Document:

exv10w24

 

EXHIBIT 10.24

ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.

600 TELEPHONE AVENUE

ANCHORAGE, AK 99503

November 7, 2007

Leonard Steinberg

c/o Alaska Communications Systems

600 Telephone Ave.

Anchorage, AK 99503

Re: Employment Agreement 

Dear Leonard:

          This letter agreement (“Agreement”) sets forth the terms and conditions of your continued
employment with Alaska Communications Systems Holdings, Inc. (hereinafter “ACS” or the “Company”),
effective as of the date hereof (hereinafter, the “Effective Date”).

     1.     Employment and Services. You will continue to serve ACS in your role as Vice President,
General Counsel and Corporate Secretary (hereinafter “Executive” or “you”), for the period
beginning on the Effective Date and ending upon termination pursuant to paragraph 4 (the
“Employment Period”). During the Employment Period, you shall render such services to the Company
and its affiliates and subsidiaries as the Board of Directors of Alaska Communications Systems
Holdings, Inc. or its affiliates (hereinafter “Board of Directors”) shall reasonably designate from
time to time, and you shall devote your best efforts and full time and attention as an Executive
Officer to the business of the Company. “Executive Officer” for the purpose of this Agreement is
defined as an officer reporting to the CEO or similar executive responsible for business
operations. Your responsibility includes operational decision making and goal setting of the
business as required by and to support the Company strategy and achievement of corporate goals in
the areas outlined in Appendix A.

     2.     Compensation. The Company shall pay you an annual base salary (“Annual Base Salary”) of
$220,000 during the first year of the Employment Period, subject to annual review in each year of
the Employment Period thereafter (for any partial year during the Employment Period, the Annual
Base Salary shall be prorated based on the number of days during such year on which you are
employed by the Company). Your Annual Base Salary may be increased in years following the first
year of employment but may not be decreased. As used herein, the term “Annual Base Salary” refers
to the Annual Base Salary as so increased. Such Annual Base Salary shall be payable in installments
in accordance with the Company’s regular payroll practices.

          In addition, you will be eligible to receive an annual cash incentive payment (“Cash
Incentive”) to be awarded ninety (90) days after the end of each fiscal year, to be paid as soon as
practicable but not later than one hundred twenty (120) days after the end of the fiscal year. In
order to determine the amount of such Cash Incentive, the Company, acting in good faith, shall
determine appropriate Company business targets and, as it may deem appropriate,

1

 

specific performance targets applicable to you for each fiscal year, and your Cash Incentive
shall be based upon 100% attainment of such targets. The Company agrees that if the Company attains
its business targets and you attain all performance targets specifically applicable to you, you
shall receive a Cash Incentive equal to one hundred percent (100%) of your Annual Base Salary in
effect with respect to any such fiscal year. In the event that the Company exceeds or does not
exceed the business targets and/or you exceed or do not exceed one or more of the performance
targets specifically applicable to you, there shall be appropriate adjustments in the amount of
your Cash Incentive as provided for in the Company’s then applicable cash incentive program, as may
be amended from time to time. The determination of appropriate performance targets shall take
place not later than ninety (90) days subsequent to the commencement of the Company’s fiscal year,
and all performance targets shall be provided to you within thirty (30) days of the Company’s
determination of such performance targets.

          (a)     [Reserved]

          (b)     During the course of the Employment Period, you may be granted performance-accelerated
restricted stock and long-term performance accelerated restricted stock. Performance-accelerated
restricted stock and long-term performance accelerated restricted stock generally vest during the
fifth year following the Effective Date, unless earlier acceleration occurs as a result of the
achievement of specified annual performance targets or three-year performance targets,
respectively. Future equity awards may vary and are subject to continued approval by the Company’s
board of directors. Vesting ceases for all equity awards upon termination of your employment,
subject to certain exceptions set forth in such awards. Notwithstanding anything to the contrary
in this paragraph 2(b), all equity compensation is subject to approval by the Company’s board of
directors with terms and conditions set forth in the Company’s standard restricted stock or
equivalent documentation, and all grants set forth herein are subject to your execution of and
assent to such documentation, provided, however, that the provisions set forth in
Sections 2(b)(i) and (ii) below shall apply to such grants (notwithstanding any general integration
language in such grant documentation) unless expressly and specifically amended by such grant
documentation.

               (i) In the event the Employment Period shall terminate without Cause or for Good Reason during
a Change in Control Period (as defined below) any and all shares subject to any option agreements
or restricted stock agreements between the Company and the Executive shall automatically vest in
full at that time.

               (ii) In the event the Employment Period shall terminate without Cause or for Good Reason
during a time other than during a Change in Control Period, continued vesting shall occur with
respect to any shares subject to a performance-accelerated restricted stock agreement previously
entered into between the Company and the Executive during the twelve (12) months following the end
of the Employment Period; provided however, that additional vesting under this
subparagraph 2(b)(ii) shall be provided to Participant ratably in such proportion as the length of
Executive’s employment (during the applicable performance period giving rise to the acceleration of
such restricted stock) bears to the total length of such performance period. No time vesting
provisions related to restricted stock or any options shall continue after termination of the
Employment Period under this subparagraph 2(b)(ii). For the purposes of the foregoing proportion,
a Participant’s employment shall be deemed to have

2

 

continued for the entirety of any month the Participant has remained an employee as of at
least the fifteenth (15th) day of such month. For illustrative purposes only, if a restricted
stock grant provides for acceleration based on the Company’s performance during calendar year 2010,
and Participant terminates his or her employment for Good Reason on February 15, 2010, should the
Company’s performance satisfy the requirements of accelerated vesting set forth in the restricted
stock grant, one-sixth (1/6th) of the Participant’s restricted stock shall accelerate and vest in
2011. All other restricted stock shall be deemed forfeited by the Participant.

     3.     Benefits. During the Employment Period, you shall be entitled to participate in the
Company’s employment benefit plans which may be amended, eliminated or replaced from time to time,
subject to and in accordance with applicable eligibility requirements, such as life and disability
insurance plans (other than severance plans or arrangements which are provided for herein.)

     4.     Termination and Severance. The Employment Period shall terminate on the first to occur of:

          (a)     thirty (30) days following written notice by you to the Company of your resignation (with
or without Good Reason) not in connection with a Change in Control, (it being understood that you
will continue to perform your services hereunder during such thirty (30) day period);

          (b)     ninety (90) days following written notice by you to the Company of your resignation
following or in connection with a Change in Control, (it being understood that you will continue to
perform your services hereunder during the ninety (90) day period following the Change in Control)

          (c)     your death or Disability,

          (d)     your termination by the Company with or without Cause,

          (e)     on the fifth anniversary of the Effective Date (the “Scheduled Expiration Date”);
provided, however, that the Scheduled Expiration Date shall be automatically
extended for successive one-year periods unless, at least ninety (90) days prior to the
then-current Scheduled Expiration Date, either the Company or you shall give written notice to the
other of an intention not to extend the Employment Period.

3

 

          In the event the Employment Period shall terminate (i) by the Company without Cause, (ii) by
you for Good Reason or (iii) as a result of the Company’s notice to you of an intention not to
extend the Employment Period after the Scheduled Expiration Date, the Company shall concurrently
therewith pay to you in twelve consecutive equal monthly installments an aggregate sum equal to one
times (1X) your Annual Base Salary plus one times (1X) your Cash Incentive. You shall also be
reimbursed for the cost of continuing your health insurance coverage under COBRA for the twelve
(12) month period following such a termination.

          In the event the Employment Period shall terminate (i) by the Company without Cause, (ii) by
you for Good Reason, (iii) as a result of your death or Disability or (iv) as a result of the
Company’s notice to you of an intention not to extend the Employment Period after the Scheduled
Expiration Date, the Company shall provide personal travel for you, your spouse and dependent
family members and transport of household belongings to a maximum of $50,000, if you or, in the
event of your death, your spouse or dependent family members, elect to relocate to the lower 48
states within three (3) months of termination of the Employment Period. In the event of
Executive’s death, the relocation benefit contained in this paragraph will be provided to
Executive’s spouse and dependent family members.

          Except as otherwise set forth in this paragraph 4 or pursuant to the terms of employee benefit
plans in which you participate pursuant to paragraph 3, you shall not be entitled to any
compensation or other payment from the Company in connection with termination of your employment.

     5.     Definitions. For purpose of this Agreement, the following definitions will
apply:

          (a)     “Good Reason” shall mean: (i) the assignment of you by the Company to a position with a
title or duties that are materially inconsistent with or constitute a material diminution of your
role of Executive Officer, it being understood that the addition or reassignment of duties and
responsibilities or change of title as deemed necessary for the operation of the business by the
Executive Officers of the Company, including you, shall not, in and of itself, constitute Good
Reason for purposes of this paragraph; or (ii) the transfer, without your concurrence, of your
principal place of employment to a geographic location more than forty (40) miles from your then
current principal place of employment. To be eligible for any severance payments under this
provision, you must terminate the Employment Agreement for Good Reason within 180 days of the event
identified in (i) or (ii) or else forfeit any and all right to the severance benefits as set forth
in paragraph 2(b)(ii).

          (b)     “Cause” shall mean: (i) your willful failure to comply with lawful directions of the Board
of Directors of the Company that is not cured within thirty (30) days of your receipt of written
notice from either the Board of the Company or of its subsidiaries, of your specific failure to
perform lawful directions; (ii) a willful or knowing material misrepresentation to the Board of the
Company or its affiliates, or your supervisor, or a conviction or guilty plea to (A) any felony or
(B) a misdemeanor involving fraud, dishonesty, or moral turpitude; or (iii) a material breach of
this Agreement (other than due to physical or mental illness) that is not cured to the extent
deemed capable by the Board or the Chief Executive Officer of the Company within

4

 

its or her reasonable discretion within thirty (30) days after receiving written notice from
either the Board or the Chief Executive Officer of the Company, as the case may be, of your
specific failure to perform your duties;

          (c)     “Change in Control” shall mean: (i) the acquisition by any person or group (as that term
is used in Regulation 13D under the Securities Exchange Act of 1934, as amended), other than any of
its affiliates, of beneficial ownership of a majority or more of the Company’s outstanding voting
securities; or (ii) any sale, lease, exchange or other transfer in one transaction or a series of
transactions, other than to an entity with substantially the same equity holders as immediately
prior to such transfer, of all or substantially all of the assets of the Company or its operating
subsidiaries (taken together), or any plan for the liquidation or dissolution of the Company;

          (d)     “Change in Control Period” means the period beginning two (2) months prior to the date of
a Change in Control and ending twelve (12) months after the date of a Change in Control.

          (e)     “Disability” shall mean that, for a period of six (6) consecutive months in any twelve
(12) month period, you are incapable of substantially fulfilling the duties of your positions as
set forth in paragraph 1 because of physical, mental or emotional incapacity resulting from injury,
sickness or disease. Any question as to the existence or extent of the Disability upon which you
and the Company cannot agree shall be determined by a qualified, independent physician agreed to by
the Company and by you or in the event of your incapacity, your guardian, within ten (10) days of
written notice by either party. The determination of any such physician shall be final and
conclusive for all purposes; provided, however, that you or your legal representatives shall have
the right to present to such physician such information as to such Disability as you or they may
deem appropriate, including the opinion of your personal physician.

          (f)     “Potential Transaction” shall mean any merger, acquisition, disposition, joint venture,
partnership, strategic alliance, ownership, partial ownership, lender or borrower relationship or
relationship of significant control or influence with any party.

