Document:

exv10w1

 

Exhibit 10.1

COMMON STOCK PURCHASE AGREEMENT

by and between

KINGSBRIDGE CAPITAL LIMITED

and

MICROMET, INC.

dated as of August 30, 2006

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I            DEFINITIONS
	 	 	2	 
	Section 1.01. “Blackout Amount”
	 	 	2	 
	Section 1.02. “Blackout Shares”
	 	 	2	 
	Section 1.03. “Business Day”
	 	 	2	 
	Section 1.04. “Bylaws”
	 	 	2	 
	Section 1.05. “Certificate”
	 	 	2	 
	Section 1.06. “Closing Date”
	 	 	2	 
	Section 1.07. “Commission”
	 	 	2	 
	Section 1.08. “Commission Documents”
	 	 	2	 
	Section 1.09. “Commitment Period”
	 	 	2	 
	Section 1.10. “Common Stock”
	 	 	2	 
	Section 1.11. “Condition Satisfaction Date”
	 	 	2	 
	Section 1.12. “Consolidated Subsidiary”
	 	 	2	 
	Section 1.13. “Convertible Security”
	 	 	2	 
	Section 1.14. “Conversion Price”
	 	 	2	 
	Section 1.15. “Damages”
	 	 	3	 
	Section 1.16. “Draw Down”
	 	 	3	 
	Section 1.17. “Draw Down Amount”
	 	 	3	 
	Section 1.18. “Draw Down Discount Price”
	 	 	3	 
	Section 1.19. “Draw Down Notice”
	 	 	3	 
	Section 1.20. “Draw Down Pricing Period”
	 	 	3	 
	Section 1.21. “DTC”
	 	 	3	 
	Section 1.22. “Effective Date”
	 	 	3	 
	Section 1.23. “Exchange Act”
	 	 	3	 
	Section 1.24. “Excluded Merger or Sale”
	 	 	3	 
	Section 1.25. “Knowledge”
	 	 	3	 
	Section 1.26. “LIBOR”
	 	 	3	 
	Section 1.27. “Make Whole Amount”
	 	 	4	 
	Section 1.28. “Market Capitalization”
	 	 	4	 
	Section 1.29. “Material Adverse Effect”
	 	 	4	 
	Section 1.30. “Maximum Commitment Amount”
	 	 	4	 
	Section 1.31. “Maximum Draw Down Amount”
	 	 	4	 
	Section 1.32. “NASD”
	 	 	4	 

 

TABLE OF CONTENTS
(Continued)

	 	 	 	 	 
	 	 	Page	 
	Section 1.33. “Permitted Transaction”
	 	 	4	 
	Section 1.34. “Person”
	 	 	4	 
	Section 1.35. “Principal Market”
	 	 	5	 
	Section 1.36. “Prohibited Transaction”
	 	 	5	 
	Section 1.37. “Prospectus”
	 	 	5	 
	Section 1.38. “Registrable Securities”
	 	 	5	 
	Section 1.39. “Registration Rights Agreement”
	 	 	5	 
	Section 1.40. “Registration Statement”
	 	 	5	 
	Section 1.41. “Regulation D”
	 	 	5	 
	Section 1.42. “Section4(2)”
	 	 	5	 
	Section 1.43. “Securities Act”
	 	 	5	 
	Section 1.44. “Settlement Date”
	 	 	5	 
	Section 1.45. “Shares”
	 	 	5	 
	Section 1.46. “Trading Day”
	 	 	5	 
	Section 1.47. “VWAP”
	 	 	6	 
	Section 1.48. “Warrant”
	 	 	6	 
	Section 1.49. “Warrant Shares”
	 	 	6	 
	ARTICLE II            PURCHASE AND SALE OF COMMON STOCK
	 	 	6	 
	Section 2.01. Purchase and Sale of Stock
	 	 	6	 
	Section 2.02. Closing
	 	 	6	 
	Section 2.03. Registration Statement and Prospectus
	 	 	6	 
	Section 2.04. Warrant
	 	 	6	 
	Section 2.05. Blackout Shares
	 	 	6	 
	ARTICLE III            DRAW DOWN TERMS
	 	 	6	 
	Section 3.01. Draw Down Notice
	 	 	6	 
	Section 3.02. Number of Shares
	 	 	7	 
	Section 3.03. Limitation on Draw Downs
	 	 	7	 
	Section 3.04. Trading Cushion
	 	 	7	 
	Section 3.05. Settlement
	 	 	7	 
	Section 3.06. Delivery of Shares; Payment of Draw Down Amount
	 	 	7	 
	Section 3.07. Failure to Deliver Shares
	 	 	8	 
	ARTICLE IV            REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	 	 	8	 

ii

 

TABLE OF CONTENTS
(Continued)

	 	 	 	 	 
	 	 	Page	 
	Section 4.01. Organization, Good Standing and Power
	 	 	8	 
	Section 4.02. Authorization; Enforcement
	 	 	9	 
	Section 4.03. Capitalization
	 	 	9	 
	Section 4.04. Issuance of Shares
	 	 	10	 
	Section 4.05. No Conflicts
	 	 	10	 
	Section 4.06. Commission Documents, Financial Statements
	 	 	10	 
	Section 4.07. No Material Adverse Change
	 	 	11	 
	Section 4.08. No Undisclosed Liabilities
	 	 	11	 
	Section 4.09. No Undisclosed Events or Circumstances
	 	 	11	 
	Section 4.10. Actions Pending
	 	 	11	 
	Section 4.11. Compliance with Law
	 	 	12	 
	Section 4.12. Certain Fees
	 	 	12	 
	Section 4.13. Disclosure
	 	 	12	 
	Section 4.14. Material Non-Public Information
	 	 	12	 
	Section 4.15. Exemption from Registration; Valid Issuances
	 	 	12	 
	Section 4.16. No General Solicitation or Advertising in Regard to this Transaction 
	 	 	13	 
	Section 4.17. No Integrated Offering
	 	 	13	 
	Section 4.18. Acknowledgment Regarding Investor’s Purchase of Shares
	 	 	13	 
	ARTICLE V            REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR
	 	 	13	 
	Section 5.01. Organization and Standing of the Investor
	 	 	13	 
	Section 5.02. Authorization and Power
	 	 	13	 
	Section 5.03. No Conflicts
	 	 	14	 
	Section 5.04. Financial Capability
	 	 	14	 
	Section 5.05. Information
	 	 	14	 
	Section 5.06. Selling Restrictions
	 	 	15	 
	Section 5.07. Statutory Underwriter Status
	 	 	15	 
	Section 5.08. Not an Affiliate
	 	 	15	 
	Section 5.09. Manner of Sale
	 	 	15	 
	Section 5.10. Prospectus Delivery
	 	 	15	 
	ARTICLE VI            COVENANTS OF THE COMPANY
	 	 	16	 
	Section 6.01. Securities
	 	 	16	 
	Section 6.02. Reservation of Common Stock
	 	 	16	 

iii

 

TABLE OF CONTENTS
(Continued)

	 	 	 	 	 
	 	 	Page	 
	Section 6.03. Registration and Listing
	 	 	16	 
	Section 6.04. Registration Statement
	 	 	16	 
	Section 6.05. Compliance with Laws
	 	 	17	 
	Section 6.06. Reporting Requirements
	 	 	17	 
	Section 6.07. Other Financing
	 	 	17	 
	Section 6.08. Prohibited Transactions
	 	 	18	 
	Section 6.09. Corporate Existence
	 	 	18	 
	Section 6.10. Non-Disclosure of Non-Public Information
	 	 	18	 
	Section 6.11. Notice of Certain Events Affecting Registration; Suspension of Right
to Request a Draw Down
	 	 	19	 
	Section 6.12. Amendments to the Registration Statement
	 	 	19	 
	Section 6.13. Prospectus Delivery
	 	 	19	 
	ARTICLE VII            CONDITIONS TO THE OBLIGATION OF THE INVESTOR TO ACCEPT A DRAW DOWN
	 	 	19	 
	Section 7.01. Accuracy of the Company’s Representations and Warranties
	 	 	20	 
	Section 7.02. Performance by the Company
	 	 	20	 
	Section 7.03. Compliance with Law
	 	 	20	 
	Section 7.04. Effective Registration Statement
	 	 	20	 
	Section 7.05. No Knowledge
	 	 	20	 
	Section 7.06. No Suspension
	 	 	20	 
	Section 7.07. No Injunction
	 	 	20	 
	Section 7.08. No Proceedings or Litigation
	 	 	20	 
	Section 7.09. Sufficient Shares Registered for Resale
	 	 	21	 
	Section 7.10. Warrant
	 	 	21	 
	Section 7.11. Opinion of Counsel
	 	 	21	 
	Section 7.12. Accuracy of Investor’s Representation and Warranties
	 	 	21	 
	Section 7.13. Payment of Fees
	 	 	21	 
	ARTICLE VIII            TERMINATION
	 	 	21	 
	Section 8.01. Term
	 	 	21	 
	Section 8.02. Other Termination
	 	 	21	 
	Section 8.03. Effect of Termination
	 	 	22	 
	ARTICLE IX            INDEMNIFICATION
	 	 	22	 
	Section 9.01. Indemnification
	 	 	22	 

iv

 

TABLE OF CONTENTS
(Continued)

	 	 	 	 	 
	 	 	Page	 
	Section 9.02. Notification of Claims for Indemnification
	 	 	23	 
	ARTICLE X            MISCELLANEOUS
	 	 	25	 
	Section 10.01. Fees and Expenses
	 	 	25	 
	Section 10.02. Reporting Entity for the Common Stock
	 	 	25	 
	Section 10.03. Brokerage
	 	 	25	 
	Section 10.04. Notices
	 	 	25	 
	Section 10.05. Assignment
	 	 	27	 
	Section 10.06. Amendment; No Waiver
	 	 	27	 
	Section 10.07. Entire Agreement
	 	 	27	 
	Section 10.08. Severability
	 	 	27	 
	Section 10.09. Title and Subtitles
	 	 	28	 
	Section 10.10. Counterparts
	 	 	28	 
	Section 10.11. Choice of Law
	 	 	28	 
	Section 10.12. Specific Enforcement, Consent to Jurisdiction
	 	 	28	 
	Section 10.13. Survival
	 	 	28	 
	Section 10.14. Publicity
	 	 	28	 
	Section 10.15. Further Assurances
	 	 	29	 
	Section 10.16. Absence of Presumption
	 	 	29	 

v

 

COMMON STOCK PURCHASE AGREEMENT

by and between

KINGSBRIDGE CAPITAL LIMITED

and

MICROMET, INC.

dated as August 30, 2006

     This COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) is entered into as of the 30th
day of August, 2006 by and between KINGSBRIDGE CAPITAL LIMITED, an entity organized and existing
under the laws of the British Virgin Islands, whose registered address is Palm Grove House, 2nd
Floor, Road Town, Tortola, British Virgin Islands (the “Investor”) and MICROMET, INC., a
corporation organized and existing under the laws of the State of Delaware (the “Company”).

     WHEREAS, the parties desire that, upon the terms and subject to the conditions and limitations
set forth herein, the Company may issue and sell to the Investor, from time to time as provided
herein, and the Investor shall purchase from the Company, up to $25 million worth of shares of
Common Stock (as defined below); and

     WHEREAS, such investments will be made in reliance upon the provisions of Section 4(2)
(“Section 4(2)”) and Regulation D (“Regulation D”) of the United States Securities
Act of 1933, as amended and the rules and regulations promulgated thereunder (the “Securities
Act”), and/or upon such other exemption from the registration requirements of the Securities
Act as may be available with respect to any or all of the investments in Common Stock to be made
hereunder; and

     WHEREAS, the parties hereto are concurrently entering into a Registration Rights Agreement in
the form of Exhibit A hereto (the “Registration Rights Agreement”) pursuant to which the
Company shall register the Common Stock issued and sold to the Investor under this Agreement and
under the Warrant (as defined below), upon the terms and subject to the conditions and limitations
set forth therein; and

     WHEREAS, in consideration for the Investor’s execution and delivery of, and its performance of
its obligations under, this Agreement, the Company is concurrently issuing to the Investor a
warrant in the form of Exhibit B hereto (the “Warrant”) pursuant to which the Investor may
purchase from the Company up to 285,000 shares of Common Stock, upon the terms and subject to the
conditions and limitations set forth therein;

     NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

     Section 1.01. “Blackout Amount” shall have the meaning assigned to such term in the
Registration Rights Agreement.

     Section 1.02. “Blackout Shares” shall have the meaning assigned to such term in the
Registration Rights Agreement.

     Section 1.03. “Business Day” shall mean any day other than a Saturday, a Sunday or a
day on which banks in New York City, New York are authorized or obligated by executive order to
close.

     Section 1.04. “Bylaws” shall have the meaning assigned to such term in Section 4.03
hereof.

     Section 1.05. “Certificate” shall have the meaning assigned to such term in Section
4.03 hereof.

     Section 1.06. “Closing Date” means the date on which this Agreement is executed and
delivered by the Company and the Investor.

     Section 1.07. “Commission” means the United States Securities Exchange Commission.

     Section 1.08. “Commission Documents” shall have the meaning assigned to such term in
Section 4.06 hereof.

     Section 1.09. “Commitment Period” means the period commencing on the Effective Date
and expiring on the earliest to occur of (i) the date on which the Investor shall have purchased
Shares pursuant to this Agreement for an aggregate purchase price equal to the Maximum Commitment
Amount, (ii) the date this Agreement is terminated pursuant to Article VIII hereof, and (iii) the
date occurring thirty-six (36) months from the Effective Date.

     Section 1.10. “Common Stock” means the common stock of the Company, par value $0.00004
per share.

     Section 1.11. “Condition Satisfaction Date” shall have the meaning assigned to such
term in Article VII hereof.

     Section 1.12. “Consolidated Subsidiary” means any subsidiary that the Company
consolidates in the preparation of its audited consolidated financial statements.

     Section 1.13. “Convertible Security” shall have the meaning assigned to such term in
Section 6.08 hereof.

     Section 1.14. “Conversion Price” shall have the meaning assigned to such term in
Section 6.08 hereof.

2

 

     Section 1.15. “Damages” means any loss, claim, damage, liability, costs and expenses
(including, without limitation, reasonable attorneys’ fees and expenses and costs and reasonable
expenses of expert witnesses and investigation).

     Section 1.16. “Draw Down” shall have the meaning assigned to such term in Section 3.01
hereof.

     Section 1.17. “Draw Down Amount” means the actual amount of a Draw Down paid to the
Company.

