Document:

exv4w2

 

EXHIBIT 4.2

DATE: NOVEMBER 28, 2007

ROCKWELL MEDICAL TECHNOLOGIES, INC.

COMMON STOCK WARRANT

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS WARRANT AND THE
SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED, PLEDGED OR
RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THIS WARRANT MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO
THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS.

     This certifies that RJ Aubrey IR Services LLC (the “Holder”), its designees or
permitted assigns, at any time or from time to time during the period starting from 5:00 a.m.
(Eastern Time) on the one year anniversary of the date hereof (the “Initial Exercise Date”)
to and including 5:00 p.m. (Eastern Time) on the date that is the fifth (5th)
anniversary of the date hereof (the “Expiration Date”), for value received, is entitled to
purchase from ROCKWELL MEDICAL TECHNOLOGIES, INC., a Michigan corporation (the “Company”),
subject to the terms set forth below, 80,000 fully-paid and nonassessable shares (subject to
adjustment as provided herein) (the “Warrant Shares”) of the Company’s Common Stock, no par
value per share (the “Common Stock”). The per share exercise price (the “Exercise
Price”) per Warrant Share issuable pursuant to this Common Stock Warrant shall be equal to
$10.00 (subject to adjustment as provided herein), payable in accordance with Section 1 hereof.

     This Warrant is issued subject to the following terms and conditions:

     1. Exercise, Issuance of Certificates.

          (a) Exercise. The Holder may exercise this Warrant at any time and from time to time during
the period from the Initial Exercise Date to the Expiration Date for all or any part of the Warrant
Shares (but not for a fraction of a share) that may be purchased hereunder, as that number may be
adjusted pursuant to Section 3 of this Warrant. The Company agrees that the Warrant Shares
purchased under this Warrant shall be and are deemed to be issued to the Holder hereof as the
record owner of such Warrant Shares as of the close of business on the date on which this Warrant
shall have been surrendered, properly endorsed, the completed and executed Form of Subscription
delivered, and payment made for such Warrant Shares (such date, a “Date of Exercise”).
Certificates for the Warrant Shares so purchased, together with any other securities or property to
which the Holder hereof is entitled upon such exercise,
shall be delivered to the Holder hereof by the Company at the Company’s expense as soon as
practicable after the rights represented by this Warrant have been so exercised. In case of a
purchase of less than all the Warrant Shares which may be purchased under this Warrant, the Company
shall cancel this Warrant

 

 

and execute and deliver to the Holder hereof within a reasonable time a
new Warrant or Warrants of like tenor for the balance of the Warrant Shares purchasable under the
Warrant surrendered upon such purchase. Each stock certificate so delivered shall be registered in
the name of such Holder and issued with a legend in substantially the form of the legend placed on
the front of this Warrant.

          Notwithstanding anything set forth herein, this Warrant shall not be exercisable with respect
to the minimum number of Warrant Shares as will result in the Holder (together with its affiliates)
owning, holding or beneficially owning more than 9.99% of the outstanding Common Stock (the
“Ownership Limit”), and at any time, and from time to time, if the Holder (together with its
affiliates) owns, holds or beneficially owns a percentage less than the Ownership Limit, then this
Warrant shall thereafter become exercisable, first with respect to any Warrant Shares for which
this Warrant would have been exercisable but for the Ownership Limit and second, but in each case
again, only to the extent that, after giving effect to such exercisability, such exercisability
will not result in the Holder (together with its affiliates) owning, holding or beneficially owning
more than the Ownership Limit. The restrictions set forth in this paragraph do not pertain if,
excluding the shares for which this Warrant is then exercisable, the Holder (together with its
affiliates) owns, holds or beneficially owns outstanding Capital Stock in an amount greater than
the Ownership Limit. The restrictions set forth in this paragraph may be waived by the Holder upon
written notice to the Company.

          (b) Other Provisions. The Company’s obligations to issue and deliver Warrant Shares in
accordance with the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same. Nothing herein shall limit a Holder’s right to pursue
any other remedies available to it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with respect to the Company’s failure to
timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.

          (c) Payment of Exercise Price. The Holder shall pay the applicable aggregate Exercise
Price in cash by delivering immediately available funds to the Company.

     2. Shares to be Fully Paid; Reservation of Shares. The Company covenants and agrees
that all Warrant Shares will, upon issuance and payment of the applicable Exercise Price, be duly
authorized, validly issued, fully paid and nonassessable, and free of all preemptive rights, liens
and encumbrances, except for any restrictions on transfer provided for herein. The Company shall
at all times reserve and keep available out of its authorized and unissued Common Stock, solely for
the purpose of providing for the exercise of the rights to purchase all Warrant Shares granted
pursuant to this Warrant, such number of shares of Common Stock as shall, from time to time, be
sufficient therefor.

     3. Adjustment of Exercise Price and Number of Shares. The Exercise Price and the
total number of Warrant Shares shall be subject to adjustment from time to time upon the occurrence
of certain events described in this Section 3.

          (a) Subdivision or Combination of Stock. In the event the outstanding shares of the
Company’s Common Stock shall be increased by a stock dividend payable in Common Stock, stock split,
subdivision, or other similar transaction occurring after the date hereof into a greater number of
shares of Common Stock, the Exercise Price in effect immediately prior to such subdivision shall be
proportionately reduced and the number of Warrant Shares issuable hereunder proportionately
increased. Conversely, in the event the outstanding shares of the Company’s Common Stock shall be
decreased by reverse stock split, combination, consolidation, or other similar transaction occurring after
the date hereof into a lesser number of shares of Common Stock, the Exercise Price in effect
immediately prior to such

2

 

combination shall be proportionately increased and the number of Warrant
Shares issuable hereunder proportionately decreased.

          (b) Reclassification, Reorganization, Merger, Etc.. If any reclassification of the
capital stock of the Company or any reorganization, consolidation, merger, or any sale, lease,
license, exchange or other transfer (in one transaction or a series of related transactions) of all
or substantially all, of the business and/or assets of the Company (the “Reclassification
Events”) shall be effected in such a way that holders of Common Stock shall be entitled to
receive stock, securities, or other assets or property, then, as a condition of such
Reclassification Event, lawful and adequate provisions shall be made whereby the Holder hereof
shall thereafter have the right to purchase and receive in exchange for payment of the applicable
aggregate Purchase Price (in lieu of the shares of Common Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights represented hereby) such
shares of stock, securities, or other assets or property as may be issued or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock equal to the number of
shares of such stock immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby. In any Reclassification Event, appropriate provision shall be made with
respect to the rights and interests of the Holder of this Warrant to the end that the provisions
hereof (including, without limitation, provisions for adjustments of the Exercise Price and of the
number of Warrant Shares), shall thereafter be applicable, as nearly as may be, in relation to any
shares of stock, securities, or assets thereafter deliverable upon the exercise hereof.

          (c) Notice of Adjustment. Upon any adjustment of the Exercise Price or any increase
or decrease in the number of Warrant Shares, the Company shall give written notice thereof, by
first class mail postage prepaid, addressed to the registered Holder of this Warrant at the address
of such Holder as shown on the books of the Company. The notice shall be prepared and signed by
the Company’s Chief Financial Officer and shall state the Exercise Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares purchasable at such price
upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.

     4. No Voting or Dividend Rights. Nothing contained in this Warrant shall be construed
as conferring upon the holder hereof the right to vote or to consent to receive notice as a
stockholder of the Company on any other matters or any rights whatsoever as a shareholder of the
Company. No dividends or interest shall be payable or accrued in respect of this Warrant or the
interest represented hereby or the shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised.

     5. Compliance with Securities Act. The Holder of this Warrant, by acceptance hereof,
agrees that this Warrant is being acquired for its own account and not for any other person or
persons, for investment purposes and that it will not offer, sell, or otherwise dispose of this
Warrant except under circumstances which will not result in a violation of the Act or any
applicable state securities laws.

     6. Limited Transferability. The Holder represents that by accepting this Warrant it
understands that this Warrant and any securities obtainable upon exercise of this Warrant have not
been registered for sale under Federal or state securities laws and are being offered and sold to
the Holder pursuant to one or more exemptions from the registration requirements of such securities
laws. In the absence of an effective registration of such securities or an exemption therefrom,
any certificates for such securities shall bear the legend set forth on the first page hereof. The
Holder understands that it must bear the economic risk of its investment in this Warrant and any
securities obtainable upon exercise of this Warrant for an indefinite period of time, as this
Warrant and such securities have not been registered
under Federal or state securities laws and therefore cannot be sold unless subsequently
registered under such laws, unless an exemption from such registration is available.

3

 

     7. Amendment, Waiver, etc. Except as expressly provided herein, neither this Warrant
nor any term hereof may be amended, waived, discharged or terminated other than by a written
instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or
termination is sought; provided, however, that any provisions hereof may be amended, waived,
discharged or terminated upon the written consent of the Company and the Majority of the Holders;
provided, that (x) any such amendment or waiver must apply to all of the warrants issued
pursuant to the Agreement; and (y) the number of Warrant Shares subject to this Warrant, the
Warrant Price and the Expiration Date may not be amended, and the right to exercise this Warrant
may not be altered or waived, without the written consent of the Holder hereof. For purposes
hereof, “Majority of the Holders” shall mean Holders of more than fifty percent (50%) of
the Warrant Shares then issuable upon exercise of then outstanding warrants of like tenor to this
Warrant issued by the Company in connection with the Agreement.

     8. Notices. Any notice, request, or other document required or permitted to be given or
delivered to the Holder hereof or the Company shall be sent by postage prepaid first class mail,
overnight courier or telecopy, or delivered by hand to the party to whom such correspondence is
required or permitted to be given hereunder. The date of giving any notice shall be the date of its
actual receipt.

     All correspondence to the Company shall be addressed as follows:

Rockwell
Medical Technologies, Inc.

30142 Wixom Road, Michigan 48393

Attn: Legal Department

Telecopy: 248-960-9119

With copies to:

Dykema Gossett PLLC

400 Renaissance Center

Detroit, Michigan 48243

Attn: Mark Metz

     All correspondence to the Holder shall be addressed as follows:

RJ Aubrey IR Services LLC

321 Grandview Ave.

Glen Ellyn, IL 60137

     9. Governing Law. This Warrant shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the laws of the State of Michigan.

     10. Lost or Stolen Warrant. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such
loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or
in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company,
at its expense, will make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.

     11. Fractional Shares. No fractional shares shall be issued upon exercise of this
Warrant. The Company shall, in lieu of issuing any fractional share, pay the Holder entitled to
such fraction a sum in cash equal to such fraction (calculated to the nearest 1/100th of a share)
multiplied by the then effective Exercise Price on the date the Form of Subscription is received by
the Company.

