Document:

exv10w1

 

Exhibit 10.1

Execution Version

Securities Purchase Agreement, dated as of November 9, 2007
(this “Agreement”), among EPIX PHARMACEUTICALS, INC., a Delaware
corporation (the “Company”), and the Purchasers listed on Exhibit A
hereto, together with their permitted transferees (each, a
“Purchaser” and collectively, the “Purchasers”).

Introduction

          The Company and the Purchasers are executing and delivering this Agreement in reliance upon
the exemption from securities registration afforded by Section 4(2) of the Securities Act and Rule
506 of Regulation D promulgated thereunder.

          The Purchasers desire to purchase and the Company desires to sell, upon the terms and
conditions stated in this Agreement, shares of the Company’s common stock, par value $.01 per share
(the “Common Stock”).

          The capitalized terms used herein and not otherwise defined have the meanings given them in
Article VII.

          In consideration of the premises and the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company
and the Purchasers (severally and not jointly) hereby agree as follows:

ARTICLE I

Purchase and Sale of Shares

          Section 1.1 Purchase and Sale of Shares. At the Closing, the Company will issue and
sell to each Purchaser, and each Purchaser will, severally and not jointly, purchase from the
Company the number of shares of Common Stock (the “Shares”) set forth opposite such Purchaser’s
name on Exhibit A hereto. The purchase price for each Share shall be $3.10 (the “Purchase Price”),
which represents a discount of approximately 15% to the closing bid price of the Common Stock as
reported on NASDAQ (symbol “EPIX”) at 4:00 p.m. EST on November 9, 2007.

          Section 1.2 Payment. At the Closing, each Purchaser will pay the aggregate Purchase
Price set forth opposite its name on Exhibit A hereto by wire transfer of immediately available
funds in accordance with wire instructions provided by the Company to the Purchasers prior to the
Closing. At the Closing, the Company will instruct its transfer agent to deliver stock
certificates to the Purchasers representing the Shares against delivery of the aggregate Purchase
Price on the Closing Date.

          Section 1.3 Closing Date. The closing of the transaction contemplated by this
Agreement will take place on or about November 15, 2007 (the “Closing Date”) and the closing (the
“Closing”) will be held at the offices of Goodwin Procter LLP, Exchange Place, 53 State
Street, Boston, MA 02109, or at such other time and place as shall be agreed upon by the
Company and the Purchasers hereunder of a majority in interest of the aggregate number of Shares
purchased hereunder.

 

 

ARTICLE II

Representations And Warranties Of The Company

          The Company hereby represents and warrants to the Purchasers that:

          Section 2.1 Organization and Qualification; Subsidiaries. Each of the Company and its
Subsidiaries is duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its organization, with corporate power and authority to conduct its business as
currently conducted as disclosed in the SEC Documents (as defined in Section 2.6 hereof). Each of
the Company and its Subsidiaries is duly qualified to do business and is in good standing in every
jurisdiction in which the nature of the business conducted by it or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good standing, as the
case may be, would not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect. The only corporations, associations or other entities currently majority owned or
controlled, directly or indirectly, by the Company are the entities listed in Exhibit 21.1 to the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

          Section 2.2 Authorization; Enforcement. The Company has all requisite corporate power
and authority to enter into and to perform its obligations under this Agreement, to consummate the
transactions contemplated hereby and to issue the Shares in accordance with the terms hereof. The
execution, delivery and performance of this Agreement by the Company and the consummation by it of
the transactions contemplated hereby (including the issuance of the Shares) have been duly
authorized by the Company’s Board of Directors and no further consent or authorization of the
Company, its Board of Directors, or its stockholders is required. This Agreement has been duly
executed by the Company and constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, or moratorium or similar laws
affecting creditors’ and contracting parties’ rights generally and except as enforceability may be
subject to general principles of equity and except as rights to indemnity and contribution may be
limited by state or federal securities laws or public policy underlying such laws.

          Section 2.3 Capitalization. The authorized capital stock of the Company, as of
November 6, 2007, consisted of (a) 100,000,000 shares of Common Stock, of which 36,059,436 shares
were issued and outstanding and (b) 1,000,000 shares of Preferred Stock, $0.01 par value per share,
none of which have been issued. All of the issued and outstanding shares of Common Stock have been
duly authorized, validly issued, fully paid, and nonassessable. As of November 6, 2007, options to
purchase an aggregate of 3,780,747 shares of Common Stock were outstanding, warrants to purchase
11,117 shares of Common Stock were outstanding and 2,239,393 shares of Common Stock were reserved
for issuance upon conversion of the Company’s outstanding convertible notes. Except as disclosed in
or contemplated by the SEC Documents, the Company does not have outstanding any options to
purchase, warrants, or any preemptive rights or other rights to subscribe for or to purchase,
any securities or obligations convertible into or exchangeable for, or any contracts or commitments
to issue or sell, shares of its capital stock or any such options, rights, convertible securities
or

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obligations other than options granted under the Company’s stock option plans and its employee
stock purchase plan.

          Section 2.4 Issuance of Shares. The Shares are duly authorized and, upon issuance in
accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable
and shall be free from all taxes, liens and charges (excluding taxes, liens or charges created by
or through the Purchaser) and will not be subject to preemptive rights or other similar rights of
stockholders of the Company. No co-sale right, right of first refusal or other similar right
exists with respect to the Shares or the issuance and sale thereof. The issue and sale of the
Shares will not result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities.

          Section 2.5 No Conflicts; Government Consents and Permits, Compliance. (a) The
execution, delivery and performance of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby (including the issuance of the Shares) will not (i)
conflict with or result in a violation of any provision of its certificate of incorporation or
bylaws or require the approval of the Company’s stockholders, (ii) violate or conflict with, or
result in a breach of any provision of, or constitute a default under, any agreement, indenture, or
instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including United States federal
and state securities laws and regulations and regulations of any self-regulatory organizations to
which the Company or its securities are subject) applicable to the Company or any of its
Subsidiaries, except in the case of clauses (ii) and (iii) only, for such conflicts, breaches,
defaults, and violations as would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.

          (b) The Company is not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency or any regulatory or self regulatory
agency or any other Person in order for it to execute, deliver or perform any of its obligations
under this Agreement in accordance with the terms hereof, or to issue and sell the Shares in
accordance with the terms hereof other than such as have been made or obtained, and except for the
registration of the Shares under the Securities Act pursuant to Section 6 hereof, any filings
required to be made under federal and state securities laws, and any required filings or
notifications regarding the issuance or listing of additional shares with NASDAQ.

          (c) Each of the Company and its Subsidiaries has all franchises, permits, licenses, and any
similar authority necessary for the conduct of its business as now being conducted by it, except
for such franchise, permit, license or similar authority, the lack of which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect. Neither of the
Company nor its Subsidiaries has received any notice of any proceeding relating to revocation or
modification of any such franchise, permit, license, or similar authority except where such
revocation or modification would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.

          (d) Except as set forth on the SEC Documents, neither the Company nor any Subsidiary (i) is in
violation of any order of any court, arbitrator or governmental body, or (ii) is or, since January
1, 2007, has been in violation of any statute, rule or regulation of any

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governmental authority,
including without limitation all foreign, federal, state and local laws applicable to its business,
except in each case as would not reasonably be expected to have a Material Adverse Effect.

          Section 2.6 SEC Documents, Financial Statements. (a) The Company has timely filed all
reports, schedules, forms, statements and other documents required to be filed by it with the SEC
during the 12 months preceding the date of this Agreement, pursuant to the reporting requirements
of the Exchange Act, except for the Annual Report on Form 10-K for the fiscal year ended December
31, 2006 which was not timely when filed on April 10, 2007 (the Annual Report on Form 10-K for
the fiscal year ended December 31, 2006 and all other reports, schedules, forms, statements and
other documents filed by the Company on or after January 1, 2007, including all exhibits included
therein and financial statements and schedules thereto and documents (other than exhibits)
incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”).
As of their respective dates, the SEC Documents complied as to form in all material respects with
the requirements of the Exchange Act, and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were
filed with the SEC, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading. The Financial Statements
have been prepared in accordance with accounting principles generally accepted in the United
States, consistently applied, during the periods involved (except (i) as may be otherwise indicated
in the Financial Statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes, may be condensed or summary statements or
may conform to the SEC’s rules and instructions for Reports on Form 10-Q) and fairly present in all
material respects the consolidated financial position of the Company as of the dates thereof and
the consolidated results of its operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal and recurring year-end audit adjustments). There is no
material transaction, arrangement, or other relationship between the Company and an unconsolidated
or other off balance sheet entity that is required to be disclosed by the Company in its Exchange
Act filings and is not so disclosed. All material agreements that were required to be filed as
exhibits to the SEC Documents under Item 601 of Regulation S-K (collectively, the “Material
Agreements”) to which the Company or any of its Subsidiaries are a party, or to which the property
or assets of the Company or any of its Subsidiaries are subject, have been filed or incorporated by
reference as exhibits to the applicable SEC Document. Each of the Company and its Subsidiaries is
not in breach of or default under any of the Material Agreements to which it is a party, and to the
Company’s Knowledge, no other party to a Material Agreement is in breach of or default under such
Material Agreement, except, in each case, for such breaches or defaults as would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect. Neither the Company
nor any of its Subsidiaries has received a written notice of termination of any of the Material
Agreements. Except with respect to the matters covered by the Confidentiality Agreement executed
by the applicable Purchaser, the Company confirms that neither it nor any person acting on its
behalf has provided any Purchaser or its agents or counsel with any information that the Company
believes constitutes
material, non-public information. The Company understands and confirms that each Purchaser
will rely on the foregoing representation in effecting transactions in securities of the Company.

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     (b) As of the date hereof the Company is not an ineligible issuer, as defined in Rule 405
under the Securities Act.

          Section 2.7 Absence of Litigation. Except in each case as disclosed in the SEC
Documents, as of the date hereof, (i) there is no action, suit or proceeding before or by any
court, public board, government agency, self-regulatory organization or body pending or, to the
Company’s Knowledge, threatened against the Company or any of its Subsidiaries that, if determined
adversely would reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect; (ii) to the Knowledge of the Company there is no investigation before or by any
court, public board, government agency, self-regulatory organization or body pending or threatened
against the Company or any of its Subsidiaries that, if determined adversely would reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect; (iii) to the
Knowledge of the Company, there is not pending any investigation by the SEC involving the Company
or any current or former director or officer of the Company; and (iv) the Company has not received
any stop order or other order suspending the effectiveness of any registration statement filed by
the Company under the Exchange Act or the Securities Act and, to the Company’s Knowledge, the SEC
has not issued any such order.

          Section 2.8 Intellectual Property Rights. Each of the Company and its Subsidiaries
owns or possesses licenses or sufficient rights to use the inventions (patented and non-patented),
know-how, trade secrets, trademarks, trademark applications, service marks, service names, trade
names and copyrights and any other material intellectual property that it is currently using and,
to the Company’s Knowledge, that are necessary to enable it to conduct its business as conducted as
of the date hereof (the “Intellectual Property”), except for such Intellectual Property the lack of
which could not reasonably be expected, individually or in the aggregate, to result in a Material
Adverse Effect. Except as disclosed in the SEC Documents, neither the Company nor any of its
Subsidiaries has, to the Company’s Knowledge, infringed the intellectual property rights of third
parties and no third party, to the Company’s Knowledge and except as disclosed in the SEC
Documents, is infringing the Intellectual Property, in each case, which could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse Effect. Except as
disclosed in the SEC Documents, there are no material options, licenses or agreements relating to
the Intellectual Property, nor is the Company or any of its Subsidiaries bound by or a party to any
material options, licenses or agreements relating to the patents, patent applications, patent
rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks,
service names, trade names or copyrights of any other person or entity. As of the date hereof,
there is no material claim or action or proceeding pending or, to the Company’s Knowledge,
threatened, that challenges the right of the Company or any of its Subsidiaries with respect to any
Intellectual Property. The Company and its Subsidiaries have taken reasonable security measures to
protect the secrecy, confidentiality and value of all of their Intellectual Property.

          Section 2.9 Placement Agents. The Company has taken no action that would give rise to
any claim by any person for brokerage commissions, placement agent’s fees or
similar payments relating to this Agreement or the transactions contemplated hereby, except
for dealings with the Placement Agents, whose commissions and fees will be paid by the Company.

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          Section 2.10 Investment Company. The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.

          Section 2.11 No Material Adverse Effect. Since December 31, 2006, except as described
or referred to in the SEC Documents and except for cash expenditures in the ordinary course of
business, there has not been any change in the business, financial condition, results of
operations, its assets or liabilities except for any such change that would not reasonably be
expected to result, individually or in the aggregate, in a Material Adverse Effect. No event,
liability or development has occurred or exists with respect to the Company or its Subsidiaries or
their respective business, properties, operations or financial condition, that would be required to
be disclosed by the Company under applicable securities laws at the time this representation is
made that has not been publicly disclosed at least one trading day prior to the date that this
representation is made.

          Section 2.12 Nasdaq Global Market. The issued and outstanding shares of Common Stock
are listed on NASDAQ, and, to the Company’s Knowledge, there are no proceedings to revoke or
suspend such listing. The Company is in compliance in all material respects with the requirements
of NASDAQ for continued listing of the Common Stock thereon and any other NASDAQ listing and
maintenance requirements and has not received any notification from the SEC or NASDAQ regarding
delisting or suspension of the Common Stock.

          Section 2.13 Acknowledgment Regarding Purchasers’ Purchase of Shares. The Company
acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s
length purchaser with respect to this Agreement and the transactions contemplated hereby. The
Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the
Company (or in any similar capacity with respect to the Company), with respect to this Agreement
and the transactions contemplated hereby and any advice given by any Purchaser or any of their
respective representatives or agents to the Company in connection with this Agreement and the
transactions contemplated hereby is merely incidental to such Purchaser’s purchase of the Shares.
The Company further represents to each Purchaser that the Company’s decision to enter into this
Agreement has been based upon the independent evaluation of the transactions contemplated hereby by
the Company and its representatives.

          Section 2.14 Accountants. Ernst & Young LLP, who have expressed their opinion with
respect to the audited financial statements and schedules that will be included as a part of the
Registration Statement, are independent accountants as required by the Securities Act.

          Section 2.15 Insurance. Each of the Company and its Subsidiaries is insured by
insurers of recognized financial responsibility against such losses and risks and in such amounts
as the Company believes are prudent for a company (i) in the businesses and location in which the
Company or the Material Subsidiary, as applicable, is engaged, and (ii) with the
resources of the Company or the Material Subsidiary, as applicable. Neither the Company nor
any of its Subsidiaries has received any notice that it will not be able to renew its existing
insurance coverage as and when such coverage expires.

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          Section 2.16 Foreign Corrupt Practices. Neither the Company nor any of its
Subsidiaries nor, to the Company’s Knowledge, any director, officer, agent, employee or other
person acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions
for, or on behalf of, the Company or any subsidiary, (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii)
made any direct or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic government
official or employee; except in the cases of clauses (i), (ii) and (iv) only, as would not
reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

          Section 2.17 Private Placement. Neither the Company nor any person acting on its or
their behalf, has, directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under any circumstances that would require registration of the
Shares under the Securities Act; provided that no representation or warranty is made pursuant to
this Section 2.17 with respect to the Placement Agents. None of the Company, its Subsidiaries, any
of their affiliates, or any Person acting on their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security, under circumstances
that would require registration of any of the Shares under the Securities Act or cause this
offering of the Shares to be integrated with prior offerings by the Company for purposes of the
Securities Act or any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of NASDAQ.