     Section 1.18. “Draw Down Discount Price” means (i) 86% of the VWAP on any Trading Day
during a Draw Down Pricing Period when the VWAP equals or exceeds $2.00 but is less than or equal
to $2.50, (ii) 88% of the VWAP on any Trading Day during a Draw Down Pricing Period when the VWAP
exceeds $2.50 but is less than or equal to $4.35, (iii) 90% of the VWAP on any Trading Day during a
Draw Down Pricing Period when the VWAP exceeds $4.35 but is less than or equal to $8.00, (iv) 92%
of the VWAP on any Trading Day during a Draw Down Pricing Period when the VWAP exceeds $8.00 but is
less than or equal to $10.00, or (v) 94% of the VWAP on any Trading Day during a Draw Down Pricing
Period when VWAP exceeds $10.00.

     Section 1.19. “Draw Down Notice” shall have the meaning assigned to such term in
Section 3.01 hereof.

     Section 1.20. “Draw Down Pricing Period” shall mean, with respect to each Draw Down, a
period of eight (8) consecutive Trading Days beginning on the first Trading Day specified in a Draw
Down Notice.

     Section 1.21. “DTC” shall mean the Depository Trust Company, or any successor thereto.

     Section 1.22. “Effective Date” means the first Trading Day immediately following the
date on which the Registration Statement is declared effective by the Commission.

     Section 1.23. “Exchange Act” means the U.S. Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

     Section 1.24. “Excluded Merger or Sale” shall have the meaning assigned to such term
in the Warrant.

     Section 1.25. “Knowledge” with respect to the Company means the actual knowledge of
the President, Chief Executive Officer, Vice President, Business Development, Senior Vice
President, General Counsel and Secretary, Senior Vice President Operations and Acting Chief
Financial Officer, Senior Vice President, Clinical Development, Director, Human Resources, Vice
President, Process Development, Vice President Preclinical Development, Vice President Research and
the Senior Vice President and Chief Scientific Officer or any other Vice President of the Company.

     Section 1.26. “LIBOR” means the offered rate for twelve-month U.S. dollar deposits
that appears on Moneyline Telerate Page 3750 (or such other page as may replace such Moneyline
Telerate Page 3750 for the purpose of displaying comparable rates), as of 11:00 a.m. (London time)
two (2) Business Days prior to the beginning of the relevant period.

3

 

     Section 1.27. “Make Whole Amount” shall have the meaning specified in Section 3.07.

     Section 1.28. “Market Capitalization” means, as of any Trading Day, the product of (i)
the closing sale price of the Common Stock as reported by Bloomberg L.P. using the AQR function and
(ii) the number of outstanding shares of Common Stock of the Company as reported by Bloomberg L.P.
using the DES function.

     Section 1.29. “Material Adverse Effect” means any effect that is not negated,
corrected, cured or otherwise remedied by the Company within a reasonable period of time on the
business, operations, properties or financial condition of the Company and its Consolidated
Subsidiaries that is material and adverse to the Company and such subsidiaries, taken as a whole,
and/or any condition, circumstance, or situation that would prohibit or otherwise interfere with
the ability of the Company to perform any of its obligations under this Agreement, the Registration
Rights Agreement or the Warrant in any material respect; provided, that none of the
following shall constitute a “Material Adverse Effect”: (i) the effects of conditions or events
that are generally applicable to the capital, financial, banking, currency, biotechnology or
pharmaceutical markets, (ii) any changes or effects resulting from the announcement or consummation
of the transactions contemplated by this Agreement, including, without limitation, any changes or
effects associated with any particular Draw Down, and (iii) changes in the market price of the
Common Stock.

     Section 1.30. “Maximum Commitment Amount” means the lesser of (i) $25 million in
aggregate Draw Down Amounts or (ii) 6,251,193 shares of Common Stock (as adjusted for stock splits,
stock combinations, stock dividends, recapitalizations and the like that occur on or after the date
of this Agreement minus the number of Blackout Shares, if any, delivered to the Investor under the
Registration Rights Agreement), provided, however, that the Maximum Commitment
Amount shall not exceed that number of shares of Common Stock which the Company may issue pursuant
to the Agreement and the transactions contemplated herein, without breaching the Company’s
obligations under the rules and regulations of the Principal Market.

     Section 1.31. “Maximum Draw Down Amount” means the lesser of:

     (a) $5 million, or

     (b) (i) if the Company’s Market Capitalization is equal to or greater than $225 million at the
time of the Draw Down, 1.5% of the Company’s Market Capitalization at the time of the Draw Down;
(ii) if the Company’s Market Capitalization is equal to or exceeds $175 million but is less than
$225 million at the time of the Draw Down, 1.25% of the Company’s Market Capitalization at the time
of the Draw Down; (iii) if the Company’s Market Capitalization is equal to or exceeds $62.8 million
but is less than $175 million at the time of the Draw Down, 1% of the Company’s Market
Capitalization at the time of the Draw Down.

     Section 1.32. “NASD” means the National Association of Securities Dealers, Inc.

     Section 1.33. “Permitted Transaction” shall have the meaning assigned to such term in
Section 6.07 hereof.

     Section 1.34. “Person” means any individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including any government or
political subdivision or an agency or instrumentality thereof.

4

 

     Section 1.35. “Principal Market” means the NASDAQ National Market, NASDAQ Global
Market, the NASDAQ Capital Market, the American Stock Exchange or the New York Stock Exchange,
whichever is at the time the principal trading exchange or market for the Common Stock.

     Section 1.36. “Prohibited Transaction” shall have the meaning assigned to such term in
Section 6.08 hereof.

     Section 1.37. “Prospectus” as used in this Agreement means the prospectus in the form
included in the Registration Statement, as supplemented from time to time pursuant to Rule 424(b)
of the Securities Act.

     Section 1.38. “Registrable Securities” means (i) the Shares, (ii) the Warrant Shares,
and (iii) any securities issued or issuable with respect to any of the foregoing by way of
exchange, stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, once issued such securities shall cease to be Registrable Securities when
(w) the Registration Statement has been declared effective by the Commission and such Registrable
Securities have been disposed of pursuant to the Registration Statement, (x) such Registrable
Securities have been sold under circumstances under which all of the applicable conditions of Rule
144 (or any similar provision then in force) under the Securities Act (“Rule 144”) are met,
(y) such time as such Registrable Securities have been otherwise transferred to holders who may
trade such shares without restriction under the Securities Act, and the Company has delivered a new
certificate or other evidence of ownership for such securities not bearing a restrictive legend or
(z) in the opinion of inside or outside counsel to the Company such Registrable Securities may be
sold without registration and without any time, volume or manner limitations pursuant to Rule
144(k) (or any similar provision then in effect) under the Securities Act.

     Section 1.39. “Registration Rights Agreement” shall have the meaning set forth in the
recitals of this Agreement.

     Section 1.40. “Registration Statement” shall have the meaning assigned to such term in
the Registration Rights Agreement.

     Section 1.41. “Regulation D” shall have the meaning set forth in the recitals of this
Agreement.

     Section 1.42. “Section 4(2)” shall have the meaning set forth in the recitals of this
Agreement.

     Section 1.43. “Securities Act” shall have the meaning set forth in the recitals of
this Agreement.

     Section 1.44. “Settlement Date” shall have the meaning assigned to such term in
Section 3.05 hereof.

     Section 1.45. “Shares” means the shares of Common Stock of the Company that are and/or
may be purchased hereunder.

     Section 1.46. “Trading Day” means any day other than a Saturday or a Sunday on which
the Principal Market is open for trading in equity securities.

5

 

     Section 1.47. “VWAP” means the volume weighted average price (the aggregate sales
price of all trades of Common Stock during each Trading Day divided by the total number of shares
of Common Stock traded during such Trading Day) of the Common Stock during any Trading Day as
reported by Bloomberg, L.P. using the AQR function.

     Section 1.48. “Warrant” shall have the meaning set forth in the recitals of this
Agreement.

     Section 1.49. “Warrant Shares” means the shares of Common Stock issuable to the
Investor upon exercise of the Warrant.

ARTICLE II

PURCHASE AND SALE OF COMMON STOCK

     Section 2.01. Purchase and Sale of Stock. Upon the terms and subject to the
conditions set forth in this Agreement, the Company shall, to the extent it elects to make Draw
Downs in accordance with Article III hereof, issue and sell to the Investor and the Investor shall
purchase from the Company Common Stock for an aggregate in Draw Down Amounts of up to the Maximum
Commitment Amount, consisting of purchases based on Draw Downs in accordance with Article III
hereof.

     Section 2.02. Closing. In consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement, the Company agrees
to issue and sell to the Investor, and the Investor agrees to purchase from the Company, that
number of the Shares to be issued in connection with each Draw Down. The execution and delivery of
this Agreement (the “Closing”) shall take place on August 30, 2006 (the “Closing
Date”). Each party shall deliver at or prior to the Closing all documents, instruments and
writings required to be delivered at the Closing by such party pursuant to this Agreement.

     Section 2.03. Registration Statement and Prospectus. The Company shall prepare and
file with the Commission the Registration Statement (including the Prospectus) in accordance with
the provisions of the Securities Act and the Registration Rights Agreement.

     Section 2.04. Warrant. On the Closing Date, the Company shall issue and deliver the
Warrant to the Investor.

     Section 2.05. Blackout Shares. The Company shall deliver any Blackout Amount or issue
and deliver any Blackout Shares to the Investor in accordance with Section 1(e) of the Registration
Rights Agreement.

ARTICLE III

DRAW DOWN TERMS

     Subject to the satisfaction of the conditions hereinafter set forth in this Agreement, the
parties agree as follows:

     Section 3.01. Draw Down Notice. During the Commitment Period, the Company may, in its
sole discretion, issue a Draw Down Notice (defined below) specifying the dollar amount of Shares it
elects to sell to the Investor (each such election a “Draw Down”) up to a Draw Down

6

 

Amount
equal to the Maximum Draw Down Amount, which Draw Down the Investor will be obligated to accept.
The Company shall inform the Investor in writing via e-mail to the addresses set forth in Section
10.04 and via facsimile transmission to the number set forth in Section 10.04, with a copy to the
Investor’s counsel, as to such Draw Down Amount before commencement of trading on the first Trading
Day of the related Draw Down Pricing Period (the “Draw Down Notice”). In addition to the
Draw Down Amount, each Draw Down Notice shall designate the first Trading Day of the Draw Down
Pricing Period. In no event shall any Draw Down Amount exceed the Maximum Draw Down Amount. Each
Draw Down Notice shall be accompanied by a certificate, signed by the Chief Executive Officer or
Chief Financial Officer and dated as of the date of such Draw Down Notice, in the form of
Exhibit C hereof.

     Section 3.02. Number of Shares. Subject to Section 3.06(b), the number of Shares to
be issued in connection with each Draw Down shall be equal to the sum of the number of shares
issuable on each Trading Day of the Draw Down Pricing Period. Subject to Section 3.06(b), the
number of Shares issuable on a Trading Day during a Draw Down Pricing Period shall be equal to the
quotient of one eighth (1/8th) of the Draw Down Amount divided by the Draw Down Discount
Price for such Trading Day.

     Section 3.03. Limitation on Draw Downs. Only one Draw Down shall be permitted for
each Draw Down Pricing Period.

     Section 3.04. Trading Cushion. Unless the parties agree in writing otherwise, there
shall be a minimum of ten (10) Trading Days between the expiration of any Draw Down Pricing Period
and the beginning of the next succeeding Draw Down Pricing Period.

     Section 3.05. Settlement. Subject to Section 3.06(b), the number of Shares purchased
by the Investor in any Draw Down shall be determined and settled on two separate dates. Shares
purchased by the Investor during the first four Trading Days of any Draw Down Pricing Period shall
be determined and settled no later than the sixth Trading Day of such Draw Down Pricing Period.
Shares purchased by the Investor during the second four Trading Days of any Draw Down Pricing
Period shall be determined and settled no later than the second Trading Day after the last Trading
Day of such Draw Down Pricing Period. Each date on which settlement of the purchase and sale of
Shares occurs hereunder being referred to as a “Settlement Date.” The Investor shall
provide the Company with delivery instructions for the Shares to be issued at each Settlement Date
at least two Trading Days in advance of such Settlement Date. The number of Shares actually issued
shall be rounded to the nearest whole number of Shares.

     Section 3.06. Delivery of Shares; Payment of Draw Down Amount.

     (a) On each Settlement Date, the Company shall deliver the Shares purchased by the Investor to
the Investor or its designees exclusively via book-entry through the DTC to an
account designated by the Investor, and upon receipt of the Shares, the Investor shall cause
payment therefor to be made to the Company’s designated account by wire transfer of immediately
available funds, if the Shares are received by the Investor no later than 12:00 p.m. (Eastern
Time), or next day available funds, if the Shares are received thereafter. Upon the written
request of the Company, the Investor will cause its banker to confirm to the Company that the
Investor has provided irrevocable instructions to cause payment for the Shares to be made as set
forth above, upon confirmation by such banker that the Shares have been delivered through the DTC
in unrestricted form.

7

 

     (b) For each Trading Day during a Draw Down Pricing Period that the VWAP is less than the
greater of (i) 85% of the Closing Price of the Company’s Common Stock on the Trading Day
immediately preceding the commencement of such Draw Down Pricing Period, or (ii) $2.00, such
Trading Day shall not be used in calculating the number of Shares to be issued in connection with
such Draw Down, and the Draw Down Amount in respect of such Draw Down Pricing Period shall be
reduced by one eighth (1/8th) of the initial Draw Down Amount specified in the Draw Down
Notice. If trading in the Company’s Common Stock is suspended for any reason for more than three
(3) consecutive or non-consecutive hours during any Trading Day during a Draw Down Pricing Period,
such Trading Day shall not be used in calculating the number of Shares to be issued in connection
with such Draw Down, and the Draw Down Amount in respect of such Draw Down Pricing Period shall be
reduced by one eighth (1/8th) of the initial Draw Down Amount specified in the Draw Down Notice.