     12. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure
to the benefit of and be binding upon the successors of the Company and the successors and assigns
of the Holder. The provisions of this Warrant are intended to be for the benefit of all Holders
from time to time of this Warrant, and shall be enforceable by any such Holder.

     13. Severability of Provisions. In case any one or more of the provisions of this
Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby
and the parties will attempt in good faith to agree upon a valid and enforceable provision which
shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Warrant.

     14. Registration Rights. The Holder is entitled to the benefit of certain
registration rights with respect to the shares of Common Stock issuable upon the exercise of this
Warrant as provided in the Registration Rights Agreement, dated as of the date hereof, among the
Company and the persons executing such agreement as Purchasers, and any subsequent Holder may be
entitled to such rights.

[Signature Page Follows]

4

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its president
and chief executive officer, thereunto duly authorized as of this 28th day of November, 2007.

	 	 	 	 	 
	 	ROCKWELL MEDICAL TECHNOLOGIES, INC.

 	 
	 	By:  	 	 
	 

	 	Name:  	Robert L. Chioini 	 
	 	Title:  	President and Chief Executive Officer 	 
	 

Signature Page—Common Stock Warrant

 

 

FORM OF SUBSCRIPTION

(To be signed only upon exercise of Warrant)

To: ROCKWELL MEDICAL TECHNOLOGIES, INC.

     The undersigned, the holder of the attached Common Stock Warrant, hereby elects to exercise
the purchase right represented by such Warrant for, and to purchase thereunder,
                                        
shares of Common Stock of ROCKWELL MEDICAL
TECHNOLOGIES, INC. and such holder herewith makes payment of $                     therefor.

      

      

     The undersigned requests that certificates for such shares be issued in the name of, and
delivered to:                   
                     
               
               
               
               
                     
whose address is:                                                                          
       .

DATED:                                                             

	 	 	 	 	 
	 	 	 
	 	 	(Signature must conform in all respects to name
of Holder as specified on the face of the
Warrant)
	 
	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

6exv10w20

 

Exhibit 10.20

ROCKWELL MEDICAL TECHNOLOGIES, INC.

COMMON STOCK PURCHASE AGREEMENT

     This
COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) is dated as of November 28, 2007, and
is by and among (i) Rockwell Medical Technologies, Inc., a Michigan corporation, with its principal
office at 30142 Wixom Road, Wixom, Michigan 48393 (the “Company”) and (ii) each person
listed on Schedule 1 hereto (each of the persons or entities described in clause (ii),
individually, a “Purchaser” and, collectively, the “Purchasers”).

     WHEREAS, the Company desires to issue and sell to the Purchasers, and the Purchasers desire to
purchase from the Company, (i) an aggregate of 2,158,337 shares (the “Shares”) of the
authorized but unissued shares of common stock, no par value per share, of the Company (the
“Common Stock”), and (ii) warrants to purchase an aggregate of 1,079,169 shares of
Common Stock, for an aggregate purchase price of $12,950,022, in each case all upon the terms and
subject to the conditions set forth in this Agreement;

     WHEREAS, 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 of 1933, as amended and the provisions of Regulation D
(“Regulation D”), as promulgated by the
U.S. Securities and Exchange Commission thereunder; and

     WHEREAS, simultaneously with entering in this Agreement, the Company and the Purchasers are
entering into that certain Registration Rights Agreement, dated as of the date hereof (as amended,
the “Registration Rights Agreement”), pursuant to which the Company shall register for resale the
Shares and the Warrant Shares (as defined below) on the terms set forth therein.

     NOW THEREFORE, in consideration of the mutual agreements, representations, warranties and
covenants herein contained, the parties hereto agree as follows:

     1. Definitions. As used in this Agreement, the following terms shall have the
following respective meanings:

          (a) “Affiliate” means any Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, a Person, as such
terms are used and construed under Rule 144 (as defined below). With respect to a Purchaser, any
investment fund or managed account that is managed on a discretionary basis by the same investment
manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

          (b)
“Board” means the board of directors of the Company.

          (c) “Effective Date” means the date on which the registration statement(s) covering
the resale of all of the Shares and the Warrant Shares is initially declared effective by the SEC.

          (d) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and all of
the rules and regulations promulgated thereunder.

 

 

-2-

          (e)
“FDA” means the U.S. Food and Drug Administration or other successor administration or
agency.

          (f) “knowledge” when used in reference to a business entity means the actual or
constructive knowledge of the directors and executive officers of such business entity, and when
used in reference to an individual means the actual or constructive knowledge of such individual.
For this purpose, “constructive” knowledge means the knowledge that a person should have had after
reasonable inquiry or investigation, whether or not such inquiry or investigation has actually
occurred.

          (g)
“Majority Purchasers” has the meaning set forth in Section 8.12.

          (h) “Material Adverse Effect” has the meaning set forth in Section 3.1 of this
Agreement.

          (i)
“Person” (whether or not capitalized) means an individual, entity, partnership, limited
liability company, corporation, association, trust, joint venture, unincorporated organization or
any other form of entity not specifically listed herein, and any government, governmental
department or agency or political subdivision thereof.

          (j) “Product” has the meaning set forth in Section 3.18 of this Agreement.

          (k)
“Regulatory Authority(ies)” means any governmental authority in a country or region that
regulates the manufacture or sale of Company’s products, including, but not limited to, the United
States Food and Drug Administration.

          (l) “Rule 144” means Rule 144 promulgated under the Securities Act and any successor or
substitute rule, law or provision.

          (m) “SEC” means the Securities and Exchange Commission.

          (n) “Securities Act” means the Securities Act of 1933, as amended, and all of the
rules and regulations promulgated thereunder.

          (o) “Transfer Agent Instructions” means irrevocable instructions given in writing by
the Company to the Company’s transfer agent to issue an original stock certificate to each
Purchaser for the number of Shares purchased by such Purchaser as set
forth on Schedule 1 hereto
and registered in the name of such Purchaser.

          (p) “Transaction Documents” means, collectively, this Agreement, the Registration
Rights Agreement, the Warrants and any other documents or agreements executed in connection with
the transactions contemplated by this Agreement.

          (q) “Warrants” means the warrants to purchase shares of Common Stock, dated as of the
Closing Date, issued by the Company to the Purchasers, in the form
attached hereto as Exhibit A.

          (r)
“Warrant Shares” means the shares of Common Stock issued or issuable upon the exercise of
the Warrants.

 

-3-

     2. Purchase and Sale; Closing.

          2.1 Purchase and Sale. Subject to and upon the terms and conditions set forth in this
Agreement, the Company agrees to issue and sell to each Purchaser, and each Purchaser hereby
agrees, severally and not jointly, to purchase from the Company, at the Closing, units consisting
of one (1) Share and a Warrant to purchase one-half (1/2) share of Common Stock, with the aggregate
number of Shares and Warrants being purchased under this Agreement by each Purchaser as set forth
opposite such Purchaser’s name on Schedule 1 hereto. The Shares and the corresponding Warrants
shall be purchased as a unit at a purchase price per unit equal to $6.00.

          2.2
Closing. The closing of the transactions contemplated under this Agreement (the
“Closing”) shall take place as soon as possible after the satisfaction or waiver of the
conditions set forth in Section 5 below, and in any event on or prior to 11:30 a.m. (Eastern Time)
on Wednesday, November 28, 2007, remotely via exchange of documents and signatures. At the
Closing, (a) the Company shall deliver to each Purchaser (i) an original stock certificate,
registered in the name of such Purchaser, representing the number of Shares purchased by such
Purchaser, and (ii) an original warrant, registered in the name of such Purchaser, representing the
number of Warrants purchased by such Purchaser, and (b) each Purchaser shall deliver to the Company
payment of the purchase price for such Shares and Warrants by wire transfer of immediately
available funds to such account as the Company shall designate in writing. The date on which the
Closing actually occurs is the “Closing Date”.

     3. Representations and Warranties of the Company. Except as otherwise specifically
described in the Company’s SEC Documents (as defined herein) and the exhibits thereto, which
qualifies the following representations, warranties and covenants in their entirety, or as set
forth on the specific schedule furnished by the Company to each Purchaser (collectively, the
“Disclosure Schedule”) attached hereto as
Exhibit B, the Company hereby represents and warrants to
each Purchaser, as of the date of this Agreement and as of the Closing Date (if different)as
follows:

          3.1 Incorporation. The Company and each of the Subsidiaries (as defined in Section
3.17 below), if any, is a corporation or other entity duly organized, validly existing and in good
standing under the laws of the State of Michigan (or such other applicable jurisdiction of
incorporation or formation), and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or the character of the 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 result in a material adverse effect on the assets,
liabilities (contingent or otherwise), business, operations, prospects or condition (financial or
otherwise) of the Company and its subsidiaries taken as a whole (“Material Adverse Effect”). The
Company and each of the Subsidiaries, if any, have all requisite corporate power and authority to
carry on its business as now conducted and to carry out the transactions contemplated hereby and in
the Transaction Documents. Neither the Company nor any of the Subsidiaries is in violation of any
of the provisions of its articles of incorporation (or other similar corporate formation or
organization document) or by-laws (or other similar corporate governance document).

          3.2 Capitalization. The authorized capital stock of the Company consists of (i)
20,000,000 shares of Common Stock, of which 11,656,849 shares are outstanding as of the date of
this Agreement, and (ii) 3,416,664 shares of preferred stock, of which there are zero (0) shares
outstanding as of the date of this Agreement; and (iii) 4,237,135 shares of Common Stock are
issuable and reserved for issuance pursuant to option (or other
equity incentive) plans or securities exercisable for, or convertible into or exchangeable for any shares of capital stock of
the Company comprised of (a) outstanding stock options to purchase 3,132,135 shares of the
Company’s Common Stock under existing approved stock

 

-4-

option or other equity incentive plans, (b) 925,000 shares of Common Stock reserved for future
issuance under existing approved stock plans, and (c) 180,000 shares of the Company’s Common Stock
are reserved for issuance under outstanding warrant agreements. All shares of the Company’s issued
and outstanding capital stock have been duly authorized, are validly issued and outstanding, and
are fully paid and non-assessable and were issued in full compliance with applicable state and
federal securities laws and rights of third parties. Except as set forth on Schedule 3.2
to the Disclosure Schedule, there are no existing options, warrants, calls, preemptive (or similar)
rights, subscriptions or other rights, agreements, arrangements or commitments of any character
obligating the Company to issue, transfer or sell, or cause to be issued, transferred or sold, any
shares of the capital stock of the Company or other equity interests in the Company or any
securities convertible into or exchangeable for such shares of capital stock or other equity
interests, excluding the Shares, the Warrants and the Warrant Shares to be issued to the Purchasers
as contemplated by this Agreement, and there are no outstanding contractual obligations of the
Company to repurchase, redeem or otherwise acquire any shares of its capital stock or other
securities or equity interests. The issue and sale of the Shares, the Warrants and the Warrant
Shares will not obligate the Company to issue or sell, pursuant to any pre-emptive right or
otherwise, shares of Common Stock or other securities to any Person (other than the Purchasers) and
will not result in a right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under any outstanding shares of capital stock or other securities. The
issuance and sale of the Shares, the Warrants (and the Warrant Shares pursuant to the Warrants)
will not result in the adjustment of the exercise, conversion, exchange or reset price of any
outstanding security.