          Section 2.18 No Registration Rights. No person has the right to (i) prohibit the
Company from filing the Registration Statement or (ii) other than rights as disclosed in the SEC
Documents, which rights have been satisfied or waived, require the Company to register any
securities for sale under the Securities Act by reason of the filing of the Registration Statement.
The granting and performance of the registration rights under this Agreement will not violate or
conflict with, or result in a breach of any provision of, or constitute a default under, any
agreement, indenture or instrument to which the Company is a party.

          Section 2.19 Application of Takeover Protections. Assuming that no Purchaser will
become an Interested Stockholder within the meaning of Section 203 of the Delaware General
Corporation Law, the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not impose any restriction on any Purchaser, or create in any
party (including any current stockholder of the Company) any rights, under any share acquisition,
business combination, poison pill (including any distribution under a rights agreement), or other
similar anti-takeover provisions under the Company’s charter documents or the laws of its state of
incorporation.

          Section 2.20 Sarbanes-Oxley Act. The Company is in material compliance with all
applicable provisions of the U.S. Sarbanes-Oxley Act of 2002 that are effective and the rules and
regulations promulgated in connection therewith.

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          Section 2.21 Internal Accounting Controls. The Company maintains (i) effective
internal control over financial reporting as defined in Rule 13a-15 under the Securities Exchange
Act of 1934, as amended, and (ii) a system of internal accounting controls sufficient to provide
reasonable assurance that (A) transactions are executed in accordance with management’s general or
specific authorizations; (B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to maintain
asset accountability; (C) access to assets is permitted only in accordance with management’s
general or specific authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to any
differences. The Company maintains disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable
assurance that information required to be disclosed in the Company’s reports under the Exchange Act
is recorded, processed, summarized and reported within the time periods specified in the rules and
forms of the SEC, and that such information is accumulated and communicated to the Company’s
management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to
allow timely decisions regarding required disclosures.

          Section 2.22 Compliance in Clinical Trials. Nothing has come to the attention of the
Company that has caused the Company to believe that the clinical trials conducted by or on behalf
of the Company were and, if still pending, are being, conducted not in accordance with experimental
protocols, procedures and controls pursuant to accepted professional scientific standards; the
descriptions of the results of such studies, tests and trials contained in the SEC Documents, if
any, are not inconsistent with such results in any material respects. Except as described in the
SEC Documents, no results of any other studies or tests have come to the attention of the Company
that have caused the Company to believe that such results call into question the results described
in the SEC Documents of the clinical trials. The Company has not received any notices or
correspondence from the U.S. Food and Drug Administration or any other governmental agency
requiring the termination, suspension or modification of any clinical trials currently conducted
by, or on behalf of, the Company or in which the Company has participated that are described in the
SEC Documents, if any, or the results of which are referred to in the SEC Documents.

          Section 2.23 No Manipulation of Stock. The Company has not, and to its knowledge no
one acting on its behalf has, taken, nor will it take, directly or indirectly, any action designed
to stabilize or manipulate the price of the Common Stock or any security of the Company to
facilitate the sale or resale of any of the Shares.

          Section 2.24 Related Party Transactions. Except with respect to transactions (i) that
are not required to be disclosed and (ii) contemplated hereby to the extent any director or
executive officer or an Affiliate of any director or executive officer purchases Securities
hereunder, all transactions that have occurred between or among the Company, on the one hand,
and any of its executive officers or directors, or any Affiliate or Affiliates of any such
officer or director, on the other hand, prior to the date hereof have been disclosed in the SEC
Documents.

          Section 2.25 Disclosure. The representations and warranties of the Company contained
herein are true and correct in all material respects and do not contain any untrue

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statement of a
material fact or omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not misleading.

          Section 2.26 U.S. Real Property Holding Corporation. The Company is not, nor has it
ever been, a U.S. real property holding corporation within the meaning of Section 897 of the
Internal Revenue Code of 1986, as amended.

          Section 2.27 Indebtedness. Except as disclosed in the SEC Documents, neither the
Company nor any of its Subsidiaries is in violation of any term of or in default under any
contract, agreement or instrument relating to any Indebtedness, except where such violations and
defaults would not result, individually or in the aggregate, in a Material Adverse Effect. For
purposes of this Agreement: (y) “Indebtedness” of any Person means, without duplication (A) all
indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred
purchase price of property or services (other than trade payables entered into in the ordinary
course of business), (C) all reimbursement or payment obligations with respect to letters of
credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred in connection with
the acquisition of property, assets or businesses, (E) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as financing, in either case
with respect to any property or assets acquired with the proceeds of such indebtedness (even though
the rights and remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (F) all monetary obligations under any leasing
or similar arrangement which, in connection with generally accepted accounting principles,
consistently applied for the periods covered thereby, is classified as a capital lease, (G) all
indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage,
lien, pledge, charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by any Person, even though the Person which owns
such assets or property has not assumed or become liable for the payment of such indebtedness, and
(H) all Contingent Obligations (as defined below) in respect of indebtedness or obligations of
others of the kinds referred to in clauses (A) through (G) above and (z) “Contingent Obligation”
means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person
with respect to any indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is
to provide assurance to the obligee of such liability that such liability will be paid or
discharged, or that any agreements relating thereto will be complied with, or that the holders of
such liability will be protected (in whole or in part) against loss with respect thereto.

          Section 2.28 Title. The Company and its Subsidiaries have good and marketable title
to all real property and good title to all personal property owned by them which
is material to the business of the Company and its Subsidiaries, in each case free and clear
of all liens, encumbrances and defects, except for such liens, encumbrances and defects as are
disclosed in the SEC Documents, or arise under the convertible senior notes that have been issued
by the Company and its Subsidiaries, or under the credit facilities that have been entered into by
the Company, if any, or as would not reasonably be expected, individually or in the

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aggregate, to
result in a Material Adverse Effect.  Any real property and facilities held under lease by the
Company and any of its Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as would not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.

          Section 2.29 Environmental Laws. The Company and its Subsidiaries (i) are in
compliance with any and all Environmental Laws (as hereinafter defined), (ii) have received all
permits, licenses or other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) are in compliance with all terms and conditions of
any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii),
the failure to so comply could be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect.  The term “Environmental Laws” means all federal, state, local or foreign
laws relating to pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively,
“Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as
well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered,
promulgated or approved thereunder.

          Section 2.30 Employee Relations. Except as disclosed in the SEC Documents, neither the
Company nor any of its Subsidiaries is a party to any collective bargaining agreement. Except as
disclosed in the SEC Documents, no executive officer of the Company has notified the Company that
such executive officer intends to leave the Company or otherwise terminate such executive officer’s
employment with the Company. The Company and its Subsidiaries are in compliance with all federal,
state, local and foreign laws and regulations respecting labor, employment and employment practices
and benefits, terms and conditions of employment and wages and hours, except where failure to be in
compliance would not, either individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect.

          Section 2.31 Tax Status. The Company and each of its Subsidiaries (i) has made or
filed all foreign, federal and state income and all other material tax returns, reports and
declarations required by any jurisdiction to which it is subject to be filed prior to the date
hereof, (ii) has paid all taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations, except those being
contested in good faith and (iii) has set aside on its books provision reasonably adequate for the
payment of all taxes for periods ending on or prior to the date hereof for which a tax return,
report or declaration has not yet been filed or for periods that include but do not end on the date
hereof. There are no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction.

          Section 2.32 Subsidiary Rights. Except as set forth in the SEC Documents and except as
provided in the convertible senior notes issued by the Company and its Subsidiaries or under the
credit facilities that have been entered into by the Company, if any, the Company or one of its
Subsidiaries has the right to vote, and (subject to limitations imposed by applicable law)

10

 

to
receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the
Company or such subsidiary.

          Section 2.33 Acknowledgement Regarding Purchasers’ Trading Activity. It is understood
and acknowledged by the Company that, except as provided in Section 3.11 and subject to compliance
by the Purchasers with applicable law, (i) none of the Purchasers have been asked by the Company or
its Subsidiaries to agree, nor has any Purchaser agreed with the Company or its Subsidiaries, to
desist from purchasing or selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Shares for any specified term;
(ii) any Purchaser, and counterparties in “derivative” transactions to which any such Purchaser is
a party, directly or indirectly, presently may have a “short” position in the Common Stock, and
(iii) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s
length counterparty in any “derivative” transaction. The Company further understands and
acknowledges that, (a) subject to compliance by the Purchasers with applicable law, one or more
Purchasers may engage in hedging and/or trading activities at various times during the period that
the Shares are outstanding and (b) such hedging and/or trading activities, if any, can reduce the
value of the existing stockholders’ equity interest in the Company both at and after the time the
hedging and/or trading activities are being conducted. The Company acknowledges that such
aforementioned hedging and/or trading activities do not constitute a breach of this Agreement, or
any of the documents executed in connection herewith.

ARTICLE III

Purchaser’s Representations And Warranties

          Each Purchaser represents and warrants to the Company, severally and not jointly, with respect
to itself and its purchase hereunder, that:

          Section 3.1 Investment Purpose. The Purchaser is purchasing the Shares for its own
account and not with a present view toward the public sale or distribution thereof and has no
intention of selling or distributing any of such Shares or any arrangement or understanding with
any other persons regarding the sale or distribution of such Shares except in accordance with the
provisions of Article VI or except as would not result in a violation of the Securities Act. The
Purchaser will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of
(or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the Shares
(including hedging in respect thereof) except in accordance with the provisions of Article VI or
pursuant to and in accordance with the Securities Act.

          Section 3.2 Questionnaires. Purchaser has submitted to the Company a Registration
Statement notice and questionnaire (“Registration Statement Questionnaire”) substantially in the
form of Exhibit B hereto and such questionnaire shall be accurate and correct when delivered and as
of the Closing Date.

          Section 3.3 Reliance on Exemptions. The Purchaser understands that the Shares are
being offered and sold to it in reliance upon specific exemptions from the registration
requirements of United States federal and state securities laws, including Section 4(2) of the
Securities Act and Rule 506 of Regulation D thereunder and that the Company is relying upon

11

 

the
truth and accuracy of, and the Purchaser’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility of the Purchaser to acquire the
Shares.

          Section 3.4 Information. The Purchaser has had the opportunity to review the SEC
Documents. At a reasonable time prior to the Offering, the Purchaser has been afforded the
opportunity to ask questions and receive answers concerning the terms and conditions of the
Offering and to obtain any additional information which the Company possesses or can acquire
without unreasonable effort or expense that is necessary to verify the accuracy of the information
contained in the SEC Documents. Neither such inquiries nor any other investigation conducted by or
on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such
Purchaser’s right to rely on the truth, accuracy and completeness of the SEC Documents and the
Company’s representations and warranties contained herein.

          Section 3.5 Acknowledgement of Risk. (a) The Purchaser acknowledges and understands
that its investment in the Shares involves a significant degree of risk, including, without
limitation, (i) an investment in the Company is speculative, and only Purchasers who can afford the
loss of their entire investment should consider investing in the Company and the Shares; (ii) the
Purchaser may not be able to liquidate its investment; (iii) transferability of the Shares is
limited; (iv) in the event of a disposition of the Shares, the Purchaser could sustain the loss of
its entire investment; (v) the Company has not paid any dividends on its Common Stock since
inception and does not anticipate the payment of dividends in the foreseeable future and (vi) the
“Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31,
2006 and as amended by the SEC Documents. Such risks are more fully set forth in the SEC
Documents;

          (b) The Purchaser is an “accredited investor” as defined in Rule 501(a) of Regulation D under
the Securities Act. The Purchaser is able to bear the economic risk of holding the Shares for an
indefinite period, and has knowledge and experience in financial and business matters such that it
is capable of evaluating the risks of the investment in the Shares; and

          (c) The Purchaser has, in connection with the Purchaser’s decision to purchase Shares, not
relied upon any representations or other information (whether oral or written) other than as set
forth in the representations and warranties of the Company contained herein, and the Purchaser has,
with respect to all matters relating to this Agreement and the offer and sale of the Shares, relied
solely upon the advice of such Purchaser’s own counsel and has not relied upon or consulted any
counsel to the Placement Agents or counsel to the Company.

          Section 3.6 Governmental Review. The Purchaser understands that no United States
federal or state agency or any other government or governmental agency has passed upon or made any
recommendation or endorsement of the Shares or an investment therein.

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          Section 3.7 Transfer or Resale. The Purchaser understands that:

          (a) the Shares have not been and are not being registered under the Securities Act (other than
as contemplated in Article VI) or any applicable state securities laws and, consequently, the
Purchaser may have to bear the risk of owning the Shares for an indefinite period of time because
the Shares may not be transferred unless (i) the resale of the Shares is registered pursuant to an
effective registration statement under the Securities Act, as contemplated in Article VI; (ii) the
Purchaser has delivered to the Company an opinion of counsel (in form, substance and scope
reasonably satisfactory to the Company) to the effect that the Shares to be sold or transferred may
be sold or transferred pursuant to an exemption from such registration; or (iii) the Shares are
sold or transferred pursuant to Rule 144;

          (b) any sale of the Shares made in reliance on Rule 144 may be made only in accordance with
the terms of Rule 144 and, if Rule 144 is not applicable, any resale of the Shares may require
compliance with some other exemption under the Securities Act or the rules and regulations of the
SEC thereunder; and

          (c) except as set forth in Article VI, neither the Company nor any other person is under any
obligation to register the resale of the Shares under the Securities Act or any state securities
laws or to comply with the terms and conditions of any exemption thereunder.

          Section 3.8 Legends. (a) The Purchaser understands the certificates representing the
Shares will bear a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Shares) while a legend is
required on such Shares:

          THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SHARES MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER APPLICABLE SECURITIES LAWS, OR UNLESS
OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THOSE LAWS. THE COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. NOTWITHSTANDING THE
FOREGOING, THE SHARES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SHARES TO THE EXTENT EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT.

          Section 3.9 Authorization; Enforcement. The Purchaser has all requisite power and
authority to enter into this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The Purchaser has taken all necessary action to authorize the
execution, delivery and performance of this Agreement. This Agreement has been duly executed by
the Purchaser and constitutes a valid and binding obligation of the Purchaser enforceable in
accordance with its terms, except as enforceability may be limited by

13

 

applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ and contracting parties’ rights generally and except as enforceability may be subject to
general principles of equity and except as rights to indemnity and contribution may be limited by
state or federal securities laws or public policy underlying such laws.

          Section 3.10 Residency. The Purchaser is a resident of the jurisdiction set forth
immediately below such Purchaser’s name on the signature pages hereto.

          Section 3.11 No Broker; Agent. Except as otherwise specifically set forth in such
Purchaser’s Registration Statement Questionnaire, such Purchaser represents and warrants that such
Purchaser is not (a) a broker or dealer admitted to membership in the National Association of
Securities Dealers, Inc. (“NASD”), (b) a controlling stockholder of an NASD member, or (c) a person
associated with a member of the NASD; provided, however, that any exception to the foregoing set
forth in such Purchaser’s Registration Statement Questionnaire shall be appropriately disclosed in
the Plan of Distribution. Such Purchaser represents and warrants that it has not engaged,
consented to nor authorized any broker, finder or intermediary to act on its behalf, directly or
indirectly, as a broker, finder or intermediary in connection with the transactions contemplated by
this Agreement. Purchaser shall indemnify and hold harmless the Company from and against all fees,
commissions or other payments owing to any such person or firm acting on behalf of such Purchaser
hereunder.