     6.     Confidential Information. You acknowledge that information obtained by you while employed
by the Company concerning the business or affairs of (i) the Company, its affiliates and
subsidiaries or (ii) any enterprise that is the subject of an actual or Potential Transaction,
considered, evaluated, reviewed or otherwise made known to you by the Company, its affiliates or
subsidiaries (“Confidential Information”) is the property of the Company. You shall not, without
the prior written consent of the Company, disclose to any person or use for your own account any
Confidential Information except (i) in the normal course of performance of your duties hereunder,
(ii) to the extent necessary to comply with applicable laws, or (iii) to the extent that such
information becomes generally known to and available for use by the public other than as a result
of your acts or omissions to act. Upon termination of your employment or at the request of the
Company at any time, you shall deliver to the Company all documents containing Confidential
Information relating to the business or affairs of the Company that you may then possess or have
under your control.

5

 

     7.     Non-Competition; Non-Solicitation.

          (a)     Non-Competition. You acknowledge that you are and will be in possession of Confidential
Information and that your services are of unique and great value to the Company. Accordingly, from
the Effective Date until the expiration of the period ending twelve (12) months from the date of
the termination of your employment with the Company or its affiliated companies (the “Non-Compete
Period”), you shall not directly or indirectly own, invest (equity or debt) in, manage, control,
participate in, consult with, advise, render services to, or in any manner engage in, or be
connected as an employee, officer, partner, director, consultant or otherwise with (i) the
provision of telecommunications services in the state of Alaska, or (ii) any enterprise that is
engaged in the provision of telecommunications services and is the active subject of a Potential
Transaction in which you are directly involved or have material knowledge at any time prior to the
termination of this Agreement (a “Competitive Business”). Nothing herein shall prohibit you from
being a passive owner of not more than one percent (1 %) of any publicly traded class of capital
stock of any entity engaged in a Competitive Business.

          (b)     Non-Solicitation. During the Non-Compete Period, you shall not directly or indirectly
induce or attempt to induce any employee of the Company or its affiliates or subsidiaries to
terminate, or in any way interfere with, the relationship between the Company or its affiliates or
subsidiaries and any employee thereof, nor shall you directly or indirectly solicit or attempt to
solicit business from any customer or supplier of the Company or its affiliates or subsidiaries.

          (c)     Scope of Restriction. If, at the time of enforcement of this paragraph 6, a court shall
hold that the duration, scope or area restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum duration, scope or area
reasonable under such circumstances shall be substituted for the stated duration, scope or area.

     8.     Survival. Any termination of your employment or of this Agreement shall have no effect on
the continuing operation of those provisions that by their nature continue beyond the term of this
Agreement, including Sections 4, 5, 6, or 7 for the periods specified therein.

     9.     Indemnification. The Company agrees to indemnify you and hold you harmless from any and
all claims arising from or relating to your status as an employee, officer, Executive Officer,
director or agent of the Company, its affiliates, or subsidiaries, to the fullest extent permitted
by Delaware law other than claims arising from your gross negligence.

     10.     Waiver of Claims. You agree as a condition to your receipt of any termination or
severance benefits pursuant to Section 4 hereof that you waive, discharge and release any and all
claims, demands and causes of action, whether known or unknown, against the Company, its affiliates
and subsidiaries, and their respective current and former directors, officers, employees, attorneys
and agents arising out of, connected with or incidental to your employment or other dealings with
the Company, its affiliates or subsidiaries, which you or anyone acting on your behalf might
otherwise have had or asserted and any claim to any compensation or benefits from your employment
with the Company or its affiliates (other than pursuant to the terms of this Agreement or of any
employee benefit plans set forth in paragraph 3 hereof) provided, however, that in no event do you
waive any claims you may have under section 8 above.

6

 

     11.     Governing Law. This Agreement and all questions concerning the construction, validity and
interpretation of this Agreement shall be governed by and determined in accordance with the
internal law, and not the law of conflicts, of the State of Delaware. All disputes between ACS and
Executive (whether contractual or otherwise, including, without limitation, disputes relating to or
arising under or by reason of this Agreement or the other agreements referred to herein) must be
resolved by binding confidential arbitration held within thirty (30) miles of Executive’s place of
employment, specific location to be selected by the Board of Directors of Alaska Communications
Systems Holdings, Inc. Such arbitration shall be conducted in accordance with the rules of the
National Rules for Resolution of Employment Disputes of the American Arbitration Association (the
AAA) and judgment on the award rendered in such arbitration may be entered in any court having
jurisdiction. Nothing in this Agreement shall restrict the right of ACS or its affiliates to seek
injunctive relief arising out of any violation by the Executive of this Agreement. This Agreement
is intended by ACS and Executive to be a binding and completely integrated agreement superseding
all prior and contemporaneous promises, representations, offers, contracts and agreements between
ACS and Executive. This Agreement may not be amended except in writing executed by Executive and
the Chairman of the Board of ACS (or other Board’ authorized designee). This Agreement shall only
be binding on ACS and Executive if and when both parties have executed the Agreement in
counterparts.

     12.     Notices. All demands, notices and communications hereunder shall be in writing and shall
be deemed to have been duly given, if mailed, by registered or certified mail, return receipt
requested, or, if by other means, when received by the other party at the address set forth herein,
or such other address as may hereafter be furnished to the other party by like notice.

     Notice or communication hereunder shall be deemed to have been received on the date delivered
to or received at the premises of the addressee if delivered other than by mail, and in the case of
mail, upon the depositing of the same in the United States mail as above stated (as evidenced, in
the case of registered or certified mail, by the date noted on the return receipt.) Notices shall
be addressed as follows:

	 	 	 
	If to the Executive:

	 	Leonard Steinberg

c/o Alaska Communications Systems

600 Telephone Avenue

Anchorage, Alaska 99503
	 
	 	 
	If to the Company:

	 	Alaska Communications Systems Holdings, Inc.

600 Telephone Avenue

Anchorage, Alaska 99503

Attention: President & CEO

     13.     Severability Clause. Any part, provision, representation or warranty of this Agreement,
which is prohibited, or which is held to be void or unenforceable shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof.

7

 

     14.     Successors and Assigns; Assignment of Agreement. This Agreement shall bind and inure to
the benefit of and be enforceable by the parties hereto and the respective successors and assigns
of the parties hereto. As used in this Agreement, “Company,” and “ACS” shall mean the Company, and
ACS as hereinbefore defined and any subsidiaries and successors to their businesses and/or assets
which assume this Agreement by operation of law, or otherwise. This Agreement is personal to you
and without the prior written consent of the Company shall not be assignable by you otherwise than
by will or the laws of descent and distribution.

     15.     Waiver. The failure of any party to insist upon strict performance of a covenant
hereunder or of any obligation hereunder, irrespective of the length of time for which such failure
continues, shall not be a waiver of such party’s right to demand strict compliance in the future.
No consent or waiver, express or implied, to or of any breach or default in the performance of any
obligation hereunder, shall constitute a consent or waiver to or of any other breach or default in
the performance of the same or any other obligation hereunder. No term or provision of the
Agreement may be waived unless such waiver is in writing and signed by the party against whom such
waiver is sought to be enforced.

     16.     Entire Agreement. This Agreement constitutes the entire Agreement between the parties
hereto with respect to the subject matter contemplated herein and supersedes all prior agreements,
including any and all prior employment agreements between the Executive and the Company and/or the
2006 Officer Severance Plan, as may be applicable, whether written or oral, between the parties,
relating to the subject matter hereof. This Agreement shall not be modified except in writing
executed by all parties hereto.

     17.     Captions. Titles or captions of paragraphs contained in this Agreement are inserted only
as a matter of convenience and for reference, and in no way define, limit, extend or describe the
scope of this Agreement or the intent of any provision hereof.

     18.     Counterparts. For the purpose of facilitating the execution of this Agreement, and for
other purposes, this Agreement may be executed in any number of counterparts. Each counterpart
shall be deemed to be an original, and all such counterparts shall constitute one and the same
instrument.

[Signature Page Follows]

8

 

     IN WITNESS WHEREOF, the undersigned have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the date first above written.

     Please execute the extra copy of this letter Agreement in the space below and return it to the
undersigned at the address set forth above to confirm your understanding and acceptance of the
agreements contained herein.

	 	 	 	 	 
	 	Very truly yours,

ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.

 	 
	 	By:  	/s/ Liane Pelletier
 	 
	 	Name:  	Liane Pelletier 	 
	 	Title:  	President & CEO 	 
	 

	 	 	 	 	 
	Accepted and agreed to:

 	 	 
	/s/ Leonard Steinberg
 	 	 
	Leonard Steinberg 	 	 
	 	 	 
	 

9exv10w1

 

Exhibit 10.1

THIRD AMENDED AND RESTATED CONVERTIBLE PROMISSORY NOTE

PURCHASE AGREEMENT

     This THIRD AMENDED AND RESTATED CONVERTIBLE PROMISSORY NOTE PURCHASE AGREEMENT, dated as of
March 18, 2008 is made between the purchaser listed on the signature pages hereto (the “$5 Million
Note Purchaser”) and the “Purchasers” (as defined below), and ALSERES PHARMACEUTICALS, INC., a
Delaware corporation (the “Company”).

RECITALS

     WHEREAS, the Company entered into that certain Convertible Promissory Note Purchase Agreement,
dated as of March 22, 2007 (the “Original Agreement”) by and among the Company and the purchasers
listed therein (the “Original Convertible Note Purchasers”) pursuant to which the Company issued to
each of the Original Convertible Note Purchasers a convertible promissory note (collectively, the
“Original Notes”), and the Company obtained the right to borrow up to $15,000,000 from the Original
Convertible Note Purchasers;

     WHEREAS, the Company entered into that certain Amended and Restated Convertible Promissory
Note Purchase Agreement, dated as of May 1, 2007 by and among the Company and the purchasers listed
therein, pursuant to which the Original Convertible Note Purchasers agreed not to request any
additional Advances (as defined in the Original Agreement) under the Original Agreement, and
Highbridge International LLC (“Highbridge”) was added as a Purchaser (as defined in the Original
Agreement) and was issued a convertible promissory note (the “Highbridge Note”);

     WHEREAS, the Company entered into that certain Second Amended and Restated Convertible
Promissory Note Purchase Agreement, dated as of August 13, 2007 by and among the Company and the
purchasers listed therein (the “Amended Note Purchasers”), pursuant to which the Company obtained
the right to borrow up to $25,000,000 (the “Advance Amount”) from the Amended Note Purchasers and
Ingalls & Snyder Value Partners L.P. (“ISVP”) was added as a Purchaser (as defined in the Original
Agreement) and was issued a convertible promissory note in the principal amount of $10,000,000 (the
“ISVP Note”);

     WHEREAS, as of the date hereof, the Company has borrowed $25,000,000 of the Advance Amount;

     WHEREAS, the Company requires certain funds for the operation of its business; and

     WHEREAS, the $5 Million Note Purchaser is willing to provide the Company with such funds
through the increase of the Advance Amount by $5 million to an aggregate of $30 million and the
purchase of the New Note (defined below) on the terms and conditions hereafter provided, including
certain registration rights relating to the Common Stock issued and issuable upon the conversion of
the Convertible Notes (defined below);

     NOW, THEREFORE, in order to induce the $5 Million Note Purchaser to purchase the New Note and
for other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound, the $5 Million Note Purchaser, the Amended Note
Purchasers, ISVP and the Company hereby agree as follows:

 

 

     1. DEFINED TERMS. When used in this Agreement the following terms shall have the following
meanings (such meanings being equally applicable to both the singular and plural forms of the terms
defined):

     “$5 Million Note Purchaser” shall have the meaning set forth in the preamble.

     “Advance Amount” shall have the meaning set forth in the preamble.

     “Affiliates” shall mean any corporation, company, partnership, joint venture and/or firm that
controls, is controlled by, or is under common control with the Company. For purposes of this
definition, “control” shall mean (a) in the case of corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the stock or shares having the right to vote for the
election of directors and (b) in the case of non-corporate entities, direct or indirect ownership
of at least fifty percent (50%) of the equity interest with the power to direct the management and
policies of such non-corporate entities.