          3.3 Registration Rights. Except as set forth on Schedule 3.3 to the
Disclosure Schedule, the Company has not granted or agreed to grant to any Person any right
(including “piggy-back” and demand registration rights) to have any shares of capital stock or
other securities of the Company registered with the SEC or any other governmental authority. The
Company is eligible to utilize the registration statement on Form S-3 in connection with fulfilling
its obligations to the Purchasers under the Registration Rights Agreement and, to the Company’s
knowledge, no facts or circumstances currently exist or are pending or threatened which could
reasonably be expected to prevent the Company from remaining eligible to use Form S-3 to register
the Shares and Warrant Shares pursuant to said Registration Rights Agreement.

          3.4 Authorization. All corporate action on the part of the Company, its officers,
directors and shareholders, necessary for the authorization, execution, delivery and performance of
this Agreement and the Transaction Documents and the consummation of the transactions contemplated
herein and therein has been taken. When executed and delivered by the Company, each of this
Agreement and the Transaction Documents shall constitute a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms, except as such may be
limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights
generally and by general equitable principles. The Company has all requisite corporate power and
authority to enter into this Agreement and the Transaction Documents and to carry out and perform
its obligations under their respective terms.

          3.5 Valid Issuance of the Shares. The Shares, the Warrants and the Warrant Shares
have been duly authorized, and the Shares and the Warrant Shares, upon issuance pursuant to the
terms hereof and the terms of the Warrants, respectively, will be validly issued, fully paid and
nonassessable and not subject to any encumbrances and restrictions except for restrictions on
transfer set forth in the Transaction Documents or imposed by applicable securities laws,
preemptive rights or any other similar contractual rights of the stockholders of the Company or any
other Person. The Company has reserved from its duly authorized capital stock the number of shares
of Common Stock issuable under the terms of this Agreement and upon the exercise in full of all of
the Warrants.

 

-5-

          3.6 Financial Statements. The Company has prepared and made available to the
Purchasers copies of (i) the audited consolidated balance sheet of the Company and the Subsidiaries
as of the fiscal year ended December 31, 2006 and the related audited consolidated income
statement, audited consolidated statement of cash flows and audited consolidated statement of
stockholders’ equity of the Company and the Subsidiaries for the
year then ended (the “Audited
Financial Statements”), and (ii) the unaudited consolidated balance sheet of the Company and the
Subsidiaries as of September 30, 2007 (the “Most
Recent Balance Sheet”), and the related unaudited
consolidated income statement and unaudited consolidated statement of cash flows of the Company and
the Subsidiaries for the same periods then ended (the financial statements in this clause (ii) are
hereinafter referred to, collectively, as the “Unaudited
Financial Statements”). All of the
financial statements described in clauses (i)-(ii) above are hereinafter referred to, collectively,
as the “Financial Statements”. The Financial Statements have been prepared in
accordance with United States generally accepted accounting principles applied on a consistent
basis during the periods covered thereby, subject, in the case of the Unaudited Financial
Statements, to normal year-end adjustments (which individually and in the aggregate are not
material) and to the absence of footnotes thereto, and present fairly, in all material respects,
the financial position of the Company and the Subsidiaries and the results of operations as of the
date and for the periods indicated therein.

          3.7 SEC Documents. The Company has prepared and made available to the Purchasers
copies of the following reports of the Company (collectively, the
“SEC Documents”): (i) the annual
report on Form 10-K for the year ended December 31, 2006 (the
“Annual Report”) and (ii) quarterly
reports on Form 10-Q for the periods ended September 30, 2007, June 30, 2007 and March 31, 2007.
As of their respective filing dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act, and the rules and regulations promulgated thereunder, and none of
the SEC Documents contain 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 made therein, in
light of the circumstances under which they were made, not misleading. The financial statements of
the Company included in the SEC Documents comply in all material respects with applicable
accounting requirements and the rules and regulations of the SEC with respect thereto in effect at
the time of filing. All contracts, agreements, instruments and other documents to which the
Company is a party or to which the property or assets of the Company are subject are included as
part of, or specifically identified in, the SEC Documents to the extent required by the rules and
regulations of the SEC as in effect at the time of filing, and each such contract, agreement,
instrument and other document is legal, valid, binding and enforceable against the Company in
accordance with their respective terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors’ rights generally and by general equitable
principles. For the three (3) full fiscal years prior to this year, the Company has prepared and
filed with the SEC all filings and reports required by the Securities Act and the Exchange Act to
make the Company’s filings and reports current in all respects. Except as set forth in the SEC
Documents, and except for liabilities and obligations incurred since the date of the Most Recent
Balance Sheet in the ordinary course of business, consistent with past practice: (i) the Company
and its Subsidiaries do not have any material liabilities or obligations (whether absolute,
accrued, contingent or otherwise) and (ii) there has not been any aspect of the prior or current
conduct of the business of the Company or its Subsidiaries which may form the basis for any
material claim by any third party which if asserted could result in a Material Adverse Effect.

          3.8 Consents. Except for (a) the filing and effectiveness of any registration
statement required to be filed by the Company under the Securities Act pursuant to the terms of the
Registration Rights Agreement; (b) any required state “blue sky” law filings in connection with the
transactions contemplated hereunder or under the Transaction Documents; and (c) the possible
filing of Form D with

 

-6-

the SEC; the execution and delivery by the Company of this Agreement and the Transaction
Documents, the consummation of the transactions contemplated herein and therein, and the issuance
of the Shares, the Warrants and the Warrant Shares, do not require the consent or approval of any
third party or the stockholders of, or any lender to, the Company or the Trading Market (as defined
below). All material consents, approvals, orders and authorizations required on the part of the
Company in connection with the execution or delivery of, or the performance of the obligations
under, this Agreement and the Transaction Documents, and the consummation of the transactions
contemplated herein and therein, including the issuance of the Shares the Warrants and the Warrant
Shares, have been obtained or will be obtained and will be effective as of the Closing Date.

          3.9 No Conflict; Compliance With Laws.

          (a) The execution, delivery and performance by the Company of this Agreement and the
Transaction Documents, and the consummation of the transactions contemplated hereby and thereby,
including the issuance of the Shares, the Warrants and the Warrant Shares, do not and will not (i)
conflict with or violate any provision of the articles of incorporation (or other charter
documents) or by-laws (or other similar documents) of the Company or any of the Subsidiaries, (ii)
breach, conflict with or result in any violation of or default (or an event that with notice or
lapse of time or both would become a default) under, or give rise to a right of termination,
amendment, acceleration or cancellation (with or without notice or lapse of time, or both) of any
obligation, contract, commitment, lease, agreement, mortgage, note, bond, indenture or other
instrument or obligation to which the Company or any of the Subsidiaries is a party or by which
they or any of their properties or assets are bound, except in each case to the extent such breach,
conflict, violation, default, termination, amendment, acceleration or cancellation does not, and
could not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect, or (iii) result in a violation of any statute, law, rule, regulation, order, ordinance or
restriction applicable to the Company, the Subsidiaries or any of their properties or assets, or
any judgment, writ, injunction or decree of any court, judicial or quasi-judicial tribunal
applicable to the Company, the Subsidiaries or any of their properties or assets.

          (b) Neither the Company nor any of the Subsidiaries, (i) is in default under or in violation
of (and no event has occurred that has not been waived that, with notice or lapse of time or both,
would result in a default by the Company or any of the Subsidiaries), nor has the Company or any of
the Subsidiaries received written notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or instrument to which
it is a party or by which it or any of its properties or assets is bound (whether or not such
default or violation has been waived), except in each case to the extent such default or violation
does not, and could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect (ii) is in violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws relating to
taxes, environmental protection, occupational health and safety, food and drugs, product quality
and safety, employment and labor matters, and securities regulation (including the Securities Act,
the Exchange Act and the Federal Food, Drug and Cosmetic Act, and all rules and regulations
promulgated under each such Act).

          3.10 Brokers or Finders. Except as set forth in Schedule 3.10, neither the
Company nor any of the Subsidiaries has dealt with any broker or finder in connection with the
transactions contemplated by this Agreement or the Transaction Documents, and neither the Company
nor any of the Subsidiaries has incurred, or shall incur, directly or indirectly, any liability for
any brokerage or finders’ fees or agents’ commissions or any similar charges in connection with
this Agreement or the Transaction Documents, or any transaction contemplated hereby or thereby.

 

-7-

          3.11 Trading Market Listing and Maintenance. The Company’s Common Stock is currently
traded, and thus quoted, on The Nasdaq Global Market
(“Trading Market”). Since January 1, 2004,
the Company has complied in all material respects with all of the marketplace rules and regulations
of the Trading Market. The Company has not, in the twelve (12) months preceding the date hereof,
received notice from any Trading Market on which the Common Stock is or has been listed or quoted
to the effect that the Company is not in compliance with the listing or maintenance requirements of
such Trading Market. The Company is currently in material compliance with all such listing and
maintenance requirements and, to the Company’s knowledge, there is currently no basis for the
delisting of the Common Stock from the Trading Market. The Company and its directors, officers,
employees and agents has not at any time prior to the Closing Date provided any Purchaser with any
material, non-public information regarding the Company or any of the Subsidiaries.

