knowledge, contractual preemptive or other
similar rights to subscribe for or purchase securities of the Company upon the issuance
and sale thereof.
	 
	6.	 	The execution and delivery of the Transaction Documents by the Company, the
performance by the Company of its obligations thereunder and the issuance and sale of
the Shares (i) will not result in any violation of the provisions of the Charter or
By-laws of the Company; (ii) to our knowledge, will not constitute a breach of, or
default under, or result in the creation or imposition of any security interest,
mortgage, pledge, lien, charge, encumbrance or adverse claim upon any property or
assets of the Company, pursuant to any material agreement filed as an exhibit to the
SEC Reports, including, without limitation, under the Purchase Agreement; (iii) to our
knowledge, will not result in any violation of any federal or California law or any
administrative or court decree, applicable to the Company; or (iv) to our knowledge,
will not require any consent, approval, authorization or other order of, or
registration or filing with, any federal or state court or other governmental or
regulatory authority or agency, except (i) with respect to the transactions
contemplated by the Purchase Agreement as may be required under the Securities Act and
the Exchange Act, (ii) the filing of Form D with the Commission; (iii) as required by
the state securities or “blue sky” laws as to which we express no opinion and (iv) for
those which will be obtained prior to closing or for which, to our knowledge, the
failure to obtain could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

 

	7.	 	Assuming the accuracy of the representations and warranties of the Company, the
Purchasers contained in the Purchase Agreement and the compliance of such parties with
the agreements set forth therein (other than Section 3.1(n) of the Purchase Agreement),
it is not necessary, in connection with the issuance and sale of any of the Shares as
of the date hereof, in the manner contemplated by Transaction Documents, to register
the issuance of any of the Shares under the Securities Act.
	 
	8.	 	Based on the Company’s certifications as to the use of proceeds from the sale
of the Shares, the Company is not, and after receipt of payment for the Shares will not
be, an “investment company” within the meaning of the Investment Company Act.
	 
	9.	 	To our knowledge, the Company owns directly all of the capital stock of each
U.S. Subsidiary.

 

 

EXHIBIT C-2

FORM OF OPINION OF PRC COUNSEL

	1.	 	IAS Electronics (Shenzhen), Ltd (“IAS Shenzhen”) is duly formed and validly existing under
PRC Laws. To the best of our knowledge, it is not in default of any registration, filing or
licensing requirements under the PRC Laws. IAS Shenzhen has passed the joint annual
inspection conducted by the relevant authorities in China in 2007 for the year of 2006. To the
best of our knowledge, at present, none of the businesses, activities of IAS Shenzhen is
unauthorized or exceeds the business scope of its business licenses.
	 
	2.	 	All of the registered capital of IAS Shenzhen have been duly and validly authorized, fully
paid and non-assessable and are owned directly by International Assembly Solutions Limited
(Hong Kong), a company organized under the laws of Hong Kong Special Administrative Region,
free and clear of all liens, encumbrances, equities or claims.
	 
	3.	 	To the best of our knowledge, we do not know of any PRC legal or governmental proceedings
pending or threatened to which the Company or any of its Chinese subsidiaries is a party or to
which any of the properties of the Company or any of its Chinese subsidiaries is subject that
are required to be described in the SEC Reports of the Company and are not so described.

 

 

EXHIBIT C-3

FORM OF OPINION OF HONG KONG COUNSEL

	1.	 	International Assembly Solutions Limited (Hong Kong), a company organized under the laws of
Hong Kong (the “IAS HK”), has been duly incorporated and is validly existing under the laws of
Hong Kong, with corporate power and authority to own its properties and conduct its business
currently conducted and as described in the SEC Reports of the Company. All of the issued
share capital of IAS HK has been duly authorized and validly issued and is owned directly by
the Company, free and clear of all liens, encumbrances, equities or claims.
	 
	2.	 	All dividends or other distributions payable with respect to the shares of IAS HK may, under
the current laws and regulations of Hong Kong, be paid in the lawful currency of Hong Kong and
may be converted into U.S. dollars that may be freely transferred out of Hong Kong.
	 
	3.	 	After due inquiry, we are not aware of any legal or governmental proceedings pending or
threatened in Hong Kong to which the Company or any of its Chinese or Hong Kong subsidiaries
is a party or to which any of the properties of the Company or any of its Chinese or Hong Kong
subsidiaries is subject that are required to be described in the SEC Reports of the Company
and are not so described.