     Section 3.07. Failure to Deliver Shares. If the Company fails, on any Settlement
Date, to take all actions within its reasonable control to cause the delivery of the Shares
purchased by the Investor, and such failure is not cured within two (2) Trading Days following such
Settlement Date, the Company shall pay to the Investor on demand in cash by wire transfer of
immediately available funds to an account designated by the Investor the “Make Whole
Amount;” provided, however, that in the event that the Company is prevented
from delivering Shares in respect of any such Settlement Date in a timely manner by any fact or
circumstance that is reasonably within the control of, or directly attributable to, the Investor,
then such two (2) Trading Day period shall be automatically extended until such time as such fact
or circumstance is cured. As used herein, the Make Whole Amount shall be an amount equal to the
sum of (i) the Draw Down Amount actually paid by the Investor in respect of such Shares plus (ii)
an amount equal to the actual loss suffered by the Investor in respect of sales to subsequent
purchasers, pursuant to transactions entered into before the Settlement Date, of the Shares that
were required to be delivered by the Company, which shall be based upon documentation reasonably
satisfactory to the Company demonstrating the difference (if greater than zero) between (A) the
price per share paid by the Investor to purchase such number of shares of Common Stock necessary
for the Investor to meet its share delivery obligations to such subsequent purchasers minus (B) the
average Draw Down Discount Price during the applicable Draw Down Pricing Period. In the event that
the Make Whole Amount is not paid within two (2) Trading Days following a demand therefor from the
Investor, the Make Whole Amount shall accrue interest compounded daily at a rate of LIBOR plus 300
basis points per annum, up to and including the date on which the Make Whole Amount is actually
paid. Notwithstanding anything to the contrary set forth in this Agreement, in the event that the
Company pays the Make Whole Amount (plus interest, if applicable) in respect of any Settlement Date
in accordance with this Section 3.07, such payment shall be the Investor’s sole remedy in respect
of the Company’s failure to deliver Shares in respect of such Settlement Date, and the Company
shall not be obligated to deliver such Shares.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company hereby makes the following representations and warranties to the Investor:

     Section 4.01. Organization, Good Standing and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the State of Delaware and
has all requisite power and authority to own, lease and operate its properties and to carry on its
business as now being conducted. Except as set forth in the Commission Documents (as defined
below), as of the date hereof the Company does not own more than fifty percent (50%) of the

8

 

outstanding capital stock of or control any other business entity, other than any wholly-owned
subsidiary that is not “significant” within the meaning of Regulation S-X promulgated by the
Commission. The Company is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, other than those in which the failure so to qualify or be in
good standing would not have a Material Adverse Effect.

     Section 4.02. Authorization; Enforcement. (i) The Company has the requisite corporate
power and authority to enter into and perform its obligations under this Agreement, the
Registration Rights Agreement and the Warrant and to issue the Shares, the Warrant, the Warrant
Shares and any Blackout Shares (except to the extent that the number of Blackout Shares required to
be issued exceeds the number of authorized shares of Common Stock under the Certificate); (ii) the
execution and delivery of this Agreement and the Registration Rights Agreement, and the execution,
issuance and delivery of the Warrant, by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary corporate action and no
further consent or authorization of the Company or its Board of Directors or stockholders is
required (other than as contemplated by Section 6.05); and (iii) each of this Agreement and the
Registration Rights Agreement has been duly executed and delivered, and the Warrant has been duly
executed, issued and delivered, by the Company and constitutes a valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, securities, insolvency, or similar laws
relating to, or affecting generally the enforcement of, creditors’ rights and remedies, or
indemnification or by other equitable principles of general application.

     Section 4.03. Capitalization. The authorized capital stock of the Company and the
shares thereof issued and outstanding as of August 22, 2006 are set forth in the Commission
Documents. All of the outstanding shares of the Common Stock as of August 22, 2006 have been duly
and validly authorized and issued, and are fully paid and non-assessable. Except as set forth in
this Agreement or in the Commission Documents, as of August 22, 2006, no shares of Common Stock
were entitled to preemptive rights or registration rights, and there were no outstanding options,
warrants, scrip, rights issued by the Company to subscribe to, call or commitments of any character
whatsoever issued by the Company relating to, or securities or rights convertible into or
exchangeable for or giving any right to subscribe for, any shares of capital stock of the Company.
Except as set forth in this Agreement or in the Commission Documents, as of August 22, 2006, there
were no contracts, commitments, understandings, or arrangements by which the Company is or may
become bound to issue additional shares of the capital stock of the Company or options, securities
or rights convertible into or exchangeable for or giving any right to subscribe for any shares of
capital stock of the Company. Except as described in the Commission Documents, as of the date
hereof the Company is not a party to any agreement granting registration rights to any Person with
respect to any of its equity or debt
securities. Except as set forth in the Commission Documents or as previously disclosed to the
Investor in writing, as of the date hereof the Company is not a party to, and it has no Knowledge
of, any agreement restricting the voting or transfer of any shares of the capital stock of the
Company. The offer and sale of all capital stock, convertible securities, rights, warrants, or
options of the Company issued during the twenty-four month period immediately prior to the Closing
complied in all material respects with all applicable federal and state securities laws, and no
stockholder has a right of rescission or damages with respect thereto that could reasonably be
expected to have a Material Adverse Effect. The Company has furnished or made available to the
Investor true and correct copies of the Amended and Restated Certificate of Incorporation of the
Company, as amended, as in effect on the date hereof (the “Certificate”), and the Second

9

 

Amended and Restated Bylaws of the Company, as amended, as in effect on the date hereof (the
“Bylaws”).

     Section 4.04. Issuance of Shares. Subject to Section 6.05, the Shares, the Warrant
and the Warrant Shares have been, and any Blackout Shares will be, duly authorized by all necessary
corporate action (except to the extent that the number of Blackout Shares required to be issued
exceeds the number of authorized shares of Common Stock under the Certificate) and, when issued and
paid for in accordance with the terms of this Agreement, the Registration Rights Agreement and the
Warrant, the Shares and the Warrant Shares shall be validly issued and outstanding, fully paid and
non-assessable, and the Investor shall be entitled to all rights accorded to a holder of shares of
Common Stock.

     Section 4.05. No Conflicts. The execution, delivery and performance of this
Agreement, the Registration Rights Agreement, the Warrant and any other document or instrument
contemplated hereby or thereby, by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby do not: (i) violate any provision of the Certificate
or Bylaws, (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 material agreement, mortgage, deed of trust, indenture, note,
bond, license, lease agreement, instrument or obligation to which the Company is a party where such
default or conflict would constitute a Material Adverse Effect, (iii) create or impose a lien,
charge or encumbrance on any property of the Company under any agreement or any commitment to which
the Company is a party or by which the Company is bound or by which any of its respective
properties or assets are bound which would constitute a Material Adverse Effect, (iv) result in a
violation of any federal, state, local or foreign statute, rule, regulation, order, writ, judgment
or decree (including federal and state securities laws and regulations) applicable to the Company
or any of its Consolidated Subsidiaries or by which any property or asset of the Company or any of
its Consolidated Subsidiaries are bound where such violation would constitute a Material Adverse
Effect, or (v) require any consent of any third-party that has not been obtained pursuant to any
material contract to which the Company is subject or to which any of its assets, operations or
management may be subject where the failure to obtain any such consent would constitute a Material
Adverse Effect. The Company is not required under federal, state or local law, rule or regulation
to obtain any consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or perform any of its obligations
under this Agreement, the Registration Rights Agreement or the Warrant, or issue and sell the
Shares, the Warrant Shares or the Blackout Shares (except to the extent that the number of Blackout
Shares required to be issued exceeds the number of authorized shares of Common Stock under the
Certificate) in accordance with the terms hereof and thereof (other than any filings that may be
required to be made by the Company with the Commission, the NASD/Nasdaq or state securities
commissions subsequent to the Closing, and, any registration statement (including any amendment or
supplement thereto) which
may be filed pursuant hereto); provided that, for purposes of the representation made
in this sentence, the Company is assuming and relying upon the accuracy of the relevant
representations and agreements of the Investor herein.

     Section 4.06. Commission Documents, Financial Statements. The Common Stock is
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and since January 1, 2006, the
Company has timely filed all reports, schedules, forms, statements and other documents required to
be filed by it with the Commission pursuant to the reporting requirements of the Exchange Act,
including material filed pursuant to Section 13(a) or 15(d) of the Exchange Act (all of the
foregoing, including any such reports, schedules, forms, statements and other documents filed

10

 

after
the date hereof, and the Company’s Registration Statement on Form S-4 as filed with the Commission
on March 31, 2006, including filings incorporated by reference in any such filings, being referred
to herein as the “Commission Documents”). Except as previously disclosed to the Investor
in writing, since January 1, 2006, the Company has maintained all requirements for the continued
listing or quotation of its Common Stock, and such Common Stock is currently listed or quoted on
the Nasdaq National Market. To the extent not available on the Commission’s EDGAR filing system,
the Company has made available to the Investor true and complete copies of the Commission Documents
filed with the Commission since January 1, 2006, and prior to the Closing Date. The Company has
not provided to the Investor any information which, according to applicable law, rule or
regulation, should have been disclosed publicly by the Company but which has not been so disclosed,
other than with respect to the transactions contemplated by this Agreement. As of its date, the
Company’s Form 10-K for the year ended December 31, 2005 complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission promulgated
thereunder applicable to such document, and, as of its date, after giving effect to the information
disclosed and incorporated by reference therein, such Form 10-K did not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading. As of their respective dates, the financial statements of the Company
included in the Commission Documents filed with the Commission since January 1, 2006, complied as
to form and substance in all material respects with applicable accounting requirements and the
published rules and regulations of the Commission or other applicable rules and regulations with
respect thereto. Such financial statements have been prepared in accordance with generally
accepted accounting principles (“GAAP”) applied on a consistent basis during the periods
involved (except (i) as may be otherwise indicated in such financial statements or the notes
thereto or (ii) in the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements), and fairly present in all material respects
the financial position of the Company and its Consolidated Subsidiaries as of 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).

     Section 4.07. No Material Adverse Change. Except as disclosed in the Commission
Documents, since June 30, 2006 no event or series of events has or have occurred that would,
individually or in the aggregate, have a Material Adverse Effect on the Company.

     Section 4.08. No Undisclosed Liabilities. Neither the Company nor any of its
Consolidated Subsidiaries has any liabilities, obligations, claims or losses (whether liquidated or
unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise) that would be
required to be disclosed on a balance sheet of the Company or any Consolidated Subsidiary
(including the notes thereto) in conformity with GAAP and are not disclosed in the Commission
Documents, other than those incurred in the ordinary course of the Company’s or its Consolidated
Subsidiaries respective businesses since August 8, 2006, or which, individually or in the
aggregate, do not or would not have a Material Adverse Effect on the Company.

     Section 4.09. No Undisclosed Events or Circumstances. To the Company’s Knowledge, no
event or circumstance has occurred or exists with respect to the Company or its Consolidated
Subsidiaries or their respective businesses, properties, operations or financial condition, 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 and which, individually or in the
aggregate, would have a Material Adverse Effect on the Company.

11

 

     Section 4.10. Actions Pending. There is no action, suit, claim, investigation or
proceeding of which the Company is aware or which has been served on the Company or, to the
Knowledge of the Company, threatened against the Company or any Consolidated Subsidiary which
questions the validity of this Agreement or the transactions contemplated hereby or any action
taken or to be taken pursuant hereto or thereto. Except as set forth in the Commission Documents,
there is no action, suit, claim, investigation or proceeding pending or, to the Knowledge of the
Company, threatened against or involving the Company, any Consolidated Subsidiary or any of their
respective properties or assets that could be reasonably expected to have a Material Adverse Effect
on the Company. Except as set forth in the Commission Documents or as previously disclosed to the
Investor in writing, no judgment, order, writ, injunction or decree or award has been issued by or,
to the Knowledge of the Company, requested of any court, arbitrator or governmental agency which
could be reasonably expected to result in a Material Adverse Effect.

     Section 4.11. Compliance with Law. The businesses of the Company and its Consolidated
Subsidiaries have been and are presently being conducted in accordance with all applicable federal,
state and local governmental laws, rules, regulations and ordinances, except as set forth in the
Commission Documents or such that would not reasonably be expected to cause a Material Adverse
Effect. Except as set forth in the Commission Documents, the Company and each of its Consolidated
Subsidiaries have all franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals necessary for the conduct of its business as now being conducted by
it, except for such franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals, the failure to possess which, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.

     Section 4.12. Certain Fees. Except as expressly set forth in this Agreement, no
brokers, finders or financial advisory fees or commissions will be payable by the Company or any of
its Consolidated Subsidiaries in respect of the transactions contemplated by this Agreement.

     Section 4.13. Disclosure. To the Company’s Knowledge, neither this Agreement nor any
other documents, certificates or instruments furnished to the Investor by or on behalf of the
Company or any Consolidated Subsidiary in connection with the transactions contemplated by this
Agreement, the Registration Rights Agreement or the Warrant contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements made
herein or therein, in the light of the circumstances under which they were made herein or therein,
not misleading.

     Section 4.14. Material Non-Public Information. Except for this Agreement and the
transactions contemplated hereby, neither the Company, nor its employees nor its agents have
disclosed to the Investor, any material non-public information that, according to applicable law,
rule or regulation, should have been disclosed publicly by the Company prior to the date
hereof but which has not been so disclosed.

     Section 4.15. Exemption from Registration; Valid Issuances. Subject to, and in
reliance on the representations, warranties and covenants made herein by the Investor, the issuance
and sale of the Shares, the Warrant, the Warrant Shares and any Blackout Shares in accordance with
the terms and on the bases of the representations and warranties set forth in this Agreement, may
and shall be properly issued pursuant to Section 4(2), Regulation D and/or any other applicable
federal and state securities laws; provided, however, that at the request of and
with the express agreement of the Investor, the Shares and, under certain circumstances, the

12

 

Warrant Shares, will be delivered to the Investor via book entry through DTC and shall not bear
legends noting restrictions as to resale of such shares under federal and state securities laws,
nor shall such shares be subject to stop transfer instructions. Neither the sales of the Shares,
the Warrant, the Warrant Shares or any Blackout Shares pursuant to, nor the Company’s performance
of its obligations under, this Agreement, the Registration Rights Agreement, or the Warrant shall
(i) result in the creation or imposition of any liens, charges, claims or other encumbrances upon
the Shares, the Warrant Shares, any Blackout Shares or any of the assets of the Company, or (ii)
except as previously disclosed to the Investor in writing, entitle the holders of any outstanding
shares of capital stock of the Company to preemptive or other rights to subscribe to or acquire the
shares of Common Stock or other securities of the Company.

     Section 4.16. No General Solicitation or Advertising in Regard to this Transaction.
Neither the Company nor any of its affiliates or any person acting on its or their behalf (i) has
conducted any general solicitation (as that term is used in Rule 502(c) of Regulation D) or general
advertising with respect to any of the Shares, the Warrant, the Warrant Shares or any Blackout
Shares or (ii) has made any offers or sales of any security or solicited any offers to buy any
security under any circumstances that would require registration of the Shares under the Securities
Act.

     Section 4.17. No Integrated Offering. Neither the Company, nor any of its affiliates,
nor any person acting on its or their behalf has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security, other than pursuant to this Agreement
and employee benefit plans, under circumstances that would require registration under the
Securities Act of shares of the Common Stock issuable hereunder with any other offers or sales of
securities of the Company.

     Section 4.18. Acknowledgment Regarding Investor’s Purchase of Shares. The Company
acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length
investor with respect to this Agreement and the transactions contemplated hereunder. The Company
further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to this Agreement and the transactions
contemplated hereunder, and that any advice given by the Investor or any of its representatives or
agents in connection with this Agreement and the transactions contemplated hereunder is merely
incidental to the Investor’s purchase of the Shares.