          3.12 Absence of Litigation. There is no action, suit, inquiry, notice of violation,
proceeding or, to the knowledge of the Company, investigation pending nor, to the knowledge of the
Company, is any of the above threatened against the Company, any Subsidiary or any of their
respective properties before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign) (each
an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of this Agreement or any
of the Transaction Documents or any of the transactions contemplated hereby or thereby, including
the issuance of the Shares, the Warrants and the Warrant Shares, or (ii) could reasonably be
expected to, if there were an unfavorable decision, have or result in a Material Adverse Effect.
Neither the Company nor any Subsidiary, nor, to the knowledge of the Company, any director or
officer thereof, is or has been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of fiduciary duty associated
with such director or officer’s service to or association with the Company. To the knowledge of
the Company, there has not been and there is not pending or threatened, any investigation by the
SEC involving the Company or any current or former director or officer of the Company associated
with such director or officer’s service to or other association with the Company. The SEC has not
issued any stop order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

          3.13 No Undisclosed Liabilities; Indebtedness. Since the date of the Most Recent
Balance Sheet, the Company and the Subsidiaries have incurred no liabilities or obligations,
whether known or unknown, asserted or unasserted, fixed or contingent, accrued or unaccrued, mature
or unmatured, liquidated or unliquidated, or otherwise, except for liabilities or obligations,
that, individually or in the aggregate, do not or would not have a Material Adverse Effect and
other than liabilities and obligations arising in the ordinary course of business. Except for
indebtedness reflected in the Most Recent Balance Sheet, the Company has no indebtedness
outstanding as of the date hereof. The Company is not in default with respect to any outstanding
indebtedness or any instrument relating thereto.

          3.14 Title to Assets. Each of the Company and the Subsidiaries has good and
marketable title to all real and personal property owned by it that is material to the business of
the Company or such Subsidiaries, in each case free and clear of all liens and encumbrances, except
those, if any, reflected in the Financial Statements or incurred in the ordinary course of business
consistent with past practice. Any real property and facilities held under lease by the Company or
the Subsidiaries are held by it or them under valid, subsisting and enforceable leases (subject to
laws of general application relating to bankruptcy, insolvency, reorganization, or other similar
laws affecting creditors’ rights generally and other equitable remedies) with which the Company and
the Subsidiaries are in compliance in all material respects.

 

-8-

          3.15 Labor Relations. No labor or employment dispute exists or, to the knowledge of
the Company, is imminent or threatened, with respect to any of the employees of the Company or any
of the consultants who serve on any scientific advisory board or other similar committee of the
Company, that has, or could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

          3.16 Intellectual Property. The Company and the Subsidiaries own or have the right to
use all (i) valid and enforceable patents, patent applications, trademarks, trademark
registrations, service marks, service mark registrations, Internet domain name registrations,
copyrights, copyright registrations, licenses, trade secret rights and (ii) inventions, software,
works of authorship, trade names, databases, formulae, know how, Internet domain names and other
intellectual property (including trade secrets and other unpatented and/or unpatentable proprietary
confidential information, systems, or procedures) (collectively, the
“Intellectual Property”) used
in, or necessary to conduct, their respective businesses as currently conducted and as proposed to
be conducted, and as described in the SEC Documents. To the knowledge of the Company, the Company
and the Subsidiaries’ ownership or use of the Intellectual Property in their respective businesses
as currently conducted and proposed to be conducted do not give rise to any infringement,
misappropriation, or other violation of any valid and enforceable intellectual property rights of
any other person. Except as set forth on
Schedule 3.16 to the Disclosure Schedule, there have been
no written claims or notice made against the Company or any of the Subsidiaries (a) asserting the
invalidity, abuse, misuse, or unenforceability of any of the Intellectual Property, and, to the
Company’s knowledge, there are no reasonable grounds for any such claims, or (b) that they are in
conflict with or infringing upon the asserted rights of others in connection with the Intellectual
Property. Neither the Company nor its Subsidiaries have made any claim of any violation or
infringement by others of the Company’s or the Subsidiaries’ rights in or to the Intellectual
Property, and to the Company’s knowledge, no reasonable grounds for such claims exist. Other than
as set forth on Schedule 3.16 to the Disclosure Schedule, no material royalties or fees (license or
otherwise) are payable by the Company or any of the Subsidiaries to any Person by reason of the
ownership or use of any of the Intellectual Property.

          3.17 Subsidiaries; Joint Ventures. Except for the subsidiaries listed on Schedule
3.17 to the Disclosure Schedule (the “Subsidiaries”), the Company has no subsidiaries and does
not otherwise own or control, directly or indirectly, any other Person. The Company is not a
participant in any joint venture, partnership, or similar arrangement material to its business.

          3.18 Compliance with FDA and Other Regulatory Requirements.

          (a) With respect to any existing products and, to the extent applicable, any other products
currently under development by the Company (collectively, the “Products”), (i) (A) the
Company and each of its Subsidiaries has obtained all necessary and applicable approvals,
clearances, authorizations, licenses and registrations required by United States or foreign
governments or government agencies, to permit the design, development, pre-clinical and clinical
testing, manufacture, labeling, sale, distribution and promotion of its Products in jurisdictions
where it currently conducts such activities or contemplates conducting such activities (the
“Activities to Date”) with respect to each Product as are required for each Product at its
current stage of development (collectively, the “Company Licenses”); (B) the Company and
each of its Subsidiaries, as the case may be, is in compliance with all terms and conditions of
each Company License and with all applicable laws pertaining to the Activities to Date with respect
to each Product which is not required to be the subject of a Company License; (C) the Company and
each of its Subsidiaries, as the case may be, is in compliance with all applicable laws regarding
registration, license, certification for each site at which a Product is manufactured, labeled,
sold, or distributed; and (D) to the extent that any Product has been exported from the United
States, the Company

 

-9-

or, as applicable, a Subsidiary of the Company exporting such Product, has exported such
Product in compliance in all material respects with applicable law; (ii) all manufacturing
operations performed by or on behalf of the Company or its Subsidiaries have been and are being
conducted in all respects in compliance with the Quality Systems Regulations of the FDA and, to the
extent applicable to the Company or any of its Subsidiaries, counterpart regulations in the
European Union and all other countries where compliance is required; (iii) all non-clinical
laboratory studies of Products under development, sponsored by the Company or any of its
Subsidiaries and intended to be used to support regulatory clearance or approval, have been and are
being conducted in material compliance with the FDA’s Good Laboratory Practice for Non-Clinical
Studies regulations (21 CFR Part 58) in the United States and, to the extent applicable to the
Company or any of its Subsidiaries, counterpart regulations in the European Union and all other
countries; and (iv) the Company and each of its Subsidiaries is in compliance with all applicable
reporting requirements for all Company Licenses or plant registrations described in clause (i)
above, including, but not limited to, applicable adverse event reporting requirements in the United
States and outside of the United States under applicable law.

          (b) The Company and each of its Subsidiaries is in material compliance with all FDA and
non-United States equivalent agencies and similar state and local laws applicable to the
maintenance, compilation and filing of reports, including medical device reports, with regard to
the Products. Schedule 3.18(b) sets forth a list of all adverse event reports related to
the Products, including any Medical Device Reports (as defined in 21 CFR 803). The public
complaint review and analysis reports of the Company and each of its Subsidiaries through the date
hereof, including information regarding complaints by product and root cause analysis of closed
complaints, are accurate in all material respects, and except as set forth on Schedule
3.18(b), to the best of the Company’s knowledge, there are no material, undisclosed complaints
against the Company or the Products that relate to the medical aspects of the Products or which
require public disclosure by the Company (and have not been disclosed).

          (c) Neither the Company nor any of its Subsidiaries has received any written notice or other
written communication from the FDA or any other Regulatory Authority (i) contesting the pre-market
clearance or approval of, the uses of or the labeling and promotion of any of the Products, or (ii)
otherwise alleging any violation of any laws by the Company or any of its Subsidiaries. There have
been no recalls, field notifications or seizures ordered or adverse regulatory actions taken (or,
to the knowledge of the Company, threatened) by the FDA or any other Regulatory Authority with
respect to any of the Products, including any facilities where any such Products are produced,
processed, packaged or stored and neither the Company nor any of its Subsidiaries has within the
last three (3) years, either voluntarily or at the request of any Regulatory Authority, initiated
or participated in a recall of any Product or provided post-sale warnings regarding any Product.
The Company and each of its Subsidiaries have conducted all of their clinical trials with
reasonable care and in compliance with all applicable laws and the stated protocols for such
clinical trials.

          (d) All filings with and submissions to the FDA and any corollary entity in any other
jurisdiction made by the Company or any of its Subsidiaries with regard to the Products, whether
oral, written or electronically delivered, were true, accurate and complete in all material
respects as of the date made, and, to the extent required to be updated, as so updated remain true,
accurate and complete in all material respects as of the date hereof, and do not materially
misstate any of the statements or information included therein, or omit to state a material fact
necessary to make the statements therein not misleading.

          3.19 Taxes. The Company and each of the Subsidiaries has filed (or has had filed on
its behalf), will timely file or will cause to be timely filed, or has timely filed for an
extension of the time to file, all material Tax Returns (as defined below) required by applicable
law to be filed by it or them prior to or as of the date hereof, and such Tax Returns are, or will
be at the time of filing, true, correct and complete in all material respects. Each of the Company
and the Subsidiaries has paid (or has had paid on its behalf) or, where payment is not yet due, has
established (or has had established on its behalf and for

 

-10-

its sole benefit and recourse) or will establish or cause to be established in accordance with
United States generally accepted accounting principles on or before the date of hereof an adequate
accrual for the payment of, all material Taxes (as defined below) due with respect to any period
ending prior to or as of the date hereof. “Taxes” shall mean any and all taxes, charges,
fees, levies or other assessments, including income, gross receipts, excise, real or personal
property, sales, withholding, social security, retirement, unemployment, occupation, use, goods and
services, license, value added, capital, net worth, payroll, profits, franchise, transfer and
recording taxes, fees and charges, and any other taxes, assessment or similar charges imposed by
the Internal Revenue Service or any taxing authority (whether state, county, local or foreign)
(each, a “Taxing Authority”), including any interest, fines, penalties or additional
amounts attributable to or imposed upon any such taxes or other assessments. “Tax Return”
shall mean any report, return, document, declaration or other information or filing required to be
supplied to any Taxing Authority, including information returns, any documents with respect to
accompanying payments of estimated Taxes, or with respect to or accompanying requests for
extensions of time in which to file any such return, report, document, declaration or other
information. There are no claims or assessments pending against the Company or any of the
Subsidiaries for any material alleged deficiency in any Tax, and neither the Company nor any of the
Subsidiaries has been notified in writing of any material proposed Tax claims or assessments
against the Company or any of the Subsidiaries. No Tax Return of the Company or any of the
Subsidiaries is or has been the subject of an examination by a Taxing Authority. Each of the
Company and the Subsidiaries has withheld from each payment made to any of its past or present
employees, officers and directors, and any other person, the amount of all material Taxes and other
deductions required to be withheld therefrom and paid the same to the proper Taxing Authority
within the time required by law.