          Section 3.12 Prohibited Transactions. No Purchaser, directly or indirectly, and no
Person acting on behalf of or pursuant to any understanding with any Purchaser, has engaged in any
purchases or sales of any securities, including any derivatives, of the Company (including, without
limitation, any Short Sales (as defined below) involving any of the Company’s securities) (a
“Transaction”) since the time that such Purchaser was first contacted by the Company, the Placement
Agents or any other Person regarding an investment in the Company as contemplated by this
Agreement. Such Purchaser covenants that neither it nor any Person acting on its behalf or
pursuant to any understanding with such Purchaser will engage, directly or indirectly, in any
Transactions prior to the time the transactions contemplated by this Agreement are publicly
disclosed. “Short Sales” include, without limitation, all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, short sales, swaps, derivatives and similar
arrangements (including on a total return basis), and sales and other transactions through non-U.S.
broker-dealers or foreign regulated brokers. Purchaser is aware of the SEC’s position prohibiting
certain short sales where sales are made prior to the effectiveness of a resale registration
statement (see, Interpretation No. 65 in the SEC’s Telephone Interpretation Manual, Section 5,
Securities Act of 1933).

          Section 3.13 Acknowledgements Regarding Placement Agents. (a) The Purchaser
acknowledges that the Placement Agents are acting as the exclusive placement agents on a “best
efforts” basis for the Shares being offered hereby and will be compensated by the Company for
acting in such capacity. The Purchaser represents that (i) the Purchaser has a pre-existing
relationship with at least one of the Placement Agents, (ii) the Purchaser was contacted regarding
the sale of the Shares by at least one of the Placement Agents (or an authorized agent or
representative thereof) with whom the Purchaser entered into a confidentiality agreement and

14

 

(iii) no Shares were offered or sold to it by means of any form of general solicitation or
general advertising.

          (b) The Purchaser acknowledges that the Placement Agents and their directors, officers,
employees, representatives and controlling persons have no responsibility for making any
independent investigation of the Company’s SEC Documents and make no representation or warranty to
the Purchaser, express or implied, with respect to the Company or the Shares or the accuracy,
completeness or adequacy of the Company’s SEC Documents or any other publicly available
information, nor shall any of the foregoing persons be liable for any loss or damages of any kind
resulting from the use of the information contained therein or otherwise supplied to the Purchaser.
In addition, the Purchaser acknowledges that it has not relied on information provided by any of
such persons but has conducted its own investigation.

          Section 3.14 Review of Schedule 1. The Purchaser acknowledges receipt and review of
the information set forth in Schedule 1.

ARTICLE IV

Covenants

          Section 4.1 Reporting Status. The Company’s Common Stock is registered under Section
12 of the Exchange Act. During the Registration Period, the Company agrees to use commercially
reasonable efforts to timely (or within the periods permitted under Rule 12b-25 of the Exchange
Act) file with the SEC all reports required to be so filed under the Exchange Act, and the Company
will not terminate its status as an issuer required to file reports under the Exchange Act even if
the Exchange Act or the rules and regulations thereunder would permit such termination.

          Section 4.2 Expenses. The Company and each Purchaser is each severally and not
jointly liable for, and each will pay, its own expenses incurred in connection with the
negotiation, preparation, execution and delivery of this Agreement, including, without limitation,
attorneys’ and consultants’ fees and expenses. The Company shall be responsible for the payment of
any placement agent’s fees, financial advisory fees, or brokers’ commissions, including the
reasonable expenses, including, without limitation, legal fees, of the Placement Agents, in
connection with the transactions contemplated hereby. The Company shall pay all transfer agent
fees, stamp taxes and other taxes and duties levied in connection with the sale and issuance of the
Shares by the Company.

          Section 4.3 Information. (a) The Company agrees that the financial statements of the
Company to be included in any documents filed with the SEC will be prepared in accordance with
accounting principles generally accepted in the United States, consistently applied (except (i) as
may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes, may be condensed or
summary statements or may conform to the SEC’s rules and instructions for Reports on Form 10-Q),
and will fairly present in all material respects the consolidated financial position of the Company
and consolidated results of its operations and cash flows as of, and for the periods covered by,
such financial statements (subject, in the case of unaudited statements, to normal and recurring
year-end audit adjustments).

15

 

          (b) The Company covenants and agrees that neither it nor any other Person acting on its behalf
will provide any Purchaser or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto such Purchaser shall have
executed a written agreement regarding the confidentiality and use of such information after the
date hereof. The Company understands and confirms that each Purchaser shall be relying on the
foregoing representations in effecting transactions in securities of the Company.

          Section 4.4 Securities Laws Disclosure; Publicity. On or before 9:30 a.m., New York
local time, on the first Trading Day following execution of this Agreement, the Company shall issue
a press release or file a Form 8-K announcing the signing of this Agreement and describing the
material terms of the transactions contemplated by this Agreement, including the contemplated use
of proceeds. The Company acknowledges that, except for the information that will be contained in
the above referenced press release or Form 8-K, the Company has not provided the Purchaser or its
agents or counsel with any information that the Company believes constitutes material, non-public
information. On or before the fourth Business Day following execution of this Agreement, the
Company shall file a Current Report on Form 8-K with the SEC describing the terms of the
transactions contemplated by this Agreement and the contemplated use of proceeds and including as
an exhibit to such Current Report on Form 8-K this Agreement, in the form required by the Exchange
Act. The Company shall not publicly disclose any information concerning a Purchaser without the
prior written consent of such Purchaser, except for disclosure of the name of such Purchaser and
the type and amount of securities of the Company held by such Purchaser in connection with any
legal or regulatory filings required to be made by the Company or except as otherwise required by
law.

          Section 4.5 Plan of Distribution. The Purchasers expressly agree that any sale by the
Purchaser of the Shares pursuant to the Registration Statement shall be sold in a manner described
under the Plan of Distribution.

          Section 4.6 Pledge of Shares. The Company acknowledges and agrees that the Shares may
be pledged by a Purchaser in connection with a bona fide margin agreement or other loan or
financing arrangement that is secured by the Shares. The pledge of Shares shall not be deemed to
be a transfer, sale or assignment of the Shares hereunder, and no Purchasers effecting a pledge of
the Shares shall be required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement; provided that a Purchaser and its pledgee shall
comply with the provisions of this Agreement in order to effect a sale, transfer, or assignment of
any such Shares to such pledgee. At the expense of the Purchaser pledging such Shares, the Company
hereby agrees to execute and deliver such documentation as pledgee of the Shares may reasonably
request in connection with a pledge of the Shares to such pledgee by a Purchaser.

          Section 4.7 Removal of Legend. The Purchaser may request that the Company remove, and
the Company agrees to authorize the removal of any legend from the Shares (i) following any sale of
the Shares pursuant to an effective Registration Statement or Rule 144, (ii) while a registration
statement covering the resale of such security is effective under the Securities Act (provided,
however, that the Purchaser’s prospectus delivery requirements under the Securities Act will
remain), or (iii) if such Shares are eligible for sale

16

 

under Rule 144(k). Following the time a legend is no longer required for the Shares
hereunder, the Company will promptly following the delivery by a Purchaser to the Company’s
transfer agent of a legended certificate representing such securities with notice to the Company,
deliver or cause to be delivered to such Purchaser a certificate representing such securities that
is free from all restrictive and other legends. If required by the Transfer Agent, the Company
shall cause its counsel to deliver a legal opinion or notice to the Company’s transfer agent
promptly after the effective date of any registration statement (the “Effective Date”) notifying
the transfer agent of the effectiveness of the registration statement and of the fact that the
Shares can be transferred notwithstanding the foregoing legends. The Company agrees that following
the Effective Date or at such time as such legend is no longer required under clause (ii) above, it
will, no later than three trading days following the delivery by any Purchaser to the Company’s
transfer agent of a certificate representing Shares issued with a restrictive legend with notice to
the Company, deliver or cause to be delivered to such Purchaser a certificate representing such
Shares that is free from all restrictive and other legends. The Company may not make any notation
on its records or give instructions to any transfer agent of the Company that enlarge(s) the
restrictions on transfer set forth herein.

          Section 4.8 Integration. The Company shall not, and shall use its commercially
reasonable efforts to ensure that no Affiliate thereof shall sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Shares in a manner that would require
the registration under the Securities Act of the sale of the Shares to the Purchasers or that would
be integrated with the offer or sale of the Shares for purposes of the rules and regulations of
NASDAQ.

          Section 4.9 No Additional Issuances and Registrations. The Company agrees not to sell,
offer or agree to sell any shares of Common Stock or securities convertible into or exchangeable or
exercisable for Common Stock, or file or cause to be declared effective a Registration Statement
under the Securities Act relating to the offer and sale of any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock, for a period of 30 days after the
Effective Date, except for (i) the registration of the Registrable Securities, (ii) issuances of
Common Stock upon the exercise of options or warrants disclosed as outstanding in the SEC
Documents, (iii) the issuance of equity incentives to employees, (iv) issuances of shares of Common
Stock or any securities convertible into or exercisable for Common Stock in connection with a
strategic licensing arrangement, corporate partnering transaction or similar collaboration; (v)
agreements to issue shares of Common Stock or any securities convertible into or exercisable for
Common Stock, and the issuance of shares of Common Stock, in connection with the acquisition, by
merger or consolidation with, or by purchase of all or substantially all of the assets of, or by
any other manner, of any business or corporation, partnership, association or other business
organization or division thereof; (vi) any registration of securities on Form S-4 or Form S-8 or
similar forms and (vii) any post-effective amendments to registration statements effective as of
the Effective Date.

17

 

ARTICLE V

Conditions To Closing

          Section 5.1 Conditions to Obligations of the Company. The Company’s obligation to
complete the purchase and sale of the Shares and deliver such stock certificate(s) to each
Purchaser is subject to the fulfillment or waiver as of the Closing Date of the following
conditions:

          (a) Receipt of Funds. The Company shall have received immediately available funds in
the full amount of the purchase price for the Shares being purchased hereunder from Purchasers
acquiring 100% of the aggregate Shares set forth on Exhibit A hereto, provided that the Company
shall not be required to close with respect to those Purchasers who have not tendered their
purchase price.

          (b) Representations and Warranties. The representations and warranties made by each
Purchaser in Article III shall be true and correct in all material respects, except such
representations and warranties that are qualified by materiality or Material Adverse Effect, which
must be true and correct in all respects, as if they had been made on and as of such date, except
that the accuracy of representations and warranties that by their terms speak as of a specified
date will be determined as of such date.

          (c) Covenants. All covenants, agreements and conditions contained in this Agreement
to be performed by the Purchasers on or prior to the Closing Date shall have been performed or
complied with in all material respects.

          (d) Blue Sky. The Company shall have obtained all necessary blue sky law permits and
qualifications, or secured exemptions therefrom, required by any state for the offer and sale of
the Shares.

          (e) Absence of Litigation. No proceeding challenging this Agreement or the
transactions contemplated hereby, or seeking to prohibit, alter, prevent or materially delay the
Closing, shall have been instituted or be pending before any court, arbitrator, governmental body,
agency or official.

          (f) No Governmental Prohibition. The sale of the Shares by the Company shall not be
prohibited by any law or governmental order or regulation.

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

          Section 5.2 Conditions to Purchasers’ Obligations at the Closing. Each Purchaser’s
obligation to complete the purchase and sale of the Shares is subject to the fulfillment or waiver
as of the Closing Date of the following conditions:

          (a) Representations and Warranties. The representations and warranties made by the
Company in Article II that are qualified by materiality (including in the definition of Material
Adverse Effect) shall be true and correct in all respects as of the Closing Date as if they

18

 

had been made on and as of such date and the representations and warranties made by the
Company in Article II that are not so qualified shall be true and correct in all material respects
as if they had been made on and as of such date, except that the accuracy of representations and
warranties that by their terms speak as of a specified date will be determined as of such date.

          (b) Covenants. All covenants, agreements and conditions contained in this Agreement
to be performed by the Company on or prior to the Closing Date shall have been performed or
complied with in all material respects.

          (c) Blue Sky. The Company shall have obtained all necessary blue sky law permits and
qualifications, or secured exemptions therefrom, required by any state or foreign or other
jurisdiction for the offer and sale of the Shares.

          (d) Legal Opinion. The Company shall have delivered to such Purchaser an opinion,
dated as of the Closing Date, from Goodwin Procter LLP, counsel to the Company, in substantially
the form attached hereto as Exhibit C.

          (e) Certificates of the Company. The Company shall have delivered to such Purchaser
(i) a certificate of a senior executive officer of the Company, dated the Closing Date, confirming
the satisfaction of the conditions set forth in clauses (a) and (b) of this Section 5.2, (ii) a
certificate of the Secretary or Assistant Secretary of the Company, dated the Closing Date,
certifying as to the incumbency and signatures of the officers executing this Agreement and the
other documents delivered by the Company under this Agreement and (iii) a good standing certificate
of the Company, dated as of a recent date, from the Secretary of State of the State of Delaware.

          (f) Transfer Agent Instructions For Issuance of Shares. The Company shall have
delivered to its transfer agent irrevocable instructions to issue to such Purchaser or in such
nominee name(s) as designated by such Purchaser in writing one or more certificates representing
such number of Shares set forth opposite such Purchaser’s name on Exhibit A hereto.

          (g) Absence of Litigation. No proceeding challenging this Agreement or the
transactions contemplated hereby, or seeking to prohibit, alter, prevent or materially delay the
Closing, shall have been instituted or be pending before any court, arbitrator, governmental body,
agency or official.

          (h) No Governmental Prohibition. The sale of the Shares by the Company shall not be
prohibited by any law or governmental order or regulation.

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

          (j) Outstanding Shares. The Company shall have delivered to the Purchasers a letter
from the Company’s transfer agent certifying the number of shares of Common Stock outstanding as of
a date within five days of the Closing Date.

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          (k) Listed. The Common Stock shall be designated for quotation or listed on NASDAQ,
subject to official notice of issuance.

ARTICLE VI

Registration Rights

          Section 6.1 Filing of Registration Statement. The Company shall use its reasonable
best efforts to (i) file with the SEC a registration statement on Form S-1 pursuant to Rule 415
under the Securities Act (the “S-1 Registration Statement”) covering the resale of the Registrable
Securities no later than 30 days after the Closing Date, (ii) have the S-1 Registration Statement
declared effective by the Required S-1 Effectiveness Date and (iii) effect the registration,
qualifications or compliances (including, without limitation, the execution of any required
undertaking to file post-effective amendments, appropriate qualifications or exemptions under
applicable blue sky or other state securities laws and appropriate compliance with applicable
securities laws, requirements or regulations) as promptly as practicable after the filing thereof,
and the S-1 Registration Statement shall contain (except if otherwise directed by the Purchasers or
the SEC) the Plan of Distribution.

          Section 6.2 S-3 Registration Statement. The Company shall use its reasonable best
efforts (i) to prepare and file a registration statement on Form S-3 (or an amendment to the S-1
Registration Statement to convert it to Form S-3) (the “S-3 Registration Statement”) covering the
resale of the Registrable Securities by the Purchasers from time to time in compliance with the
Securities Act within 45 days after the Company first becomes eligible to file a registration
statement on Form S-3, (ii) have the S-3 Registration Statement declared effective by the Required
S-3 Effectiveness Date and (iii) effect the registration, qualifications or compliances (including,
without limitation, the execution of any required undertaking to file post-effective amendments,
appropriate qualifications or exemptions under applicable blue sky or other state securities laws
and appropriate compliance with applicable securities laws, requirements or regulations) as
promptly as practicable after the filing thereof (the term “Registration Statement” shall mean the
S-1 Registration Statement until the S-3 Registration Statement is declared effective by the SEC,
after which time it shall mean the S-3 Registration Statement), and the S-3 Registration Statement
shall contain (except if otherwise directed by the Purchasers or the SEC) the Plan of Distribution.