 

 

EXHIBIT D

FORM OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

As of September ___, 2009

Computershare Trust Co.

[Address]

[Address]

Attn:                     

Ladies and Gentlemen:

           Reference is made to that certain Securities Purchase Agreement, dated as of September
___, 2009 (the “Agreement”), by and among Solar Power, Inc., a California corporation (the
“Company”), and the purchasers named on the signature pages thereto (collectively, and including
permitted transferees, the “Holders”), pursuant to which the Company is issuing to the Holders
shares (the “Shares”) of Common Stock of the Company, par value $0.0001 per share (the “Common
Stock”).

           This letter shall serve as our irrevocable authorization and direction to you (provided
that you are the transfer agent of the Company at such time and the conditions set forth in this
letter are satisfied), subject to any stop transfer instructions that we may issue to you from time
to time, if any, to issue certificates representing shares of Common Stock upon transfer or resale
of the Shares.

           You acknowledge and agree that so long as you have received (a) written confirmation from the
Company’s legal counsel that either (1) a registration statement covering resales of the Shares has
been declared effective by the Securities and Exchange Commission (the “Commission”) under the
Securities Act of 1933, as amended (the “Securities Act”), or (2) the Shares have been sold in
conformity with Rule 144 under the Securities Act (“Rule 144”) or are eligible for sale under Rule
144, without the requirement for the Company to be in compliance with the current public
information required under Rule 144 as to such securities and without volume or manner-of-sale
restrictions and (b) if applicable, a copy of such registration statement, then, unless otherwise
required by law, within three (3) Trading Days of your receipt of a notice of transfer or a
legended certificate representing Shares (endorsed or with stock powers attached, signatures
guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer), and an
opinion of counsel to the extent required, you shall issue the certificates representing the Shares
registered in the names of such Holders or transferees, as the case may be, and such certificates
shall not bear any legend restricting transfer of the Shares thereby and should not be subject to
any stop-transfer restriction; provided, however, that if such Shares are not registered for resale
under the Securities Act or able to be sold under Rule 144 without the requirement for the Company
to be in compliance with the current public information required under Rule 144 as to such
securities and without volume or manner-of-sale restrictions, then the certificates for such Shares
shall bear the following legend:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A)
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OR (B) 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 OR BLUE SKY LAWS AS EVIDENCED

 

 

BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO
RULE 144 UNDER THE SECURITIES ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

           A form of written confirmation from the Company’s outside legal counsel that a
registration statement covering resales of the Shares has been declared effective by the Commission
under the Securities Act is attached hereto as Annex I.

           Please be advised that the Holders are relying upon this letter as an inducement to
enter into the Agreement and, accordingly, each Holder is a third party beneficiary to these
instructions.

           Please execute this letter in the space indicated to acknowledge your agreement to act
in accordance with these instructions.

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	SOLAR POWER, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Acknowledged and Agreed:

COMPUTERSHARE TRUST CO.

	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:

	 	 

	 	 
	 

	 	 

	 	 

Date: September ___, 2009

 

 

Annex I

FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT

   

Computershare Trust Co.

[Address]

[Address]

Attn:                     

        
  Re: Solar Power, Inc.

Ladies and Gentlemen:

              We are counsel to Solar Power, Inc., a California corporation (the “Company”), and
have represented the Company in connection with that certain Securities Purchase Agreement, dated
as of September ___, 2009, entered into by and among the Company and the purchasers named therein
(collectively, the “Purchasers”) pursuant to which the Company issued to the Purchasers shares of
the Company’s common stock, $0.0001 par value per share (the “Common Stock”). Pursuant to that
certain Registration Rights Agreement of even date, the Company agreed to register the resale of
the Common Stock (collectively, the “Registrable Securities”), under the Securities Act of 1933, as
amended (the “Securities Act”). In connection with the Company’s obligations under the Registration
Rights Agreement, on                     , 2009, the Company filed a Registration Statement
on [Form S-1][Form S-3] (File No. 333-                    ) (the “Registration Statement”)
with the Securities and Exchange Commission (the “Commission”) relating to the Registrable
Securities which names each of the Purchasers as a selling stockholder thereunder.