          3.20 Pensions and Benefits.

          (a) Schedule 3.20(a) to the Disclosure Schedule contains a true and complete list of
each “employee benefit plan” within the meaning of Section 3(3) of the United States Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), including, without limitation,
multiemployer plans within the meaning of Section 3(37) of ERISA, and all retirement, profit
sharing, stock option, stock bonus, stock purchase, severance, fringe benefit, deferred
compensation, and other employee benefit programs, plans, or arrangements, whether or not subject
to ERISA, under which (i) any current or former directors, officers, employees or consultants of
the Company has any present or future right to benefits and which are contributed to, sponsored by
or maintained by the Company or any of the Subsidiaries, or (ii) the Company or any of the
Subsidiaries has any present or future liability. All such programs, plans, or arrangements shall
be collectively referred to as the “Company Plans.” Each Company Plan is included as part of or
specifically identified in the SEC Documents to the extent required by the rules and regulations of
the SEC as in effect at the time of filing.

          (b) (i) Each Company Plan has been established and administered in all material respects in
accordance with its terms and in compliance with the applicable provisions of ERISA, the Internal
Revenue Code of 1986, as amended (the “Code”), and other applicable laws, rules and regulations;
(ii) each Company Plan which is intended to be qualified within the meaning of Section 401(a) of
the Code is so qualified and has received a favorable determination letter as to its qualification
(or if maintained pursuant to a prototype form of instrument the sponsor thereof has received a
favorable opinion letter as to its qualification), and to the Company’s knowledge nothing has
occurred, whether by action or failure to act, that could reasonably be expected to cause the loss
of such qualification; and (iii) no Company Plan provides retiree health or life insurance benefits
(whether or not insured), and neither the Company nor the Subsidiaries have any obligations to
provide any such retiree benefits other than as required pursuant to Section 4980B of the Code or
other applicable law.

 

-11-

          (c) No Company Plan is a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA) or a
plan subject to the minimum funding requirements of Section 302 or ERISA or Section 412 of the Code
or Title IV of ERISA, and neither the Company, the Subsidiaries, nor any member of their Controlled
Group has any liability or obligation in respect of, any such multiemployer plan or plan. With
respect to any Company Plan and to the Company’s knowledge, (i) no actions, suits or claims (other
than routine claims for benefits in the ordinary course) are pending or threatened, and (ii) no
administrative investigation, audit or other administrative proceeding by the Department of Labor,
the Pension Benefit Guaranty Corporation, the Internal Revenue Service or other governmental
agencies are pending, threatened or in progress.

          3.21 Private Placement. Neither the Company nor any person acting on the Company’s
behalf has sold or offered to sell or solicited any offer to buy the Shares, the Warrants or the
Warrant Shares by means of any form of general solicitation or advertising (within the meaning of
Regulation D under the Securities Act). Neither the Company nor any of its Affiliates nor any
person acting on the Company’s behalf has, directly or indirectly, at any time within the past
twelve (12) months, made any offer or sale of any security or solicitation of any offer to buy any
security under circumstances that would (i) eliminate the availability of the exemption from
registration under Regulation D under the Securities Act in connection with the sale or issuance of
the Shares, the Warrants and the Warrant Shares as contemplated
hereby or (ii) cause the offering or issuance of the Shares, the Warrants or the Warrant Shares pursuant to this Agreement or any of
the Transaction Documents to be integrated with prior offerings by the Company for purposes of any
applicable law, regulation or stockholder approval provisions, including the stockholder approval
provisions under the rules and regulations of the Trading Market. None of the Company or any of
the Subsidiaries is, or is an Affiliate of, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended. None of the Company or any of the Subsidiaries is a
United States real property holding corporation within the meaning of the Foreign Investment in
Real Property Tax Act of 1980. No consent, license, permit, waiver approval or authorization of,
or designation, declaration, registration or filing with, the SEC or any state securities
regulatory authority is required in connection with the offer, sale, issuance or delivery of the
Shares, the Warrants or the Warrant Shares other than the possible filing of Form D with the SEC or
any required state “blue sky” law filings. The issuance and sale of the Shares, the Warrants and
the Warrant Shares does not contravene the rules and regulations, and does not trigger the
stockholder approval provisions, of the Trading Market.

          3.22 Material Changes. Since the date of the Most Recent Balance Sheet, the Company
has conducted its business only in the ordinary course, consistent with past practice, and since
such date there has not occurred: (i) any event, occurrence or development that has had, or that
could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
(ii) any amendments or changes in the charter documents or by-laws of the Company or the
Subsidiaries; (iii) any: (A) incurrence, assumption or guarantee by the Company or the
Subsidiaries of any debt for borrowed money other than (1) equipment leases made in the ordinary
course of business, consistent with past practice and (2) any such incurrence, assumption or
guarantee with respect to an amount of $25,000 or less; (B) issuance or sale of any securities
convertible into or exchangeable for securities of the Company other than to directors, employees
and consultants pursuant to existing equity compensation or stock purchase plans of the Company;
(C) issuance or sale of options or other rights to acquire from the Company or the Subsidiaries,
directly or indirectly, securities of the Company or any securities convertible into or
exchangeable for any such securities, other than options issued to directors, employees and
consultants in the ordinary course of business, consistent with past practice; (D) issuance or sale
of any stock, bond or other corporate security other than to directors, employees and consultants
pursuant to existing equity compensation or stock purchase plans of the Company; (E) declaration or
making of any payment or distribution to stockholders or purchase or redemption of any share of its
capital stock or

 

-12-

other security other than to or from directors, officers and employees of the Company or the
Subsidiaries as compensation for or in connection with services rendered to the Company or the
Subsidiaries (as applicable) or for reimbursement of expenses incurred on behalf of the Company or
the Subsidiaries (as applicable); (F) sale, assignment or transfer of any of its intangible assets
except in the ordinary course of business, consistent with past practice, or cancellation of any
debt or claim except in the ordinary course of business, consistent with past practice; (G) waiver
of any right of substantial value whether or not in the ordinary course of business; (H) material
change in officer compensation, except in the ordinary course of business and consistent with past
practice; or (I) other commitment (contingent or otherwise) to do any of the foregoing; (iv) any
creation, sufferance or assumption by the Company or any of the Subsidiaries of any lien on any
asset or any making of any loan, advance or capital contribution to or investment in any Person, in
an aggregate amount which exceeds $25,000 outstanding at any time; (v) any entry into, amendment
of, relinquishment, termination or non-renewal by the Company or the Subsidiaries of any material
contract, license, lease, transaction, commitment or other right or obligation, other than in the
ordinary course of business, consistent with past practice; or (vi) any transfer or grant of a
right with respect to the Intellectual Property owned or licensed by the Company or the
Subsidiaries, except as among the Company and the Subsidiaries.

          3.23 Transactions with Affiliates and Employees. Except as set forth in the SEC
Documents, none of the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company, is presently a party to any transaction or agreement with the
Company (other than for services as employees, officers and directors) exceeding $120,000,
including any contract, agreement or other arrangement providing for the furnishing of services to
or by, providing for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

          3.24 Insurance. The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such amounts as are
prudent and customary for the business in which the Company and the Subsidiaries are engaged. The
Company has no reason to believe that it will not be able to renew existing insurance coverage for
itself and the Subsidiaries as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary or appropriate to continue business.

          3.25 Solvency. Based on the consolidated financial condition of the Company and the
Subsidiaries as of the date hereof, (i) the Company’s assets do not constitute unreasonably small
capital to carry on its business for the current fiscal year as now conducted and as proposed to be
conducted, including its capital needs taking into account the particular capital requirements of
the business conducted by the Company and the Company’s projected capital requirements for the
current fiscal year; and (iii) the current cash position of the Company would be sufficient to pay
all amounts on or in respect of its currently outstanding debts and other recorded accrued
liabilities when such amounts are required to be paid. The Company has no present intention to
incur indebtedness beyond its ability to pay such indebtedness.

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

 

-13-

appropriate action is taken with respect to any differences, and (v) the Company is otherwise
in compliance in all material respects with the Securities Act, the Exchange Act and all other
rules and regulations promulgated by the SEC and applicable to the Company, including the
Sarbanes-Oxley Act of 2002, as amended. The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that the Company is able to collect the information
that it is required to disclose in the reports it files with the SEC and to process, summarize and
disclose this information in the time periods specified in the SEC’s rules. The Company’s
certifying officers have evaluated the effectiveness of the Company’s disclosure controls and
procedures as of June 30, 2007. Since June 30, 2007, there have been no significant changes in the
Company’s internal control over financial reporting (as such term is used in Item 307(c) of
Regulation S-K under the Exchange Act).

          3.27 Environmental. None of the premises or any properties owned, occupied or leased by the
Company or its Subsidiaries (the “Premises”) has been used by the Company or the Subsidiaries or,
to the Company’s knowledge, by any other Person, to manufacture, treat, store, or dispose of any
substance that has been designated to be a “hazardous substance” under applicable Environmental
Laws (hereinafter defined) (“Hazardous Substances”) in violation of any applicable Environmental
Laws, except to the extent that any such violation would not reasonably, individually or in the
aggregate, be expected to have a Material Adverse Effect. To its knowledge, the Company has not
disposed of, discharged, emitted or released any Hazardous Substances which would require, under
applicable Environmental Laws, remediation, investigation or similar response activity. No
Hazardous Substances are present as a result of the actions of the Company or, to the Company’s
knowledge, any other Person, in, on or under the Premises which would give rise to any liability or
clean-up obligations of the Company under applicable Environmental Laws, except to the extent that
any such presence would not reasonably, individually or in the aggregate, be expected to have a
Material Adverse Effect. The Company and, to the Company’s knowledge, any other Person for whose
conduct it may be responsible pursuant to an agreement or by operation of law, are in material
compliance with all laws, regulations and other federal, state or local governmental requirements,
and all applicable judgments, orders, writs, notices, decrees, permits, licenses, approvals,
consents or injunctions in effect on the date of this Agreement relating to the generation,
management, handling, transportation, treatment, disposal, storage, delivery, discharge, release or
emission of any Hazardous Substance (the “Environmental
Laws”). Neither the Company nor, to the
Company’s knowledge, any other Person for whose conduct it may be responsible pursuant to an
agreement or by operation of law has received any written complaint, notice, order, or citation of
any actual, threatened or alleged noncompliance with any of the Environmental Laws, and there is no
proceeding, suit or investigation pending or, to the Company’s knowledge, threatened against the
Company or, to the Company’s knowledge, any such Person with respect to any violation or alleged
violation of the Environmental Laws, and, to the knowledge of the Company, there is no basis for
the institution of any such proceeding, suit or investigation.