          Section 6.3 Registration and Selling Expenses. All Registration Expenses incurred in
connection with any registration, qualification, exemption or compliance pursuant to Sections 6.1
and 6.2 shall be borne by the Company. All Selling Expenses relating to the sale of securities
registered by or on behalf of any Holder shall be borne by such Holder.

          Section 6.4 Registration Defaults. The Company further agrees that, in the event that
(i) the S-1 Registration Statement has not been filed with the SEC within 30 days after the Closing
Date, (ii) the S-1 Registration Statement has not been declared effective by the Required S-1
Effectiveness Date or (iii) after the Registration Statement is declared effective by the SEC, it
is suspended by the Company or ceases to remain continuously effective as to all Registrable
Securities for which it is required to be effective, other than, in each case, within the time
period(s) permitted by Section 6.8(b) (each such event referred to in clauses (i), (ii) and (iii),
a “Registration Default”), for any thirty-day period (a “Registration Default Period”)

20

 

during which the Registration Default remains uncured, the Company shall pay in cash to each
Purchaser 1% of such Purchaser’s aggregate Purchase Price for such Purchaser’s Registrable
Securities then held by such Purchaser that are not then permitted to be sold pursuant to the
Registration Statement for each Registration Default Period during which the Registration Default
remains uncured; provided, however, that if a Purchaser fails to provide the Company with any
information that is required to be provided in the Registration Statement with respect to such
Purchaser as set forth herein, then the commencement of the Registration Default Period with
respect to such Purchaser described above shall be extended until such time as the Company fails to
comply with Section 6.5(k); provided further, that the amount payable to any Holder hereunder for
any partial Registration Default Period shall be prorated for the number of actual days during such
Registration Default Period during which a Registration Default remains uncured; and provided
further, that in no event shall the Company be required to pay to any Purchaser pursuant to this
Section 6.4 an aggregate amount that exceeds 10% of the aggregate Purchase Price paid by such
Purchaser for such Purchaser’s Registrable Securities. The amount set forth above shall be the
exclusive monetary remedy available to the Holders of Registrable Securities for any Registration
Default.

          Section 6.5 Registration Period Covenants. In the case of the registration,
qualification, exemption or compliance effected by the Company pursuant to this Agreement, the
Company shall, upon reasonable request, inform each Holder as to the status of such registration,
qualification, exemption and compliance. At its expense, during the Registration Period, the
Company shall:

          (a) except for such times as the Company is permitted hereunder to suspend the use of the
prospectus forming part of the Registration Statement, use its commercially reasonable efforts to
keep such registration, and any qualification, exemption or compliance under state securities laws
that the Company determines to obtain, continuously effective with respect to a Holder (including
without limitation, amend or supplement the Prospectus, respond as promptly as practicable to any
comments received from the SEC, and filing any necessary post-effective amendment to the
Registration Statement), current and free of any material misstatements or omissions, until the
earlier of the following: (i) three years from the Closing Date; (ii) the date on which all
Registrable Securities held by such Holder may be sold under Rule 144(k); or (iii) the date that
all of the Registrable Securities have been sold by the Holder. The period of time during which
the Company is required hereunder to keep the Registration Statement effective is referred to
herein as the “Registration Period”;

          (b) advise the Holders:

          (i) within two Business Days when the Registration Statement or any post-effective
amendment thereto has been filed with the SEC and when the Registration Statement or any
post-effective amendment thereto has become effective;

          (ii) within three Business Days of any request by the SEC following the effectiveness
of the Registration Statement for amendments or supplements to the Registration Statement or
the prospectus included therein or for additional information;

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          (iii) within three Business Days of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the initiation of any
proceedings for such purpose;

          (iv) within three Business Days of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities included
therein for sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and

          (v) within three Business Days of the occurrence of any event that requires the making
of any changes in the Registration Statement or the prospectus so that, as of such date, the
Registration Statement and prospectus do not contain an untrue statement of material fact
and do not omit to state a material fact required to be stated therein or necessary to make
the statements therein (in the case of the prospectus, in the light of the circumstances
under which they were made) not misleading;

          (c) use its best efforts to obtain the withdrawal of any order suspending the effectiveness of
any Registration Statement as soon as reasonably practicable;

          (d) promptly deliver to each such Holder, without charge, as many copies of the prospectus
included in such Registration Statement and any amendment or supplement thereto as such Holder may
reasonably request in writing; and the Company consents to the use, consistent with the provisions
hereof, of the prospectus or any amendment or supplement thereto by each of the selling Holders of
Registrable Securities in connection with the offering and sale of the Registrable Securities
covered by the prospectus or any amendment or supplement thereto;

          (e) if a Holder so requests in writing, deliver to each Holder, without charge, other than
those documents available via EDGAR, (i) one copy of the following documents: (A) its annual report
to its stockholders, if any (which annual report shall contain financial statements audited in
accordance with generally accepted accounting principles in the United States of America by a firm
of certified public accountants of recognized standing), (B) if not included in substance in its
annual report to stockholders, its annual report on Form 10-K (or similar form), (C) its definitive
proxy statement with respect to its annual meeting of stockholders, (D) each of its quarterly
reports to its stockholders, and, if not included in substance in its quarterly reports to
stockholders, its quarterly report on Form 10-Q (or similar form), and (E) a copy of the full
Registration Statement (the foregoing, in each case, excluding exhibits); and (ii) if explicitly
requested, all exhibits excluded by the parenthetical to the immediately preceding clause (E);

          (f) prior to any public offering of Registrable Securities pursuant to any Registration
Statement, promptly take such actions as may be necessary to register or qualify or obtain an
exemption for offer and sale under the securities or blue sky laws of such United States
jurisdictions as any such Holders reasonably request in writing, provided that the Company shall
not for any such purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified, to consent to general service of
process in any such jurisdiction or subject itself to taxation in any jurisdiction that it is not
now subject, and do any and all other acts or things reasonably necessary or advisable to enable
the

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offer and sale in such jurisdictions of the Registrable Securities covered by such
Registration Statement;

          (g) upon the occurrence of any event contemplated by Section 6.5(b)(v) above, except for such
times as the Company is permitted hereunder to suspend the use of the prospectus forming part of
the Registration Statement, the Company shall use its commercially reasonable efforts to as soon as
reasonably practicable prepare a post-effective amendment to the Registration Statement or a
supplement to the related prospectus, or file any other required document so that, as thereafter
delivered to purchasers of the Registrable Securities included therein, the prospectus will not
include any untrue statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they were made, not
misleading;

          (h) otherwise use its commercially reasonable efforts to comply in all material respects with
all applicable rules and regulations of the SEC which could affect the sale of the Registrable
Securities;

          (i) use its commercially reasonable efforts to cause all Registrable Securities to be listed
on each securities exchange, if any, on which Common Stock issued by the Company is then listed;

          (j) use its commercially reasonable efforts to take all other steps necessary to effect the
registration of the Registrable Securities contemplated hereby and to enable the Holders to sell
Registrable Securities under Rule 144;

          (k) the Company shall, at the time the Registration Statement is declared effective, cause
each Holder that has delivered a properly completed Questionnaire to the Company on or prior to the
later of the date hereof or ten (10) Business Days prior to the time of effectiveness of the
Registration Statement to be named as a selling securityholder in the Registration Statement and
the related prospectus at the time of effectiveness; and from and after the date the Registration
Statement is declared effective the Company shall, upon the later of (x) fifteen (15) Business Days
after the date a Questionnaire is delivered or (y) fifteen (15) Business Days after the expiration
of any Suspension Period in effect when the Questionnaire is delivered, if required by applicable
law, file with the SEC a post-effective amendment to the Registration Statement or prepare and file
a supplement to the related prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that the Holder delivering such
Questionnaire is named as a selling securityholder in the Registration Statement and the related
prospectus and, if the Company shall file a post-effective amendment to the Registration Statement,
use its commercially reasonable efforts to cause such post-effective amendment to be declared
effective under the Securities Act as promptly as is practicable; and

          (l) to the extent that the final prospectus is not included in the Registration Statement
filed with the SEC, by 9:30 am Eastern time on the Business Day following the effective date of the
Registration Statement, the Company shall file with the SEC in accordance with Rule 424 under the
Securities Act the final prospectus to be used in connection with sales pursuant to such
Registration Statement.

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          Section 6.6 Certain Limitations. The Holders shall have no right to take any action
to restrain, enjoin or otherwise delay any registration pursuant to Section 6.1 or Section 6.2
hereof as a result of any controversy that may arise with respect to the interpretation or
implementation of this Agreement.

          Section 6.7 Indemnity. (a) To the extent permitted by law, the Company shall
indemnify each Holder, its directors, officers, employees and agents (including each such person
who may deemed to be an underwriter under the Securities Act) and each person controlling such
Holder or deemed underwriter within the meaning of Section 15 of the Securities Act, with respect
to which any registration that has been effected pursuant to this Agreement, against all claims,
losses, damages and liabilities (or action in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened (subject to Section 6.7(c)
below), arising out of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in the Registration Statement, Prospectus, any amendment or supplement thereof, or
issuer free-writing prospectus or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements therein not
misleading, in light of the circumstances in which they were made, or any violation by the Company
of any rule or regulation promulgated by the Securities Act applicable to the Company and relating
to any action or inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each Holder and deemed underwriter and each person
controlling such Holder or deemed underwriter, for reasonable legal and other out-of-pocket
expenses reasonably incurred in connection with investigating or defending any such claim, loss,
damage, liability or action as incurred; provided that the Company will not be liable in any such
case to the extent that any untrue statement or omission or allegation thereof is made in reliance
upon and in conformity with written information furnished to the Company by or on behalf of such
Holder or deemed underwriter specifically for use in preparation of such Registration Statement,
prospectus, amendment or supplement, or issuer free-writing prospectus; provided further that the
Company will not be liable in any such case where the claim, loss, damage or liability arises out
of or is related to the failure of such Holder or deemed underwriter to comply with the covenants
and agreements contained in this Agreement respecting sales of Registrable Securities.

          (b) Each Holder will severally, and not jointly, indemnify the Company, each of its directors,
officers, employees and agents, and each person who controls the Company within the meaning of
Section 15 of the Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof), including any of the foregoing incurred in settlement of any litigation,
commenced or threatened (subject to Section 6.7(c) below), arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in the Registration Statement,
prospectus, or any amendment or supplement thereof, or any other document incident to any such
registration (including any issuer free-writing prospectus), or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in light of the circumstances in which they were made, and will
reimburse the Company, such directors and officers, and each person controlling the Company for
reasonable legal and any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action as incurred, in each case to the
extent, but only to the extent, that such untrue statement or omission or allegation thereof is
made in reliance upon and in conformity with written information

24

 

furnished to the Company by or on behalf of the Holder specifically for use in preparation of
the Registration Statement, prospectus, amendment or supplement, or issuer free-writing prospectus.
Notwithstanding the foregoing, a Holder’s aggregate liability pursuant to this subsection (b)
shall be limited to the net amount received by the Holder from the sale of the Registrable
Securities giving rise to such claims, losses, damages and liabilities (and actions in respect
thereof).

          (c) Each party entitled to indemnification under this Section 6.7 (the “Indemnified Party”)
shall give notice to the party required to provide indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party (at its expense) to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party,
who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld, conditioned or delayed), and the
Indemnified Party may participate in such defense at such Indemnified Party’s expense; provided
further that the failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement, unless such failure is
materially prejudicial to the Indemnifying Party in defending such claim or litigation. An
Indemnifying Party shall not be liable for any settlement of an action or claim effected without
its written consent (which consent will not be unreasonably withheld, conditioned or delayed). No
Indemnifying Party, in its defense of any such claim or litigation, shall, except with the consent
(such consent not to be unreasonably withheld, conditioned or delayed) of the Indemnified Party
consent to entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation. After notice by the
Indemnifying Person to such Indemnified Person of the Indemnifying Person’s election to assume the
defense of any claim or litigation, the Indemnifying Person shall not be liable to such Indemnified
Person for any legal expenses subsequently incurred by such Indemnified Person in connection with
the defense thereof.

          (d) If the indemnification provided for in this Section 6.7 is held by a court of competent
jurisdiction to be unavailable to an Indemnified Party or is insufficient to hold such Indemnified
Party harmless with respect to any loss, liability, claim, damage or expense referred to therein,
then the Indemnifying Party shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statements or omissions which resulted in
such loss, liability, claim, damage or expense as well as any other relevant equitable
considerations; provided, however, that no Person involved in the sale of Registrable Securities
which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) in connection with such sale shall be entitled to contribution from any Person
involved in such sale of Registrable Securities as who was not guilty of fraudulent
misrepresentation. The relative fault of the Indemnifying Party and of the Indemnified Party shall
be determined by reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission. Notwithstanding
the foregoing, a Holder’s aggregate liability pursuant to this

25

 

subsection (d) shall be limited to the net amount received by the Holder from the sale of
Registrable Securities giving rise to such loss, liability, claim, damage or expense (or actions in
respect thereof) less all other amounts paid as damages in respect thereto.

          Section 6.8 Additional Covenants and Agreements of the Holders. (a) Each Holder
agrees that, upon receipt of any notice from the Company of the happening of any event requiring
the preparation of a supplement or amendment to a prospectus relating to Registrable Securities so
that, as thereafter delivered to the Holders, such prospectus shall not contain an untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, each Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement and prospectus contemplated by
Section 6.1 and Section 6.2 until its receipt of notice from the Company that the supplemented or
amended prospectus has been filed with the SEC or receipt of copies of the supplemented or amended
prospectus from the Company and, if so directed by the Company, each Holder shall deliver to the
Company all copies, other than permanent file copies then in such Holder’s possession, of the
prospectus covering such Registrable Securities current at the time of receipt of such notice.

          (b) After 30 consecutive Trading Days of continuous effectiveness of the initial S-1
Registration Statement beginning on the day such S-1 Registration Statement is declared effective
by the SEC, each Holder shall suspend, upon request of the Company, any disposition of Registrable
Securities pursuant to the Registration Statement and prospectus contemplated by Section 6.1 and
Section 6.2 for a period not to exceed 30 consecutive days (each such period, a “Suspension
Period”) to the extent that the Board of Directors of the Company, after consultation with legal
counsel, determines in good faith that the sale of Registrable Securities under the Registration
Statement would be reasonably likely to cause a violation of the Securities Act or Exchange Act or
would require disclosure of any material pending acquisition or other corporate transaction and
such disclosure would adversely affect the Company; provided, however, that, with respect to the
S-1 Registration Statement, Suspension Periods shall not be exercised more than three times in any
360-day period and one time in any 45-day period and such Suspension Periods shall not exceed 60
days in the aggregate during any 360-day period and, with respect to the S-3 Registration
Statement, Suspension Periods shall not be exercised more than twice in any 360-day period and once
in any 45-day period. The Company shall not be required to specify in the written notice to the
Holders the nature of the event giving rise to the Suspension Period. Holders hereby agree to hold
in confidence any communications in response to a notice of, or the existence of any fact or any
event giving rise to, the Suspension Period. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph. Immediately after the end of any suspension period under
this Section 6.8(b), but in no event later than three Business Days thereafter, 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.