ARTICLE V

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR

     The Investor hereby makes the following representations, warranties and covenants to the
Company:

     Section 5.01. Organization and Standing of the Investor. The Investor is a company
duly organized, validly existing and in good standing under the laws of the British Virgin Islands.

     Section 5.02. Authorization and Power. The Investor has the requisite power and
authority to enter into and perform its obligations under this Agreement, the Registration Rights
Agreement and the Warrant and to purchase the Shares, the Blackout Shares, the Warrant and the
Warrant Shares in accordance with the terms hereof and thereof. The execution, delivery and
performance of this Agreement and the Registration Rights Agreement by the Investor and the
consummation by it of the transactions contemplated hereby or thereby have been duly authorized

13

 

by
all necessary corporate action, and no further consent or authorization of the Investor, its Board
of Directors or stockholders is required. Each of this Agreement and the Registration Rights
Agreement has been duly executed and delivered by the Investor and constitutes a valid and binding
obligation of the Investor enforceable against the Investor in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation, conservatorship, receivership, or similar laws relating to, or affecting
generally the enforcement of creditor’s rights and remedies or by other equitable principles of
general application.

     Section 5.03. No Conflicts. The execution, delivery and performance of this
Agreement, the Warrant, the Registration Rights Agreement and any other document or instrument
contemplated hereby, by the Investor and the consummation of the transactions contemplated thereby
do not (i) violate any provision of the Investor’s charter documents or bylaws, (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 material agreement, mortgage, deed of trust, indenture, note, bond, license,
lease agreement, instrument or obligation to which the Investor is a party, (iii) create or impose
a lien, charge or encumbrance on any property of the Investor under any agreement or any commitment
to which the Investor is a party or by which the Investor is bound or by which any of its
respective properties or assets are bound, (iv) result in a violation of any federal, state, local
or foreign statute, rule, regulation, order, writ, judgment or decree (including federal and state
securities laws and regulations) applicable to the Investor or by which any property or asset of
the Investor are bound or affected, or (v) require the consent of any third-party that has not been
obtained pursuant to any material contract to which Investor is subject or to which any of its
assets, operations or management may be subject. The Investor is not required under federal,
state, foreign or local law, rule or regulation to obtain any consent, authorization or order of,
or make any filing or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Agreement or to purchase the Shares
or the Warrant in accordance with the terms hereof, provided that, for purposes of the
representation made in this sentence, the Investor is assuming and relying upon the accuracy of the
relevant representations and agreements of the Company herein.

     Section 5.04. Financial Capability. The Investor has the financial capability to
perform all of its obligations under this Agreement, including the capability to purchase the
Shares, the Warrant and the Warrant Shares in accordance with the terms hereof. The Investor has
such knowledge and experience in business and financial matters that it is capable of evaluating
the merits and risks of an investment in Common Stock and the Warrant. The Investor is an
“accredited investor” as defined in Regulation D. The Investor is a “sophisticated investor” as
described in Rule 506(b)(2)(ii) of Regulation D. The Investor acknowledges that an investment in
the Common Stock and the Warrant is speculative and involves a high degree of risk.

     Section 5.05. Information. The Investor and its advisors, if any, have been furnished
with all materials relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Shares, the Blackout Shares, the Warrant and the Warrant
Shares which have been requested by the Investor. The Investor has reviewed or received copies of
the Commission Documents. The Investor and its advisors, if any, have been afforded the opportunity
to ask questions of the Company. The Investor has sought such accounting, legal and tax advice as
it has considered necessary to make an informed investment decision with respect to its acquisition
of the Shares, the Warrant and the Warrant Shares. The Investor understands that

14

 

it (and not the
Company) shall be responsible for its own tax liabilities that may arise as a result of this
investment or the transactions contemplated by this Agreement.

     Section 5.06. Selling Restrictions.

     (a) The Investor has not directly or indirectly, nor has any Person acting on behalf of or
pursuant to any understanding with the Investor, engaged in any transactions in the Company’s
securities (including, without limitation, any “short sale”, as such term is defined in Rule 200 of
Regulation SHO, or any successor regulation, promulgated by the Commission under the Exchange Act
involving Common Stock) since the time that the Investor was first contacted by the Company, or any
Person acting on behalf of the Company, regarding the transactions contemplated hereby.

     (b) The Investor covenants that during the Commitment Period, neither the Investor nor any of
its affiliates nor any entity managed or controlled by the Investor will ever (i) enter into or
execute or cause any Person to enter into or execute any “short sale” (as such term is defined in
Rule 200 of Regulation SHO or any successor regulation promulgated by the Commission under the
Exchange Act) of any shares of Common Stock, (ii) sell, during the term of a Draw Down Pricing
Period, Common Stock other than Common Stock purchased (or to be purchased) pursuant to the Draw
Down pertaining to such Draw Down Pricing Period or (iii) engage, through related parties or
otherwise, in any derivative transaction directly related to shares of Common Stock (including,
without limitation, the purchase of any option or contract to sell). Notwithstanding the
foregoing, the Investor shall have the right during any Draw Down Pricing Period to sell shares of
Common Stock equal in number to the aggregate number of the Shares purchased (or to be purchased)
pursuant to the Draw Down pertaining to such Draw Down Pricing Period.

     Section 5.07. Statutory Underwriter Status. The Investor acknowledges that, pursuant
to the Commission’s current interpretations of the Securities Act, the Investor will be disclosed
as an “underwriter” within the meaning of the Securities Act in the Registration Statement (and
amendments thereto) and in any Prospectus contained therein to the extent required by applicable
law. The Company acknowledges that the Investor does not necessarily agree with such
characterization.

     Section 5.08. Not an Affiliate. The Investor is not an officer, director or
“affiliate” (as defined in Rule 405 of the Securities Act) of the Company.

     Section 5.09. Manner of Sale. At no time was Investor presented with or solicited by
or through any leaflet, public promotional meeting, television advertisement or any other form of
general solicitation or advertising by or on behalf of the Company.

     Section 5.10. Prospectus Delivery. The Investor agrees that unless the Shares and
Warrant Shares are eligible for resale pursuant to all the conditions of Rule 144, it will resell
the Shares and Warrant Shares only pursuant to the Registration Statement, in a manner
described under the caption “Plan of Distribution” in the Registration Statement, and in a manner
in compliance with all applicable securities laws, including, without limitation, the insider
trading restrictions of the Exchange Act and the prospectus delivery requirements of the Securities
Act, if any, as applicable to it in connection with sales of Registrable Securities pursuant to the
Registration Statement, and the Investor shall have delivered a current prospectus in connection
with such sale or shall have confirmed that a current prospectus is deemed to be delivered in
connection with such sale, or relied on an exemption from such prospectus delivery requirements.

15

 

The Investor, acknowledges that the delivery of the Shares or Warrant Shares through DTC is
predicated upon the Company’s reliance that the Investor will sell any Shares or Warrant Shares
pursuant to either (i) the registration requirements of the Securities Act, or (ii) an exemption
therefrom. The Investor further acknowledges and agrees that the Company shall be under no
obligation to supplement the Prospectus to reflect the issuance of any Shares pursuant to a Draw
Down at any time prior to the day following the Settlement Date with respect to such Shares.

ARTICLE VI

COVENANTS OF THE COMPANY

     The Company covenants with the Investor as follows, which covenants are for the benefit of the
Investor and its permitted assignees (as defined herein):

     Section 6.01. Securities. The Company shall notify the Commission and the Principal
Market, if and as applicable, in accordance with their rules and regulations, of the transactions
contemplated by this Agreement, and shall use commercially reasonable efforts to take all other
necessary action and proceedings as may be required and permitted by applicable law, rule and
regulation, for the legal and valid issuance of the Shares, the Warrant Shares and the Blackout
Shares, if any, to the Investor; provided, that in no event shall the Company be under any
obligation to supplement the Prospectus to reflect the issuance of any Shares pursuant to a Draw
Down at any time prior to the day following the Settlement Date with respect to such Shares.

     Section 6.02. Reservation of Common Stock. As of the date hereof, the Company has
available and the Company shall reserve and keep available at all times, free of preemptive rights
and other similar contractual rights of stockholders, shares of Common Stock for the purpose of
enabling the Company to satisfy any obligation to issue the Shares in connection with all Draw
Downs contemplated hereunder and the Warrant Shares. The number of shares so reserved from time to
time, as theretofore increased or reduced as hereinafter provided, may be reduced by the number of
shares actually delivered hereunder.

     Section 6.03. Registration and Listing. During the Commitment Period, the Company
shall use commercially reasonable efforts: (i) to take all action necessary to cause its Common
Stock to continue to be registered under Section 12(b) or 12(g) of the Exchange Act, (ii) to comply
in all material respects with its reporting and filing obligations under the Exchange Act, (iii) to
prevent the termination or suspension of such registration, or the termination or suspension of its
reporting and filing obligations under the Exchange Act or Securities Act (except as expressly
permitted herein). The Company shall use commercially reasonable efforts to maintain the listing
and trading of its Common Stock and the listing of the Shares purchased by Investor hereunder on
the Principal Market (including, without limitation, maintaining sufficient net tangible assets)
and will comply in all material respects with the Company’s reporting, filing and other obligations
under the bylaws or rules of the NASD and the Principal Market. The
Company will not be required to carry out any action pursuant to this Agreement, the
Registration Rights Agreement or the Warrant that would adversely impact the listing of the
Company’s securities on the Principal Market as now in effect or as subsequently modified by
applicable rules and regulations.

     Section 6.04. Registration Statement. Without the prior written consent of the
Investor, the Registration Statement shall be used solely in connection with the transactions
between the Company and the Investor contemplated hereby.

16

 

     Section 6.05. Compliance with Laws.

     (a) The Company shall comply, and cause each Consolidated Subsidiary to comply, with all
applicable laws, rules, regulations and orders, noncompliance with which could reasonably be
expected to have a Material Adverse Effect.

     (b) Without the consent of its stockholders in accordance with NASD rules, the Company will
not be obligated to issue, and the Investor will not be obligated to purchase, any Shares or
Blackout Shares which would result in the issuance under this Agreement, the Warrant and the
Registration Rights Agreement of Shares, Warrant Shares and Blackout Shares (collectively)
representing more than the applicable percentage under the rules of the NASD, including, without
limitation, NASD Rule 4350(i), that would require stockholder approval of the issuance thereof.
Nothing herein shall compel the Company to seek such consent of its stockholders.

     Section 6.06. Reporting Requirements. Upon reasonable written request of the Investor
during the Commitment Period, the Company shall furnish copies of the following to the Investor
within three Business Days of such request (but not sooner than filed with or submitted to the
Commission):

     (a) Quarterly Reports on Form 10-Q;

     (b) Annual Reports on Form 10-K;

     (c) Current Reports on Form 8-K; and

     (d) any other documents publicly submitted to the Commission.

     Section 6.07. Other Financing.

     (a) Nothing in this Agreement shall be construed to restrict the right of the Company to
offer, sell and/or issue securities of any kind whatsoever, provided such transaction is not a
Prohibited Transaction (as defined below) (any such transaction that is not a Prohibited
Transaction is referred to in this Agreement as a “Permitted Transaction”). Without limiting the
generality of the preceding sentence, the Company may, without the prior written consent of the
Investor, (i) establish stock option or award plans or agreements (for directors, employees,
consultants and/or advisors), and issue securities thereunder, and amend such plans or agreements,
including increasing the number of shares available thereunder, (ii) issue equity securities to
finance, or otherwise in connection with, the acquisition of one or more other companies,
equipment, technologies or lines of business, (iii) issue shares of Common Stock and/or Preferred
Stock in connection with the Company’s option or award plans, stock purchase plans, rights plans,
warrants or options, (iv) issue shares of Common Stock and/or Preferred
Stock in connection with the acquisition of products, licenses, equipment or other assets and
strategic partnerships or joint ventures; (v) issue shares of Common and/or Preferred Stock to
consultants and/or advisors as consideration for services rendered or to be rendered, (vi) issue
and sell equity or debt securities in a public offering, (vii) issue and sell any equity or debt
securities in a private placement (other than in connection with any Prohibited Transaction),
(viii) issue equity securities to equipment lessors, equipment vendors, banks or similar lending
institutions in connection with leases or loans, or in connection with strategic commercial or
licensing transactions, (ix) issue securities in connection with any stock split, stock dividend,
recapitalization, reclassification or similar event by the Company, and (x) issue shares of

17

 

Common
Stock to the Investor under any other agreement entered into between the Investor and the Company.

     (b) Notwithstanding the foregoing, other than in the ordinary course of the Company’s
business, the Company shall not engage in any Permitted Transaction involving the issuance, sale,
disposition or other transaction in the capital markets (whether public or private) involving the
Common Stock or any other capital or debt securities of the Company during any Draw Down Pricing
Period.

     Section 6.08. Prohibited Transactions. During the term of this Agreement, the Company
shall not enter into any Prohibited Transaction without the prior written consent of the Investor,
which consent may be withheld in the sole and absolute discretion of the Investor. For the purposes
of this Agreement, the term “Prohibited Transaction” shall refer to: (i) the issuance by the
Company of any rights, warrants or options to subscribe for or purchase Common Stock, or any other
securities directly or indirectly convertible into or exchangeable or exercisable for Common Stock,
at an effective conversion, exchange or exercise price that varies or may vary with or is otherwise
issuable in relation to the market price of Common Stock, including by way of one or more resets to
any fixed price; (ii) any “at-the-market offering” (as defined in Rule 415(a)(4) under the
Securities Act or any successor rule thereto) of the Company’s securities by or on behalf of the
Company, other than (A) a customary, firm-commitment underwritten public offering or (B) an
unregistered private placement of Common Stock where the price per share of such Common Stock is
fixed upon signing of definitive documentation of the sale, but not afterwards; and (iii) any
equity line or other form of financing that is substantially similar to the financing provided for
under this Agreement, provided that any future issuance by the Company of a convertible security
(“Convertible Security”) that contains provisions that adjust the conversion price of such
Convertible Security (“Conversion Price”) in the event of stock splits, dividends,
distributions or similar events or pursuant to anti-dilution provisions shall not be a Prohibited
Transaction for purposes of this Section 6.08 so long as such Convertible Security does not contain
a provision that adjusts the Conversion Price as a result of any decline in the market price of the
Common Stock after the issue date of the Convertible Security, other than a decline resulting
directly from stock splits, dividends, distributions or similar events including, without
limitation, the type of conversion price adjustments customarily found in a firm commitment Rule
144A offering to qualified institutional buyers.