          3.28 Disclosure. The Company understands and confirms that each Purchaser will rely
on the representations and covenants contained herein in effecting the transactions contemplated by
this Agreement and the Transaction Documents. All disclosure provided to the Purchasers regarding
the Company, its business and the transactions contemplated hereby, including the Schedules to this
Agreement furnished by or on behalf of the Company, taken as a whole is true and correct and does
not contain any untrue statement of 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. No event or circumstance has occurred or information exists with respect to
the Company or the Subsidiaries or its or their business, properties, prospects, operations or
financial conditions, which, under applicable law, rule or regulation, requires public disclosure
or announcement by the Company but which has not been so publicly announced or disclosed. The
Company acknowledges and agrees that no

 

-14-

Purchaser makes or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 4.

          3.29
Most Favored Nations. The Company has not entered into any other arrangements for the
purchase of shares of capital stock or other securities with any of the Purchasers or other third
parties as of the date of this Agreement on terms that are more favorable to one Purchaser (or such
other third party) vis-à-vis the other Purchasers. None of the Purchasers shall be entitled to any
rights, preferences or privileges with respect to the transactions contemplated by the Transaction
Documents that are more favorable to such Purchaser than the rights, preferences and privileges
applicable to any other Purchaser under the Transaction Documents.

     4. Representations and Warranties of the Purchasers. Each Purchaser represents and
warrants, severally and not jointly, to the Company as follows:

          4.1 Incorporation. Each Purchaser is duly organized, validly existing and in good
standing under the laws of the jurisdiction of the Purchaser’s formation. The Purchaser has all
requisite corporate power and authority to carry on its business as now conducted.

          4.2 Authorization. All action on the part of such Purchaser and, if applicable, its
officers, directors, managers, members, shareholders and/or partners necessary for the
authorization, execution, delivery and performance of this Agreement and the Registration Rights
Agreement, and the consummation of the transactions contemplated herein and therein, has been
taken. When executed and delivered, each of this Agreement and the Registration Rights Agreement
will constitute the legal, valid and binding obligation of such Purchaser, enforceable against such
Purchaser in accordance with its terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors’ rights generally and by general equitable
principles. Each Purchaser has all requisite corporate power and authority to enter into each of
this Agreement and the Registration Rights Agreement, and to carry out and perform its obligations
under the terms of hereof and thereof.

          4.3 Purchase Entirely for Own Account. Each Purchaser is acquiring the Shares,
Warrants and Warrant Shares for its own account for investment and not for resale or with a view to
distribution thereof in violation of the Securities Act. Each Purchaser is acquiring the Shares,
Warrants and Warrant Shares in the ordinary course of its business.

          4.4 Investor Status; Etc. Each Purchaser is an “accredited investor” as defined in
Rule 501 of Regulation D promulgated under the Securities Act and was not organized for the purpose
of acquiring any of the Shares, the Warrants or the Warrant Shares. Each Purchaser’s financial
condition is such that it is able to bear the risk of holding the Shares for an indefinite period
of time and the risk of loss of its entire investment. Each Purchaser has sufficient knowledge and
experience in investing in companies similar to the Company so as to be able to evaluate the risks
and merits of its investment in the Company and has so evaluated the risks and merits of such
investment. Each Purchaser understands that nothing in this Agreement or any other materials
presented to the Purchaser in connection with the purchase and sale of the Shares, Warrants and
Warrant Shares constitutes legal, tax or investment advice. Each Purchaser has consulted such
legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Shares, Warrants and Warrant Shares. Each
Purchaser understands that its investment in the Shares, Warrants and Warrant Shares involves a
significant degree of risk, including a risk of total loss of the Purchaser’s investment, and each
Purchaser has full cognizance of and understands all of the risk factors related to the Purchaser’s
purchase of the Shares, Warrants and Warrant Shares, including, but not limited to, those set forth
under the caption “Risk Factors” in the Company’s Annual Report on From 10-K for the year ended
December 31,

 

-15-

2006 and the Quarterly Report on Form 10-Q for the quarter ended September 30, 2007. The
Purchaser understands that the market price of the Common Stock can be volatile and that no
representation is being made as to the future value of the Common Stock.

          4.5 Securities Not Registered. Each Purchaser understands that the Shares, the
Warrants and the Warrant Shares have not been registered under the Securities Act, by reason of
their issuance by the Company in a transaction exempt from the registration requirements of the
Securities Act, and that the Shares, the Warrants and the Warrant Shares must continue to be held
by such Purchaser unless a subsequent disposition thereof is registered under the Securities Act or
is exempt from such registration. Each Purchaser understands that the exemptions from registration
afforded by Rule 144 (the provisions of which are known to it) promulgated under the Securities Act
depend on the satisfaction of various conditions, and that, if applicable, Rule 144 may afford the
basis for sales only in limited amounts.

          4.6 No Conflict. The execution and delivery of this Agreement and the Registration
Rights Agreement by each Purchaser, and the consummation of the transactions contemplated hereby
and thereby, will not conflict with or result in any violation of or default by such Purchaser
(with or without notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to a loss of a material benefit under (i) any
provision of the organizational documents of such Purchaser or (ii) any agreement or instrument,
permit, franchise, license, judgment, order, statute, law, ordinance, rule or regulations,
applicable to such Purchaser.

          4.7 Brokers or Finders. Such Purchaser has not retained, utilized or been represented
by any broker or finder in connection with the transactions contemplated by this Agreement.

          4.8 Consents. All consents, approvals, orders and authorizations required on the part
of such Purchaser in connection with the execution, delivery or performance of this Agreement and
the consummation of the transactions contemplated herein have been obtained and are effective as of
the date hereof.

          4.9 Disclosure of Information. Such Purchaser believes it has received all the
information it considers necessary or appropriate for deciding whether to purchase the Securities.
Such Purchaser further represents that it has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the offering of the Shares, Warrants
and Warrant Shares and the business, properties, prospects and financial condition of the Company.

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

          4.11 Reliance on Exemptions. Each Purchaser understands that the Shares and Warrants
are being offered and sold to such Purchaser in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and that the Seller is
relying upon the truth and accuracy of, and such Purchaser’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of such Purchaser set forth herein in
order to determine the availability of such exemptions and the eligibility of such Purchaser to
acquire the securities.

 

-16-

     5. Conditions Precedent.

          5.1. Conditions to the Obligation of the Purchasers to Consummate the Closing. The
obligation of each Purchaser, severally, to consummate the Closing and to purchase and pay for the
Shares and the Warrants is subject to the satisfaction of the following conditions precedent:

          (a) The representations and warranties of the Company contained herein shall be true and
correct on and as of the date hereof and as of the Closing Date.

          (b) There shall have been no material adverse change (actual or threatened) in the assets,
liabilities, business, operations, prospects, or condition (financial or otherwise) of the Company
prior to the Closing Date; and the Company shall have performed all obligations and conditions
herein required to be performed or observed by the Company on or prior to the Closing Date; and the
Company shall have performed all obligations and conditions herein required to be performed or
observed by the Company on or prior to the Closing Date.

          (c) No proceeding challenging this Agreement or the Transaction Documents, or the transactions
contemplated hereby or thereby, or seeking to prohibit, alter, prevent or materially delay the
Closing, shall have been instituted before any court, arbitrator or governmental body, agency or
official or shall be pending against or involving the Company.

          (d) The sale of the Shares and the issuance of the Warrants (and the Warrant Shares) to the
Purchasers shall not be prohibited by any law, rule, governmental order or regulation. All
necessary consents, approvals, licenses, permits, orders and authorizations of, declarations and
filings with, any governmental or administrative agency or of or with any other Person with respect
to any of the transactions contemplated hereby shall have been duly obtained or made and shall be
in full force and effect.

          (e) All instruments and corporate proceedings of the Company in connection with the
transactions contemplated by this Agreement and the Transaction Documents shall be satisfactory in
form and substance to each Purchaser, and each Purchaser shall have received copies (executed or
certified, as may be appropriate) of all documents which the Purchasers may have reasonably
requested in connection with such transactions.

          (f) Each Purchaser shall have received from Dykema Gossett PLLC, outside counsel to the
Company, an opinion addressed to such Purchaser, dated the Closing Date and substantially in the
form of Exhibit C hereto.

          (g) The Registration Rights Agreement shall have been executed and delivered by the Company.

          (h) Each Purchaser shall have received from the Company an original stock certificate
evidencing the purchase of the Shares and an original Warrant, in each case for the number of
shares of Common Stock and the number of Warrant Shares, respectively, set forth opposite such
Purchaser’s name on Schedule 1 hereto.

          (i) Each Purchaser shall have received a copy of duly executed Transfer Agent Instructions
acknowledged by the Company’s transfer agent.

 

-17-

          (j) The Company shall pay up to $50,000 for RA Capital’s fees and expenses incurred in
connection with the preparation, execution and delivery of this Agreement and the Transaction
Documents.

          (k) The Company shall have delivered a certificate dated the Closing Date and signed by the
secretary or another officer of the Company, certifying (i) that attached copies of the Articles of
Incorporation, the By-Laws and resolutions of the Board approving this Agreement, the Transaction
Documents and the transactions contemplated hereby and thereby, are all true, complete and correct
and remain in full force and effect as of the date hereof, and (ii) as to the incumbency and
specimen signature of each officer of the Company executing this Agreement, the Transaction
Documents and any other document delivered in connection herewith on behalf of the Company.

          (l) The Company shall deliver to each Purchaser, a certificate dated the Closing Date and
signed by the Company’s chief financial officer, certifying as to the requirements set forth in
Sections 5.1(a) and (b).

          (m) Trading in the Common Stock shall not have been suspended by the SEC or the Trading Market
and trading in securities, generally, as reported by Bloomberg Financial Markets shall not have
been suspended or limited, or minimum prices shall not have been established on securities whose
trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have
been declared either by the United States or New York State authorities.

          5.2. Conditions to the Obligation of the Company to Consummate the Closing. The
obligation of the Company to consummate the Closing and to issue and sell the Shares to each
Purchaser at the Closing is subject to the satisfaction of the following conditions precedent:

          (a) The representations and warranties of such Purchaser contained herein shall be true and
correct on and as of the date hereof and as of the Closing Date.

          (b) The Registration Rights Agreement shall have been executed and delivered by the
Purchasers.

          (c) The Purchasers shall have performed all obligations and conditions herein required to be
performed or complied with by the Purchasers on or prior to the Closing Date.

          (d) No proceeding challenging this Agreement or the Transaction Documents, or the transactions
contemplated hereby or thereby, or seeking to prohibit, alter, prevent or materially delay the
Closing, shall have been instituted before any court, arbitrator or governmental body, agency or
official or shall be pending against or involving such Purchaser.