          (c) As a condition to the inclusion of its Registrable Securities in the S-1 Registration
Statement, each Holder shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in writing, including
completing a Registration Statement Questionnaire.

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          (d) As a condition to the inclusion of its Registrable Securities in the S-3 Registration
Statement, each Holder shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in writing, including
completing a Registration Statement Questionnaire within fifteen days of receipt and such
Registration Statement Questionnaire shall be accurate and correct when delivered.

          (e) Each Holder hereby covenants with the Company (i) not to make any sale of the Registrable
Securities without effectively causing the prospectus delivery requirements under the Securities
Act, if any, to be satisfied, (ii) not to make any sale of the Registrable Securities to an
underwriter or underwriters for reoffering to the public pursuant to the Registration Statement and
(iii) if such Registrable Securities are to be sold by any method or in any transaction other than
on a national securities exchange or in the over-the-counter market, in privately negotiated
transactions, or in a combination of such methods, to notify the Company at least five Business
Days prior to the date on which the Holder first offers to sell any such Registrable Securities.

          (f) Each Holder agrees not to take any action with respect to any distribution deemed to be
made pursuant to such Registration Statement which would constitute a violation of Regulation M
under the Exchange Act or any other applicable rule, regulation or law.

          (g) At the end of the Registration Period, the Holders shall discontinue sales of shares
pursuant to such Registration Statement upon receipt of notice from the Company of its removal from
registration of the Registrable Securities covered by such Registration Statement which remain
unsold.

          (h) Each Holder represents and agrees that, unless it obtains the prior consent of the
Company, it will not make any offer relating to the Registrable Securities that would constitute an
“issuer free writing prospectus,” as defined in Rule 433, or that would otherwise constitute a
“free writing prospectus,” as defined in Rule 405.

          Section 6.9 Additional Covenants and Agreements of the Company. With a view to making
available to the Holders the benefits of certain rules and regulations of the SEC which at any time
permit the sale of the Registrable Securities to the public without registration, so long as the
Holders still own Registrable Securities that may not then be resold pursuant to Rule 144(k), the
Company shall use its reasonable best efforts to:

          (a) make and keep public information available, as those terms are understood and defined in
Rule 144 under the Securities Act, at all times;

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

          (c) so long as a Holder owns any Registrable Securities, furnish to such Holder, upon any
reasonable request, a written statement by the Company as to its compliance with Rule 144 under the
Securities Act, and of the Exchange Act, a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents of the

27

 

Company as such Holder may reasonably request in availing itself of any rule or regulation of
the SEC allowing a Holder to sell any such securities without registration.

          Section 6.10 Assignment of Registration Rights. The rights to cause the Company to
register Registrable Securities granted to the Holders by the Company under Section 6.1 and Section
6.2 may be assigned by a Holder in connection with a transfer by such Holder of all or a portion of
its Registrable Securities, provided, however, that (i) such transfer complies with all applicable
securities laws; (ii) such Holder gives written notice to the Company at or prior to the time of
such transfer; and (iii) such transferee agrees in writing to comply with the terms and provisions
of this Agreement, and has provided the Company with a completed Registration Statement
Questionnaire in such form as is reasonably requested by the Company. Except as specifically
permitted by this Section 6.10, the rights of a Holder with respect to Registrable Securities as
set out herein shall not be transferable to any other Person, and any attempted transfer shall
cause all rights of such Holder therein to be forfeited.

          Section 6.11 Waiver of Registration Rights. The rights of any Holder under any
provision of this Article VI may be waived (either generally or in a particular instance, either
retroactively or prospectively and either for a specified period of time or indefinitely) or
amended by an instrument in writing signed by Holders holding not less than a majority of the
Registrable Securities; provided, however, that no consideration shall be offered or paid to any
person to amend or consent to a waiver or modification of any provision of this Section 6 unless
the same consideration also is offered to all Holders of Registrable Securities.

          Section 6.12 No Piggyback on Registration. Neither the Company nor any of its
security holders (other than the Purchasers in such capacity pursuant hereto) may include
securities of the Company in the Registration Statement other than the Registrable Securities.

ARTICLE VII

Definitions

          Section 7.1 Definitions.  The following capitalized terms have the following meanings:

          “Affiliate” means, with respect to any Person (as defined below), any other Person
controlling, controlled by or under direct or indirect common control with such Person (for the
purposes of this definition “control,” when used with respect to any specified Person, shall mean
the power to direct the management and policies of such person, directly or indirectly, whether
through ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” shall have meanings correlative to the foregoing).

          “Business Day” means a day Monday through Friday on which banks are generally open for
business in New York City.

          “Closing” has the meaning set forth in Section 1.3.

          “Closing Date” has the meaning set forth in Section 1.3.

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          “Common Stock” has the meaning set forth in the introduction.

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

          “Contingent Obligation” has the meaning set forth in Section 2.28.

          “Effective Date” means the date that the S-1 Registration Statement is first declared
effective by the SEC.

          “Eligible Market” means any of the New York Stock Exchange, the American Stock Exchange, The
Nasdaq Global Select Market, The NASDAQ, The Nasdaq Capital Market or the NASD OTC Bulletin Board.

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

          “Financial Statements” means the financial statements of the Company included in the SEC
Documents.

          “Holder” means any Purchaser holding Registrable Securities or any person to whom the rights
under Article VI have been transferred in accordance with Section 6.9 hereof.

          “Indebtedness” has the meaning set forth in Section 2.28.

          “Indemnified Party” has the meaning set forth in Section 6.7(c).

          “Indemnifying Party” has the meaning set forth in Section 6.7(c).

          “Intellectual Property” has the meaning set forth in Section 2.8.

          “Knowledge of the Company” means the actual knowledge of the executive officers of the
Company, after reasonable inquiry.

          “Material Adverse Effect” means a material adverse effect on (a) the business, operations,
assets or financial condition of the Company and its Subsidiaries, taken as a whole, or (b) the
ability of the Company to perform its obligations pursuant to the transactions contemplated by this
Agreement.

          “Material Agreements” has the meaning set forth in Section 2.6.

          “NASDAQ” means The Nasdaq Global Market.

          “Offering” means the private placement of the Company’s Shares contemplated by this Agreement.

          “Person” means any person, individual, corporation, limited liability company, partnership,
trust or other nongovernmental entity or any governmental agency, court, authority or other body
(whether foreign, federal, state, local or otherwise).

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          “Placement Agents” means Banc of America Securities LLC and Needham & Company, Inc.

          “Plan of Distribution” shall mean the Plan of Distribution attached hereto as Exhibit D, which
shall be contained in the Registration Statement.

          “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” mean the Purchasers whose names are set forth on the signature pages of this
Agreement, and their permitted transferees.

          “Purchase Price” has the meaning set forth in Section 1.1.

          “register,” “registered” and “registration” refer to the registration effected by preparing
and filing a registration statement in compliance with the Securities Act, and the declaration or
ordering of the effectiveness of such registration statement.

          “Registrable Securities” means the Shares (including any shares of Common Stock issued in
connection with any stock dividend on or any split or subdivision of the Shares); provided,
however, that securities shall only be treated as Registrable Securities if and only for so long as
they (A) have not been disposed of pursuant to a registration statement declared effective by the
SEC, (B) have not been sold in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act and (C) are held by a Holder or a permitted transferee pursuant
to Section 6.10.

          “Registration Default” has the meaning set forth in Section 6.4.

          “Registration Default Period” has the meaning set forth in Section 6.4.

          “Registration Expenses” means all expenses incurred by the Company in complying with Section
6.1 and Section 6.2 hereof, including, without limitation, all registration, qualification and
filing fees, printing expenses, escrow fees, fees and expenses of counsel for the Company, blue sky
fees and expenses and the expense of any special audits incident to or required by any such
registration (but excluding the Selling Expenses of any Holder).

          “Registration Period” has the meaning set forth in Section 6.5(a).

          “Registration Statement” has the meaning set forth in Section 6.2.

          “Registration Statement Questionnaire” has the meaning set forth on Section 3.2.

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          “Required S-1 Effectiveness Date” means the date which is the earliest of (i) if the S-1
Registration Statement does not become subject to review by the SEC, (a) ninety (90) days after the
Closing Date or (b) five (5) Trading Days after the Company receives notification from the SEC that
the S-1 Registration Statement will not become subject to review and the Company fails, within such
five-day period, to request to accelerate the effectiveness of the S-1 Registration Statement, or
(ii) if the S-1 Registration Statement becomes subject to review by the SEC, one hundred and twenty
(120) days after the Closing Date.

          “Required S-3 Effectiveness Date” means the date which is the earliest of (i) if the S-3
Registration Statement does not become subject to review by the SEC, (a) ninety (90) days after the
Company first becomes eligible to file a registration statement on Form S-3 or (b) five (5) Trading
Days after the Company receives notification from the SEC that the S-3 Registration Statement will
not become subject to review and the Company fails, within such five-day period, to request to
accelerate the effectiveness of the S-3 Registration Statement, or (ii) if the S-3 Registration
Statement becomes subject to review by the SEC, one hundred and twenty (120) days after the Company
first becomes eligible to file a registration statement on Form S-3.

          “Rule 144” means Rule 144 promulgated under the Securities Act, or any successor rule.

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

          “SEC Documents” has the meaning set forth in Section 2.6.

          “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute.

          “Selling Expenses” means all selling commissions and stock transfer taxes applicable to the
sale of Registrable Securities and all fees and expenses of legal counsel for any Holder.

          “Shares” has the meaning set forth in Section 1.1.

          “Short Sales” has the meaning set forth in Section 3.13.

          “Subsidiary” means any direct or indirect subsidiary of the Company.

          “Suspension Period” has the meaning set forth in Section 6.8(b).

          “S-1 Registration Statement” has the meaning set forth in Section 6.1.

          “S-3 Registration Statement” has the meaning set forth in Section 6.2.

          “Trading Day” means (a) a day on which trading occurs on the NASDAQ (or any successor
thereto), or (b) if trading ceases to occur on the NASDAQ (or any successor thereto), any Business
Day.

          “Transaction” has the meaning set forth in Section 3.13.

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          Section 7.2 Certain Interpretations. Except where expressly stated otherwise in this
Agreement, the following rules of interpretation apply to this Agreement: (i) “or” is not
exclusive and “include”, “includes” and “including” are not limiting; (ii) definitions contained in
this Agreement are applicable to the singular as well as the plural forms of such terms; (iii)
references to an agreement or instrument mean such agreement or instrument as from time to time
amended, modified or supplemented; (iv) references to a Person are also to its permitted successors
and assigns; (v) references to an “Article”, “Section”, “Subsection”, “Exhibit” or “Schedule” refer
to an Article of, a Section or Subsection of, or an Exhibit or Schedule to, this Agreement; and
(vi) words importing the masculine gender include the feminine or neuter and, in each case, vice
versa.

ARTICLE VIII

Governing Law; Miscellaneous

          Section 8.1 Governing Law. This Agreement will be governed by and interpreted in
accordance with the laws of the State of New York without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that
would cause the application of the laws of any jurisdictions other than the State of New York.

          Section 8.2 Counterparts; Signatures by Facsimile. This Agreement may be executed in
two or more counterparts, all of which are considered one and the same agreement and will become
effective when counterparts have been signed by each party and delivered to the other parties.
This Agreement, once executed by a party, may be delivered to the other parties hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party so delivering this
Agreement.

          Section 8.3 Headings. The headings of this Agreement are for convenience of reference
only, are not part of this Agreement and do not affect its interpretation.

          Section 8.4 Severability. If any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision will be deemed
modified in order to conform with such statute or rule of law. Any provision hereof that may prove
invalid or unenforceable under any law will not affect the validity or enforceability of any other
provision hereof.

          Section 8.5 Entire Agreement; Amendments. This Agreement (including all schedules and
exhibits hereto) and any confidentiality agreement entered into between the Company and a Purchaser
solely with respect to such Purchaser (which confidentiality agreement shall continue to be in full
force and effect) constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein or therein. This Agreement
supersedes all prior agreements and understandings among the parties hereto with respect to the
subject matter hereof. No provision of this Agreement may be waived or amended other than by an
instrument in writing signed by the party to be charged with enforcement. Any amendment or waiver
effected in accordance with this Section 8.5 shall

32

 

be binding upon each holder of any Shares purchased under this Agreement at the time
outstanding, each future holder of all such securities, and the Company.

          Section 8.6 Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given: (a) upon personal delivery to the party to be notified,
(b) when sent by confirmed email, telex or facsimile if sent during normal business hours of the
recipient, if not, then on the next business day, (c) five days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (d) one business day
after deposit with a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. The addresses for such communications are:

	 	 	 	 	 
	 

	 	If to the Company:
	 	EPIX Pharmaceuticals, Inc.
	 

	 	 	 	4 Maguire Road
	 

	 	 	 	Lexington, Massachusetts 02421
	 

	 	 	 	Facsimile: (781) 761-7632
	 

	 	 	 	Attn: Kim Cobleigh Drapkin
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Goodwin Procter, LLP
	 

	 	 	 	Exchange Place
	 

	 	 	 	53 State Street
	 

	 	 	 	Boston, Massachusetts 02109
	 

	 	 	 	Facsimile: (617) 523-1231
	 

	 	 	 	Attn: Christopher Denn, Esq. and
	 

	 	 	 	Edward King, Esq.

     If to a Purchaser: To the address set forth immediately below on Exhibit A hereto. Each
party will provide ten days’ advance written notice to the other parties of any change in its
address.

          Section 8.7 Successors and Assigns. This Agreement is binding upon and inures to the
benefit of the parties and their successors and assigns. The Company will not assign this
Agreement or any rights or obligations hereunder without the prior written consent of the
Purchasers, and no Purchaser may assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Company, except as permitted in accordance with Section
6.10 hereof.

          Section 8.8 Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto, their respective permitted successors and assigns and the Placement Agents, and
is not for the benefit of, nor may any provision hereof be enforced by, any other person, except as
provided in Section 6.7.

          Section 8.9 Further Assurances. Each party will do and perform, or cause to be done
and performed, all such further acts and things, and will execute and deliver all other agreements,
certificates, instruments and documents, as another party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

33

 

          Section 8.10 No Strict Construction. The language used in this Agreement is deemed to
be the language chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.

          Section 8.11 Equitable Relief. Each Purchaser and each holder of the Shares shall
have all rights and remedies set forth in this Agreement and all rights and remedies which such
holders have been granted at any time under any other agreement or contract and all of the rights
which such holders have under any law. Any Person having any rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The Company recognizes that if it fails to perform or
discharge any of its obligations under this Agreement, any remedy at law may prove to be inadequate
relief to the Purchasers. The Company therefore agrees that the Purchasers are entitled to seek
temporary and permanent injunctive relief in any such case without the necessity of proving actual
damages and without posting a bond or other security. Each Purchaser also recognizes that, if it
fails to perform or discharge any of its obligations under this Agreement, any remedy at law may
prove to be inadequate relief to the Company. Each Purchaser therefore agrees that the Company is
entitled to seek temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages and without posting a bond or other security.

          Section 8.12 Survival of Representations and Warranties. Notwithstanding any
investigation made by any party to this Agreement, all representations and warranties made by the
Company and the Purchasers herein shall survive for a period of two years following the date
hereof.