     Section 6.09. Corporate Existence. The Company shall take all steps necessary to
preserve and continue the corporate existence of the Company; provided, however,
that nothing in this Agreement shall be deemed to prohibit the Company from engaging in any
Excluded Merger or Sale with another Person provided that in the event of an Excluded Merger or
Sale, if the surviving, successor or purchasing Person does not agree to assume the obligations
under the Warrant, then the Company shall deliver a notice to the Investor at least ten (10) days
before the consummation of such Excluded Merger or Sale (provided that, to the extent that such
transaction has not been publicly disclosed, then the Investor agrees to maintain the
confidentiality of such information and to use such information only in connection with a
decision to exercise the Warrant), the Investor may exercise the Warrant at any time before the
consummation of such Excluded Merger or Sale (and such exercise may be made contingent upon the
consummation of such Excluded Merger or Sale), and any portion of the Warrant that has not been
exercised before consummation of such Excluded Merger or Sale shall terminate and expire, and shall
no longer be outstanding.

     Section 6.10. Non-Disclosure of Non-Public Information. Except as otherwise expressly
provided in this Agreement, including Section 6.10 hereof, the Registration Rights

18

 

Agreement or the
Warrant, none of the Company, its officers, directors, employees nor agents shall disclose material
non-public information to the Investor, its advisors or representatives.

     Section 6.11. Notice of Certain Events Affecting Registration; Suspension of Right to
Request a Draw Down. The Company shall promptly notify the Investor upon the occurrence of any
of the following events in respect of the Registration Statement or the Prospectus related to the
offer, issuance and sale of the Shares and the Warrant Shares hereunder: (i) receipt of any
request for additional information by the Commission or any other federal or state governmental
authority during the period of effectiveness of the Registration Statement for amendments or
supplements to the Registration Statement or the Prospectus; (ii) the issuance by the Commission or
any other federal or state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that purpose; and (iii) receipt
of any notification with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose. The Company shall not be required to disclose
to the Investor the substance or specific reasons of any of the events set forth in clauses (i)
through (iii) of the previous sentence, only that the event has occurred. The Company shall not
request a Draw Down during the continuation of any of the foregoing events.

     Section 6.12. Amendments to the Registration Statement. When the Registration
Statement is declared effective by the Commission, the Company shall (i) not file any amendment to
the Registration Statement or make any amendment or supplement to the Prospectus of which the
Investor shall not previously have been advised; provided, however, that the
Company shall, to the extent it deems advisable, and without the prior consent of or notice to
Investor, supplement the Prospectus within one Trading Day following the Settlement Date for each
Draw Down solely to reflect the issuance of Shares with respect to such Draw Down and (ii) so long
as, in the reasonable opinion of counsel for the Investor, a Prospectus is required to be delivered
in connection with sales of the Shares by the Investor, if the Company files any information,
documents or reports that are incorporated by reference in the Registration Statement pursuant to
the Exchange Act, the Company shall, if requested in writing by the Investor, deliver a copy of
such information, documents or reports to the Investor promptly following such filing.

     Section 6.13. Prospectus Delivery. From time to time for such period as in the
reasonable opinion of counsel for the Investor a prospectus is required by the Securities Act to be
delivered in connection with sales by the Investor, the Company will expeditiously deliver to the
Investor, without charge, as many copies of the Prospectus (and of any amendment or supplement
thereto) as the Investor may reasonably request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions of the Securities
Act and state securities laws in connection with the offering and sale of the Shares and the
Warrant Shares and for such period of time thereafter as the Prospectus is required by the
Securities Act to be delivered in connection with sales of the Shares and the Warrant Shares.

ARTICLE VII

CONDITIONS TO THE OBLIGATION OF THE INVESTOR TO ACCEPT A DRAW

DOWN

     The obligation of the Investor hereunder to accept a Draw Down Notice and to acquire and pay
for the Shares in accordance therewith is subject to the satisfaction or waiver, at each Condition
Satisfaction Date, of each of the conditions set forth below. Other than those conditions set
forth in Section 7.12 which are for the Company’s sole benefit and may be waived

19

 

by the Company at
any time in its sole discretion, the conditions are for the Investor’s sole benefit and may be
waived by the Investor at any time in its sole discretion. As used in this Agreement, the term
“Condition Satisfaction Date” shall mean, with respect to each Draw Down, the date on which
the applicable Draw Down Notice is delivered to the Investor and each Settlement Date in respect of
the applicable Draw Down Pricing Period.

     Section 7.01. Accuracy of the Company’s Representations and Warranties. Each of the
representations and warranties of the Company shall be true and correct in all material respects as
of the date when made as though made at that time except for representations and warranties that
are expressly made as of a particular date.

     Section 7.02. Performance by the Company. The Company shall have, in all material
respects, performed, satisfied and complied with all covenants, agreements and conditions required
by this Agreement, the Registration Rights Agreement and the Warrant to be performed, satisfied or
complied with by the Company.

     Section 7.03. Compliance with Law. The Company shall have complied in all respects
with all applicable federal, state and local governmental laws, rules, regulations and ordinances
in connection with the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby except for any failures to so comply which could not
reasonably be expected to have a Material Adverse Effect.

     Section 7.04. Effective Registration Statement. Upon the terms and subject to the
conditions set forth in the Registration Rights Agreement, the Registration Statement shall have
previously become effective and shall remain effective and (i) neither the Company nor the Investor
shall have received notice that the Commission has issued or intends to issue a stop order with
respect to the Registration Statement or that the Commission otherwise has suspended or withdrawn
the effectiveness of the Registration Statement, either temporarily or permanently, or intends or
has threatened to do so (unless the Commission’s concerns have been addressed and the Investor is
reasonably satisfied that the Commission no longer is considering or intends to take such action),
and (ii) no other suspension of the use or withdrawal of the effectiveness of the Registration
Statement or the Prospectus shall exist.

     Section 7.05. No Knowledge. The Company shall have no Knowledge of any event that
could reasonably be expected to have the effect of causing the Registration Statement with respect
to the resale of the Registrable Securities by the Investor to be suspended or otherwise
ineffective (which event is more likely than not to occur within eight Trading Days following the
Trading Day on which a Draw Down Notice is delivered).

     Section 7.06. No Suspension. Trading in the Company’s Common Stock shall not have
been suspended by the Commission, the Principal Market or the NASD and trading in
securities generally as reported on the Principal Market shall not have been suspended or
limited as of the Condition Satisfaction Date.

     Section 7.07. 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 which prohibits the consummation of any of the
transactions contemplated by this Agreement.

     Section 7.08. No Proceedings or Litigation. No action, suit or proceeding before any
arbitrator or any governmental authority shall have been commenced, and, to the Knowledge of

20

 

the
Company, no investigation by any governmental authority shall have been threatened, against the
Company or any subsidiary, or any of the officers, directors or affiliates of the Company or any
subsidiary seeking to enjoin, prevent or change the transactions contemplated by this Agreement.

     Section 7.09. Sufficient Shares Registered for Resale. The Company shall have
sufficient Shares, calculated using the closing trade price of the Common Stock as of the Trading
Day immediately preceding such Draw Down Notice, registered under the Registration Statement to
issue and sell such Shares in accordance with such Draw Down Notice.

     Section 7.10. Warrant. The Warrant shall have been duly executed, delivered and
issued to the Investor, and the Company shall not be in default in any material respect under any
of the provisions thereof, provided that any refusal by or failure of the Company to issue and
deliver Warrant Shares in respect of any exercise (in whole or in part) thereof shall be deemed to
be material for the purposes of this Section 7.10.

     Section 7.11. Opinion of Counsel. The Investor shall have received an opinion of
counsel to the Company, dated as of the Effective Date, in the form reasonably agreed to by the
Investor and its counsel prior to the date hereof.

     Section 7.12. Accuracy of Investor’s Representation and Warranties. The
representations and warranties of the Investor shall be true and correct in all material respects
as of the date when made as though made at that time except for representations and warranties that
are made as of a particular date.

     Section 7.13. Payment of Fees. The Company shall be current on all undisputed expense
invoices that the Company is required to pay pursuant to Section 10.01.

ARTICLE VIII

TERMINATION

     Section 8.01. Term. Unless otherwise terminated in accordance with Section 8.02
below, this Agreement shall terminate upon the earlier to occur of (i) the expiration of the
Commitment Period or (ii) the issuance of Shares pursuant to this Agreement in an amount equal to
the Maximum Commitment Amount.

     Section 8.02. Other Termination.

     (a) The Investor may terminate this Agreement upon one (1) Business Day’s notice if the
Company enters into any Prohibited Transaction as set forth in Section 6.08 without the Investor’s
prior written consent.

     (b) The Investor may terminate this Agreement upon one (1) Business Day’s notice to the
Company at any time in the event that the Registration Statement is not first declared effective in
accordance with the Registration Rights Agreement; provided, however, that in the
event the Registration Statement is declared effective prior to the delivery of such notice, the
Investor shall thereafter have no right to terminate this Agreement pursuant to this Section
8.02(b).

     (c) The Investor may terminate this Agreement upon one (1) Business Day’s notice to the
Company at any time in the event that following the first twelve (12) month period of the

21

 

term, the
Company fails to make cumulative Draw Downs of at least $1.25 million during any consecutive twelve
(12) month period during the term. For the avoidance of doubt, this provision shall not entitle
the Investor to terminate this Agreement prior to the end of the twenty-fourth (24th)
month of the term.

     (d) The Company may terminate this Agreement upon one (1) Business Day’s notice;
provided, however, that the Company shall not terminate this Agreement pursuant to
this Section 8.02(d) during any Draw Down Pricing Period; provided further;
that, in the event of any termination of this Agreement by the Company hereunder, so long as the
Investor owns Shares purchased hereunder and/or Warrant Shares, unless all of such shares of Common
Stock may be resold by the Investor without registration and without any time, volume or manner
limitations pursuant to Rule 144(k) (or any similar provision then in effect) under the Securities
Act, the Company shall not suspend or withdraw the Registration Statement or otherwise cause the
Registration Statement to become ineffective, or voluntarily delist the Common Stock from, the
Principal Market without listing the Common Stock on another Principal Market.

     (e) Each of the parties hereto may terminate this Agreement upon one (1) Business Day’s notice
if the other party has breached a material representation, warranty or covenant to this Agreement
and such breach is not remedied within ten (10) Business Days after notice of such breach is
delivered to the breaching party.

     Section 8.03. Effect of Termination. In the event of termination by the Company or
the Investor, written notice thereof shall forthwith be given to the other party and the
transactions contemplated by this Agreement shall be terminated without further action by either
party. If this Agreement is terminated as provided in Section 8.01 or 8.02 herein, this Agreement
shall become void and of no further force and effect, except as provided in Section 10.13. Nothing
in this Section 8.03 shall be deemed to release the Company or the Investor from any liability for
any breach under this Agreement occurring prior to such termination, or to impair the rights of the
Company and the Investor to compel specific performance by the other party of its obligations under
this Agreement arising prior to such termination.

ARTICLE IX

INDEMNIFICATION

     Section 9.01. Indemnification.

     (a) Except as otherwise provided in this Article IX, unless disputed as set forth in Section
9.02, the Company agrees to indemnify, defend and hold harmless the Investor and its affiliates and
their respective officers, directors, agents, employees, subsidiaries, partners, members and
controlling persons (each, an “Investor Indemnified Party”), to the fullest extent
permitted by law from and against any and all Damages directly resulting from or directly arising
out of any breach of any representation or warranty, covenant or agreement by the Company in this
Agreement, the Registration Rights Agreement or the Warrant; provided, however,
that the Company shall not be liable under this Article IX to an Investor Indemnified Party to the
extent that such Damages resulted or arose from the breach by an Investor Indemnified Party of any
representation, warranty, covenant or agreement of an Investor Indemnified Party contained in this
Agreement, the Registration Rights Agreement or the Warrant or the negligence, recklessness,
willful misconduct or bad faith of an Investor Indemnified Party. The parties intend that any
Damages subject to indemnification pursuant to this Article IX will be net of insurance proceeds
(which the Investor Indemnified Party agrees to use commercially reasonable efforts to

22

 

recover).
Accordingly, the amount which the Company is required to pay to any Investor Indemnified Party
hereunder (a “Company Indemnity Payment”) will be reduced by any insurance proceeds
actually recovered by or on behalf of any Investor Indemnified Party in reduction of the related
Damages. In addition, if an Investor Indemnified Party receives a Company Indemnity Payment
required by this Article IX in respect of any Damages and subsequently receives any such insurance
proceeds, then the Investor Indemnified Party will pay to the Company an amount equal to the
Company Indemnity Payment received less the amount of the Company Indemnity Payment that would have
been due if the insurance proceeds had been received, realized or recovered before the Company
Indemnity Payment was made.

     (b) Except as otherwise provided in this Article IX, unless disputed as set forth in Section
9.02, the Investor agrees to indemnify, defend and hold harmless the Company and its affiliates and
their respective officers, directors, agents, employees, subsidiaries, partners, members and
controlling persons (each, a “Company Indemnified Party”), to the fullest extent permitted
by law from and against any and all Damages directly resulting from or directly arising out of any
breach of any representation or warranty, covenant or agreement by the Investor in this Agreement,
the Registration Rights Agreement or the Warrant; provided, however, that the
Investor shall not be liable under this Article IX to a Company Indemnified Party to the extent
that such Damages resulted or arose from the breach by a Company Indemnified Party of any
representation, warranty, covenant or agreement of a Company Indemnified Party contained in this
Agreement, the Registration Rights Agreement or the Warrant or negligence, recklessness, willful
misconduct or bad faith of a Company Indemnified Party. The parties intend that any Damages
subject to indemnification pursuant to this Article IX will be net of insurance proceeds (which the
Company agrees to use commercially reasonable efforts to recover). Accordingly, the amount which
the Investor is required to pay to any Company Indemnified Party hereunder (an “Investor
Indemnity Payment”) will be reduced by any insurance proceeds theretofore actually recovered by
or on behalf of any Company Indemnified Party in reduction of the related Damages. In addition, if
a Company Indemnified Party receives an Investor Indemnity Payment required by this Article IX in
respect of any Damages and subsequently receives any such insurance proceeds, then the Company
Indemnified Party will pay to the Investor an amount equal to the Investor Indemnity Payment
received less the amount of the Investor Indemnity
Payment that would have been due if the insurance proceeds had been received, realized or
recovered before the Investor Indemnity Payment was made.

     Section 9.02. Notification of Claims for Indemnification. Each party entitled to
indemnification under this Article IX (an “Indemnified Party”) shall, promptly after the
receipt of notice of the commencement of any claim against such Indemnified Party in respect of
which indemnity may be sought from the party obligated to indemnify such Indemnified Party under
this Article IX (the “Indemnifying Party”), notify the Indemnifying Party in writing of the
commencement thereof. Any such notice shall describe the claim in reasonable detail. The failure
of any Indemnified Party to so notify the Indemnifying Party of any such action shall not relieve
the Indemnifying Party from any liability which it may have to such Indemnified Party (a) other
than pursuant to this Article IX or (b) under this Article IX unless, and only to the extent that,
such failure results in the Indemnifying Party’s forfeiture of substantive rights or defenses or
the Indemnifying Party is prejudiced by such delay. The procedures listed below shall govern the
procedures for the handling of indemnification claims.