          (e) The sale of the Shares and the issuance of the Warrants (and the Warrant Shares) by the
Company shall not be prohibited by any law, rule, governmental order or regulation. All necessary
consents, approvals, licenses, permits, orders and authorizations of, declarations and filings
with, any governmental or administrative agency or of any other Person with respect to any of the
transactions contemplated hereby shall have been duly obtained or made and shall be in full force
and effect.

          (f) All instruments and corporate proceedings in connection with the transactions contemplated
by this Agreement to be consummated at the Closing shall be reasonably satisfactory in form and
substance to the Company, and the Company shall have received counterpart originals, or

 

-18-

certified or other copies of all documents, including without limitation records of corporate
or other proceedings, which it may have reasonably requested in connection therewith.

          (g) Each Purchaser shall deliver to the Company payment of the purchase price for such Shares
and Warrants by wire transfer of immediately available funds to such account as the Company shall
designate in writing.

     6. Certain Covenants and Agreements.

          6.1. Transfer of Securities. Each Purchaser shall not sell, assign, pledge, transfer
or otherwise dispose of or encumber any of the Shares, the Warrants or the Warrant Shares, except
(i) pursuant to an effective registration statement under the Securities Act, or (ii) to an
Affiliate (so long as such Affiliate is an “accredited investor” and agrees to be bound by the
terms and provisions of this Agreement as if, and to the fullest extent as, such Purchaser), or
(iii) pursuant to an available exemption from registration under the Securities Act (including
sales permitted pursuant to Rule 144) and applicable state securities laws and, if requested by the
Company, upon delivery by such Purchaser of either an opinion of counsel of such Purchaser
reasonably satisfactory to the Company to the effect that the proposed transfer is exempt from or
does not require registration under the Securities Act and applicable state securities laws or a
representation letter of such Purchaser reasonably satisfactory to the Company setting forth a
factual basis for concluding that such proposed transfer is exempt from or does not require
registration under the Securities Act and applicable state securities laws. Any transfer or
purported transfer of the Shares in violation of this Section 6.1 shall be void. The Company shall
not register any transfer of the Shares in violation of this Section 6.1. The Company may, and may
instruct any transfer agent for the Company, to place such stop transfer orders as may be required
on the transfer books of the Company in order to ensure compliance with the provisions of this
Section 6.1.

          6.2. Legends.

          (a) To the extent applicable, each certificate or other document evidencing the Shares and the
Warrant Shares shall be endorsed with the legend set forth below, and each Purchaser covenants
that, except to the extent such restrictions are waived by the Company, it shall not transfer the
shares represented by any such certificate without complying with the restrictions on transfer
described in this Agreement and the legends endorsed on such certificate:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER SAID ACT.”

          (b) The legend set forth in Section 6.2(a) shall be removed from the certificates evidencing
the Shares and the Warrant Shares, (i) following any sale of such Shares or Warrant Shares pursuant
to Rule 144 or any effective registration statement, or (ii) if such Shares or Warrant Shares are
eligible for sale under Rule 144(k) (and the holder of such Shares or Warrant Shares has submitted
a written request for removal of the legend indicating that the holder has complied with the
applicable provisions of Rule 144 or such judicial interpretation or pronouncement), or (iii) if
such legend is not required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the Commission) (and the holder of such
Shares or Warrant Shares has submitted a written request for removal of the legend indicating that
the holder has complied with the

 

-19-

applicable provisions of Rule 144). The Company shall cause its counsel to issue a legal
opinion to the Company’s transfer agent promptly upon the occurrence of any of the events in
clauses (i), (ii) or (iii) above to effect the removal of the legend on certificates evidencing the
Shares or the Warrant Shares and shall also cause its counsel to issue a “blanket” legal opinion or
other letter to the Company’s transfer agent promptly after the Effective Date (provided that there
is an effective registration statement covering the resale of the Shares or the Warrant Shares, as
the case may be), if required by the Company’s transfer agent, to allow sales without restriction
pursuant to an effective registration statement. The Company agrees that at such time as such
legend is no longer required under this Section 6.2(b), it will use its best efforts to, no later
than three (3) business days following the delivery by a Purchaser to the Company or the Company’s
transfer agent of a certificate representing the Shares or Warrant Shares issued with a restrictive
legend, deliver or cause to be delivered to such Purchaser a certificate representing such Shares
or Warrant Shares that is free from all restrictive and other legends; provided that in the
case of removal of the legend for reasons set forth in clause (ii) above, the holder of such Shares
or Warrant Shares has submitted a written request for removal of the legend indicating that the
holder has complied with the applicable provisions of Rule 144. The Company may not make any
notation on its records or give instructions to any transfer agent of the Company that enlarge the
restrictions on transfer set forth in this Section.

          6.3 Publicity. Except to the extent required by applicable laws, rules, regulations
or stock exchange requirements, neither (i) the Company, the Subsidiaries or any of their
Affiliates nor (ii) any Purchaser or any of its Affiliates shall, without the written consent of
the other, make any public announcement or issue any press release with respect to the transactions
contemplated by this Agreement. In no event will either (i) the Company, the Subsidiaries or any
of their Affiliates or (ii) any Purchaser or any of its Affiliates make any public announcement or
issue any press release with respect to the transactions contemplated by this Agreement without
consulting with the other party, to the extent feasible, as to the content of such public
announcement or press release. The Purchaser and the Company agree that this Agreement is material
to the Company and both the Purchaser and the Company understand that the Company will issue a
press release upon entry into this Agreement and that the Company will file a Current Report on
Form 8-K as required under SEC rules.

          6.4
Material Non-Public Information. Except as required by law, the Company and its
directors, officers, employees and agents shall not provide any Purchaser with any material,
non-public information regarding the Company or any of the Subsidiaries at any time after the
Closing. In the event (a) of a breach of the foregoing covenant following the Closing Date, (b)
that the Company is legally required to make certain disclosures to any Purchaser (and does so)
following the Closing Date, or (c) that any material, non-public information disclosed to any
Purchaser prior to the Closing is not made public by the Company on or prior to the Effective Date,
then in each case in addition to any other remedy provided for herein, in the Transaction Documents
or in equity or at law, each Purchaser to whom material, non-public information has been disclosed
(whether such information was/is disclosed prior to the Closing, as a result of a breach or as
required by law) may request, in writing, that the Company promptly (but in no event more than five
(5) business days after the date of such writing) publicly disclose, by press release, SEC filing
or otherwise an appropriate summary of the information that, in such Purchaser’s reasonable
judgment, constitutes the then material non-public information. After such five (5) business day
period, the Purchaser(s) who was or were in receipt of such material, non-public information shall
be automatically authorized to make all of the information, or any portion thereof, available to
the public generally, without incurring any liability to the Company for such disclosure.

          6.5 Filing of Information. The Company covenants to timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports required to be filed by
the Company pursuant to all applicable securities laws, including the Exchange Act. At any time if
the

 

-20-

Company is not required to file reports pursuant to such laws, it will prepare and furnish to
the Purchasers and make publicly available in accordance with paragraph (c) of Rule 144 such
information as is required for the Purchasers to sell the Shares and the Warrant Shares under Rule
144. The Company further covenants that it will use its best efforts to take such further action
as any holder of Shares or Warrant Shares may reasonably request to satisfy the provisions of Rule
144 applicable to the issuer of securities relating to transactions for the sale of securities
pursuant to Rule 144.

          6.6 Use of Proceeds. The Company covenants and agrees that the proceeds from the sale
of the Shares shall be used by the Company for working capital and general corporate purposes or
any other purpose approved by the Company’s board of director, including, without limitation,
growth initiatives, capital expenditures and potential acquisitions; under no circumstances,
except with the approval of the Majority Purchasers, shall any portion of the proceeds be applied
to: (i) the payment of dividends or other distributions on any capital stock or other securities
of the Company, (ii) any expenditure not related to the business of the Company, (iii) the purchase
of any debt or equity securities of any Person for cash, including the Company, except in
connection with investment of excess cash in investments in compliance with the Company’s board
approved investment policy, or (iv) the repurchase or redemption of any Company equity or
equity-equivalent securities.

          6.7 Additional Issuance. The Company shall not issue any capital stock or other
securities in connection with the raising of additional financing or capital until all of the
Shares have been registered for resale pursuant to an effective registration statement and
otherwise in accordance with the terms set forth in the Registration Rights Agreement;
provided; however, that the foregoing shall not prohibit the Company from issuing
shares of Common Stock or securities convertible into or exercisable for Common Stock: (i) upon
exercise of the Warrants or other securities issuable upon conversion of securities outstanding as
of the date hereof, (ii) to employees, consultants, officers or directors of the Company pursuant
to stock option, stock purchase or stock bonus plans or agreements or other stock incentive plans
or arrangements approved by the Board, which are in existence as of the date hereof, (iii) pursuant
to the acquisition of another business entity or business segment of any such entity by the Company
by merger, purchase of substantially all the assets or other reorganization or corporate partnering
agreement if such issuance is approved by the Board, (iv) in connection with any stock split, stock
dividend or recapitalization of the Company, and (v) in connection with lease lines, bank loans,
strategic licensing arrangement, corporate partnering or other similar transactions,
provided such issuances described in this clause (vi) are not primarily for the purpose of
equity financing and are approved by the Board.

          6.8 Integration. The Company shall not 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 or the issuance of the Warrants or
the Warrant Shares to the Purchasers.

          6.9 Reservation of Common Stock for Issuance. The Company shall at all times have
reserved from its duly authorized capital stock the total number of shares of Common Stock issuable
upon execution of this Agreement and upon the exercise in full of the Warrants.

     7. Indemnification.

          7.1 By the Company. The Company agrees to indemnify, defend and hold harmless each
Purchaser and its Affiliates and their respective officers, directors, agents, employees,
subsidiaries, partners, members and controlling persons
(collectively, the “Purchaser Indemnitees”
or “Indemnitees”)

 

-21-

to the fullest extent permitted by law from and against any and all claims, losses, liabilities,
damages, deficiencies, judgments, assessments, fines, settlements, costs or expenses (including
interest, penalties and reasonable fees, disbursements and other charges of counsel) (collectively,
“Losses”) based upon, arising out of or otherwise in respect of any breach by the Company
of any representation, warranty, covenant or agreement of the Company contained in this Agreement
or in the Transaction Documents.

          7.2 Claims All claims for indemnification by a Purchaser Indemnitee pursuant to this Section
7 shall be made as follows:

          (a) If a Purchaser Indemnitee has incurred or suffered Losses for which it is entitled to
indemnification under this Section 7, then such Purchaser Indemnitee shall give prompt written
notice of such claim (a “Claim Notice”) to the Company. Each Claim Notice shall
state the amount of claimed Losses (the “Claimed Amount”), if known, and the basis
for such claim.