          Section 8.13 Independent Nature of Purchasers’ 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 representations
and warranties of, or the performance of the obligations of any other Purchaser under this
Agreement. Nothing contained herein and no action taken by any Purchaser pursuant thereto, shall be
deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as
a group, or are deemed affiliates (as such term is defined under the Exchange Act) with respect to
such obligations or the transactions contemplated by this Agreement. Each Purchaser 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.

          Section 8.14 Adjustments in Share Numbers and Prices. In the event of any stock split,
subdivision, dividend or distribution payable in shares of Common Stock (or other securities or
rights convertible into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination or other similar recapitalization or event occurring after the date
hereof and prior to the Closing, each reference in this Agreement and the Exhibits attached hereto
to a number of shares or a price per share shall be amended to appropriately account for such
event.

34

 

          Section 8.15 Termination. Without limiting the remedies of the parties hereunder, in
the event that the Closing shall not have occurred with respect to a Purchaser on or before five
(5) Business Days from and after the date hereof, either the Company or such Purchaser shall have
the option to terminate this Agreement, provided that the right to terminate this Agreement shall
not be available to (a) the Company if its failure to fulfill any obligation under this Agreement
has been the cause of, or resulted in, the failure of the Closing to occur on or before such date
or (b) such Purchaser if the failure of such Purchaser to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Closing to occur.

[Signature Page Follows]

35

 

          In Witness Whereof, the undersigned Purchasers and the Company have caused this
Agreement to be duly executed as of the date first above written.

	 	 	 	 	 	 	 
	 	 	EPIX PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

Securities Purchase Agreement

Signature Page

 

 

Purchaser Signature Page

By its execution and delivery of this signature page, the undersigned Purchaser hereby joins in and
agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 9, 2007 (the “Purchase Agreement”) by and among EPIX Pharmaceuticals, Inc. and the
Purchasers (as defined therein), as to the number of shares of Common Stock set forth below, and
authorizes this signature page to be attached to the Purchase Agreement or counterparts thereof.

	 	 	 	 	 	 	 	 	 
	 	 	Name of Purchaser:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Telephone No.:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	Facsimile No.:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	Number of Shares:	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Aggregate Purchase Price: $	 	 
	 

	 	 	 	 	 	 	 	 

	 	 

Securities Purchase Agreement

Signature Page

 

 

Exhibits:

	 	 	 
	A

	 	Schedule of Purchasers
	B

	 	Instruction Sheet For Purchasers
	C

	 	Opinion of Goodwin Procter LLP
	D

	 	Plan of Distribution

 

 

EXHIBIT A

SCHEDULE OF PURCHASERS

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Aggregate	 	 
	 	 	 	 	Number of	 	 
	Buyer	 	Address and Facsimile Number	 	Common Shares	 	Purchase Price
	City of New York Deferred
Compensation Plan – NYC
457/401K Small Cap Account

	 	c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attention: Darrell N. Braman

fax: (410) 345-6575
	 	 	6,400	 	 	$	19,840.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	Diamond Opportunity Fund, LLC

	 	500 Skokie Boulevard, Suite 300

Northbrook, IL 60062

(847) 919-4410

Attention: Richard Marks

fax: (847) 919-4410
	 	 	161,290	 	 	$	499,999.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	Henry Beinstein

	 	8 Dogwood Lane

Larchmont, NY 10538

fax: (212) 265-6417
	 	 	96,774	 	 	$	299,999.40	 
	 
	 	 	 	 	 	 	 	 	 	 
	John Hancock Trust – Health 

Sciences Trust

	 	c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attention: Darrell N. Braman

fax: (410) 345-6575
	 	 	16,600	 	 	$	51,460.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	Prescott Group Aggressive
Small Cap Master Fund, G.P.

	 	1924 South Utica, Suite 1120

Tulsa, OK 74104

Attention: Phil Frohlich

Fax: (918) 742-7303
	 	 	806,452	 	 	$	2,500,001.20	 
	 
	 	 	 	 	 	 	 	 	 	 
	Raytheon Company Combined 

DB/DC Master Trust – Health 

Sciences

	 	c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attention: Darrell N. Braman

fax: (410) 345-6575
	 	 	2,700	 	 	$	8,370.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	SF Capital Partners Ltd.

	 	c/o Stark Offshore Management LLC

2600 South Lake Drive

Robert J. Barnard

fax: (414) 29407700
	 	 	1,612,903	 	 	$	4,999,999.30	 
	 
	 	 	 	 	 	 	 	 	 	 
	SRB Greenway Capital, LP

	 	300 Crescent Court, Ste. 1111

Dallas, Texas 75201

attention: George Lee

fax: (214) 756-6079
	 	 	32,097	 	 	$	99,500.70	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Aggregate	 	 
	 	 	 	 	Number of	 	 
	Buyer	 	Address and Facsimile Number	 	Common Shares	 	Purchase Price
	SRB Greenway Capital (QP), L.P.

	 	300 Crescent Court, Ste. 1111

Dallas, Texas 75201

attention: George Lee

fax: (214) 756-6079
	 	 	278,484	 	 	$	863,300.40	 
	 
	 	 	 	 	 	 	 	 	 	 
	SRB Greenway Offshore
Operating Fund, L.P.

	 	300 Crescent Court, Ste. 1111

Dallas, Texas 75201

attention: George Lee

fax: (214) 756-6079
	 	 	12,000	 	 	$	37,200.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	Steelhead Investments Ltd.

	 	c/o HBK Investments, Ltd.

300 Crescent Court, Ste. 700

Dallas, Texas 75201

attention: J. Baker Gentry, Jr.

fax: (214) 758-1207
	 	 	483,871	 	 	$	1,500,000.10	 
	 
	 	 	 	 	 	 	 	 	 	 
	T. Rowe Price Health Sciences
Funds

	 	c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attention: Darrell N. Braman

fax: (410) 345-6575
	 	 	100,000	 	 	$	310,000.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	T. Rowe Price Health Sciences
Portfolio, Inc.

	 	c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attention: Darrell N. Braman

fax: (410) 345-6575
	 	 	1,200	 	 	$	3,720.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	T. Rowe Price New Horizons
Fund, Inc.

	 	c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attention: Darrell N. Braman

fax: (410) 345-6575
	 	 	226,365	 	 	$	701,731.50	 
	 
	 	 	 	 	 	 	 	 	 	 
	T. Rowe Price New Horizons
Trust

	 	c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attention: Darrell N. Braman

fax: (410) 345-6575
	 	 	6,100	 	 	$	18,910.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	TD Mutual Funds – TD Health 

Sciences Fund

	 	c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attention: Darrell N. Braman

fax: (410) 345-6575
	 	 	9,100	 	 	$	28,210.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	UBS O’Connor LLC FBO O’Connor PIPES Corporate

Strategies Master Limited

	 	One North Wacker Drive

32nd Floor

Chicago, IL 60606

Attention: Jeff Putman

fax: (312) 525-5837
	 	 	250,000	 	 	$	775,000.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	VALIC Company I – Health 

Sciences Fund

	 	c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attention: Darrell N. Braman

fax: (410) 345-6575
	 	 	14,100	 	 	$	43,710.00	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Aggregate	 	 
	 	 	 	 	Number of	 	 
	Buyer	 	Address and Facsimile Number	 	Common Shares	 	Purchase Price
	Westfield Life Sciences Fund LP

	 	c/o Westfield Capital Management

One Financial Center, 24th Floor

(617) 428-7190

attention: William A. Muggia

fax: (617) 428-7190
	 	 	67,742	 	 	$	210,000.20	 
	 
	 	 	 	 	 	 	 	 	 	 
	Westfield Life Sciences Fund 

II LP

	 	c/o Westfield Capital Management

One Financial Center, 24th Floor

attention: William A. Muggia

fax: (617) 428-7190
	 	 	900,000	 	 	$	2,790,000.20	 
	 
	 	 	 	 	 	 	 	 	 	 
	WS Opportunity Fund
International, Ltd.

	 	300 Crescent Court, Ste. 1111

Dallas, Texas 75201

attention: Joe Worsham

fax: (214) 756-6079
	 	 	71,677	 	 	$	222,198.70	 
	 
	 	 	 	 	 	 	 	 	 	 
	WS Opportunity Fund, LP

	 	300 Crescent Court, Ste. 1111

Dallas, Texas 75201

attention: Joe Worsham

fax: (214) 756-6079
	 	 	46,129	 	 	$	142,999.90	 
	 
	 	 	 	 	 	 	 	 	 	 
	WS Opportunity Fund (QP), L.P.

	 	300 Crescent Court, Ste. 1111

Dallas, Texas 75201

attention: Joe Worsham

fax: (214) 756-6079
	 	 	43,484	 	 	$	134,800.40exv4w1

 

OMNIBUS INSTRUMENT

     WHEREAS, the parties named herein desire to enter into certain Program Documents contained
herein, each such document dated as of this 9th day of November, , relating to the issuance by
Principal Life Income Fundings Trust 2007-109 (the “Trust”) of Notes with a principal amount of
$11,299,000.00 to investors under Principal Life’s secured notes program;

     WHEREAS, the Trust is a trust and will be organized under and its activities will be governed
by the provisions of the Trust Agreement (set forth in Section A of this Omnibus Instrument), dated
as of the date of the Pricing Supplement (attached to this Omnibus Instrument as Exhibit D)
(the “Pricing Supplement”), by and between the parties thereto indicated in Section F herein;

     WHEREAS, certain expense and indemnification arrangements between Principal Life and the
Trustee, on behalf of itself and on behalf of the Trust, are governed pursuant to the provisions of
the Expense and Indemnity Agreement dated as of February 16, 2006, by and between Principal Life
and the Trustee;

     WHEREAS, certain licensing arrangements between the Trust and Principal Financial Services,
Inc. will be governed pursuant to the provisions of the License Agreement (set forth in Section B
of this Omnibus Instrument), dated as of the date of the Pricing Supplement, by and between the
parties thereto indicated in Section F herein;

     WHEREAS, certain custodial arrangements of the Funding Agreement and the Guarantee will be
governed pursuant to the provisions of the Custodial Agreement (the “Custodial Agreement”) dated as
of February 16, 2006 by and among Bankers Trust Company, N.A., acting as custodian (the
“Custodian”), the Indenture Trustee and the Trustee, on behalf of the Trust;

     WHEREAS, the Notes will be issued pursuant to the Indenture (set forth in Section C of this
Omnibus Instrument), dated as of the Original Issue Date, by and between the parties thereto
indicated in Section F herein;

     WHEREAS, the sale of the Notes will be governed by the Terms Agreement (set forth in Section D
of this Omnibus Instrument), dated the date of the Pricing Supplement, by and among the parties
thereto indicated in Section F herein; and

     WHEREAS, certain agreements relating to the Notes, the Funding Agreement and the Guarantee are
set forth in the Coordination Agreement (set forth in Section E of this Omnibus Instrument), dated
as of the date of the Pricing Supplement, by and among the parties thereto indicated in Section F
herein.

     All capitalized terms used herein and not otherwise defined will have the meanings set forth
in the Indenture.

[Remainder of Page Left Intentionally Blank.]

 

SECTION A

TRUST AGREEMENT

     This TRUST AGREEMENT (this “Trust Agreement”), dated as of the date of the Pricing Supplement,
is entered into by and between GSS Holdings II, Inc., a Delaware corporation, as trust beneficial
owner (the “Trust Beneficial Owner”), and U.S. Bank Trust National Association, a national banking
association, as Trustee (the “Trustee”).

W I T N E S S E T H:

     WHEREAS, the Trust Beneficial Owner and the Trustee desire to authorize the issuance of a
Trust Beneficial Interest and a series of Notes in connection with the entry into this Trust
Agreement;

     WHEREAS, all things necessary to make this Trust Agreement a valid and legally binding
agreement of the Trustee and the Trust Beneficial Owner, enforceable in accordance with its terms,
have been done;

     WHEREAS, the parties intend to provide for, among other things, (i) the issuance and sale of
the Notes (pursuant to the Indenture, the Distribution Agreement and the related Terms Agreement)
and the Trust Beneficial Interest, (ii) the use of the proceeds of the sale of the Notes and Trust
Beneficial Interest to acquire the Funding Agreement, the payment obligations of which will be
fully and unconditionally guaranteed by the Guarantee, and (iii) all other actions deemed necessary
or desirable in connection with the transactions contemplated by this Trust Agreement; and

     WHEREAS, the parties hereto desire to incorporate by reference those certain Standard Trust
Terms, dated as of February 16, 2006, and attached to the Omnibus Instrument as Exhibit A
(the “Standard Trust Terms”) and all capitalized terms not otherwise defined herein (including the
recitals hereof) shall have the meanings set forth in the Standard Trust Terms (the Standard Trust
Terms and this Trust Agreement, collectively, the “Trust Agreement”).

     NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for
other good and valuable consideration, the sufficiency of which are hereby acknowledged, each party
hereby agrees as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. All terms, provisions and agreements set
forth in the Standard Trust Terms (except to the extent expressly modified herein) are hereby
incorporated herein by reference with the same force and effect as though fully set forth herein.
To the extent that the terms set forth in Article 2 of this Trust Agreement are inconsistent with
the terms of the Standard Trust Terms, the terms set forth in Article 2 herein shall apply.

A-1

 

ARTICLE 2

     Section 2.01 Name. The Trust created and governed by the Trust Agreement shall be the
trust specified in the Omnibus Instrument. The name of the Trust shall be the name specified in
the first paragraph of the Omnibus Instrument, as such name may be modified from time to time by
the Trustee following written notice to the Trust Beneficial Owner.

     Section 2.02 Jurisdiction. The Trust is hereby organized in, and formed under and
pursuant to, the laws of the State of New York.

     Section 2.03 Initial Capital Contribution and Ownership. The Trust Beneficial Owner
has paid or has caused to be paid to, or to an account at the direction of, the Trustee, on the
date hereof, the sum of $15 (or, in the case of Notes issued with original issue discount, such
amount multiplied by the issue price of the Notes). The Trustee hereby acknowledges receipt in
trust from the Trust Beneficial Owner, as of the date hereof, of the foregoing contribution, which
shall be used along with the proceeds from the sale of the series of Notes to purchase the Funding
Agreement. Upon the creation of the Trust and the registration of the Trust Beneficial Interest in
the Securities Register (as defined in the Trust Agreement) by the Registrar in the name of the
Trust Beneficial Owner, the Trust Beneficial Owner shall be the sole beneficial owner of the Trust.

     Section 2.04 Acknowledgment. The Trustee, on behalf of the Trust, expressly
acknowledges its duties and obligations set forth in the Standard Trust Terms incorporated herein.

     Section 2.05 Additional Terms.

     None

     Section 2.06 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to the Trust Agreement will enter into the Trust Agreement by executing the
Omnibus Instrument.

     By executing the Omnibus Instrument, the Trustee and the Trust Beneficial Owner hereby agree
that the Trust Agreement will constitute a legal, valid and binding agreement between the Trustee
and the Trust Beneficial Owner.

     All terms relating to the Trust or the series of Notes not otherwise included in the Trust
Agreement will be as specified in the Omnibus Instrument, the Pricing Supplement or the
Distribution Agreement as indicated herein.

A-2

 

     Section 2.07 Governing Law. The Trust Agreement will be governed by, and construed in
accordance with, the laws of the State of New York.

     Section 2.08 Counterparts. The Trust Agreement, through the Omnibus Instrument, may
be executed in any number of counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute but one and the same instrument.

[Remainder of Page Left Intentionally Blank.]