     “Agreement” means this Second Amended and Restated Convertible Promissory Note Purchase
Agreement, as it may be amended or modified and in effect from time to time.

     “Amended Note Purchasers” shall have the meaning set forth in the preamble.

     “Business Day” means any day other than a Saturday, Sunday, or other day on which commercial
banks in the Commonwealth of Massachusetts are authorized or required to close.

     “Commitment Percentage” shall have the meaning set forth in Section 2.1 hereof.

     “Common Stock” means the common stock, $0.01 par value per share, of the Company.

     “Convertible Notes” shall mean, collectively, the Original Notes, the Highbridge Note, the
ISVP Note and the New Note.

     “Cut Back Shares” has the meaning set forth in Section 9.1(d).

     “Effective Date” means the date that the Registration Statement is first declared effective by
the SEC.

     “Effectiveness Period” has the meaning set forth in Section 9.1(b).

     “Electing Purchaser” shall have the meaning set forth in Section 4.2

     “Event of Default” shall have the meaning assigned to such term in Section 11 hereof.

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

     “First Commercial Sale” shall mean, with respect to each Molecular Imaging Product, the first
commercial sale in a country as part of a nationwide introduction by the Company, its Affiliates or
its or its Affiliates’ licensees or sublicensees.

     “Highbridge Note” shall have the meaning set forth in the preamble.

     “Highest Lawful Rate” means the maximum lawful interest rate, if any, that at any time or from
time to time may be contracted for, charged, or received under the laws applicable to the
Purchasers which are presently in effect or, to the extent allowed by law, under such applicable
laws which allow a higher maximum nonusurious interest rate than applicable laws now allow.

     “Indemnified Party” has the meaning set forth in Section 9.4(c).

     “Indemnifying Party” has the meaning set forth in Section 9.4(c).

 

 

     “ISVP” has the meaning set forth in the preamble.

     “ISVP Note” has the meaning set forth in the preamble.

     “Loan Documents” means collectively, this Agreement and the Convertible Notes.

     “Losses” means any and all losses, claims, damages, liabilities, settlement costs and
expenses, including, without limitation, reasonable attorneys’ fees.

     “Maturity Date” means the earliest to occur of (a) December 31, 2010 and (b) the date on which
a Purchaser declares a Default (as defined in Section 11 below) to have occurred.

     “Molecular Imaging Products” shall mean products approved for sale by the appropriate U.S.
and/or foreign regulatory body containing as the active ingredient the Company’s radio-labeled
molecular imaging agents, currently in development or developed by the Company in the future,
including, without limitation, the ALTROPANE® and FLUORATEC molecular imaging agents,
for the diagnosis and monitoring of Parkinson’s Disease and Attention Deficit Hyperactivity
Disorder using SPECT or PET camera imaging techniques.

     “Net Sales” shall mean the gross amount received by the Company, its Affiliates and/or its or
its Affiliates’ licensees or sublicensees on sales or other dispositions of Molecular Imaging
Products to Third Parties (other than licensees or sublicensees) in bona fide, arm’s-length
transactions, less the following deductions:

     (a) Trade, cash and/or quantity discounts actually allowed and taken directly with respect to
such sales, as reflected in the amount invoiced;

     (b) Tariffs, duties, excises, sales taxes or other taxes imposed upon and paid directly by the
Company with respect to the production, sale, delivery or use of the Molecular Imaging Product
(excluding national, state or local taxes based on income), as reflected in the amount invoiced;

     (c) Amounts repaid or credited by reason of rejections, defects, recalls or returns, or
because of chargebacks, refunds, rebates, retroactive price reductions or delayed ship orders;

     (d) Amounts credited for uncollectible amounts on previously sold products;

     (e) Freight, insurance and other transportation charges incurred in shipping a Molecular
Imaging Product to Third Parties, as reflected in the amount invoiced;

     (f) Deduction of one percent (1%) for distribution and warehousing expenses; and

     (g) Any other reduction or specifically identifiable amounts included in the gross invoice
that are creditable for reasons substantially equivalent to those listed above.

     Notwithstanding anything in this Agreement to the contrary, “Net Sales” shall exclude any
sales or other disposition of Molecular Imaging Products for test marketing, clinical trial
purposes or compassionate or similar use.

     Net Sales amounts shall be determined from the books and records of the Company, its
Affiliates and/or its or its Affiliates’ licensees or sublicensees, maintained in accordance with
generally accepted accounting principles, consistently applied.

     Sales between or among the Company, its Affiliates or their respective licensees and
sublicensees shall be disregarded for purposes of calculating Net Sales. In the case of any sale or
other disposal of a Molecular Imaging Product between or among the Company and its Affiliates,

 

 

licensees and sublicensees, for resale, Net Sales shall be calculated as above only on the value
charged or invoiced on the first arm’s-length sale thereafter to a Third Party.

     In the case of any sale or other disposal for value, such as barter or counter-trade, of any
Molecular Imaging Product, or part thereof, other than in an arm’s-length transaction exclusively
for money, Net Sales shall be calculated as above on the value of the non-cash consideration
received or the fair market price (if higher) of the Molecular Imaging Product in the country of
sale or disposal.

     In the event the Molecular Imaging Product is sold in a finished dosage form in combination
with one or more other active ingredients (a “Combination Product”), the Net Sales of the Molecular
Imaging Product, for the purposes of determining royalty payments, shall be determined by
multiplying the Net Sales (as defined above) of the Combination Product by the fraction, ‘A/(A+B)’
where ‘A’ is the weighted (by sales volume) average sale price in the relevant country of the
Molecular Imaging Product when sold separately in finished form and ‘B’ is the weighted average
sale price in that country of the other product(s) sold separately in finished form. In the event
that such average sale price cannot be determined for both the Molecular Imaging Product and the
other product(s) in the Combination Product, Net Sales for purposes of determining royalty payments
shall be agreed by the Parties based on the relative value contributed by each component, such
agreement not to be unreasonably withheld.

     “New Note” shall have the meaning set forth in Section 2.1 hereof.

     “Obligations” means all unpaid principal of and accrued and unpaid interest on the Convertible
Notes, and all other obligations, interest, fees, charges and expenses of the Company to the
Purchasers arising under the Loan Documents.

     “Original Convertible Note Purchasers” shall have the meaning set forth in the preamble.

     “Person” means an individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, a government or any department or agency
thereof.

     “Pre-Commercial Income” shall mean, with respect to each Molecular Imaging Product, all
license fees, milestone payments and other amounts received by the Company and/or its Affiliates
from Third Parties in connection with or related to the licensing or sublicensing to such Third
Parties of the Company’s and/or its Affiliate’s rights under the intellectual property covering the
Molecular Imaging Product. Notwithstanding anything in the foregoing to the contrary,
“Pre-Commercial Income” shall exclude (a) any royalty payments or milestone payments based upon
commercial sales levels, (b) amounts received for research and development activities undertaken
for, or in collaboration with, such Third Parties, (c) amounts received for debt or equity
securities of the Company and/or its Affiliates, provided that any amounts received in excess of
the then current fair market value of such debt or equity securities shall, to the extent of such
excess, be deemed to be Pre-Commercial Income, and (d) transfer pricing amounts paid in respect of
Molecular Imaging Products supplied to such Third Parties.

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

     “Prospectus” means the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a

 

 

prospectus filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable Securities covered by
the Registration Statement, and all other amendments and supplements to the Prospectus including
post-effective amendments, and all material incorporated by reference or deemed to be incorporated
by reference in such Prospectus.

     “Purchasers” means the Original Convertible Note Purchasers, the Amended Note Purchasers, ISVP
and the $5 Million Note Purchaser.

     “Registrable Securities” means the shares of Common Stock issued or issuable on the conversion
of any Convertible Notes pursuant to Section 9, except the New Note.

     “Registration Statement” means each registration statement required to be filed under Section
9, including (in each case) the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and
all material incorporated by reference or deemed to be incorporated by reference in such
registration statement.

     “Registration Statement Questionnaire” means a questionnaire in the form attached hereto as
Exhibit B.

     “Required Effectiveness Date” means (i) if a Registration Statement does not become subject to
review by the SEC, the date which is the earlier of (a) ninety (90) days after the Required Filing
Date or (b) five (5) Trading Days after the Company receives notification from the SEC that such
Registration Statement will not become subject to review, or (ii) if a Registration Statement
becomes subject to review by the SEC, the date which is the earlier of (a) one hundred and twenty
(120) days after the Required Filing Date or (b) five (5) Trading Days after the Company receives
notification from the SEC that the SEC has no further comment to such Registration Statement.

     “Required Filing Date” has the meaning set forth in Section 9.1(a).

     “Restriction Termination Date” has the meaning set forth in Section 9.1(d).

     “Rule 144 Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a Person, as such
terms are used in and construed under Rule 144 under the Securities Act.

     “SEC” means the United States Securities and Exchange Commission.

     “SEC Reports” means all documents required to be filed by the Company under the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof,
together with any other materials filed or furnished by the Company under the Exchange Act, whether
or not any such materials were required.

     “SEC Restrictions” has the meaning set forth in Section 9.1(d).

     “Securities Act” means the Securities Act of 1933, as amended.

     “Stockholder Approval” shall have the meaning set forth in Section 4.1(b).

     “Third Party” shall mean any person or entity other than the Company or any of its Affiliates.

 

 

     “Total Converted Balance” shall have the meaning set forth in Section 4.2

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

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

     “Transfer Agent” means Continental Stock Transfer & Trust Company, or any successor transfer
agent for the Company.

     “Valid Claim” means a claim of any issued, unexpired United States or foreign patent, which
shall not be disclaimed, nor held invalid or unenforceable by a court of competent jurisdiction in
an unappealed or unappealable decision.

     2. CONVERTIBLE NOTE FACILITY.

          2.1 Purchase and Sale of New Note. At each Closing (as defined below), the $5 Million
Note Purchaser agrees on the terms of and subject to the conditions specified in this Agreement, to
purchase from the Company, according to the $5 Million Note Purchaser’s pro rata share (based upon
the respective “Commitment Percentage” of the $5 Million Note Purchaser as set forth on Schedule
2.1 attached hereto), and the Company agrees to sell to the $5 Million Note Purchaser listed on
Schedule 2.1, convertible promissory notes dated as of the date of such Closing in the form
attached to this Agreement as Exhibit A (the “New Note”); provided, however, that in no event shall
the $5 Million Note Purchaser be obligated hereunder to purchase, in the aggregate, more than a
principal amount of $5 million in New Notes.

          2.2 Closing. The closing of the issuance and sale of the New Note issued hereunder
shall be held at the offices of counsel to the Company at 5:00 p.m. on the date and place as the
Company and the $5 Million Note Purchaser mutually agree in writing (each such date, a “Closing”).

          2.3 Payment of New Note Purchase Price. At each Closing, (i) the Company shall deliver
to the $5 Million Note Purchaser a New Note at such Closing, and (ii) as payment in full for the
New Note being purchased by the $5 Million Note Purchaser at such Closing, the $5 Million Note
Purchaser shall pay its purchase amount to the Company by wire transfer of immediately available
funds to an account designated by the Company.

          2.4 Interest. Interest shall accrue on each Convertible Note from the date of issuance
until such Convertible Note is paid in full or otherwise converted pursuant to Section 4 hereof.
The Company promises to pay interest on the outstanding principal amount of each Convertible Note
(i) until the Maturity Date, or if earlier, conversion pursuant to Section 4 hereof, at a per annum
interest rate equal to five percent (5%), (ii) from and after the Maturity Date, or during the

 

 

continuance of an Event of Default, at a per annum rate equal to ten percent (10%) or (iii) if less
than the rates applicable under both clauses (i) and (ii), the Highest Lawful Rate. Interest shall
be calculated on the basis of a 360-day year for the actual number of days elapsed. Interest shall
accrue until paid in full and all unpaid interest shall be due and payable on the Maturity Date,
unless otherwise converted pursuant to Section 4 hereof.