             In connection with the foregoing, we advise you that a member of the Commission’s
staff has advised us by telephone that the Commission has entered an order declaring the
Registration Statement effective under the Securities Act at ___ [a.m.][p.m.] on                     , ___,
and we have no knowledge, after telephonic inquiry of a member of the staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that purpose are pending
before, or threatened by, the Commission and the Registrable Securities are available for resale
under the Securities Act pursuant to the Registration Statement.

           This letter shall serve as our standing notice to you that the Common Stock may be
freely transferred by the Purchasers pursuant to the Registration Statement. You need not require
further letters from us to effect any future legend-free issuance or reissuance of shares of Common
Stock to the Purchasers or the transferees of the Purchasers, as the case may be, as contemplated
by the Company’s Irrevocable Transfer Agent Instructions dated September ___, 2009, provided at the
time of such reissuance, the Company has not otherwise notified you that the Registration Statement
is unavailable for the resale of the Registrable Securities. This letter shall serve as our
standing instructions with regard to this matter.

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	Weintraub Genshlea Chediak Law Corporation	 	 
	 
	 	 	 	 	 	 
	 
	 	By:	 	 	 	 
	 
	 	 	 	 

	 	 

 

 

EXHIBIT E

FORM OF SECRETARY’S CERTIFICATE

The undersigned hereby certifies that he is the duly elected, qualified and acting Secretary of
Solar Power, Inc., a California corporation (the “Company”), and that as such he is authorized to
execute and deliver this certificate in the name and on behalf of the Company and in connection
with the Securities Purchase Agreement, dated as of September ___, 2009, by and among the Company
and the investors party thereto (the “Securities Purchase Agreement”), and further certifies in his
official capacity, in the name and on behalf of the Company, the items set forth below.
Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the
Securities Purchase Agreement.

	1.	 	Attached hereto as Exhibit A is a true, correct and complete copy of the resolutions
duly adopted by the Board of Directors of the Company or a duly authorized Committee of the
Board of Directors of the Company at a meeting of the Board of Directors or Committee held on
                    , 2009. Such resolutions have not in any way been amended, modified, revoked or
rescinded, have been in full force and effect since their adoption to and including the date
hereof and are now in full force and effect.
	 
	2.	 	Attached hereto as Exhibit B is a true, correct and complete copy of the Certificate
of Incorporation of the Company, together with any and all amendments thereto currently in
effect, and no action has been taken to further amend, modify or repeal such Certificate of
Incorporation, the same being in full force and effect in the attached form as of the date
hereof.
	 
	3.	 	Attached hereto as Exhibit C is a true, correct and complete copy of the Bylaws of
the Company and any and all amendments thereto currently in effect, and no action has been
taken to further amend, modify or repeal such Bylaws, the same being in full force and effect
in the attached form as of the date hereof.
	 
	4.	 	Each person listed below has been duly elected or appointed to the position(s) indicated
opposite his name and is duly authorized to sign the Securities Purchase Agreement and each of
the Transaction Documents on behalf of the Company, and the signature appearing opposite such
person’s name below is such person’s genuine signature.

	 	 	 	 	 
	Name	 	Position	 	Signature
	 
	 	 	 	 
	Stephen C. Kircher
	 	Chief Executive Officer	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Jeff Winzeler
	 	Chief Financial Officer	 	 
	 
	 	 	 	 

IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this ___ day of September,
2009.

              
              
             
             

Secretary

 

 

I, Stephen C. Kircher, Chief Executive Officer, hereby certify that Alan M. Lefko is the duly
elected, qualified and acting Secretary of the Company and that the signature set forth above is
his true signature.

              
              
             
             

Chief Executive Officer

 

 

EXHIBIT A

Resolutions

 

 

EXHIBIT B

Certificate of Incorporation

 

 

EXHIBIT C

Bylaws

 

 

EXHIBIT F

FORM OF OFFICER’S CERTIFICATE

The undersigned, the Chief Executive Officer of Solar Power, Inc., a California corporation (the
“Company”), pursuant to Section 5.1(i) of the Securities Purchase Agreement, dated as of September
___, 2009, by and among the Company and the investors signatory thereto (the “Securities Purchase
Agreement”), hereby represents, warrants and certifies as follows (capitalized terms used but not
otherwise defined herein shall have the meaning set forth in the Securities Purchase Agreement):

	 	1.	 	The representations and warranties of the Company contained in the Securities
Purchase Agreement are 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 date hereof, as though made on and as of such date,
except for such representations and warranties that speak as of a specific date.
	 