A-3

 

SECTION B

LICENSE AGREEMENT

     This LICENSE AGREEMENT (this “License Agreement”), dated as of the date of the Pricing
Supplement, is entered into by and between Principal Financial Services, Inc., an Iowa corporation
with its principal place of business at 711 High Street, Des Moines, Iowa 50392 (the “Licensor”),
and the Principal Life Income Fundings Trust specified in the Omnibus Instrument (the “Licensee”).

W I T N E S S E T H:

     WHEREAS, the Licensor is the owner of certain trademarks and service marks and registrations
and pending applications therefor, and may acquire additional trademarks and service marks in the
future, all as described more fully below;

     WHEREAS, the Licensee desires to use certain of the Licensor’s trademarks and service marks in
connection with the Licensee’s activities, as described more fully below;

     WHEREAS, the Licensor and the Licensee wish to formalize the agreement between them regarding
the Licensee’s use of the Licensor’s marks; and

     WHEREAS, the parties hereto desire to incorporate by reference those certain Standard License
Agreement Terms, dated March 5, 2004, and attached to the Omnibus Instrument as Exhibit B
(the “Standard License Agreement Terms”) and all capitalized terms not otherwise defined herein
(including the recitals hereof) shall have the meanings set forth in the Standard License Agreement
Terms (the Standard License Agreement Terms and this License Agreement, collectively, the “License
Agreement”).

     NOW, THEREFORE, in consideration of the mutual promises set forth herein and for other good
and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, each
party hereby agrees as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. All terms, provisions and agreements set
forth in the Standard License Agreement Terms (except to the extent expressly modified herein) are
hereby incorporated herein by reference with the same force and effect as though fully set forth
herein. To the extent that the terms set forth in Article 2 of this License Agreement are
inconsistent with the terms of the Standard License Agreement Terms, the terms set forth in Article
2 herein shall apply.

ARTICLE 2

     Section 2.01 Additional Terms.

     None

B-1

 

     Section 2.02 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to the License Agreement will enter into the License Agreement by executing the
Omnibus Instrument.

     By executing the Omnibus Instrument, the Licensor and the Licensee hereby agree that the
License Agreement will constitute a legal, valid and binding agreement between the Licensor and the
Licensee.

     All terms relating to the Trust or the Notes not otherwise included in the License Agreement
will be as specified in the Omnibus Instrument or Pricing Supplement, as indicated herein.

     Section 2.03 Counterparts. The License Agreement, through the Omnibus Instrument, may
be executed in any number of counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute but one and the same instrument.

[Remainder of Page Left Intentionally Blank.]

B-2

 

SECTION C

INDENTURE

     This INDENTURE (this “Indenture”) is entered into as of the Original Issue Date by and between
the Principal Life Income Fundings Trust specified in the Omnibus Instrument (the “Trust”) and
Citibank, N.A., as indenture trustee (the “Indenture Trustee”).

     Citibank, N.A., in its capacity as indenture trustee, hereby accepts its role as Registrar,
Paying Agent, Transfer Agent and Calculation Agent hereunder.

     References herein to “Indenture Trustee,” “Registrar,” “Transfer Agent,” “Paying Agent” or
“Calculation Agent” shall include the permitted successors and assigns of any such entity from time
to time.

W I T N E S S E T H:

     WHEREAS, the Trust has duly authorized the execution and delivery of this Indenture to provide
for the issuance of Notes;

     WHEREAS, all things necessary to make this Indenture a valid and legally binding agreement of
the Trust and the other parties to this Indenture, enforceable in accordance with its terms, have
been done, and the Trust proposes to do all things necessary to make the Notes, when executed by
the Trust and authenticated and delivered pursuant hereto, valid and legally binding obligations of
the Trust as hereinafter provided; and

     WHEREAS, the parties hereto desire to incorporate by reference those certain Standard
Indenture Terms, dated as of February 16, 2006, and attached to the Omnibus Instrument as
Exhibit C (the “Standard Indenture Terms”) and all capitalized terms not otherwise defined
herein (including the recitals hereof) shall have the meanings set forth in the Standard Indenture
Terms (the Standard Indenture Terms and this Indenture, collectively, the “Indenture”).

     NOW, THEREFORE, for and in consideration of the premises and the purchase of the Notes by the
Holders thereof, it is mutually covenanted and agreed by each of the parties hereto as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. All terms, provisions and agreements set
forth in the Standard Indenture Terms (except to the extent expressly modified herein) are hereby
incorporated herein by reference (with the same force and effect as though fully set forth herein).
To the extent that the terms set forth in Article 2 of this Indenture are inconsistent with the
terms of the Standard Indenture Terms, the terms set forth in Article 2 herein shall apply.

C-1

 

ARTICLE 2

     Section 2.01 Agreement to be Bound. Each of the Trust, the Indenture Trustee, the
Registrar, the Transfer Agent, the Paying Agent and the Calculation Agent hereby agrees to be bound
by all of the terms, provisions and agreements set forth in the Indenture, with respect to all
matters contemplated in the Indenture, including, without limitation, those relating to the
issuance of the below-referenced Notes.

     Section 2.02 Designation of the Trust, the Notes, the Funding Agreement and the
Guarantee. The Trust created by the Trust Agreement and referred to in the Indenture is the
Principal Life Income Fundings Trust specified in the Omnibus Instrument. The Notes issued by the
Trust and governed by the Indenture shall be the Notes specified in the Pricing Supplement. The
Funding Agreement designated hereby is the Funding Agreement designated in the Pricing Supplement
dated as of the Original Issue Date between the Trust and Principal Life. The Guarantee designated
hereby is the Guarantee dated as of the Original Issue Date of PFG.

     Section 2.03 Additional Terms.

     None

     Section 2.04 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to the Indenture will enter into the Indenture by executing the Omnibus
Instrument.

     By executing the Omnibus Instrument, the Indenture Trustee, the Registrar, the Transfer Agent,
the Paying Agent, the Calculation Agent and the Trust hereby agree that the Indenture will
constitute a legal, valid and binding agreement between the Indenture Trustee, the Registrar, the
Transfer Agent, the Paying Agent, the Calculation Agent and the Trust.

     All terms relating to the Trust or the Notes not otherwise included in the Indenture will be
as specified in the Omnibus Instrument or Pricing Supplement, as indicated herein.

     Section 2.05 Counterparts. The Indenture, through the Omnibus Instrument, may be
executed in any number of counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute one and the same instrument.

[Remainder of Page Left Intentionally Blank.]

C-2

 

SECTION D

TERMS AGREEMENT

     This TERMS AGREEMENT (this “Terms Agreement”) is entered into as of the Original Issue Date by
and among Principal Life Insurance Company (“Principal Life”), Principal Financial Group, Inc.
(“PFG”), the Principal Life Income Fundings Trust specified in the Omnibus Instrument (the “Trust”)
and the Purchasing Agent specified in the Pricing Supplement (the “Purchasing Agent”).

W I T N E S S E T H:

     WHEREAS, Principal Life, PFG and the agent named therein, including the Purchasing Agent have
entered into that certain Distribution Agreement dated February 16, 2006 (the “Distribution
Agreement”).

     NOW, THEREFORE, in consideration of the mutual promises set forth herein and other good and
valuable consideration, the sufficiency and receipt of which are hereby acknowledged, each of the
parties hereby agrees as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. The provisions of the Distribution Agreement
and the related definitions (unless otherwise specified herein) are incorporated by reference
herein and shall be deemed to have the same force and effect as if set forth in full herein.

ARTICLE 2

     Section 2.01 Addition of Trust as Party to Distribution Agreement.

     Pursuant to Section 1 of the Distribution Agreement, each of the undersigned parties hereby
acknowledges and agrees that the Trust, upon execution hereof by the Trust and the other parties to
the Distribution Agreement (other than any other trusts organized in connection with the
Registration Statement that are party thereto as of the date hereof), shall become a Trust for
purposes of the Distribution Agreement in accordance with the terms thereof, in respect of the
Notes, with all the authority, rights, powers, duties and obligations of a Trust under the
Distribution Agreement. The Trust confirms that any agreement, covenant, acknowledgment,
representation or warranty under the Distribution Agreement applicable to the Trust is made by the
Trust at the date hereof, unless another time or times are specified in the Distribution Agreement,
in which case such agreement, covenant, acknowledgment, representation or warranty shall be deemed
to be confirmed by the Trust at such specified time or times.

     Section 2.02 Purchase of Notes as Principal.

     (a) Subject in all respects to the terms and conditions of the Distribution Agreement, the
Trust hereby agrees to sell to the Purchasing Agent and the Purchasing Agent hereby agrees to
purchase the Notes having the terms specified in the Pricing Supplement relating to such Notes.

D-1

 

(b) In connection with any purchase of Notes from the Trust by the Purchasing Agent as principal,
the parties agrees that the items specified on Schedule I of the Omnibus Instrument will be
delivered as of the Settlement Date.

     Section 2.03 Termination. Upon the termination of this Terms Agreement pursuant to
Section 13(b) of the Distribution Agreement the undersigned parties hereby agree to that the
expenses reasonably incurred prior to or in connection with such termination will be borne by
Principal Life and PFG.

     Section 2.04 Applicable Time. For purposes of the Distribution Agreement, the
Applicable Time shall be 10:00 am Central Standard Time on November 9, 2007.

     Section 2.05 Free Writing Prospectus. For purposes of the Distribution Agreement,
each free writing prospectus (attached to this Omnibus Instrument as Exhibit G) constitutes
a part of the Time of Sale Prospectus.

     Section 2.06 Governing Law. This Terms Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to the principles of conflicts
of laws thereof.

     Section 2.07 Notices. For purposes of Section 14 of the Distribution Agreement, the
Trust’s communications details are as set forth in Section E of the Omnibus Instrument.

     Section 2.08 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to this Terms Agreement will enter into this Terms Agreement by executing the
Omnibus Instrument.

     By executing the Omnibus Instrument, each party hereto agrees that this Terms Agreement will
constitute a legal, valid and binding agreement by and among such parties.

     All terms relating to the Trust or the Notes not otherwise included in this Terms Agreement
will be as specified in the Omnibus Instrument, the Pricing Supplement or the Distribution
Agreement as indicated herein.

     Section 2.09 Counterparts. This Terms Agreement, through the Omnibus Instrument, may
be executed in any number of counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute but one and the same instrument.

[Remainder of Page Left Intentionally Blank.]

D-2

 

SECTION E

COORDINATION AGREEMENT

     This COORDINATION AGREEMENT (this “Coordination Agreement”), dated as of the date of the
Pricing Supplement, is entered into by and among Principal Life Insurance Company (“Principal
Life”), Principal Financial Group, Inc. (“PFG”), the Principal Life Income Fundings Trust specified
in the Omnibus Instrument (the “Trust”), Principal Financial Services, Inc. (“PFSI”), Bankers Trust
Company, N.A. and Citibank, N.A., as indenture trustee (the “Indenture Trustee”).

W I T N E S S E T H

     WHEREAS, the Trust will enter into the Funding Agreement with Principal Life dated as of the
Original Issue Date specified in the Pricing Supplement;

     WHEREAS, PFG will issue a Guarantee to the Trust as of the Original Issue Date specified in
the Pricing Supplement, which will fully and unconditionally guarantee the payment obligations of
Principal Life under the Funding Agreement;

     WHEREAS, the Purchasing Agents (as defined in the Terms Agreement) have agreed to sell the
Notes in accordance with the Registration Statement;

     WHEREAS, the Trust intends to issue the Notes in accordance with the Indenture, to
collaterally assign to, and grant a security interest in, the Funding Agreement and the Guarantee
to and in favor of the Indenture Trustee in accordance with the Indenture to secure payment of the
Notes;

     WHEREAS, the Custodian will hold the Funding Agreement and the Guarantee on behalf of the
Indenture Trustee pursuant to the terms of the Custodial Agreement; and

     WHEREAS, certain licensing arrangements between the Trust and PFSI will be governed pursuant
to the provisions of the License Agreement.

     NOW, THEREFORE, to give effect to the agreements and arrangements established under the Terms
Agreement included in the Omnibus Instrument, as applicable, the Trust Agreement, the Indenture and
the Notes, and in consideration of the agreements and obligations set forth herein and for other
good and valuable consideration, the sufficiency of which are hereby acknowledged, each party
hereby agrees as follows:

ARTICLE 1

     Section 1.01 Delivery of the Funding Agreement and the Guarantee. The Trust hereby
authorizes the Custodian, on behalf of the Indenture Trustee, to receive the Funding Agreement from
Principal Life and the Guarantee from PFG pursuant to the assignment of the Funding Agreement and
Guarantee (the “Assignment”), to be entered into on the Original Issue Date, included in the
closing instrument dated as of the Original Issue Date (the “Closing Instrument”).

E-1

 

     Section 1.02 Issuance and Purchase of the Notes.

     (a) Delivery of the Funding Agreement and the Guarantee to the Custodian, on behalf of the
Indenture Trustee, pursuant to the Assignment or execution of the cross receipt contained in the
Closing Instrument shall be confirmation of payment by the Trust for the Funding Agreement.

     (b) The Trust hereby directs the Indenture Trustee, upon receipt by the Custodian, on behalf
of the Indenture Trustee, of the Funding Agreement pursuant to the Assignment and upon receipt by
the Custodian, on behalf of the Indenture Trustee, of the Guarantee, (i) to authenticate the
certificates representing the Notes (the “Notes Certificates”) in accordance with the Indenture and
(ii) to (A) deliver each relevant Notes Certificate to the clearing system or systems identified in
each such Notes Certificate, or to the nominee of such clearing system, or the custodian thereof,
for credit to such accounts as the Purchasing Agent may direct, or (B) deliver each relevant Notes
Certificate to the purchasers thereof as identified by the Purchasing Agent.

ARTICLE 2

     Section 2.01 Directions Regarding Periodic Payments. As registered owner of the
Funding Agreement and the Guarantee as collateral securing payments on the Notes, the Indenture
Trustee will receive payments on the Funding Agreement and the Guarantee on behalf of the Trust.
The Trust hereby directs the Indenture Trustee to use such funds to make payments on behalf of the
Trust pursuant to the Trust Agreement and the Indenture.

     Section 2.02 Maturity of the Funding Agreement. Upon the maturity of the Funding
Agreement and the return of funds thereunder, the Trust hereby directs the Indenture Trustee to set
aside from such funds an amount sufficient for the repayment of the outstanding principal on the
Notes and Trust Beneficial Interest when due.

ARTICLE 3

     Section 3.01 Certificates. Principal Life hereby agrees to deliver an Officer’s
Certificate, a copy of which is attached hereto as Exhibit E, on a quarterly basis to any
rating agency currently rating the Program. The Trust hereby agrees to deliver an Officer’s
Certificate, a copy of which is attached hereto as Exhibit F, on a quarterly basis to any
rating agency currently rating the Program.

     Section 3.02 Filings. Principal Life hereby covenants, as sponsor and depositor, to
file, or cause to be filed, in a timely manner on behalf of the Trust all reports, certifications
or similar filings required under the Securities Exchange Act of 1934, as amended.

ARTICLE 4

     Section 4.01 No Additional Liability. Nothing in this Coordination Agreement shall
impose any liability or obligation on the part of any party to this Coordination Agreement to make
any payment or disbursement in addition to any liability or obligation such party has under the
Program Documents, except to the extent that a party has actually received funds which it is
obligated to disburse pursuant to this Coordination Agreement.

E-2

 

     Section 4.02 No Conflict. This Coordination Agreement is intended to be in
furtherance of the agreements reflected in the documents related to the Program Documents, and not
in conflict. To the extent that a provision of this Coordination Agreement conflicts with the
provisions of one or more Program Documents, the provisions of such Program Documents shall govern.