          2.5 Method of Payment. All payments of principal, interest, and fees hereunder shall
be made on the date when due in immediately available funds in United States Dollars to the
Purchasers at each Purchaser’s address specified on the signature page hereof, or at such other
address as shall be directed by the applicable Purchaser in a writing received by the Company.

          2.6 Prepayments. The Company may not prepay any amounts under any Convertible Notes
whether principal or interest.

          2.7 Usury Savings Clause. Notwithstanding any other provision herein, the aggregate
interest rate charged with respect to any of the Obligations, shall not exceed the Highest Lawful
Rate. If the rate of interest (determined without regard to the preceding sentence) under this
Agreement at any time exceeds the Highest Lawful Rate, the outstanding amount under the Convertible
Notes issued hereunder shall bear interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which would have been due hereunder if the
stated rates of interest set forth in this Agreement had at all times been in effect. In addition,
if when the Convertible Notes issued hereunder are repaid in full the total interest due hereunder
is less than the total amount of interest which would have been due hereunder if the stated rates
of interest set forth in this Agreement had at all times been in effect, then to the extent
permitted by law, the Company shall pay to the Purchasers an amount equal to the difference between
the amount of interest paid and the amount of interest which would have been paid if the Highest
Lawful Rate had at all times been in effect. Notwithstanding the foregoing, it is the intention of
the Purchasers and the Company to conform strictly to any applicable usury laws. Accordingly, if
the Purchasers contract for, charge, or receive any consideration which constitutes interest in
excess of the Highest Lawful Rate, then any such excess shall be cancelled automatically and, if
previously paid, shall be applied to the outstanding principal amount of the Convertible Notes
issued hereunder or be refunded to the Company.

     3. CONDITIONS PRECEDENT. The obligations of the $5 Million Note Purchaser to purchase the New
Note shall be subject to the following conditions precedent that on the date of the Closing:

          3.1 Each of the representations and warranties of the Company contained in this Agreement and
the New Note shall be true and correct in all material respects; and

          3.2 At the time of, and immediately after giving effect to, the issuance of such New Note, no
Event of Default shall have occurred and be continuing.

     4. OPTIONAL CONVERSION.

          4.1 Conversion to Equity.

                 (a) After December 31, 2007, at any time during which Convertible Notes remain outstanding, up
to all of the outstanding principal and accrued interest under any particular Convertible Note then
outstanding may be converted, at the sole option of the holder thereof and by written notice to the
Company, into shares of Common Stock of the Company at a conversion price equal to $2.50 per share.

 

 

                 (b) Notwithstanding anything to the contrary contained herein, each Purchaser shall be
prohibited from effecting a conversion pursuant to this Section 4.1 if at the time of such
conversion (i) the Common Stock issuable to a Purchaser pursuant to such conversion or as a result
of such conversion, when taken together with all shares of Common Stock then held or otherwise
beneficially owned by a Purchaser exceeds 19.9% of the total number of issued and outstanding
shares of Common Stock of the Company immediately prior to such conversion, (ii) the Common Stock
issuable to a Purchaser pursuant to such conversion or as a result of such conversion, exceeds
19.9% of the total number of issued and outstanding shares of Common Stock of the Company
immediately prior to such conversion, in each case unless the stockholders of the Company have
approved the conversion of all of the shares of Common Stock issuable hereunder and the
transactions contemplated hereby pursuant to Nasdaq Marketplace Rule 4350(i)(1)(D)(ii) and any
other applicable rules and regulations (“Stockholder Approval”). The foregoing provision however
shall not restrict the number of shares of Common Stock which a Purchaser may receive or
beneficially own in order to determine the amount of securities or other consideration that a
Purchaser may receive in the event of a merger, sale or other business combination involving the
Company.

                 (c) The Company hereby covenants and agrees that in the event a Purchaser is prohibited from
effecting a conversion of Convertible Notes pursuant to this Section 4.1, then upon receipt of
written notice of such event from such Purchaser, the Company shall use its best efforts to seek
Stockholder Approval.

                 (d) Notwithstanding anything to the contrary contained herein, the Company shall not effect
any conversion of the Highbridge Note or the ISVP Note, and neither Highbridge nor ISVP, nor any of
their respective affiliates shall have the right to effect any conversion pursuant to this Section
4.1, to the extent that after giving effect to such conversion, Highbridge (together with its
affiliates and any other person or entity acting as a group together with Highbridge) on the one
hand, or ISVP (together with its affiliates and any other person or entity acting as a group
together with ISVP) on the other hand, would beneficially own in excess of 9.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of
Common Stock issuable upon any such conversion. For purposes of the foregoing sentence, the number
of shares of Common Stock beneficially owned by Highbridge or ISVP shall include the number of
shares of Common Stock issuable upon the conversion with respect to which such determination is
being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A)
exercise of the remaining, nonexercised portion of the Highbridge Note or the ISVP Note
beneficially owned by Highbridge or ISVP or any of their respective affiliates and (B) exercise or
conversion of the unexercised or nonconverted portion of any other securities of the Company
(including, without limitation, any other convertible notes or warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially owned by
Highbridge or ISVP or any of their respective affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 4.1(d), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 4(d), in determining the number of outstanding shares of
Common Stock, Highbridge and ISVP may rely on the number of outstanding shares of Common Stock as
reflected in the later dated of (x) the Company’s most recent Form 10-K (y) a more recent public
announcement by the Company or (z) any other notice by the Company or the Transfer Agent setting
forth the number of shares of Common Stock outstanding. Upon the written or oral request of
Highbridge or ISVP, the Company shall

 

 

within two Trading Days confirm orally and in writing to Highbridge the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of securities of the Company,
including the Highbridge Note or the ISVP Note, since the date as of which such number of
outstanding shares of Common Stock was reported.

          4.2 Conversion to Royalty Stream.

                 (a) At any time all or any of the Purchasers may elect (as such, collectively, the “Electing
Purchasers”, and, individually, an “Electing Purchaser”), at their sole option and by written
notice to the Company, to convert, in $1 million increments, up to the entire amount of the
principal and accrued interest then outstanding on all Convertible Notes then held by such Electing
Purchaser (the “Total Converted Balance”), into the right to receive from the Company the following
payments related to the Company’s Molecular Imaging Products:

                              (i) For each One Million ($1,000,000) of Total Converted Balance,

                              (A) 2% of Pre-Commercial Income; plus

                              (B) a royalty at a rate of one half of one percent (0.5%) of Net Sales of Molecular Imaging
Products.

                         By way of example only, if the Total Converted Balance being converted by the Electing
Purchaser is $3.5 million, the Company would be required to pay 7% of Pre-Commercial Income (2% x
3.5) to such Electing Purchaser plus a royalty of 1.75% on Net Sales of Molecular Imaging Products
(0.5% x 3.5).

                              (ii) The Company agrees to provide each Purchaser with at least 30 days prior written notice
of the execution of a partnership agreement for the Molecular Imaging products to enable them to
make an election to convert under this Section 4.2. Upon receipt of such notice, each Purchaser
will have 30 days to elect such conversion. For purposes of clarity, any amounts which may be owed
by the Company under Section 4.2(a)(i) above after proper notice is given and no election is made,
shall be owed on a going-forward basis and shall not apply retroactively to any Pre-Commercial
Income received by the Company and/or its Affiliates or Net Sales of Molecular Imaging Products
prior to the date of such election to convert.

                 (b) The Company shall make the payments set forth in Section 4.2(a)(i) above on a calendar
quarterly basis to each Electing Purchaser.

                 (c) The Company shall deliver to each Electing Purchaser within sixty (60) days after the end
of each calendar quarter following such Electing Purchaser’s election to convert, reasonably
detailed written accountings of Pre-Commercial Income and Net Sales of Molecular Imaging Products
that are subject to payments due to such Electing Purchaser hereunder for such calendar quarter.
When the Company delivers such accountings to such Electing Purchaser, the Company shall also
deliver all payments due under Section 4.2(a)(i) for such calendar quarter.

                 (d) On a country-by-country and Molecular Imaging Product-by-Molecular Imaging Product basis,
the royalty obligation of the Company hereunder shall cease at the expiration of the last-to-expire
Valid Claim covering a Molecular Imaging Product in said country or, in the case of countries where
no Valid Claims covering a Molecular Imaging Product have been granted, ten (10) years after the
First Commercial Sale of a Molecular Imaging Product in said country. In no event will the
Company’s royalty obligation hereunder cease so long as royalties

 

 

in excess of those owed hereunder are paid to the Company by its licensee of any or all of the
Molecular Imaging Products.

     5. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to each Purchaser that
on the date hereof:

          5.1 The Company is duly organized, validly existing, and in good standing under the laws of
its jurisdiction of incorporation and is duly qualified and in good standing in every other
jurisdiction where the nature of its business or the location or ownership of its properties
requires such qualification and where the failure to be so qualified would reasonably be expected
to have a material adverse effect on the Company’s business, operations, properties, assets or
condition (financial or otherwise).

          5.2 The Company has the corporate power and authority to execute and deliver this Agreement
and the Convertible Notes and to perform all of the obligations hereunder, and all necessary
corporate action has been taken to execute and deliver this Agreement and the Convertible Notes and
to issue and sell the Convertible Notes hereunder.

          5.3 This Agreement and the Convertible Notes constitute the legal, valid, and binding
obligations of the Company, enforceable against the Company in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization or similar laws generally
affecting the enforcement of the rights of creditors.

          5.4 The execution, delivery and performance by the Company of this Agreement and the
Convertible Notes does not (i) violate any provisions of the Company’s Certificate of
Incorporation, as amended, bylaws, as amended, or any material contract, agreement, law,
regulation, order, decree or writ to which the Company or any of its properties are subject or (ii)
require the consent or approval of any person, entity or authority, including, without limitation,
any regulatory authority or governmental body of the United States of America or any state thereof
or any political subdivision of any of the foregoing.

     6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser represents and warrants,
severally and not jointly, to the Company as follows:

          6.1 Investment Intent. Such Purchaser understands that the Convertible Notes have not
been registered under the Securities Act or any applicable state securities law and is acquiring
the Convertible Notes as principal for its own account for investment purposes only and not with a
view to or for distributing or reselling such Convertible Notes, has no present intention of
distributing the Convertible Notes and has no arrangement or understanding with any other persons
regarding the distribution of the Convertible Notes. Such Purchaser is acquiring the Convertible
Notes hereunder in the ordinary course of its business. Such Purchaser does not have any agreement
or understanding, directly or indirectly, with any person to distribute the Convertible Notes.

          6.2 Purchaser Status. At the time such Purchaser was offered the Convertible Notes, it
was, and at the date hereof it is an “accredited investor” as defined in Rule 501(a) under the
Securities Act. Such Purchaser (if not already a registered broker-dealer under Section 15 of the
Exchange Act) is not required to be registered as a broker-dealer under Section 15 of the Exchange
Act.

          6.3 Experience of Purchaser. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the prospective investment in the

 

 

Convertible Notes, and has so evaluated the merits and risks of such investment. Such Purchaser is
able to bear the economic risk of an investment in the Convertible Notes and, at the present time,
is able to afford a complete loss of such investment.

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

          6.5 Certain Fees. No brokerage or finder’s fees or commissions are or will be payable
by such Purchaser to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other person with respect to the transactions contemplated by this
Agreement. The Company shall have no obligation with respect to any fees or with respect to any
claims made by or on behalf of other persons for fees of a type contemplated in this Section 6.5
that may be due in connection with the transactions contemplated by this Agreement.