     (a) Any claim for indemnification for Damages that do not result from a Third Party Claim as
defined in the following paragraph, shall be asserted by written notice given by the Indemnified
Party to the Indemnifying Party. Such Indemnifying Party shall have a period of thirty (30) days
after the receipt of such notice within which to respond thereto. If such

23

 

Indemnifying Party does
not respond within such thirty (30) day period, such Indemnifying Party shall be deemed to have
refused to accept responsibility to make payment as set forth in
Section 9.01. If such Indemnifying Party does not respond within such thirty (30) day period or rejects such claim in
whole or in part, the Indemnified Party shall be free to pursue such remedies as specified in this
Agreement.

     (b) If an Indemnified Party shall receive notice or otherwise learn of the assertion by a
person or entity not a party to this Agreement of any threatened legal action or claim
(collectively a “Third Party Claim”), with respect to which an Indemnifying Party may be
obligated to provide indemnification, the Indemnified Party shall give such Indemnifying Party
written notice thereof within twenty (20) days after becoming aware of such Third Party Claim.

     (c) An Indemnifying Party may elect to defend (and, unless the Indemnifying Party has
specified any reservations or exceptions, to seek to settle or compromise) at such Indemnifying
Party’s own expense and by such Indemnifying Party’s own counsel, any Third Party Claim. Within
thirty (30) days after the receipt of notice from an Indemnified Party (or sooner if the nature of
such Third Party Claim so requires), the Indemnifying Party shall notify the Indemnified Party
whether the Indemnifying Party will assume responsibility for defending such Third Party Claim,
which election shall specify any reservations or exceptions. If such Indemnifying Party does not
respond within such thirty (30) day period or rejects such claim in whole or in part, the
Indemnified Party shall be free to pursue such remedies as specified in this Agreement. In case
any such Third Party Claim shall be brought against any Indemnified Party, and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be entitled to assume
the defense thereof at its own expense, with counsel satisfactory to such Indemnified Party in its
reasonable judgment; provided, however, that any Indemnified Party may, at its own expense, retain
separate counsel to participate in such defense at its own expense. Notwithstanding the foregoing,
in any Third Party Claim in which both the Indemnifying Party, on the one hand, and an Indemnified
Party, on the other hand, are, or are reasonably likely to become, a party, such Indemnified Party
shall have the right to employ separate counsel and to control its own defense of such claim if, in
the reasonable opinion of counsel to such Indemnified Party, either (x) one or more significant
defenses are available to the
Indemnified Party that are not available to the Indemnifying Party or (y) a conflict or
potential conflict exists between the Indemnifying Party, on the one hand, and such Indemnified
Party, on the other hand, that would make such separate representation advisable; provided,
however, that in such circumstances the Indemnifying Party (i) shall not be liable for the
fees and expenses of more than one counsel to all Indemnified Parties and (ii) shall reimburse the
Indemnified Parties for such reasonable fees and expenses of such counsel incurred in any such
Third Party Claim, as such expenses are incurred, provided that the Indemnified Parties agree to
repay such amounts if it is ultimately determined that the Indemnifying Party was not obligated to
provide indemnification under this Article IX. The Indemnifying Party agrees that it will not,
without the prior written consent of the Indemnified Party, settle, compromise or consent to the
entry of any judgment in any pending or threatened claim relating to the matters contemplated
hereby (if any Indemnified Party is a party thereto or has been actually threatened to be made a
party thereto) unless such settlement, compromise or consent includes an unconditional release of
such Indemnified Party from all liability arising or that may arise out of such claim. The
Indemnifying Party shall not be liable for any settlement of any claim effected against an
Indemnified Party without the Indemnifying Party’s written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. The rights accorded to an Indemnified Party
hereunder shall be in addition to any rights that any Indemnified Party may have at common law, by
separate agreement or otherwise; provided, however, that notwithstanding the
foregoing or anything to the

24

 

contrary contained in this Agreement, nothing in this Article IX shall
restrict or limit any rights that any Indemnified Party may have to seek equitable relief.

ARTICLE X

MISCELLANEOUS

     Section 10.01. Fees and Expenses.

     (a) Each of the Company and the Investor agrees to pay its own expenses incident to the
performance of its obligations hereunder, except that the Company shall be solely responsible for
(i) all reasonable attorneys fees and expenses incurred by the Investor in connection with (A) the
preparation, negotiation, execution and delivery of this Agreement, the Registration Rights
Agreement and the Warrant, and (B) the review of the Registration Statement, correspondence with
the Commission and amendments and supplements to the Registration Statement and Prospectus, (ii)
all reasonable fees and expenses incurred by the Investor in connection with any amendments,
modifications or waivers of this Agreement, including, without limitation, all reasonable attorneys
fees and expenses, (iii) all reasonable fees and expenses incurred in connection with the
Investor’s enforcement of this Agreement, including, without limitation, all reasonable attorneys
fees and expenses, (iv) due diligence expenses incurred by the Investor during the term of this
Agreement equal to $12,500 per calendar quarter, and (v) all stamp or other similar taxes and
duties, if any, levied in connection with issuance of the Shares pursuant hereto; provided,
however, that in each of the above instances the Investor shall provide customary
supporting invoices or similar documentation in reasonable detail describing such expenses
(however, the Investor shall not be obligated to provide detailed time sheets); provided
further that the maximum aggregate amount payable by the Company pursuant to clause (i)
and (ii) above shall be $75,000 and the Investor shall bear all fees and expenses in excess of
$75,000 incurred in connection with the events described under clauses (i) and (ii) above.

     (b) If any action at law or in equity is necessary to enforce or interpret the terms of this
Agreement, the Registration Rights Agreement or the Warrant, the prevailing party shall be
entitled to reasonable fees, costs and necessary disbursements in addition to any other relief
to which such party may be entitled.

     Section 10.02. Reporting Entity for the Common Stock. The reporting entity relied
upon for the determination of the trading price or trading volume of the Common Stock on any given
Trading Day for the purposes of this Agreement shall be Bloomberg, L.P. or any successor thereto.
The written mutual consent of the Investor and the Company shall be required to employ any other
reporting entity.

     Section 10.03. Brokerage. Each of the parties hereto represents that it has had no
dealings in connection with this transaction with any finder or broker who will demand payment of
any fee or commission from the other party. The Company, on the one hand, and the Investor, on the
other hand, agree to indemnify the other against and hold the other harmless from any and all
liabilities to any Persons claiming brokerage commissions or finder’s fees on account of services
purported to have been rendered on behalf of the indemnifying party in connection with this
Agreement or the transactions contemplated hereby.

     Section 10.04. Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or
certified,

25

 

return receipt requested, postage prepaid, (iii) delivered by reputable air courier
service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile,
addressed as set forth below or to such other address as such party shall have specified most
recently by written notice given in accordance herewith, in each case with a copy to the e-mail
address set forth beside the facsimile number for the addressee below. Any notice or other
communication required or permitted to be given hereunder shall be deemed effective (a) upon hand
delivery or delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a Business Day during
normal business hours where such notice is to be received), or the first Business Day following
such delivery (if delivered other than on a Business Day during normal business hours where such
notice is to be received) or (b) on the second Business Day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Company:

Micromet, Inc.

2110 Rutherford Road,

Carlsbad, CA 92008

Facsimile: (760) 494-4269

E-mail: christian.itin@micromet-inc.com

Attention: President

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

Cooley Godward LLP

11951 Freedom Drive

Reston, VA 20190

Facsimile: (703) 456-8100

Attention: Christian E. Plaza, Esq.

E-mail: cplaza@cooley.com

And another a copy (which shall not constitute notice) to:

Micromet Legal Department

2110 Rutherford Road

Carlsbad, CA 92008

Telephone: (703) 251-4420

Facsimile: +49-89-895-277-84-270

Attention: SVP and General Counsel

E-mail: matthias.alder@micromet-inc.com

If to the Investor:

Kingsbridge Capital Limited

Attention: Mr. Tony Hillman

PO Box 1075

Elizabeth House

9 Castle Street

26

 

St Helier

Jersey

JE42QP

Channel Islands

Tel: 011-44-1534-636-041

Fax: 011-44-1534-636-042

Email: admin@kingsbridgecap.com

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

Kingsbridge Corporate Services

Kingsbridge House

New Abbey

Kilcullen

Co.Kildare

Ireland

Tel: 011-353-45-481-811

Fax: 011-353-45-482-003

Email: adamgurney@kingsbridge.ie; emmagalway@kingsbridge.ie, and pwhelan@kingsbridge.ie

And another a copy (which shall not constitute notice) to:

Clifford Chance US LLP

31 West 52nd Street

New York, NY 10019

Telephone: (212) 878-8000

Facsimile: (212) 878-8375

Attention: Keith M. Andruschak, Esq.

E-mail: keith.andruschak@cliffordchance.com

Either party hereto may from time to time change its address or facsimile number for notices under
this Section by giving at least ten (10) days’ prior written notice of such changed address or
facsimile number to the other party hereto.

     Section 10.05. Assignment. Neither this Agreement nor any rights of the Investor or
the Company hereunder may be assigned by either party to any other Person.

     Section 10.06. Amendment; No Waiver. No party shall be liable or bound to any other
party in any manner by any warranties, representations or covenants except as specifically set
forth in this Agreement, the Warrant and the Registration Rights Agreement. Except as expressly
provided in this Agreement, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by both parties hereto. The
failure of the either party to insist on strict compliance with this Agreement, or to exercise any
right or remedy under this Agreement, shall not constitute a waiver of any rights provided under
this Agreement, nor estop the parties from thereafter demanding full and complete compliance nor
prevent the parties from exercising such a right or remedy in the future.

     Section 10.07. Entire Agreement. This Agreement, the Registration Rights Agreement
and the Warrant set forth the entire agreement and understanding of the parties relating to the

27

 

subject matter hereof and supersede all prior and contemporaneous agreements, negotiations and
understandings between the parties, both oral and written, relating to the subject matter hereof.

     Section 10.08. Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void,
this Agreement shall continue in full force and effect without said provision; provided
that, if the severance of such provision materially changes the economic benefits of this Agreement
to either party as such benefits are anticipated as of the date hereof, then such party may
terminate this Agreement on five (5) Business Days prior written notice to the other party. In
such event, the Registration Rights Agreement will terminate simultaneously with the termination of
this Agreement; provided that in the event that this Agreement is terminated by the Company in
accordance with this Section 10.08 and the Warrant Shares either have not been registered for
resale by the Investor in accordance with the Registration Rights Agreement or are otherwise not
freely tradable (if and when issued) in accordance with applicable law, then the Registration
Rights Agreement in respect of the registration of the Warrant Shares shall remain in full force
and effect.

     Section 10.09. Title and Subtitles. The titles and subtitles used in this Agreement
are used for the convenience of reference and are not to be considered in construing or
interpreting this Agreement.

     Section 10.10. Counterparts. This Agreement may be executed in multiple counterparts,
each of which may be executed by less than all of the parties and shall be deemed to be an original
instrument which shall be enforceable against the parties actually executing such counterparts and
all of which together shall constitute one and the same instrument.

     Section 10.11. Choice of Law. This Agreement shall be construed under the laws of the
State of New York.

     Section 10.12. Specific Enforcement, Consent to Jurisdiction.

     (a) The Company and the Investor acknowledge and agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof or thereof, this being in
addition to any other remedy to which any of them may be entitled by law or equity.

     (b) Subject to Section 9.03, each of the Company and the Investor (i) hereby irrevocably
submits to the jurisdiction of the United States District Court and other courts of the United
States sitting in the State of New York for the purposes of any suit, action or proceeding arising
out of or relating to this Agreement and (ii) hereby waives, and agrees not to assert in any such
suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such
court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. Each of the Company and the Investor consents to
process being served in any such suit, action or proceeding by mailing a copy thereof 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 in this Section
shall affect or limit any right to serve process in any other manner permitted by law.

28

 

     Section 10.13. Survival. The representations and warranties of the Company and the
Investor contained in Articles IV and V of this Agreement and the covenants contained in Articles
V, VI and X of this Agreement shall survive the execution and delivery hereof and the Closing until
the termination of this Agreement, and the agreements and covenants set forth in Article VIII and
Article IX of this Agreement shall survive the execution and delivery hereof and the Closing
hereunder.

     Section 10.14. Publicity. Except as otherwise required by applicable law or
regulation, or Nasdaq rule or judicial process, prior to the Closing, neither the Company nor the
Investor shall issue any press release or otherwise make any public statement or announcement with
respect to this Agreement or the transactions contemplated hereby or the existence of this
Agreement. In the event the Company is required by law, regulation, Nasdaq rule or judicial
process, based upon reasonable advice of the Company’s inside or outside counsel, to issue a press
release or otherwise make a public statement or announcement with respect to this Agreement prior
to the Closing, the Company shall consult with the Investor on the form and substance of such press
release, statement or announcement. Promptly after the Closing, each party may issue a press
release or otherwise make a public statement or announcement with respect to this Agreement or the
transactions contemplated hereby or the existence of this Agreement; provided that, prior
to issuing any such press release, making any such public statement or announcement, the party
wishing to make such release, statement or announcement consults and cooperates in good faith with
the other party in order to formulate such press release, public statement or announcement in form
and substance reasonably acceptable to both parties.

     Section 10.15. Further Assurances. From and after the date of this Agreement, upon
the request of the Investor or the Company, each of the Company and the Investor shall execute and
deliver such instruments, documents and other writings as may be reasonably necessary or desirable
to confirm and carry out and to effectuate fully the intent and purposes of this Agreement.

     Section 10.16. Absence of Presumption. This Agreement shall be construed without
regard to any presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.

[Remainder of this page intentionally left blank]

29

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officer as of the date first written.

	 	 	 	 	 
	 	KINGSBRIDGE CAPITAL LIMITED

 	 
	 	By:  	/s/ Maria O’Donoghue
 	 
	 	 	Maria O’Donoghue 	 
	 	 	Director 	 
	 
	 	MICROMET, INC.

 	 
	 	By:  	/s/ Christian Itin
 	 
	 	 	Name:  	Christian Itin 	 
	 	 	Title:  	President & CEO 	 
	 

30

 

Exhibit A

Form of Registration Rights Agreement

 

 

Exhibit B

Warrant

 

 

Exhibit C

Officer’s Certificate

     I, [NAME OF OFFICER], do hereby certify to Kingsbridge Capital Limited (the “Investor”), with
respect to the common stock of Micromet, Inc. (the “Company”) issuable in connection with the Draw
Down Notice, dated ___ (the “Notice”) attached hereto and delivered pursuant to Article
III of the Common Stock Purchase Agreement, dated as of August 30, 2006 (the “Agreement”), by and
between the Company and the Investor, as follows (capitalized terms used but undefined herein have
the meanings given to such terms in the Agreement):

     1. I am the duly elected [OFFICER] of the Company.

     2. The representations and warranties of the Company set forth in Article IV of the Agreement
are true and correct in all material respects as though made on and as of the date hereof (except
for such representations and warranties that are made as of a particular date).