     Section 4.03 Governing Law. This Coordination Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to the principles of
conflicts of laws thereof.

     Section 4.04 Severability. If any provision in this Coordination Agreement shall be
invalid, illegal or unenforceable, such provision shall be deemed severable from the remaining
provisions of this Coordination Agreement and shall in no way affect the validity or enforceability
of such other provisions of this Coordination Agreement.

     Section 4.05 Severability. If any provision in this Coordination Agreement shall be
invalid, illegal or unenforceable, such provision shall be deemed severable from the remaining
provisions of this Coordination Agreement and shall in no way affect the validity or enforceability
of such other provisions of this Coordination Agreement.

     Section 4.06 Notices. All demands, notices and communications under this Coordination
Agreement shall be in writing and shall be deemed to have been duly given upon receipt at the
addresses set forth below:

     To the Trust:

Principal Life Income Fundings Trust (followed by the number set forth in the

   Omnibus Instrument)

c/o U.S. Bank Trust National Association

100 Wall Street, 16th Floor

New York, New York 10005

Attention: Corporate Trust Administration

Telephone: (212) 361-2184

Facsimile: (212) 509-3384

     To the Indenture Trustee:

Citibank, N.A.

Citibank Agency & Trust

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Nancy Forte

Telephone: (212) 816-5685

Facsimile: (212) 657-3862

E-3

 

     To Principal Life:

Principal
Life Insurance Company

711 High Street

Des Moines, Iowa 50392

Attention: General Counsel

Telephone: (515) 247-5111

Facsimile: (515) 248-3011

     With a copy to:

Principal Life Insurance Company

711 High Street

Des Moines, Iowa 50392

Attention: Jim Fifield

Telephone: (515) 248-9196

Facsimile: (866) 496-6527

     To PFG:

Principal Financial Group, Inc.

711 High Street

Des Moines, Iowa 50392

Attention: General Counsel

Telephone: (515) 247-5111

Facsimile: (515) 248-3011

     With a copy to:

Principal Life Insurance Company

711 High Street

Des Moines, Iowa 50392

Attention: Jim Fifield

Telephone: (515) 248-9196

Facsimile: (866) 496-6527

     To Principal Financial Services, Inc.:

Principal Financial Services, Inc.

711 High Street

Des Moines, Iowa 50392

Attention: General Counsel

Telephone: (515) 247-5111

Facsimile: (515) 248-3011

E-4

 

     With a copy to:

Principal Life Insurance Company

711 High Street

Des Moines, Iowa 50392

Attention: Jim Fifield

Telephone: (515) 248-9196

Facsimile: (866) 496-6527

     To Bankers Trust Company, N.A:

Bankers Trust Company, N.A.

453 7th Street

Des Moines, Iowa 50309-2728

Attention: Angela C. Brick

Telephone: (515) 245-2820

Facsimile: (515) 247-2101

or at such other address as shall be designated by any such party in a written notice to the other
parties.

ARTICLE 5

     Section 5.01 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to this Coordination Agreement will enter into this Coordination Agreement by
executing the Omnibus Instrument.

     By executing the Omnibus Instrument, each party hereto agrees that this Coordination Agreement
will constitute a legal, valid and binding agreement by and among the Trust, Principal Life, PFG,
PFSI, the Custodian and the Indenture Trustee.

     All terms relating to the Trust or the Notes not otherwise included in this Coordination
Agreement will be as specified in the Omnibus Instrument or Pricing Supplement, as indicated
herein.

     Section 5.02 Acknowledgment. Principal Life hereby acknowledges Section 2.10 of the
Indenture and Section 6.1 of the Custodial Agreement. The Trust hereby acknowledges and agrees to
the terms of the Custodial Agreement.

     Section 5.03 Counterparts. This Coordination Agreement, through the Omnibus
Instrument, may be executed in any number of counterparts, each of which counterparts shall be
deemed to be an original, and all of which counterparts shall constitute but one and the same
instrument.

     Section 5.04 Capitalized Terms. All capitalized terms used herein and not otherwise
defined in this Coordination Agreement will have the meanings set forth in the Indenture.

[Remainder of Page Left Intentionally Blank.]

E-5

 

SECTION F

MISCELLANEOUS AND EXECUTION PAGES

     This Omnibus Instrument may be executed by each of the parties hereto in any number of
counterparts, and by each of the parties hereto on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

     Each signatory, by its execution hereof, does hereby become a party to each of the agreements
or indenture identified for such party as of the date specified in such agreements or indenture.

     IN WITNESS WHEREOF, the undersigned have executed this Omnibus Instrument with respect to the
Notes as of the date first written above.

	 	 	 	 	 
	 	PRINCIPAL LIFE INSURANCE COMPANY (in executing below agrees and becomes a party to (i) the Terms Agreement set forth in Section D herein and (ii) the Coordination Agreement set forth in Section E herein)

 	 
	 	By:  	/s/ Christopher P. Freese
 	 
	 	 	Name:  	Christopher P. Freese 	 
	 	 	Title:  	Officer 	 
	 
	 	PRINCIPAL FINANCIAL GROUP, INC. (in executing below agrees and becomes a party to (i) the Terms Agreement set forth in Section D herein and (ii) the Coordination Agreement set forth in Section E herein)

 	 
	 	By:  	/s/ Elizabeth D. Swanson
 	 
	 	 	Name:  	Elizabeth D. Swanson 	 
	 	 	Title:  	Counsel 	 
	 
	 	PRINCIPAL FINANCIAL SERVICES, INC. (in executing below agrees and becomes a party to the License Agreement set forth in Section B herein.)

 	 
	 	By:  	/s/ Elizabeth D. Swanson
 	 
	 	 	Name:  	Elizabeth D. Swanson 	 
	 	 	Title:  	Counsel 	 
	 

[Execution Page 1 of 3]

 

 

	 	 	 	 	 
	 	THE PRINCIPAL LIFE INCOME FUNDINGS TRUST DESIGNATED IN THIS OMNIBUS INSTRUMENT (in executing below agrees and becomes a party to (i) the License Agreement set forth in Section B herein, (ii) the Indenture set forth in Section C herein, (iii) the Terms Agreement set forth in Section D herein and (iv) the Coordination Agreement set forth in Section E herein)

By: U.S. Bank Trust National Association, not in its individual capacity but solely in its capacity as trustee of the Trust

 	 
	 	By:  	/s/ Millie Rolla
 	 
	 	 	Name:  	Millie Rolla 	 
	 	 	Title:  	Assistant Vice President 	 
	 
	 	U.S. BANK TRUST NATIONAL ASSOCIATION (in executing below agrees and becomes a party to the Trust Agreement set forth in Section A herein), as Trustee

 	 
	 	By:  	/s/ Millie Rolla
 	 
	 	 	Name:  	Millie Rolla 	 
	 	 	Title:  	Assistant Vice President 	 
	 
	 	GSS HOLDINGS II, INC. (in executing below agrees and becomes a party to the Trust Agreement set forth in Section A herein), as Trust Beneficial Owner

 	 
	 	By:  	/s/ Bernard J. Angelo
 	 
	 	 	Name:  	Bernard J. Angelo 	 
	 	 	Title:  	Vice President 	 
	 
	 	CITIBANK, N.A. (in executing below agrees and becomes a party to (i) the Indenture set forth in Section C herein, as Indenture Trustee, Registrar, Transfer Agent, Paying Agent and Calculation Agent and (ii) the Coordination Agreement set forth in Section E herein), as Indenture Trustee, Registrar, Transfer Agent, Paying Agent and Calculation Agent

 	 
	 	By:  	/s/ Jennifer McCourt
 	 
	 	 	Name:  	Jennifer McCourt 	 
	 	 	Title:  	Vice President 	 
	 

[Execution Page 2 of 3]

 

 

	 	 	 	 	 
	 	BANKERS TRUST COMPANY, N.A. (in executing below agrees and becomes a party to the Coordination Agreement set forth in Section E herein)

 	 
	 	By:  	/s/ Diana L. Cook
 	 
	 	 	Name:  	Diana L. Cook 	 
	 	 	Title:  	Vice President 	 
	 
	 	MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (in executing below agrees and becomes a party to the Terms Agreement set forth in Section D herein)

 	 
	 	By:  	/s/ Diane Kenna
 	 
	 	 	Name:  	Diane Kenna 	 
	 	 	Title:  	Authorized Signatory 	 
	 

[Execution Page 3 of 3]

 

 

INDEX OF EXHIBITS AND SCHEDULES TO THE OMNIBUS INSTRUMENT

	 	 	 
	Exhibit A

	 	Standard Trust Terms — Incorporated herein by reference to Exhibit
99.2 to Principal Life Insurance Company’s Current Report on Form
8-K, filed on March 1, 2006.
	 
	 	 
	Exhibit B

	 	Standard License Agreement Terms — Incorporated herein by
reference to Exhibit 99.1 to Principal Life Insurance Company’s
Current Report on Form 8-K, filed on March 29, 2004.
	 
	 	 
	Exhibit C

	 	Standard Indenture Terms — Incorporated herein by reference to
Exhibit 4.1 to Principal Life Insurance Company’s Current Report
on Form 8-K, filed on December 6, 2006.
	 
	 	 
	Exhibit D

	 	Pricing Supplement — Incorporated herein by reference to the
Pricing Supplement with respect to Principal Life Income Fundings
Trust 2007-109, filed on November 5, 2007 with the Securities and
Exchange Commission pursuant to Rule 424(b)(2) under the
Securities Act of 1933, as amended.
	 
	 	 
	Exhibit E

	 	Principal Life Insurance Company Officer’s Certificate
	 
	 	 
	Exhibit F

	 	Principal Life Income Fundings Trusts Trustee Officer’s Certificate
	 
	 	 
	Exhibit G

	 	Free Writing Prospectus(es)
	 
	 	 
	Schedule I

	 	Terms Agreement Specifications

 

 

EXHIBIT E

Principal Life Insurance Company

Officer’s Certificate

     The undersigned, an officer of Principal Life Insurance Company, an Iowa stock life insurance
company (“Principal Life”), does hereby certify to Standard & Poor’s Ratings Services, a division
of The McGraw-Hill Companies, Inc., in such capacity and on behalf of Principal Life, to the
knowledge of the undersigned and after reasonable inquiry, that:

	 	1.	 	each of the representations and warranties of Principal Life contained in each
Expense and Indemnity Agreement entered into in connection with the Registration
Statement (defined below), and each Funding Agreement issued in connection with the
Program (the “Specified Agreements”) (other than any representation or warranty
expressly made as of a date prior to the date hereof) are true and correct on and as of
the date hereof, with the same effect as though such representation or warranty had
been made on and as of the date hereof;
	 
	 	2.	 	no default under any of the Specified Agreements and no event or any condition
which, with notice or lapse of time or both, would become a default, has occurred and
is continuing as of the date hereof;
	 
	 	3.	 	Principal Life has performed and complied with, respectively, in all material
respects, all of the agreements, covenants, obligations and conditions applicable to
Principal Life required by the Specified Agreements to be performed or complied with by
Principal Life on or before the date hereof;
	 
	 	4.	 	the Registration Statement filed on Form S-3 (File Nos. 333-129763 and
333-129763-01) (the “Registration Statement”) by Principal Life and Principal Financial
Group, Inc. has been declared effective by the Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended (the “Act”) and no stop
order suspending the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been commenced by or are pending before or
contemplated by the Commission;
	 
	 	5.	 	all filings, if any, required by Rule 424 and Rule 430A under the Act have been
made in a timely manner;
	 
	 	6.	 	since ___, the Trusts organized in connection with the program contemplated
by the Registration Statement have issued the following series of Notes:
	 
	 	 	 	     [List each series of Notes.] [(collectively, the “Designated Notes”)]; and
	 
	 	7.	 	the Funding Agreements issued in connection with the Designated Notes have been
executed and delivered by Principal Life in accordance with the terms and conditions of the
Program Documents.

E-1

 

     Capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Standard Indenture Terms attached as Exhibit 4.1 to
the Registration Statement.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the l day of
l, 200l.

	 	 	 	 	 
	 	[Name], [in his/her] capacity as an

authorized officer of Principal Life

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	

E-2

 

EXHIBIT F

Principal Life Income Fundings Trusts

Trustee Officer’s Certificate

     U.S. Bank Trust National Association, not in its individual capacity but solely in its
capacity as trustee acting on behalf of each common law trust organized under the laws of the State
of New York (in such capacity, the “Trustee,” and each such common law trust being referred to
herein as, a “Trust”) in connection with the program contemplated by Registration Statement Nos.
333-129763 and 333-129763-01 filed on Form S-3 (the “Registration Statement”) by Principal Life
Insurance Company and Principal Financial Group, Inc. with the Securities and Exchange Commission,
does hereby certify to Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc., in such capacity and on behalf of each Trust, to the knowledge of the Trustee, that:

	 	1.	 	each of the representations and warranties of each Trust contained in the Notes
issued in connection with the Program, each Indenture entered into in connection with
the Registration Statement and the Expense and Indemnity Agreement concerning the
Trusts (the “Specified Agreements”) (other than any representation or warranty
expressly made as of a date prior to the date hereof) are true and correct on and as of
the date hereof, with the same effect as though such representation or warranty had
been made on and as of the date hereof;
	 
	 	2.	 	no default under any of the Specified Agreements and no event or any condition
which, with notice or lapse of time or both, would become a default, has occurred and
is continuing as of the date hereof;
	 
	 	3.	 	each Trust has performed and complied with, respectively, in all material
respects, all of the agreements, covenants, obligations and conditions applicable to
such Trust required by the Specified Agreements to be performed or complied with by
such Trust on or before the date hereof;
	 
	 	4.	 	the Notes issued in connection with the Program, have been issued, in all
material respects, in accordance with the terms and conditions of the Program
Documents; and
	 
	 	5.	 	each Funding Agreement has been executed and delivered by the related Trust in
accordance with the terms and conditions of the Program Documents.

     Capitalized terms used herein and not otherwise defined herein shall have the meanings set
forth in the Standard Indenture Terms attached as Exhibit 4.1 to the Registration Statement. In no
event shall U.S. Bank Trust National Association in its personal corporate capacity have any
liability for any of the certifications or statements contained in this Trustee Officer’s
Certificate, such liability being solely that of each Trust.

F-1

 

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the l day of
l, 200l.

	 	 	 	 	 
	 	U.S. Bank Trust National Association, not in its

capacity but solely in its capacity as Trustee acting

on behalf of each Trust

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

F-2

 

	 	 	 	 	 

EXHIBIT G

Free Writing Prospectus(es)

None.

G-1

 

SCHEDULE I

Terms Agreement Specifications

     In connection with Section 3(a)(iv) of the Distribution Agreement, the Program under which the
Notes are issued is rated Aa2 by Moody’s Investors Service, Inc. (“Moody’s”) and AA by Standard &
Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. (“S&P”). Principal Life and
PFG expect that the Notes will be rated Aa2 by Moody’s. The Company’s financial strength rating is
Aa2 by Moody’s and AA by S&P.

     In accordance with Section 2.02(b) of the Terms Agreement and in connection with the purchase
of Notes from the Trust by the Purchasing Agent as principal, the following items will be delivered
on the Settlement Date:

	•	 	Opinion of Sidley Austin LLP regarding the enforceability of the Guarantee and the
Notes.

     All capitalized terms used herein and not otherwise defined herein will have the meanings set
forth in the Distribution Agreement.

I-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00132-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00132-of-00352.parquet"}]]