          6.6 Acquiring Person. Such Purchaser, after giving effect to the transactions
contemplated hereby, will not, either individually or with a group (as defined in Section 13(d)(3)
of the Exchange Act), become the beneficial owner of 20% or more of the Company’s outstanding
Common Stock. For purposes of this Section 6.6, beneficial ownership shall be determined pursuant
to Rule 13d-3 under the Exchange Act.

     7. AFFIRMATIVE COVENANTS. During the term of this Agreement and while the Convertible Notes
remain outstanding, unless each Purchaser consents thereto in writing:

          7.1 The Company shall maintain its corporate existence, business and assets, keep its business
and assets adequately insured and comply in all material respects with all requirements of
applicable law.

          7.2 The Company (a) shall provide each Purchaser at least 10 days prior written notice of the
Company’s intent to change its name or its mailing address and (b) shall not change its type of
organization or jurisdiction of organization.

     8. NEGATIVE COVENANTS. So long as any principal and interest remains outstanding under the
Convertible Notes, the Company shall not:

          8.1 Create, incur, assume, guaranty, become liable with respect to (contingently or
otherwise), or permit to be outstanding any indebtedness for money borrowed (including, without
limitation, any indebtedness evidenced by any notes, instruments or agreements or in connection
with any capitalized lease), except for (i) obligations under this Agreement and the Convertible
Notes and (ii) up to an additional $5 million of indebtedness solely from Purchasers hereunder and
upon the same terms and conditions as those contained herein;

          8.2 (i) Declare or pay any cash dividend, or make a distribution on, repurchase, or redeem,
any class of stock of the Company, other than pursuant to repurchase obligations under existing
employee stock purchase or option plans or (ii) Sell, lease, transfer or otherwise dispose of any
material assets or property of the Company; or

          8.3 Dissolve or liquidate.

     9. REGISTRATION RIGHTS.

          9.1 Registration Statement.

 

 

                 (a) Subject to the receipt of necessary information from the Purchasers, including the
information requested in the Registration Statement Questionnaire, within 60 calendar days
following the date hereof (the “Required Filing Date”), the Company shall prepare and file with the
SEC a Registration Statement covering the resale of all Registrable Securities for an offering to
be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3
(except if the Company is not then eligible to register for resale the Registrable Securities on
Form S-3, in which case such registration shall be on another appropriate form in accordance with
the Securities Act and the Exchange Act).

                 (b) The Company shall use reasonable best efforts to cause the Registration Statement to be
declared effective by the SEC as promptly as possible after the filing thereof, but in any event
prior to the Required Effectiveness Date, and shall use reasonable best efforts to keep the
Registration Statement continuously effective under the Securities Act until the earlier of the
date that all Registrable Securities covered by such Registration Statement have been sold or can
be sold publicly under Rule 144(k) (the “Effectiveness Period”); provided that, upon notification
by the SEC that a Registration Statement will not be reviewed or is no longer subject to further
review and comments, the Company shall request acceleration of such Registration Statement within
five (5) Trading Days after receipt of such notice and request that it become effective on 4:00
p.m. New York City time on the Effective Date and file a prospectus supplement for any Registration
Statement, if required under Rule 424 (or otherwise), by 9:00 a.m. New York City time the day after
the Effective Date.

                 (c) Notwithstanding anything in this Agreement to the contrary, after 60 consecutive Trading
Days of continuous effectiveness of the initial Registration Statement filed and declared effective
pursuant to this Agreement, the Company may, by written notice to the Purchasers, suspend sales
under a Registration Statement after the Effective Date thereof and/or require that the Purchasers
immediately cease the sale of shares of Common Stock pursuant thereto and/or defer the filing of
any subsequent Registration Statement if (i) the Company is engaged in a merger, acquisition or
sale and the Board of Directors of the Company determines in good faith, by appropriate
resolutions, that, as a result of such activity, (A) it would be materially detrimental to the
Company (other than as relating solely to the price of the Common Stock) to maintain a Registration
Statement at such time or (B) it is in the best interests of the Company to suspend sales under
such registration at such time, (ii) requested by the SEC or any other federal or state
governmental authority during the Effectiveness Period of the Registration Statement for amendments
or supplements to a Registration Statement or related Prospectus or for additional information;
(iii) the SEC or any other federal or state governmental authority issued any stop order suspending
the effectiveness of a Registration Statement or the initiation of any proceedings for that
purpose; (iv) the Company receives 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, (v) the Company
elected to delay the disclosure of material non-public information concerning the Company, the
disclosure of which at the time is not, in the good faith judgment of the Board of Directors of the
Company, in the best interest of the Company; or (vi) any event or circumstance which necessitates
the making of any changes in the Registration Statement or Prospectus, or any document incorporated
or deemed to be incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein not misleading, or
that in the case of the Prospectus, it will not contain any

 

 

untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
Upon receipt of such notice, each Purchaser shall immediately discontinue any sales of Registrable
Securities pursuant to such registration until such Purchaser is advised in writing by the Company
that the current Prospectus or amended Prospectus, as applicable, may be used. In no event,
however, shall this right be exercised to suspend sales beyond the period during which (in the good
faith determination of the Company’s Board of Directors) the failure to require such suspension
would be materially detrimental to the Company. The Company’s rights under this Section 9.1(c) may
be exercised for a period of no more than 20 Trading Days at a time and not more than three times
in any twelve-month period. Immediately after the end of any suspension period under this Section
9.1(c), the Company shall take all necessary actions (including filing any required supplemental
prospectus) to restore the effectiveness of the applicable Registration Statement and the ability
of the Purchasers to publicly resell their Registrable Securities pursuant to such effective
Registration Statement.

                 (d) Notwithstanding the other provisions of this Agreement, if at any time the SEC takes the
position that some or all of the Registrable Securities may not be included in the Registration
Statement because (i) the inclusion of such Registrable Securities violates the provisions of Rule
415 as a result of the number of shares included in such Registration Statement, and/or (ii) the
Registrable Securities cannot be sold as an “at the market offering,” the Company shall (A) remove
from the Registration Statement such portion of the Registrable Securities (the “Cut Back Shares”)
and/or (B) agree to such restrictions and limitations on the registration and resale of the
Registrable Securities as the SEC may require to assure the Company’s compliance with the
requirements of Rule 415 (collectively, the “SEC Restrictions”). Any cut-back imposed pursuant to
this Section 9.1(d) shall be allocated among the Purchasers on a pro rata basis. From and after
such time as the Company is able to effect the registration of the Cut Back Shares in accordance
with any SEC Restrictions (such date, the “Restriction Termination Date”), all of the provisions of
this Section 9.1 shall again be applicable to the Cut Back Shares; provided, however, that for such
purposes the Required Filing Date shall be deemed to be the Restriction Termination Date.
Notwithstanding the foregoing, the Company shall not be required to register any shares of Common
Stock issuable upon conversion of the New Note.

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

                 (a) Not less than three Trading Days prior to the filing of a Registration Statement or any
related Prospectus or any amendment or supplement thereto, furnish via email to those Purchasers
who have supplied the Company with email addresses copies of all such documents proposed to be
filed, which documents (other than any document that is incorporated or deemed to be incorporated
by reference therein) will be subject to the review (but not approval) of such Purchaser; provided
that, the failure of any Purchaser or his, her or its counsel to respond to such proposed documents
within two Trading Days after the Purchasers have been so furnished with copies of such documents
shall be deemed approval of same; and provided, further, that no such review and comment shall
inhibit the Company from filing the Registration Statement, any Prospectus or any such amendment or
supplement within five Business Days after such notice has been provided or otherwise from
complying with its obligations hereunder.

 

 

                 (b) (i) Subject to Section 9.1(c), prepare and file with the SEC such amendments, including
post-effective amendments, to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep the Registration Statement continuously effective, as to the
applicable Registrable Securities for the Effectiveness Period and prepare and file with the SEC
such additional Registration Statements in order to register for resale under the Securities Act
all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented
by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424; (iii) respond as promptly as reasonably possible to any comments received from the SEC
with respect to the Registration Statement or any amendment thereto; and (iv) comply in all
material respects with the provisions of the Securities Act and the Exchange Act with respect to
the disposition of all Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by the Purchasers thereof
set forth in the Registration Statement as so amended or in such Prospectus as so supplemented.

                 (c) During the Effectiveness Period, notify the Purchasers as promptly as reasonably possible,
and if requested by the Purchasers confirm such notice in writing no later than two Trading Days
thereafter, of any of the following events: (i) the SEC notifies the Company whether there will be
a “review” of any Registration Statement; (ii) the SEC comments in writing on any Registration
Statement; (iii) any Registration Statement or any post-effective amendment is declared effective;
(iv) the SEC or any other federal or state governmental authority requests any amendment or
supplement to any Registration Statement or Prospectus or requests additional information related
thereto; (v) the SEC issues any stop order suspending the effectiveness of any Registration
Statement or initiates any Proceedings for that purpose; (vi) the Company receives notice of any
suspension of the qualification or exemption from qualification of any Registrable Securities for
sale in any jurisdiction, or the initiation or threat of any Proceeding for such purpose; or (vii)
the financial statements included in any Registration Statement become ineligible for inclusion
therein or any Registration Statement or Prospectus or other document contains any untrue statement
of a material fact or omits to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were made, not
misleading.

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

                 (e) Prior to any public offering of Registrable Securities, use reasonable best efforts to
register or qualify or cooperate with the selling Purchasers in connection with the registration or
qualification (or exemption from such registration or qualification) of such Registrable Securities
for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United
States as any Purchaser requests in writing, to keep each such registration or qualification (or
exemption therefrom) effective for so long as required, but not to exceed the duration of the
Effectiveness Period, and to do any and all other acts or things reasonably necessary or advisable
to enable the disposition in such jurisdictions of the Registrable Securities covered by a
Registration Statement; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in

 

 

respect of doing business in any jurisdiction in which it is not otherwise so subject or provide
any undertaking that causes the Company undue expense or burden.

                 (f) Upon any sale of Registrable Securities pursuant to the Registration Statement for the
account of a Purchaser, cooperate with the Purchasers to facilitate the timely preparation and
delivery of certificates representing such Registrable Securities to be delivered to a transferee
pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by
this Agreement and under law, of all restrictive legends, and to enable such certificates to be in
such denominations and registered in such names as any such Purchaser may reasonably request;
provided, that, the delivery of such certificates shall be subject to the payment by the Purchasers
of any transfer taxes, if applicable.

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

                 (h) Comply in all material respects with all rules and regulations of the SEC with respect to
the Registration Statement and the disposition of all Registrable Securities covered by the
Registration Statement.

                 (i) It shall be a condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable Securities of any
particular Purchaser that such Purchaser furnish to the Company a completed Registration Statement
Questionnaire and such other information regarding itself, the Registrable Securities and other
shares of Common Stock held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall complete and execute such documents in connection with such
registration as the Company may reasonably request. Upon the Company’s reasonable written request,
such Purchaser will promptly notify the Company of any changes in the information set forth in the
Registration Statement or the Registration Statement Questionnaire regarding such Purchaser or its
plan of distribution or other information as the Company may reasonably request in connection with
any registration referred to in Section 9. The Company shall not be required to include any
Registrable Securities held by a Purchaser in the Registration Statement if such Purchaser fails to
complete or update the Registration Statement Questionnaire or provide the information requested in
the Registration Statement Questionnaire in accordance with this Section 9.2(i).

                 (j) The Company shall use reasonable best efforts to comply with all applicable rules and
regulations of the SEC under the Securities Act and the Exchange Act, including, without
limitation, Rule 172 under the Securities Act, file any final Prospectus, including any supplement
or amendment thereof, with the SEC pursuant to Rule 424 under the Securities Act, promptly inform
the Purchasers in writing if, at any time during the Effectiveness Period, the Company does not
satisfy the conditions specified in Rule 172(c) and, as a result thereof, the Purchasers are
required to deliver a Prospectus in connection with any disposition of Registrable Securities

 

 

and take such other actions as may be reasonably necessary to facilitate the registration of the
Registrable Securities hereunder.