     3. The Company has performed in all material respects all covenants and agreements to be
performed by the Company on or prior to the date hereof related to the Notice and has satisfied
each of the conditions to the obligation of the Investor set forth in Article VII of the Agreement.

     4. The Shares issuable in respect of the Notice will be delivered without restrictive legend
via book entry through the Depositary Trust Company to an account designated by the Investor.

     The
undersigned has executed this Certificate this ___ day of ___, 200[_].

	 	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:exv10w2

 

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of August 30, 2006, is
by and between MICROMET, INC. (the “Company”) and KINGSBRIDGE CAPITAL LIMITED, an entity
organized and existing under the laws of the British Virgin Islands, whose registered address is
Palm Grove House, 2nd Floor, Road Town, Tortola, British Virgin Islands (the “Investor”).

     WHEREAS, the Company and the Investor have entered into that certain Common Stock Purchase
Agreement, dated as of the date hereof (the “Purchase Agreement”), pursuant to which the
Company may issue, from time to time, to the Investor up to $25 million worth of shares of Common
Stock as provided for therein;

     WHEREAS, pursuant to the terms of, and in partial consideration for the Investor entering
into, the Purchase Agreement, the Company has issued to the Investor a warrant, exercisable from
time to time, in accordance with its terms, within five (5) years following the six-month
anniversary of the date of issuance (the “Warrant”) for the purchase of an aggregate of up
to 285,000 shares of Common Stock at a price specified in such Warrant;

     WHEREAS, pursuant to the terms of, and in partial consideration for, the Investor’s agreement
to enter into the Purchase Agreement, the Company has agreed to provide the Investor with certain
registration rights with respect to the Registrable Securities (as defined in the Purchase
Agreement) as set forth herein;

     NOW, THEREFORE, in consideration of the premises, the representations, warranties, covenants
and agreements contained herein, in the Warrant, and in the Purchase Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, intending
to be legally bound hereby, the parties hereto agree as follows (capitalized terms used herein and
not defined herein shall have the respective meanings ascribed to them in the Purchase Agreement):

ARTICLE I

REGISTRATION RIGHTS

     Section 1.1. Registration Statement.

     (a) Filing of the Registration Statement. Upon the terms and subject to the
conditions set forth in this Agreement, the Company shall file with the Commission within sixty
(60) calendar days after the Closing Date a registration statement on Form S-3 under the Securities
Act or such other form as deemed appropriate by counsel to the Company for the registration for the
resale by the Investor of the Registrable Securities (the “Registration Statement”).

     (b) Effectiveness of the Registration Statement. The Company shall use commercially
reasonable efforts (i) to have the Registration Statement declared effective by the Commission as
soon as reasonably practicable, but in any event no later than one hundred eighty (180) calendar
days after the Closing Date and (ii) to ensure that the Registration Statement remains in effect
throughout the term of this Agreement as set forth in Section 4.2, subject to the terms and
conditions of this Agreement.

     (c) Regulatory Disapproval. The contemplated effective date for the Registration
Statement as described in Section 1.1(b) shall be extended without default or liquidated damages
hereunder or under the Purchase Agreement in the event that the Company’s failure to obtain the
effectiveness of the Registration Statement on a timely basis results from (i) the failure of the
Investor to timely provide the Company with information requested by the Company and necessary to
complete the Registration

 

 

Statement in accordance with the requirements of the Securities Act, or (ii) the Commission’s
disapproval of the structure of the transactions contemplated by the Purchase Agreement, or (iii)
events or circumstances that are not in any way attributable to the Company. In the event of clause
(ii) above, the parties agree to cooperate with one another in good faith to arrive at a resolution
acceptable to the Commission.

     (d) Failure to Maintain Effectiveness of Registration Statement. In the event the
Company fails to maintain the effectiveness of the Registration Statement (or the Prospectus)
throughout the period set forth in Section 4.2, other than temporary suspensions as set forth in
Section 1.1(e) and the Investor holds any Registrable Securities at any time during the period of
such ineffectiveness (an “Ineffective Period”), the Company shall pay to the Investor in
immediately available funds into an account designated by the Investor an amount equal to the
product of (x) the total number of Registrable Securities issued to the Investor under the Purchase
Agreement (which, for the avoidance of doubt, shall not include any Warrant Shares) and owned by
the Investor at any time during such Ineffective Period and (y) the result, if greater than zero,
obtained by subtracting the VWAP on the Trading Day immediately following the last day of such
Ineffective Period from the VWAP on the Trading Day immediately preceding the day on which any such
Ineffective Period began; provided, however, (i) that the foregoing payments shall
not apply in respect of Registrable Securities that are otherwise freely tradable by the Investor
or if the Company offers to repurchase from the Investor such Registrable Securities for a per
share purchase price equal to the VWAP on the Trading Day immediately preceding the day on which
any such Ineffective Period began and (ii) that the Company shall be under no obligation to
supplement the Prospectus to reflect the issuance of any Shares pursuant to a Draw Down at any time
prior to the day following the Settlement Date with respect to such Shares and that the failure to
supplement the Prospectus prior to such time period shall not be deemed a failure to maintain the
effectiveness of the Registration Statement (or Prospectus) for purposes of this Agreement
(including this Section 1.1(d)).

     (e) Deferral or Suspension During a Blackout Period. Notwithstanding the provisions
of Section 1.1(d), if in the good faith judgment of the Company, following consultation with legal
counsel, it would be detrimental to the Company or its stockholders for the Registration Statement
to be filed or for resales of Registrable Securities to be made pursuant to the Registration
Statement due to (i) the existence of a material development or potential material development
involving the Company that the Company would be obligated to disclose in the Registration
Statement, which disclosure would be premature or otherwise inadvisable at such time or would have
a Material Adverse Effect on the Company or its stockholders, or (ii) a filing of a
Company-initiated registration of any class of its equity securities, which, in the good faith
judgment of the Company, because such filing of the Registration Statement or continued resale
would adversely affect or require premature disclosure of the filing of such Company-initiated
registration (notice thereof, a “Blackout Notice”), the Company shall have the right to (A)
immediately defer such filing for a period of not more than sixty (60) days beyond the date by
which such Registration Statement was otherwise required hereunder to be filed or (B) suspend use
of such Registration Statement for a period of not more than thirty (30) days (any such deferral or
suspension period, a “Blackout Period”). The Investor acknowledges that it would be
seriously detrimental to the Company and its stockholders for such Registration Statement to be
filed (or remain in effect) during a Blackout Period and therefore essential to defer such filing
(or suspend the use thereof) during such Blackout Period and agrees to cease any disposition of the
Registrable Securities during such Blackout Period. The Company may not utilize any of its rights
under this Section 1.1(e) to defer the filing of a Registration Statement (or suspend its
effectiveness) more than six (6) times in any twelve (12) month period. In the event that, within
fifteen (15) Trading Days following any Settlement Date, the Company gives a Blackout Notice to the
Investor and the VWAP on the Trading Day immediately preceding such Blackout Period (“Old
VWAP”) is greater than the VWAP on the first Trading Day following such Blackout Period that
the Investor may sell its Registrable Securities pursuant to an effective Registration Statement
(“New VWAP”), then the Company shall pay to the Investor, by wire transfer of immediately

2

 

available funds to an account designated by the Investor, the “Blackout Amount.” For
the purposes of this Agreement, Blackout Amount means a percentage equal to: (1) seventy-five
percent (75%) if such Blackout Notice is delivered prior to the fifth (5th) Trading Day following
such Settlement Date; (2) fifty percent (50%) if such Blackout Notice is delivered on or after the
fifth (5th) Trading Day following such Settlement Date, but prior to the tenth (10th) Trading Day
following such Settlement Date; (3) twenty-five percent (25%) if such Blackout Notice is delivered
on or after the tenth (10th) Trading Day following such Settlement Date, but prior to the fifteenth
(15th) Trading Day following such Settlement Date; and (4) zero percent (0%) thereafter of: the
product of (i) the number of Registrable Securities purchased by the Investor pursuant to the most
recent Draw Down and actually held by the Investor immediately prior to the Blackout Period and
(ii) the result, if greater than zero, obtained by subtracting the New VWAP from the Old VWAP;
provided, however, that no Blackout Amount shall be payable in respect of Registrable Securities
(A) that are otherwise freely tradable by the Investor, including under Rule 144, during the
Blackout Period, or (B) if the Company offers to repurchase from the Investor such Registrable
Securities for a per share purchase price equal to the VWAP on the Trading Day immediately
preceding the day on which any such Ineffective Period began. For any Blackout Period in respect
of which a Blackout Amount becomes due and payable, rather than paying the Blackout Amount, the
Company may at is sole discretion, issue to the Investor shares of Common Stock with an aggregate
market value determined as of the first Trading Day following such Blackout Period equal to the
Blackout Amount (“Blackout Shares”).

     (f) Liquidated Damages. The Company and the Investor hereto acknowledge and agree
that the amounts payable under Sections 1.1(d) and 1.1(e) and the Blackout Shares deliverable under
Section 1.1(e) above (i) shall constitute the Investor’s sole remedy with respect to the Company’s
failure to maintain the effectiveness, or for any deferral or suspension, of the Registration
Statement, and (ii) shall constitute liquidated damages and not penalties. The parties further
acknowledge that (i) the amount of loss or damages likely to be incurred by the Investor is
incapable or is difficult to precisely estimate, (ii) the amounts specified in such subsections
bear a reasonable proportion and are not plainly or grossly disproportionate to the probable loss
likely to be incurred in connection with any failure by the Company to obtain or maintain the
effectiveness of the Registration Statement, (iii) one of the reasons for the Company and the
Investor reaching an agreement as to such amounts was the uncertainty and cost of litigation
regarding the question of actual damages, and (iv) the Company and the Investor are sophisticated
business parties and have been represented by sophisticated and able legal and financial counsel
and negotiated this Agreement at arm’s length. The Investor further agrees that, if the Company
makes the payments provided for in Section 1.1(e), the Company’s deferral or suspension of the
Registration Statement pursuant to Section 1.1(e) shall not constitute a material breach or default
of any obligation of the Company to the Investor.

     (g) Additional Registration Statements. In the event and to the extent that the
Registration Statement fails to register a sufficient amount of Common Stock necessary for the
Company to issue and sell to the Investor and the Investor to purchase from the Company all of the
Registrable Securities to be issued, sold and purchased under the Purchase Agreement and the
Warrant, the Company shall, upon a timetable mutually agreeable to both the Company and the
Investor, prepare and file with the Commission an additional registration statement or statements
in order to effectuate the purpose of this Agreement, the Purchase Agreement and the Warrant.

ARTICLE II

REGISTRATION PROCEDURES

     Section 2.1. Filings; Information. The Company shall effect the registration with
respect to the sale of the Registrable Securities by the Investor in accordance with the intended
methods of disposition thereof. Without limiting the foregoing, the Company in each such case will
do the following

3

 

as expeditiously as possible, but in no event later than the deadline, if any, prescribed
therefor in this Agreement:

     (a) Subject to Section 1.1(e), the Company shall (i) prepare and file with the Commission the
Registration Statement; (ii) use commercially reasonable efforts to cause such filed Registration
Statement to become and to remain effective (pursuant to Rule 415 under the Securities Act or
otherwise); (iii) prepare and file with the Commission such amendments and supplements to the
Registration Statement and the Prospectus used in connection therewith as may be necessary to keep
such Registration Statement effective for the time period prescribed by Section 4.2 and in order to
effectuate the purpose of this Agreement, the Purchase Agreement and the Warrant and (iv) comply
with the provisions of the Securities Act with respect to the disposition of all securities covered
by such Registration Statement during such period in accordance with the intended methods of
disposition by the Investor set forth in such Registration Statement; provided,
however, that the Company shall be under no obligation to supplement the Prospectus to
reflect the issuance of any Shares pursuant to a Draw Down at any time prior to the Trading Day
following the Settlement Date with respect to such Shares and, provided further,
that the Investor shall be responsible for the delivery of the Prospectus to the Persons to whom
the Investor sells the Shares and the Warrant Shares, and the Investor agrees to dispose of
Registrable Securities in compliance with the plan of distribution described in the Registration
Statement and otherwise in compliance with applicable federal and state securities laws.

     (b) Three (3) Trading Days prior to filing the Registration Statement or Prospectus, or any
amendment or supplement thereto (excluding amendments deemed to result from the filing of documents
incorporated by reference therein, supplements to the Prospectus required in respect of any
particular Settlement Date, and supplements to the Registration Statement for which consent of or
notice to the Investor is not required pursuant to Section 6.12 of the Purchase Agreement), the
Company shall deliver to the Investor and to counsel representing the Investor, in accordance with
the notice provisions of Section 4.8, copies of the Registration Statement, Prospectus and/or any
amendments or supplements thereto as proposed to be filed, together with exhibits thereto, which
documents will be subject to review by the Investor and such counsel, and thereafter deliver to the
Investor and such counsel, in accordance with the notice provisions of Section 4.8, such number of
copies of the Registration Statement, each amendment and supplement thereto (in each case including
all exhibits thereto), the Prospectus (including each preliminary prospectus) and such other
documents or information as the Investor or counsel may reasonably request in order to facilitate
the disposition of the Registrable Securities, provided, however, that to the extent reasonably
practicable, such delivery may be accomplished via electronic means.

     (c) After the filing of the Registration Statement, the Company shall promptly notify the
Investor of any stop order issued or threatened by the Commission in connection therewith and take
all commercially reasonable actions required to prevent the entry of such stop order or to remove
it if entered.

     (d) The Company shall use commercially reasonable efforts to (i) register or qualify the
Registrable Securities under such other securities or blue sky laws of each jurisdiction in the
United States as the Investor may reasonably (in light of its intended plan of distribution)
request, and (ii) cause the Registrable Securities to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary by virtue of the
business and operations of the Company and do any and all other customary acts and things that may
be reasonably necessary or advisable to enable the Investor to consummate the disposition of the
Registrable Securities; provided, however, that the Company will not be required to
qualify generally to do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 2.1(d), subject itself to taxation in any such jurisdiction, consent
or subject itself to general service of process in any such jurisdiction,

4

 

change any existing business practices, benefit plans or outstanding securities or amend or
otherwise modify the Charter or Bylaws.