	 	2.	 	The Company has performed, satisfied and complied in all material respects with
all covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by it at or prior to the date hereof.

IN WITNESS WHEREOF, the undersigned has executed this certificate this ___ day of September, 2009.

              
              
             
             
Chief Executive Officer

 

 

EXHIBIT G

WIRE INSTRUCTIONS

JPMorgan Chase Bank

ABA # 021000021

Account No.: 806026803

Account Name: Deutsche Bank/Solar Power Escrow

 

 

ADDENDUM NO. 1 TO SECURITIES PURCHASE AGREEMENT

This Addendum No. 1 to the Securities Purchase Agreement (the “Addendum”) is made as of September
___, 2009 by and between Solar Power, Inc., a California corporation (the “Company”), and the
Purchasers dated as of the date hereof by and among the Company and the Purchasers (the
“Agreement”). Capitalized terms not specifically defined hereunder shall have the meanings
assigned to them under the Agreement.

1. Company Representations. A new Company representation as hereby added to the Agreement at
Section 3.1(jj), and shall read in its entirety as follows:

	 	(jj)	 	Based upon prior operations and review of its reports, the Company
believes that it is not a “shell company” as that term is defined in Rule 405.

2. Removal of Legends. For clarity, the Company confirms that it will pay transfer agent and DTC
fees for legend removal.

3. Additional Issuance of Securities. Section 4.14(i)(3) is amended so that item (iii) therein
shall require that any bona fide firm commitment underwritten offering with a nationally recognized
underwriter which generates gross proceeds to the Company in excess of $50,000,000 (other than
“equity lines”), in order to be excluded securities.

4. Per Share Purchase Price Protection. A new Section 4.16 is hereby added to the Agreement to
provide for adjustment in purchase price in the event the Company sells securities within a twelve
month period from the Closing at a per share price that is lower than the per share price paid by
the Purchasers pursuant to the Agreement. Section 4.16 shall read in its entirety as follows:

     "4.16 Anti-dilution.

     (a) If at any time after the Closing and prior to the first anniversary of the Closing,
the Company sells or issues or agrees to sell or issue Dilutive Shares (as defined below) to
any person or entity for consideration per share that is less than the Trigger Price (as
defined below) in effect immediately prior to such issuance or sale (each, a “Dilutive
Issuance”), the Company shall concurrently, at the option of the Company, either (A) issue
to Purchaser for no consideration a number of shares of Common Stock equal to (i)
Purchaser’s Adjusted Shares (as defined below) less (ii) Purchaser’s Original Shares (as
defined below) (the “Anti-Dilution Shares”), or (B) pay to Purchaser an amount in cash equal
to the product of (x) an amount equal to the Trigger Price immediately prior to such
Dilutive Issuance less the consideration per share paid in respect of such Dilutive Shares
multiplied by (y) Purchaser’s Original Shares. For purposes of this Section 4.16, such shares shall be allocated a portion of the consideration of the initial issuance of Common
Stock pursuant to the Agreement. No fractional shares of Common Stock shall be issued
pursuant to this Section 4.16. The number of shares of Common Stock issued shall be rounded
up or down to the nearest integral number of whole shares of Common Stock. For the purposes
of this Section 4.16, whenever Dilutive Shares are issued for a consideration other than
cash, either in whole or in part, the consideration per share paid in respect of such
Dilutive Shares shall be the fair market

1

 

value of such consideration as established in good faith by resolution of the Company’s
board of directors.

     (b) Definitions. For the purposes of this Section 4.16, for each Dilutive
Issuance, the following terms shall have the following meanings:

     (i) “Adjusted Shares” means the number of shares of Common Stock equal to the product
of (x) the Purchaser’s Original Shares, multiplied by (y) the quotient of (1) the Trigger
Price in effect immediately prior to a Dilutive Issuance, divided by (2) the Trigger Price
in effect immediately after such Dilutive Issuance.

     (ii) “Common Equivalent Shares” means shares of Common Stock issuable upon conversion,
exercise or exchange of Convertible Securities.