          9.3 Registration Expenses. The Company shall pay all fees and expenses incident to the
performance of or compliance with Section 9 by the Company, including without limitation (a) all
registration and filing fees and expenses, including without limitation those related to filings
with the SEC, any Trading Market and in connection with applicable state securities or Blue Sky
laws, (b) printing expenses (including without limitation expenses of printing certificates for
Registrable Securities), (c) messenger, telephone and delivery expenses, (d) fees and disbursements
of counsel for the Company, (e) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this Agreement, and (f) all
listing fees to be paid by the Company to the Trading Market.

          9.4 Indemnification.

                 (a) Indemnification by the Company. The Company shall, notwithstanding any termination
of this Agreement, indemnify and hold harmless each Purchaser, the officers, directors, partners,
members, agents and employees of each of them, each Person who controls any such Purchaser (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, partners, members, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all Losses (as determined
by a court of competent jurisdiction in a final judgment not subject to appeal or review), as
incurred, arising out of or relating to (i) any misrepresentation or breach of any representation
or warranty made by the Company in the Loan Documents or any other certificate, instrument or
document contemplated hereby or thereby, (ii) any breach of any covenant, agreement or obligation
of the Company contained in the Loan Documents or any other certificate, instrument or document
contemplated hereby or thereby or (iii) any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto, or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus or form of prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading; provided however that the Company will
not be liable in any such case to the extent that (A) such untrue statements, alleged untrue
statements, omissions or alleged omissions are based solely upon information regarding such
Purchaser furnished in writing to the Company by such Purchaser for use therein, or to the extent
that such information relates to such Purchaser or such Purchaser’s proposed method of distribution
of Registrable Securities and was reviewed and expressly approved by such Purchaser in writing
expressly for use in the Registration Statement (including without limitation the information set
forth in the Registration Statement Questionnaire), (B) the failure of the Purchaser to comply with
the covenants and agreements contained in Section 10.3 or 9.2(j) with respect to resale of
Registrable Securities, or (C) with respect to any prospectus used by a Purchaser, an untrue
statement or omission of material fact contained in such prospectus that was corrected on a timely
basis in the prospectus, as then amended or supplemented, if such corrected prospectus was timely
made available by the Company to the Purchaser, and the Purchaser seeking indemnity hereunder was
advised in writing not to use the incorrect prospectus prior to the use giving rise to Losses.

                 (b) Indemnification by the Purchasers. Each Purchaser shall, severally and not
jointly, indemnify and hold harmless the Company and its directors and officers, and each Person,
if any,

 

 

that controlled the Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, to the fullest extent permitted by applicable law, from and against all Losses
(as determined by a court of competent jurisdiction in a final judgment not subject to appeal or
review), as incurred, arising out of or relating to any untrue statement of a material fact
contained in the Registration Statement, any Prospectus, or any form of prospectus, or in any
amendment or supplement thereto, or arising out of or relating to any omission of a material fact
required to be stated therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under
which they were made) not misleading, but only to the extent that such untrue statements, alleged
untrue statements, omissions or alleged omissions are based solely upon information regarding such
Purchaser furnished in writing to the Company by such Purchaser for use therein. In no event shall
the liability of any selling Purchaser hereunder be greater in amount than the dollar amount of the
net proceeds received by such Purchaser upon the sale of the Registrable Securities giving rise to
such indemnification obligation.

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

                 An Indemnified Party shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party has agreed in
writing to pay such fees and expenses; or (ii) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (iii) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party
(in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense thereof and the reasonable fees and expenses of separate
counsel shall be at the expense of the Indemnifying Party). It shall be understood, however, that
the Indemnifying Party shall not, in connection with any one such Proceeding (including separate
Proceedings that have been or will be consolidated before a single judge) be liable for the fees
and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties,
which firm shall be appointed by a majority of the Indemnified Parties. The Indemnifying Party
shall not be liable for any settlement of any such Proceeding effected without its written consent,
which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding
in respect of which any

 

 

Indemnified Party is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

                 All reasonable fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party,
as incurred, within 20 Trading Days of written notice thereof to the Indemnifying Party (regardless
of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to
reimburse all such fees and expenses to the extent it is finally judicially determined that such
Indemnified Party is not entitled to indemnification hereunder).

                 (d) Contribution. If a claim for indemnification under Section 9.4(a) or (b) is
unavailable to an Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in
connection with the actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission. The
amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to
the limitations set forth in Section 9.4(c), any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent such party would
have been indemnified for such fees or expenses if the indemnification provided for in this Section
was available to such party in accordance with its terms.

                 The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 9.4(d) were determined by pro rata allocation or by any other method of allocation
that does not take into account the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 9.4(d), a Purchaser shall not
be required to contribute, in the aggregate, any amount in excess of the amount by which the net
proceeds actually received by a Purchaser from the sale of the Registrable Securities subject to
the Proceeding exceed the amount of any damages that a Purchaser has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation.

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

          9.5 Dispositions. Each of the Purchasers agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement and shall sell its Registrable
Securities in accordance with the Plan of Distribution set forth in the Prospectus. Each of the

 

 

Purchasers further agrees that, upon receipt of a notice from the Company of the occurrence of any
event of the kind described in Sections 9.2(c)(v), (vi) or (vii), such Purchaser will discontinue
disposition of such Registrable Securities under the Registration Statement until such Purchaser is
advised in writing by the Company that the use of the Prospectus, or amended Prospectus, as
applicable, may be resumed. The Company may provide appropriate stop orders to enforce the
provisions of this paragraph. Each of the Purchasers, severally and not jointly with the other
Purchasers, agrees that the removal of the restrictive legend from certificates representing
Registrable Securities as set forth in Section 10.1 is predicated upon the Company’s reliance that
each Purchaser will comply with the provisions of this subsection. Both the Company and the
Transfer Agent, and their respective directors, officers, employees and agents, may rely on this
Section.

          9.6 Registration of Other Securities. Notwithstanding anything contained herein to the
contrary and for the avoidance of doubt, the parties hereto acknowledge that (a) the Company has
granted registration rights to other security holders, and (b) any Registration Statement prepared,
filed and made effective under this Section 9 may also cover the resale of securities held by such
security holders to the extent that the Company has an obligation to register such securities under
any of the agreements listed in the SEC Reports.

          9.7 Withdrawal of Registration Statement. After the termination of the Effectiveness
Period, the Company shall be entitled to withdraw the Registration Statement, and Purchasers shall
have no further right to offer or sell any of the Registrable Securities pursuant to the
Registration Statement.

     10. OTHER AGREEMENTS OF THE PARTIES

          10.1 Transfer Restrictions.

                 (a) Each of the Purchasers, severally but not jointly, covenant to the Company that the
Registrable Securities will only be disposed of pursuant to an effective registration statement
under, and in compliance with the requirements of, the Securities Act or pursuant to an available
exemption from the registration requirements of the Securities Act, and in compliance with any
applicable state securities laws. In connection with any transfer of Registrable Securities other
than pursuant to an effective registration statement or to the Company, or pursuant to Rule 144(k),
the Company may require the transferor to provide to the Company an opinion of counsel selected by
the transferor, the form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration under the Securities Act.
Notwithstanding the foregoing, the Company hereby consents to and agrees to register on the books
of the Company and with its Transfer Agent, without any such legal opinion, except to the extent
that the Transfer Agent requests such legal opinion, any transfer of Registrable Securities by a
Purchaser to a Rule 144 Affiliate of such Purchaser, provided that the transferee certifies to the
Company that it is an “accredited investor” as defined in Rule 501(a) under the Securities Act and
provided that such Rule 144 Affiliate does not request any removal of any existing legends on any
certificate evidencing the Registrable Securities.

                 (b) Each of the Purchasers, severally but not jointly, agrees to the imprinting, until no
longer required by this Section 10.1(b), of the following legend on any certificate evidencing any
of the Registrable Securities:

 

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS. THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS
DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

                 Certificates evidencing the Registrable Securities shall not be required to contain such
legend or any other legend (i) while a registration statement (including the Registration
Statement) covering the Registrable Securities is effective under the Securities Act and a
prospectus meeting the requirements of Section 10 of the Securities Act is available with respect
to such Registrable Securities, (ii) following any sale of such Registrable Securities pursuant to
Rule 144 if the holder provides the Company with a legal opinion (and the documents upon which the
legal opinion is based) reasonably acceptable to the Company to the effect that the Registrable
Securities can be sold under Rule 144, (iii) if the Registrable Securities are eligible for sale
under Rule 144(k), or (iv) if the holder provides the Company with a legal opinion (and the
documents upon which the legal opinion is based) reasonably acceptable to the Company to the effect
that the legend is not required under applicable requirements of the Securities Act (including
controlling judicial interpretations and pronouncements issued by the Staff of the SEC). Following
the Effective Date and provided the registration statement referred to in clause (i) above is then
in effect, or at such earlier time as a legend is no longer required for certain Registrable
Securities, the Company will no later than three Trading Days following the delivery by a Purchaser
to the Company or the Transfer Agent (if delivery is made to the Transfer Agent a copy shall be
contemporaneously delivered to the Company) of (i) a legended certificate representing such
Registrable Securities (and, in the case of a requested transfer, endorsed or with stock powers
attached, signatures guaranteed, and otherwise in form necessary to affect transfer), and (ii) an
opinion of counsel to the extent required by Section 10.1(a), deliver or cause to be delivered to
such Purchaser a certificate representing such Registrable Securities that is free from all
restrictive and other legends. The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this
Section 10.1(b).

                 (c) The Company will not object to and shall permit (except as prohibited by law) a Purchaser
to pledge or grant a security interest in some or all of the Registrable Securities in connection
with a bona fide margin agreement with a registered broker-dealer or grant a security interest in
some or all of the Registrable Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the
provisions of this Agreement, and if required under the terms of such arrangement, the Company will
not object to and shall permit (except as prohibited by law) such Purchaser to transfer

 

 

pledged or secured Registrable Securities to the pledgees or secured parties. Except as required by
law, such a pledge or transfer would not be subject to approval of the Company, no legal opinion of
the pledgee, secured party or pledgor shall be required in connection therewith (but such legal
opinion shall be required in connection with a subsequent transfer or foreclosure following default
by the Purchaser transferee of the pledge), and no notice shall be required of such pledge. Each of
the Purchasers acknowledges that the Company shall not be responsible for any pledges relating to,
or the grant of any security interest in, any of the Registrable Securities or for any agreement,
understanding or arrangement between any Purchaser and its pledgee or secured party. At the
appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation
as a pledgee or secured party of Registrable Securities may reasonably request in connection with a
pledge or transfer of the Registrable Securities, including the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder.
Provided that the Company is in compliance with the terms of this Section 10.1(c), the Company’s
indemnification obligations pursuant to Section 9.4 shall not extend to any Proceeding or Losses
arising out of or related to this Section 10.1(c).

          10.2 Registration Questionnaire. Each of the Purchasers will complete or cause to be
completed the Registration Statement Questionnaire attached hereto as Exhibit B (or has otherwise
provided in a written form the information requested in such Registration Statement Questionnaire)
for use in preparation of the Registration Statement, and the information contained in such
completed Registration Statement Questionnaire (or such other form provided by the Purchaser) will
be true and correct on the effective date of the Registration Statement. Each of the Purchasers
covenants that, upon the Company’s reasonable written request, it will promptly notify the Company
of any changes in such information or other information as the Company may reasonably request in
connection with any registration referred to in Section 9.