     (e) The Company shall make available to the Investor (and will deliver to Investor’s counsel),
(A) subject to restrictions imposed by the United States federal government or any agency or
instrumentality thereof, copies of all public correspondence between the Commission and the Company
concerning the Registration Statement and will also make available for inspection by the Investor
and any attorney, accountant or other professional retained by the Investor (collectively, the
“Inspectors”), (B) upon reasonable advance notice during normal business hours all
financial and other records, pertinent corporate documents and properties of the Company
(collectively, the “Records”) as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company’s officers and employees to supply all
information reasonably requested by any Inspectors in connection with the Registration Statement;
provided, however, that any such Inspectors must agree in writing for the benefit
of the Company not to use or disclose any such Records except as provided in this Section 2.1(e).
Records that the Company determines, in good faith, to be confidential and that it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless the disclosure or
release of such Records is requested or required pursuant to oral questions, interrogatories,
requests for information or documents or a subpoena or other order from a court of competent
jurisdiction or other judicial or governmental process; provided, however, that
prior to any disclosure or release pursuant to the immediately preceding clause, the Inspectors
shall provide the Company with prompt notice of any such request or requirement so that the Company
may seek an appropriate protective order or waive such Inspectors’ obligation not to disclose such
Records; and, provided, further, that if failing the entry of a protective order or
the waiver by the Company permitting the disclosure or release of such Records, the Inspectors,
upon advice of counsel, are compelled to disclose such Records, the Inspectors may disclose that
portion of the Records that counsel has advised the Inspectors that the Inspectors are compelled to
disclose; provided, however, that upon any such required disclosure, such Inspector
shall use his or her best efforts to obtain reasonable assurances that confidential treatment will
be afforded such information. The Investor agrees that information obtained by it solely as a
result of such inspections (not including any information obtained from a third party who, insofar
as is known to the Investor after reasonable inquiry, is not prohibited from providing such
information by a contractual, legal or fiduciary obligation to the Company) shall be deemed
confidential and shall not be used for any purposes other than as indicated above or by it as the
basis for any market transactions in the securities of the Company or its affiliates unless and
until such information is made generally available to the public. The Investor further agrees that
it will, upon learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential.

     (f) The Company shall otherwise comply in all material respects with all applicable rules and
regulations of the Commission, including, without limitation, compliance with applicable reporting
requirements under the Exchange Act.

     (g) The Company shall appoint (or shall have appointed) a transfer agent and registrar for all
of the Registrable Securities covered by such Registration Statement not later than the effective
date of such Registration Statement.

     (h) The Investor shall cooperate with the Company, as reasonably requested by the Company, in
connection with the preparation and filing of any Registration Statement hereunder. The Company
may require the Investor to promptly furnish in writing to the Company such information as may be
required in connection with such registration including, without limitation, all such information
as may be requested by the Commission or the NASD or any state securities commission and all such
information regarding the Investor, the Registrable Securities held by the Investor and the
intended method of

5

 

disposition of the Registrable Securities. The Investor agrees to provide such information
requested in connection with such registration within five (5) business days after receiving such
written request and the Company shall not be responsible for any delays in obtaining or maintaining
the effectiveness of the Registration Statement caused by the Investor’s failure to timely provide
such information.

     (i) Upon receipt of a Blackout Notice from the Company, the Investor shall immediately
discontinue disposition of Registrable Securities pursuant to the Registration Statement covering
such Registrable Securities until (i) the Company advises the Investor that the Blackout Period has
terminated and (ii) the Investor receives copies of a supplemented or amended prospectus, if
necessary. If so directed by the Company, the Investor will deliver to the Company (at the expense
of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in
the Investor’s possession (other than a limited number of file copies) of the prospectus covering
such Registrable Securities that is current at the time of receipt of such notice.

     Section 2.2. Registration Expenses. Except as set forth in Section 10.01 of the
Purchase Agreement, the Company shall pay all registration expenses incurred in connection with the
Registration Statement (the “Registration Expenses”), including, without limitation: (i)
all registration, filing, securities exchange listing and fees required by the National Association
of Securities Dealers, (ii) all registration, filing, qualification and other fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel
in connection with blue sky qualifications of the Registrable Securities), (iii) all word
processing, duplicating, printing, messenger and delivery expenses, (iv) the Company’s internal
expenses (including, without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), (v) the fees and expenses incurred by the Company in
connection with the listing of the Registrable Securities, (vi) reasonable fees and disbursements
of counsel for the Company and customary fees and expenses for independent certified public
accountants retained by the Company (including the expenses of any special audits or comfort
letters or costs associated with the delivery by independent certified public accountants of such
special audit(s) or comfort letter(s), (vii) the fees and expenses of any special experts retained
by the Company in connection with such registration and amendments and supplements to the
Registration Statement and Prospectus, and (viii) premiums and other costs of the Company for
policies of insurance against liabilities of the Company arising out of any public offering of the
Registrable Securities being registered to the extent the Company in its discretion elects to
obtain and maintain insurance. Any fees and disbursements of underwriters, broker-dealers or
investment bankers, including without limitation underwriting fees, discounts, transfer taxes or
commissions, and any other fees or expenses (including legal fees and expenses) if any,
attributable to the sale of Registrable Securities, shall be payable by each holder of Registrable
Securities pro rata on the basis of the number of Registrable Securities of each such holder that
are included in a registration under this Agreement.

ARTICLE III

INDEMNIFICATION

     Section 3.1. Indemnification. The Company agrees to indemnify and hold harmless the
Investor, its partners, affiliates, officers, directors, employees and duly authorized agents, and
each Person or entity, if any, who controls the Investor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, together with the partners, affiliates, officers,
directors, employees and duly authorized agents of such controlling Person or entity (collectively,
the “Controlling Persons”), from and against any loss, claim, damage, liability, costs and
expenses (including, without limitation, reasonable attorneys’ fees and disbursements and costs and
expenses of investigating and defending any such claim) (collectively, “Damages”), joint or
several, and any action or proceeding in respect thereof to which the Investor, its partners,
affiliates, officers, directors, employees and duly authorized agents, and any Controlling Person,
may become subject under the Securities Act or otherwise, as incurred, insofar as

6

 

such Damages (or actions or proceedings in respect thereof) arise out of, or are based upon,
any untrue statement or alleged untrue statement of a material fact contained in any Registration
Statement, or in any preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement relating to the Registrable Securities or arises out of, or are based upon, any omission
or alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein under the circumstances not misleading, and shall reimburse the
Investor, its partners, affiliates, officers, directors, employees and duly authorized agents, and
each such Controlling Person, for any legal and other expenses reasonably incurred by the Investor,
its partners, affiliates, officers, directors, employees and duly authorized agents, or any such
Controlling Person, as incurred, in investigating or defending or preparing to defend against any
such Damages or actions or proceedings; provided, however, that the Company shall
not be liable to the extent that any such Damages arise out of the Investor’s (or any other
indemnified Person’s) (i) failure to send or give a copy of the final prospectus or supplement (as
then amended or supplemented) to the persons asserting an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written confirmation of the sale of
Registrable Securities to such person if such statement or omission was corrected in such final
prospectus or supplement or (ii) written confirmation of the sale of Registrable Securities
purchased in any specific Draw Down prior to the filing of a supplement to the Prospectus to
reflect such Draw Down (provided the Company is in compliance with its covenants with respect to
the filing of such supplement); provided, further, that the Company shall not be
liable to the extent that any such Damages arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such Registration Statement, or
any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the Company by or on behalf
of the Investor or any other person who participates as an underwriter in the offering or sale of
such securities, in either case, specifically stating that it is for use in the preparation
thereof. In connection with any Registration Statement with respect to which the Investor is
participating, such Investor will indemnify and hold harmless, to the same extent and in the same
manner as set forth in the preceding paragraph, the Company, each of its partners, affiliates,
officers, directors, employees and duly authorized agents of such controlling Person (each a
“Company Indemnified Person”) against any Damages to which any Company Indemnified Person
may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Damages
arise out of or are based upon (a) any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement, or in any preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement relating to the Registrable Securities or arise out of,
or are based upon, any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein under the circumstances not misleading
to the extent that such violation occurs in reliance upon and in conformity with written
information furnished to the Company by the Investor or on behalf of the Investor expressly for use
in connection with such Registration Statement, (b) any failure by the Investor to comply with
prospectus delivery requirements of the Securities Act, the Exchange Act or any other law or legal
requirement applicabl
e to sales under the Registration Statement, or (c) a written confirmation of
the sale of Registrable Securities purchased by such Investor in any specific Draw Down prior to
the filing of a supplement to the Prospectus to reflect such Draw Down (provided the Company is in
compliance with its covenants with respect to the filing of such supplement).

     Section 3.2. Conduct of Indemnification Proceedings. All claims for indemnification
under Section 3.1 shall be asserted and resolved in accordance with the provisions of Section 9.02
of the Purchase Agreement.

     Section 3.3. Additional Indemnification. Indemnification similar to that specified in
the preceding paragraphs of this Article 3 (with appropriate modifications) shall be given by the
Company and the Investor with respect to any required registration or other qualification of
securities under any federal or state law or regulation of any governmental authority other than
the Securities Act. The

7

 

provisions of this Article III shall be in addition to any other rights to indemnification,
contribution or other remedies which an Indemnified Party or a Company Indemnified Person may have
pursuant to law, equity, contract or otherwise.

     To the extent that any indemnification provided for herein is prohibited or limited by law,
the indemnifying party will make the maximum contribution with respect to any amounts for which it
would otherwise be liable under this Article III to the fullest extent permitted by law. However,
(a) no contribution will be made under circumstances where maker of such contribution would not
have been required to indemnify the indemnified party under the fault standards set forth in this
Article III, (b) if the Investor is guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) the Investor will not be entitled to contribution from any
Person who is not guilty of such fraudulent misrepresentation, and (c) contribution (together with
any indemnification obligations under this Agreement) by the Investor will be limited in amount to
the proceeds received by the Investor from sales of Registrable Securities.

ARTICLE IV

MISCELLANEOUS

     Section 4.1. No Outstanding Registration Rights. Except as otherwise disclosed in
accordance with the Purchase Agreement or in the Commission Documents, the Company represents and
warrants to the Investor that there is not in effect on the date hereof any agreement by the
Company pursuant to which any holders of securities of the Company have a right to cause the
Company to register or qualify such securities under the Securities Act or any securities or blue
sky laws of any jurisdiction.

     Section 4.2. Term. The registration rights provided to the holders of Registrable
Securities hereunder, and the Company’s obligation to keep the Registration Statement effective,
shall terminate at the earlier of (i) such time that is two years following the termination of the
Purchase Agreement, (ii) such time as all Registrable Securities have been issued and have ceased
to be Registrable Securities, or (iii) upon the consummation of an “Excluded Merger or Sale” as
defined in the Warrant. Notwithstanding the foregoing, paragraph (d) of Section 1.1, Article III,
Section 4.7, Section 4.8, Section 4.9, Section 4.10 and Section 4.13 shall survive the termination
of this Agreement.

     Section 4.3. Rule 144. The Company will, at its expense, promptly take such action as
holders of Registrable Securities may reasonably request to enable such holders of Registrable
Securities to sell Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act (“Rule
144”), as such Rule may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the Commission. If at any time the Company is not required to file such
reports, it will, at its expense, forthwith upon the written request of any holder of Registrable
Securities, make available adequate current public information with respect to the Company within
the meaning of paragraph (c)(2) of Rule 144 or such other information as necessary to permit sales
pursuant to Rule 144. Upon the request of the Investor, the Company will deliver to the Investor a
written statement, signed by the Company’s principal financial officer, as to whether it has
complied with such requirements.

     Section 4.4. Certificate. The Company will, at its expense, forthwith upon the
request of any holder of Registrable Securities, deliver to such holder a certificate, signed by
the Company’s principal financial officer, stating (a) the Company’s name, address and telephone
number (including area code), (b) the Company’s Internal Revenue Service identification number, (c)
the Company’s Commission file number, (d) the number of shares of each class of Stock outstanding
as shown by the most recent report or statement published by the Company, and (e) whether the
Company has filed the reports required to be

8

 

filed under the Exchange Act for a period of at least ninety (90) days prior to the date of
such certificate and in addition has filed the most recent annual report required to be filed
thereunder.

     Section 4.5. Amendment And Modification. Any provision of this Agreement may be
waived, provided that such waiver is set forth in a writing executed by both parties to this
Agreement. The provisions of this Agreement, including the provisions of this sentence, may be
amended, modified or supplemented, and waivers or consents to departures from the provisions hereof
may be given, only with the written consent of the Investor and the Company. No course of dealing
between or among any Person having any interest in this Agreement will be deemed effective to
modify, amend or discharge any part of this Agreement or any rights or obligations of any person
under or by reason of this Agreement.

     Section 4.6. Successors and Assigns; Entire Agreement. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. The Company may assign this Agreement at any time in
connection with a sale or acquisition of the Company, whether by merger, consolidation, sale of all
or substantially all of the Company’s assets, or similar transaction, without the consent of the
Investor, provided that the successor or acquiring Person or entity agrees in writing to assume all
of the Company’s rights and obligations under this Agreement. The Investor may assign its rights
and obligations under this Agreement only to (i) an affiliate that meets all applicable
requirements of federal and state securities laws, or (ii) with the prior written consent of the
Company, and any purported assignment by the Investor other than as set forth above shall be null
and void. This Agreement, together with the Purchase Agreement and the Warrant sets forth the
entire agreement and understanding between the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and every nature among
them.

     Section 4.7. Severability. If any provision of this Agreement becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall
continue in full force and effect without said provision; provided that if the severance of
such provision materially changes the economic benefits of this Agreement to either party as such
benefits are anticipated as of the date hereof, then such party may terminate this Agreement on
five (5) Business Days prior written notice to the other party. In such event, the Purchase
Agreement will terminate simultaneously with the termination of this Agreement.

     Section 4.8. Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be given in accordance with Section 10.04 of
the Purchase Agreement.

     Section 4.9. Governing Law; Dispute Resolution. This Agreement shall be construed
under the laws of the State of New York.

     Section 4.10. Headings. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they affect their
meaning, construction or effect.

     Section 4.11. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed to be an original instrument and all of which together shall
constitute one and the same instrument.

     Section 4.12. Further Assurances. Each party shall cooperate and take such action as
may be reasonably requested by another party in order to carry out the provisions and purposes of
this Agreement and the transactions contemplated hereby.

9

 

     Section 4.13. Absence of Presumption. This Agreement shall be construed without
regard to any presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.

[Remainder of this page intentionally left blank]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by the
undersigned, thereunto duly authorized, as of the date first set forth above.

	 	 	 	 	 
	 	MICROMET, INC.

 	 
	 	By:  	/s/ Christian Itin
 	 
	 	 	Name:  	Christian Itin 	 
	 	 	Title:  	President & CEO 	 
	 
	 	KINGSBRIDGE CAPITAL LIMITED

 	 
	 	By:  	/s/ Maria O’Donoghue
 	 
	 	 	Maria O’Donoghue 	 
	 	 	Director 	 
	 

11

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