     (iii) “Convertible Securities” for purposes of this Section 4.16 only means any stock
or securities convertible into or exercisable or exchangeable for Common Stock, including
rights, warrants or options to subscribe for or purchase Common Stock or Convertible
Securities.

     (iv) “Dilutive Shares” means shares of Common Stock or Common Equivalent Shares issued
and sold at a price per share less than the Trigger Price after the Closing and prior to the
first anniversary of the Closing other than:

     (A) shares of Common Stock issued upon conversion of any warrant or option in
accordance with its terms, which warrant or option was outstanding as of the Closing, and
including warrants to be issued to the placement agents in connection with the sale of the
Securities;

     (B) shares of Common Stock and options to purchase Common Stock granted pursuant to the
Company’s 2006 Equity and Incentive Plan, and shares of Common Stock issued upon exercise of
any such options;

     (C) shares of Common Stock or Convertible Securities issued upon exercise, conversion
or exchange of any Convertible Securities existing as of the Closing;

     (D) shares of Common Stock (and/or Convertible Securities and the shares of Common
Stock issuable upon conversion, exchange or exercise of such Convertible Securities) issued
in connection with any stock split, stock dividend, reverse stock split, recapitalization,
reorganization or other distribution of shares of Common Stock (each, a “Recapitalization
Event”) that does not affect the relative economic interests or rights of holders of Common
Stock; and/or

     (E) Common Stock or Convertible Securities issued as part of any offering registered
under the Securities Act (“Public Offering”).

2

 

     For purposes of this Clause (iv), Common Equivalent Shares are deemed to be issued and
sold when Convertible Securities are issued and sold, and the price per share at which such
Common Equivalent Shares are deemed to be issued and sold shall equal the initial
conversion, exercise, subscription, purchase or exchange price per share, as the case may
be, of the Common Stock underlying such Convertible Securities, rights (as set forth in the
instrument relating thereto without regard to any provisions contained therein designed to
protect against dilution).

     (v) “Original Shares” means (x) with respect to the first Dilutive Issuance, the total
number of Common Shares acquired by Purchaser pursuant to the Agreement (as adjusted for any
Recapitalization Event) and (y) with respect to each Dilutive Issuance thereafter, the total
number of Adjusted Shares immediately prior to such Dilutive Issuance (as adjusted for any
Recapitalization Event). For the avoidance of doubt, any Common Shares acquired by
Purchaser or an affiliate of Purchaser from either the Company or any other stockholder of
the Company under any contract other than this Agreement shall in no event be included in
the number of Original Shares under this Section 4.16 or any adjustment pursuant to this
Section 4.16.

     (vi) “Trigger Price” shall initially mean (A) $1.00 per share (as adjusted for any
Recapitalization Event). In connection with each Dilutive Issuance, the Trigger Price shall
be adjusted downwards to equal the lowest price per Dilutive Share paid for the Dilutive
Shares issued or sold in such Dilutive Issuance. The Trigger Price shall also be
proportionately adjusted from time to time for any Recapitalization Event pursuant to which
securities of the Company are issued with respect to the Original Shares and/or Adjusted
Shares.

     (c) Notwithstanding anything herein to the contrary, if the Company has not obtained
shareholder approval, if required by the applicable rules and regulations of the principal
Trading Market (or any successor entity) upon which the Company’s shares of Common Stock are
listed or quoted, then the Company may not issue under this Section 4.16, in the aggregate,
in excess of (1) 19.999% of the number of shares of Common Stock outstanding as of the date
hereof, less (2) the sum of (a) the Common Shares issued at the Closing and any shares of
Common Stock issued at the closing of a subsequent financing plus (b) any Anti-Dilution
Shares (such number of shares, the “Issuable Maximum”). Each Purchaser shall be entitled to
a portion of the Issuable Maximum equal to the quotient obtained by dividing (x) the
aggregate number of Common Shares issued and sold to such Purchaser on the Closing by (y)
the aggregate number of shares of Common Stock issued and sold by the Company on the closing
of the subsequent financing. Any remainder over the Issuable Maximum shall be paid by the
Company in cash or other consideration acceptable to the Purchaser.

     (d) The Purchasers agree that any term or provision of the Agreement or this Addendum
may be modified by consent of those Purchasers who hold a majority of the outstanding Common
Shares issued pursuant to the Agreement at the time of such consent, which modification
shall be binding on all Purchasers.

3

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