          10.3 No Sale of Registrable Securities. Each of the Purchasers hereby, severally but
not jointly, covenants with the Company not to make any sale of the Registrable Securities without
(i) complying with the provisions of this Agreement and (ii) satisfying the requirements of the
Securities Act and the rules and regulations promulgated thereunder, including, without limitation,
causing the prospectus delivery requirement under the Securities Act to be satisfied if the
Purchaser is notified by the Company pursuant to Section 9.2(j) hereof that the conditions
specified in Rule 172(c) of the Securities Act were not satisfied and, as a result thereof, the
Purchasers are required to deliver a Prospectus in connection with any disposition of Registrable
Securities. Each of the Purchasers acknowledges that there may occasionally be times when the
Company determines that, subject to the limitations of Section 9.1, it must suspend the use of the
prospectus forming a part of the Registration Statement until such time as an amendment to the
Registration Statement has been filed by the Company and declared effective by the SEC, an
appropriate report has been filed by the Company with the SEC pursuant to the Exchange Act or until
the Company has amended or supplemented such prospectus. Each of the Purchasers hereby, severally
but not jointly, covenants that it will not sell any Registrable Securities pursuant to the
Registration Statement during the period commencing at the time at which the Company gives each
Purchaser written notice of any suspension of the use of the Registration Statement and ending at
the time the Company gives each Purchaser written notice that each Purchaser may thereafter effect
sales pursuant to the Registration Statement.

 

 

     11. DEFAULTS. The occurrence of any one or more of the following events shall constitute a
“Default” or an “Event of Default”:

          11.1 The Company fails to pay any of the principal, interest or any other amounts payable
under this Agreement or any of the Convertible Notes when and as the same becomes due and payable;

          11.2 The Company files any petition or action for relief under any bankruptcy, reorganization,
insolvency or moratorium law or any other law for the relief of, or relating to, Company, now or
hereafter in effect, or seeks the appointment of a custodian, receiver, trustee (or other similar
official) of the Company or all or any substantial portion of the Company’s assets, or makes any
assignment for the benefit of creditors or takes any action in furtherance of any of the foregoing,
or fails to generally pay its debts as they become due;

          11.3 An involuntary petition is filed, or any proceeding or case is commenced, against the
Company (unless such proceeding or case is dismissed or discharged within ninety (90) days of the
filing or commencement thereof) under any bankruptcy, reorganization, arrangement, insolvency,
adjustment of debt, liquidation or moratorium statute now or hereafter in effect, or a custodian,
receiver, trustee, assignee for the benefit of creditors (or other similar official) is applied
for, appointed for the Company or to take possession, custody or control of any property of the
Company, or an order for relief is entered against the Company in any of the foregoing; or

          11.4 Any representation or warranty made by the Company under this Agreement shall have been
false or misleading in any material respect when made or deemed made.

     12. REMEDIES.

          12.1 Upon the occurrence and during the continuance of an Event of Default hereunder, the
Purchasers may, without notice or demand upon the Company, do any or all of the following:

                 (a) Declare all unpaid principal and accrued interest owing under the Convertible Notes held
by a Purchaser, and, in the case of an Event of Default pursuant to Section 11.2 or 11.3 above,
automatically, to be immediately due, payable and collectible by a Purchaser pursuant to applicable
law;

                 (b) Declare any and all unpaid principal and accrued interest due under the Convertible Notes
held by a Purchaser to thereafter bear interest at the maximum rate set forth in Section 2.4
hereof;

                 (c) Terminate any and all of such Purchaser’s obligations to purchase any additional
Convertible Notes hereunder; and

                 (d) Exercise any and all rights and remedies it may have under this Agreement, under the
Convertible Notes held by any Purchaser or under applicable law.

          12.2 All of the foregoing rights and remedies shall be cumulative and not exclusive. The
failure to exercise all or any rights, remedies, powers or privileges hereunder, under the
Convertible Notes or under applicable law, in any instance shall not constitute a waiver thereof in
that or any other instance.

     13. WAIVERS, AMENDMENTS AND OTHER PROVISIONS.

          13.1 Entire Agreement; Amendments; Invalidity. This Agreement and the Convertible
Notes constitute the entire agreement and understanding of the parties, and supercedes and

 

 

replaces in their entirety any prior discussions or agreements, all of which are merged herein and
therein. None of the terms of this Agreement or any Convertible Note may be amended or otherwise
modified except by an instrument executed by the Company and each Purchaser. If any term of this
Agreement or any Convertible Notes shall be held to be invalid, illegal or unenforceable, the
validity of all other terms hereof shall in no way be affected thereby, and this Agreement and the
Convertible Notes shall be construed and be enforceable as if such invalid, illegal or
unenforceable term had not been included herein.

          13.2 Expenses. The Company agrees to and shall pay to the Purchasers on demand, any
and all expenses, including, without limitation, reasonable attorney’s fees and disbursements,
incurred or paid by the Purchasers in connection with the collection on or enforcement of amounts
outstanding hereunder, for protecting, preserving or enforcing the Purchaser’s rights or remedies
(including fees, costs and expenses relating to any proceedings with respect to the bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or liquidation of the Company).

          13.3 Nonliability of the Purchasers; Several Obligation. The relationship between the
Company, on the one hand, and the Purchasers, on the other hand, shall be solely that of Company
and the Purchasers. The Purchasers shall have no fiduciary responsibilities to the Company as
holders of Convertible Notes.

          13.4 Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE CONVERTIBLE NOTES
ARE INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS (AND NOT THE LAWS OF CONFLICT) OF THE COMMONWEALTH OF MASSACHUSETTS. THE
COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS AND THE UNITED STATES DISTRICT COURT FOR THE COMMONWEALTH OF MASSACHUSETTS FOR THE
PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND
THE CONVERTIBLE NOTES AND THE COMPANY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE PURCHASERS TO BRING PROCEEDINGS AGAINST THE COMPANY IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE COMPANY AGAINST ANY PURCHASER OR ANY AFFILIATE OF ANY
PURCHASER UNDER OR INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH THIS AGREEMENT OR ANY CONVERTIBLE NOTE SHALL BE BROUGHT ONLY IN A COURT IN
THE COMMONWEALTH OF MASSACHUSETTS.

          13.5 Waiver of Jury Trial and Certain Damages. THE COMPANY, EACH PURCHASER WAIVES ITS
RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS AGREEMENT OR ANY CONVERTIBLE NOTE, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR
THE PERFORMANCE OF

 

 

ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, the Company waives any right which it
may have to claim or recover in any litigation referred to in the preceding sentence any special,
exemplary, punitive or consequential damages or any damages other than, or in addition to, actual
damages. The Company (i) certifies that neither the Purchaser nor any representative, agent or
attorney of the Purchaser has represented, expressly or otherwise, that the Purchaser would not, in
the event of litigation, seek to enforce the foregoing waivers and (ii) acknowledges that, in
entering into this Agreement and the Convertible Notes, the Purchasers are relying upon, among
other things, the foregoing waivers and certifications.

          13.6 Successors and Assigns. This Agreement and the other Loan Documents and all
obligations of the Company hereunder and thereunder shall be binding upon the successors and
assigns of the Company, and shall, together with the rights and remedies of the Purchasers
hereunder, inure to the benefit of the Purchasers, any future holder of this Agreement or any other
Loan Document and their respective successors and assigns, provided, however, the Company may not
transfer or assign its rights or obligations hereunder or thereunder without the express written
consent of each Purchaser, and any purported transfer or assignment by the Company without the
approval of each Purchaser shall be null and void. Each Purchaser may assign, transfer, participate
or endorse its rights under this Agreement or any of the other Loan Documents without the consent
or approval of the Company, and all such rights shall inure to the Purchasers’ successors and
assigns; provided, that such transferee agrees in writing to be bound by all of the terms of this
Agreement. No sales of participations, other sales, assignments, transfers, endorsements or other
dispositions of any rights hereunder or thereunder or any portion hereof or thereof or interest
herein or therein shall in any manner affect the obligations of the Company under this Agreement or
the other Loan Documents. The Company agrees that in connection with any such assignment, to
execute and deliver such additional documents or agreements, including, without limitation, new
Convertible Notes, as may be reasonably requested.

          13.7 Counterparts. This Agreement may be executed in any number of separate
counterparts, all of which, when taken together, shall constitute one and the same instrument,
notwithstanding the fact that all parties did not sign the same counterpart.

          13.8 No Reliance. Each of the Purchasers hereby acknowledge (i) that Wilmer Cutler
Pickering Hale and Dorr LLP has served as counsel solely to the Company in connection with entering
into this Agreement and the Convertible Notes and the transactions contemplated hereby and thereby
and not as counsel to any of the Purchasers, and (ii) that each Purchaser (a) has sought the advice
of his own legal counsel and has not relied upon Wilmer Cutler Pickering Hale and Dorr LLP, (b) has
had an opportunity to fully discuss and review the terms of this Agreement and the Convertible
Notes and the transactions contemplated hereby and thereby with such Purchaser’s counsel, and (c)
understands the contents herein and freely and voluntarily assents to all of the terms and
conditions hereof and the transactions contemplated hereby.

          13.9 Independent Nature of Purchaser’s Obligations and Rights. The obligations of each
Purchaser under this Agreement are several and not joint with the obligations of any other
Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser under this Agreement. Nothing contained herein, and no action taken by any
Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchaser as a partnership,
an association, a joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to

 

 

such obligations or the transactions contemplated hereby and the Company acknowledges that the
Purchasers are not acting in concert or as a group with respect to such obligations or the
transactions contemplated by hereby. Each of the Purchasers confirms that it has independently
participated in the negotiation of the transaction contemplated hereby with the advice of its own
counsel and advisors. Each of the Purchasers shall be entitled to independently protect and enforce
its rights, including, without limitation, the rights arising out of this Agreement, and it shall
not be necessary for any other Purchaser to be joined as an additional party in any proceeding for
such purpose.

[Remainder of Page Intentionally Left Blank]

 

 

     IN WITNESS WHEREOF, this Agreement has been duly executed as an instrument under seal as of
the date first set forth above.

	 	 	 	 	 	 	 
	COMPANY:	 	PURCHASER:
	 
	 	 	 	 	 	 
	ALSERES PHARMACEUTICALS, INC.	 	ROBERT GIPSON
	 
	 	 	 	 	 	 
	By:

	 	Kenneth L. Rice, Jr.
	 	Signature:
	 	Robert L. Gipson
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Printed Name: Kenneth L. Rice, Jr.	 	Address:	 	c/o Ingalls & Snyder LLC
	Title: EVP & CFO	 	 	 	61 Broadway, NY, NY 10006
	 
	 	 	 	 	 	 
	Address:

	 	85 Main Street	 	 	 	 
	 

	 	Hopkinton, Massachusetts 01748	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	AMENDED NOTE PURCHASERS:
	 
	 	 	 	 	 	 
	 	 	 	 	ROBERT GIPSON
	 
	 	 	 	 	 	 
	 

	 	 	 	Signature:
	 	Robert L. Gipson
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:
	 	c/o Ingalls & Snyder LLC
	 

	 	 	 	 	 	61 Broadway, NY, NY 10006
	 
	 	 	 	 	 	 
	 	 	 	 	THOMAS GIPSON
	 
	 	 	 	 	 	 
	 

	 	 	 	Signature:
	 	Thomas O. Boucher Jr.
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:
	 	By Thomas O. Boucher Jr.
	 

	 	 	 	 	 	His Attorney In Fact
	 

	 	 	 	 	 	c/o Ingalls & Snyder LLC
	 

	 	 	 	 	 	61 Broadway, NY, NY 10006

 

 

	 	 	 	 	 	 	 
	 	 	 	 	ARTHUR KOENIG
	 
	 	 	 	 	 	 
	 

	 	 	 	Signature:
	 	Thomas O. Boucher Jr.
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:
	 	By Thomas O. Boucher Jr.
	 

	 	 	 	 	 	His Attorney In Fact
	 

	 	 	 	 	 	c/o Gipson Ingalls & Snyder LLC
	 

	 	 	 	 	 	61 Broadway, NY, NY 10006

 

 

	 	 	 	 	 
	 	HIGHBRIDGE INTERNATIONAL LLC

 	 
	 	By:  	Highbridge Capital Management, LLC
 	 

	 	 	 	 	 
	 	Its Trading Manager

 	 
	 	By:  	/s/ Adam J. Chill
 	 

	 	 	 	 	 
	 	Printed Name: Adam J. Chill

Title: Managing Director

INGALLS & SNYDER VALUE PARTNERS, L.P.

 	 
	 	By:  	Thomas O. Boucher Jr.
 	 
	 	 	 	 
	 	 	 	 

	 	 	 	 	 
	 	By Thomas O. Boucher Jr.

General Partner

c/o Ingalls & Snyder LLC

61 Broadway, NY, NY 10006

 	 
	 	 	 
	 	 	 
	 	 	 
	 

Schedule 2.1

	 	 	 
	Purchaser Name	 	Commitment Percentage
	Robert Gipson

	 	100%

 

 

EXHIBIT A

THIS CONVERTIBLE PROMISSORY NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), NOR UNDER ANY STATE
SECURITIES LAWS AND MAY NOT BE PLEDGED, SOLD, ASSIGNED OR OTHERWISE TRANSFERRED UNTIL A (1)
REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW HAS BECOME EFFECTIVE
WITH RESPECT THERETO, OR (2) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL TO THE COMPANY TO THE
EFFECT THAT REGISTRATION UNDER THE ACT OR APPLICABLE STATE SECURITIES LAW IS NOT REQUIRED IN
CONNECTION WITH THE PROPOSED TRANSFER.

CONVERTIBLE PROMISSORY NOTE

	 	 	 
	$[                    ]

	 	        , 2008
	 
	 	 
	 

	 	Hopkinton, Massachusetts

     FOR VALUE RECEIVED, on the Maturity Date, Alseres Pharmaceuticals, Inc., a Delaware
corporation having a principal place of business at 85 Main Street, Hopkinton, Massachusetts 01748
(the “Company”), hereby unconditionally promises to pay to [Purchaser] (the “Purchaser”),
or order, at [        ], or such other place as Purchasers or any holder hereof may from time to time
designate, the principal sum of [        ] Dollars [($        )], in United States Dollars and in immediately
available funds as provided in the Convertible Promissory Note Purchase Agreement of even date
among the Company and the Purchasers (the “Agreement”), together with interest on the unpaid
principal amount hereof from time to time outstanding at the rate and on the dates set forth in the
Agreement. This Convertible Promissory Note is one of a series of Convertible Promissory Notes
issued pursuant to the Agreement and each such Convertible Promissory Note shall rank pari passu in
right of repayment to such other Convertible Promissory Note.

     This Convertible Promissory Note is issued pursuant to, and is entitled to the benefits of,
the Agreement, as it may be amended from time to time. Reference is hereby made thereto for a
statement of the terms and conditions under which this Convertible Promissory Note may be
converted, prepaid or its maturity date accelerated. This Convertible Promissory Note is
convertible at the election of the Purchaser pursuant to Sections 4.1 and 4.2 of the Agreement.
Capitalized terms used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.

     No delay or omission on the part of the Purchaser in exercising any right hereunder shall
operate as a waiver of such right or of any other right of Purchaser, nor shall any delay, omission
or waiver on any one occasion be deemed a bar to or waiver of the same or any other right on any
future occasion. The Company and every endorser or guarantor of this Convertible Promissory Note
regardless of the time, order or place of signing waives presentment, demand, protest and notices
of every kind and assents to any extension or postponement of the time of payment or any other
indulgence, and to the addition or release of any other party or person primarily or secondarily
liable.

 

 

     The terms and provisions of this Convertible Promissory Note may be excluded, modified, or
amended only as set forth in the Agreement. This Convertible Promissory Note shall be binding upon
the successors and assigns of the Company and inure to the benefit of Purchaser and its successors,
endorsees and assigns as set forth in the Agreement. If any term or provision of this Convertible
Promissory Note shall be held to be invalid or unenforceable, in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall only effect such term or provision,
and shall not effect such term or provision in any other jurisdiction or any other term or
provision of this Convertible Promissory Note.

     The Company hereby waives its right to a jury trial with respect to any action or claim
arising out of any dispute in connection with this Convertible Promissory Note or any of the other
Loan Documents, any rights or obligations hereunder or thereunder or the performance of such rights
and obligations.

     All rights and obligations hereunder shall be governed by the laws of the Commonwealth of
Massachusetts (without giving effect to principles of conflicts or choice of laws) and this
Convertible Promissory Note shall be deemed to be made under seal.

	 	 	 	 	 	 	 
	 	 	Alseres Pharmaceuticals, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

EXHIBIT B

ALSERES PHARMACEUTICALS, INC.

REGISTRATION STATEMENT QUESTIONNAIRE

In connection with the Registration Statement, please provide us with the following information
regarding the Purchaser.

	 	 	 
	1.

	 	Please state your organization’s name exactly as it should appear in the Registration Statement:
	 
	 	 
	 

	 	 
	 

	 	 
	 
	 	 
	 

	 	Except as set forth below, your organization does not hold any equity securities of
the Company on behalf of another person or entity.
	 
	 	 
	 

	 	State any exceptions here:
	 
	 	 
	 

	 	 
	 

	 	 
	 
	 	 
	 

	 	If the Purchaser is not a natural person, please identify the natural person or
persons who will have voting and investment control over the Securities owned by the
Purchaser:
	 
	 	 
	 

	 	 
	 

	 	 

	 	 	 	 	 
	2.

	 	Address of your organization:	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Telephone:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Fax:	 	 

 

 

	 	 	 	 	 
	 

	 	Contact Person:	 	 
	 
	 	 	 	 
	 

	 	Email:	 	 
	 
	 	 	 	 
	3.	 	Have you or your organization had any position, office or other material
relationship within the past three years with the Company or its affiliates?
(Include any relationships involving you or any of your affiliates, officers,
directors, or principal equity holders (5% or more) that has held any position or
office or has had any other material relationship with the Company (or its
predecessors or affiliates) during the past three years.)

	 	 	 	 	 	 	 	 	 
	 

	 	Yes
	 	 
	 	No
	 	 
	 

	 	 	 	 	 	 	 	 

If yes, please indicate the nature of any such relationship below:

 

 

	 	 	 
	4.

	 	Are you the beneficial or registered owner of any other securities of the Company?
(Include any equity securities that you beneficially own or have a right to acquire
within 60 days after the date hereof, and as to which you have sole voting power,
shared voting power, sole investment power or shared investment power.)

	 	 	 	 	 	 	 	 	 
	 

	 	Yes
	 	 
	 	No
	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	If yes, please describe the nature and amount of such ownership as of a recent date.

	 	 	 
	5.

	 	Except as set forth below, you wish that all the shares of the Company’s common
stock beneficially owned by you or that you have the right to acquire from the
Company be offered for your account in the Registration Statement.
	 
	 	 
	 

	 	State any exceptions here:
	 
	 	 
	6.

	 	Do you intend to distribute the Registrable Securities in accordance with the “Plan
of Distribution” section set forth in the Registration Statement?

	 	 	 	 	 	 	 	 	 
	 

	 	Yes
	 	 
	 	No
	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	If yes, please describe the nature and amount of such arrangements.

	 	 	 
	7.

	 	NASD Matters
	 
	 	 
	(a)

	 	State below whether (i) you or any associate or affiliate of yours are a member of
the NASD, a controlling shareholder of an NASD member, a person associated with a
member, a direct or indirect affiliate of a member, or an underwriter or related
person with respect to the proposed offering; (ii) you or any associate or
affiliate of yours owns any stock or other securities of any NASD member not
purchased in the open market; or (iii) you or any associate or affiliate of yours
has made any outstanding subordinated loans to any NASD member. If you are a
general or limited partnership, a no answer asserts that no such relationship
exists for you as well as for each of your general or limited partners.

	 	 	 	 	 	 	 	 	 
	Yes:

	 	 
	 	No:
	 	 
	 	 
	 

	 	 
	 	 	 	 
	 	 

If “yes,” please identify the NASD member and describe your relationship, including, in the case of
a general or limited partner, the name of the partner:

If you answer “no” to Question 7(a), you need not respond to Question 7(b).

 

 

(b) State below whether you or any associate or affiliate of yours has been an underwriter, or a
controlling person or member of any investment banking or brokerage firm which has been or might be
an underwriter for securities of the Corporation or any affiliate thereof including, but not
limited to, the common stock now being registered.

	 	 	 	 	 	 	 	 	 
	Yes:

	 	 
	 	No:
	 	 
	 	 
	 

	 	 
	 	 	 	 
	 	 

If “yes,” please identify the NASD member and describe your
relationship, including, in the case of a general or limited partner,
the name of the partner.

	8.	 	Selling Stockholder Affiliations

(a) Is the Selling Stockholder a registered broker-dealer?

	 	 	 	 	 	 	 	 	 
	Yes:

	 	 
	 	No:
	 	 
	 	 
	 

	 	 
	 	 	 	 
	 	 

(b) Is the Selling Stockholder an affiliate of a registered broker-dealer(s)?

	 	 	 	 	 	 	 	 	 
	Yes:

	 	 
	 	No:
	 	 
	 	 
	 

	 	 
	 	 	 	 
	 	 

(c) If the answer to Item (8)(b) is yes, identify the registered broker-dealer(s) and describe the
nature of the affiliation(s): _______________

(d) If the answer to Item (6)(b) is yes, did the Selling Stockholder acquire the Registrable
Securities in the ordinary course of business (if not, please explain)?

(e) If the answer to Item (8)(b) is yes, did the Selling Stockholder, at the time of purchase of
the Registrable Securities, have any agreements, plans or understandings, directly or indirectly,
with any person to distribute the Registrable Securities (if yes, please explain)?

 

 

ACKNOWLEDGEMENT

The undersigned hereby agrees to notify the Company promptly of any changes in the foregoing
information which should be made as a result of any developments, including the passage of time.
The undersigned also agrees to provide the Company and the Company’s counsel any and all such
further information regarding the undersigned promptly upon request in connection with the
preparation, filing, amending, and supplementing of the Registration Statement (or any prospectus
contained therein). The undersigned hereby consents to the use of all such information in the
Registration Statement.

The undersigned understands and acknowledges that the Company will rely on the information set
forth herein for purposes of the preparation and filing of the Registration Statement. The
undersigned understands that the undersigned may be subject to serious civil and criminal
liabilities if the Registration Statement, when it becomes effective, either contains an untrue
statement of a material fact or omits to state a material fact required to be stated in the
Registration Statement or necessary to make the statements in the Registration Statement not
misleading. The undersigned represents and warrants that all information it provides to the Company
and its counsel is currently accurate and complete and will be accurate and complete at the time
the Registration Statement becomes effective and at all times subsequent thereto, and agrees during
the Effectiveness Period and any additional period in which the undersigned is making sales of
Shares under and pursuant to the Registration Statement, and agrees during such periods to notify
the Company immediately of any misstatement of a material fact in the Registration Statement, and
of the omission of any material fact necessary to make the statements contained therein not
misleading.

	 	 	 	 	 
	Dated:

	 	 
	 	 
	 

	 	 	 	 

	 	 	 
	 

	 	 
	 

	 	 
	Name
	 	 
	 
	 	 
	 

	 	 
	 

	 	 
	Signature
	 	 
	 
	 	 
	 

	 	 
	 

	 	 
	Name and Title of Signatory

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]