          (b) Within 30 days after delivery of a Claim Notice, the Company shall provide to each
Purchaser Indemnitee (the “Indemnified Party”), a written response (the
“Response Notice”) in which the Indemnifying Party shall: (i) agree that all of
the Claimed Amount is owed to the Indemnified Party, (ii) agree that part, but not all, of the
Claimed Amount (the “Agreed Amount”) is owed to the Indemnified Party, or (iii)
contest that any of the Claimed Amount is owed to the Indemnified Party. The Indemnifying Party
may contest the payment of all or a portion of the Claimed Amount only based upon a good faith
belief that all or such portion of the Claimed Amount does not constitute Losses for which the
Indemnified Party is entitled to indemnification under this Section 7. If no Response Notice is
delivered by the Indemnifying Party within such 30-day period, then the Indemnifying Party shall be
deemed to have agreed that all of the Claimed Amount is owed to the Indemnified Party.

          (c) If the Indemnifying Party in the Response Notice agrees (or is deemed to have agreed) that
all of the Claimed Amount is owed to the Indemnified Party, then the Indemnifying Party shall owe
to the Indemnified Party an amount equal to the Claimed Amount to be paid in the manner set forth
in this Section 7. If the Indemnifying Party in the Response Notice agrees that part, but not all,
of the Claimed Amount is owed to the Indemnified Party, then the Indemnifying Party shall owe to
the Indemnified Party an amount equal to the agreed amount set forth in such Response Notice to be
paid in the manner set forth in this Section 7.

          (d) No delay on the part of the Indemnified Party in notifying the Indemnifying Party shall
relieve the Indemnifying Party of any liability or obligation hereunder except to the extent of any
actual prejudice caused by or arising out of such delay.

          7.3. Payment of Claims. An Indemnifying Party shall make payment of any portion of
any Claimed Amount that such Indemnifying Party has agreed in a Response Notice that it owes to an
Indemnified Party, or that such Indemnifying Party is deemed to have agreed it owes to such
Indemnifying Party, said payment to be made within thirty (30) days after such Response Notice is
delivered by such Indemnifying Party or should have been delivered by such Indemnifying Party, as
the case may be.

          7.4. Limitations.

          (a) Time for Claims. No Indemnifying Party will be liable for any Losses hereunder
arising out of a breach of representation or warranty unless a written claim for indemnification is
given by the Indemnified Party to the Indemnifying Party on or prior to the third anniversary of
the date on which the registration statement covering the resale of the Shares initially became
effective.

 

-22-

          (b) Maximum Amount. Notwithstanding anything contained herein to the contrary, no
Indemnifying Party will be liable for any Losses hereunder in excess of the aggregate purchase
price of all Shares and Warrants sold pursuant to this Agreement.

          7.5 Applicability; Exclusivity. Notwithstanding any term to the contrary in this
Section 7, the indemnification and contribution provisions of the Registration Rights Agreement
shall govern any claim made with respect to registration statements filed pursuant thereto or sales
made thereunder. The parties hereby acknowledge and agree that in addition to remedies of the
parties hereto in respect of any and all claims relating to any breach or purported breach of any
representation, warranty, covenant or agreement that is contained in this Agreement pursuant to the
indemnification provisions of this Section 7, all parties shall always retain the right to pursue
and obtain injunctive relief in addition to any other rights or remedies hereunder.

     8. Miscellaneous Provisions.

          8.1 Rights Cumulative. Each and all of the various rights, powers and remedies of the
parties shall be considered to be cumulative with and in addition to any other rights, powers and
remedies which such parties may have at law or in equity in the event of the breach of any of the
terms of this Agreement. The exercise or partial exercise of any right, power or remedy shall
neither constitute the exclusive election thereof nor the waiver of any other right, power or
remedy available to such party.

          8.2 Pronouns. All pronouns or any variation thereof shall be deemed to refer to the
masculine, feminine or neuter, singular or plural, as the identity of the person, persons, entity
or entities may require.

          8.3 Notices.

          (a) Any notices, reports or other correspondence (hereinafter collectively referred to as
“correspondence”) required or permitted to be given hereunder shall be sent by postage
prepaid first class mail, overnight courier or telecopy, or delivered by hand to the party to whom
such correspondence is required or permitted to be given hereunder. The date of giving any notice
shall be the date of its actual receipt.

          (b) All correspondence to the Company shall be addressed as follows:

Rockwell Medical Technologies, Inc.

30142 Wixom Road

Wixom, Michigan 48393

Attention: Legal Department

Telecopier:                                         

with copies to:

Dykema Gossett PLLC

400 Renaissance Center

Detroit, Michigan 48243-1668

Attention: Mark A. Metz

Telecopier: 313-568-6832

 

-23-

          (c) All correspondence to the Purchasers shall be addressed to their respective addresses as
set forth on Schedule 1 attached hereto or as otherwise updated by such Purchaser to the Company in
writing from time to time.

          (d) Any entity may change the address to which correspondence to it is to be addressed by
written notification as provided for herein.

          8.4 Captions. The captions and paragraph headings of this Agreement are solely for
the convenience of reference and shall not affect its interpretation.

          8.5 Severability. Should any part or provision of this Agreement be held
unenforceable or in conflict with the applicable laws or regulations of any jurisdiction, the
invalid or unenforceable part or provisions shall be replaced with a provision which accomplishes,
to the extent possible, the original business purpose of such part or provision in a valid and
enforceable manner, and the remainder of this Agreement shall remain binding upon the parties
hereto.

          8.6 Governing Law. This Agreement shall be governed by and construed in accordance
with the internal and substantive laws of the State of Michigan and without regard to any conflicts
of laws concepts which would apply the substantive law of some other jurisdiction.

          8.7 Waiver. No waiver of any term, provision or condition of this Agreement, whether
by conduct or otherwise, in any one or more instances, shall be deemed to be, or be construed as, a
further or continuing waiver of any such term, provision or condition or as a waiver of any other
term, provision or condition of this Agreement.

          8.8 Expenses. The Company shall pay its expenses incurred in connection with the
preparation, execution and delivery of this Agreement and the Transaction Documents.

          8.9 Assignment. The rights and obligations of any party hereto shall inure to the
benefit of and shall be binding upon the authorized successors and permitted assigns of such party.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Majority Purchasers, such consent not to be unreasonably withheld, except in
connection with a sale of the Company or a change of control of the Company. Each Purchaser may
assign or transfer any or all of its rights under this Agreement to any Person provided that such
assignee or transferee is an “accredited investor” and agrees in writing to be bound, with respect
to the transferred Shares and the Warrant Shares, by the provisions hereof that apply to such
assigning or transferring Purchaser; whereupon such assignee or transferee shall be deemed to be a
“Purchaser” for all purposes of this Agreement.

          8.10 Survival. The respective representations and warranties given by the parties
hereto shall survive the Closing Date and the consummation of the transactions contemplated herein
for a period of time equal to the time for which indemnification may be sought hereunder, without
regard to any investigation made by any party. The respective covenants and agreements agreed to
by a party hereto shall survive the Closing Date and the consummation of the transactions
contemplated herein in accordance with their respective terms and conditions.

          8.11 Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto respecting the subject matter hereof and supersedes all prior agreements,
negotiations, understandings, representations and statements respecting the subject matter hereof,
whether written or

 

-24-

oral;
provided that the Confidentiality Agreement dated October 16, 2007 between the Company and
RA Capital Management LLC shall remain in full force and effect.

          8.12 Amendments. Any amendment, supplement, waiver or modification of or to any provision of
this Agreement shall be effective only if made or given in writing and signed by the Company and
the Purchasers who hold a majority of the outstanding Shares (the
“Majority Purchasers”);
provided, that with respect to any amendment, supplement, modification or waiver that adversely
affects a single Purchaser and does not similarly affect all Purchasers, then the consent or waiver
of such Purchaser shall also be required.

          8.13 No Third Party Rights. This Agreement is intended solely for the benefit of the
parties hereto and is not intended to confer any benefits upon, or create any rights in favor of,
any Person (including, without limitation, any stockholder or debt holder of the Company) other
than the parties hereto.

          8.14 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
document. The parties hereto confirm that any facsimile copy of another party’s executed
counterpart of this Agreement (or its signature page thereof) will be deemed to be an executed
original thereof.

          8.15 Further Assurances. Each party hereto agrees to cooperate fully with the other
parties hereto and to execute such further instruments, documents and agreements and to give such
further written assurances as may be reasonably requested by any other party hereto to better
evidence and reflect the transactions described herein and contemplated hereby and to carry into
effect the intents and purposes of this Agreement, and further agrees to take promptly, or cause to
be taken, all actions, and to do promptly, or cause to be done, all things necessary, proper or
advisable under applicable law to consummate and make effective the transactions contemplated
hereby, to obtain all necessary waivers, consents and approvals, to effect all necessary
registrations and filings, and to remove any injunctions or other impediments or delays, legal or
otherwise, in order to consummate and make effective the transactions contemplated by this
Agreement for the purpose of securing to the parties hereto the benefits contemplated by this
Agreement.

          8.16 Waiver of Trial by Jury. THE PARTIES HERETO IRREVOCABLY WAIVE TRIAL BY JURY IN
ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

[signature pages to follow]

 

-25-

     IN WITNESS WHEREOF, the parties hereto have executed this Common Stock Purchase Agreement
under seal as of the day and year first above written.

	 	 	 	 
	 	 	CORPORATION:
	 
	 	 	ROCKWELL MEDICAL TECHNOLOGIES, INC.
	 
	 	 	 
	 

	 	By:	 
	 

	 	 	 
	 

	 	Name: 	 
	 

	 	Title:	 
	 
	 	 	 
	 

	 	By:	 
	 

	 	 	 
	 

	 	Name:	 
	 

	 	Title:	 
	 
	 	 	 

 

-26-

	 	 	 	 
	 	 	PURCHASERS:
	 
	 	 	 
	 	 	RA CAPITAL BIOTECH FUND, L.P.

By: RA Capital Management, LLC, its General Partner
	 
	 	 	 
	 

	 	By:	 
	 

	 	 	 
	 

	 	 	          Peter Kolchinsky
	 

	 	 	          Manager
	 
	 	 	 
	 	 	RA CAPITAL BIOTECH FUND II, L.P.

By: RA Capital Management, LLC, its General Partner
	 
	 	 	 
	 

	 	By:	 
	 

	 	 	 
	 

	 	 	          Peter Kolchinsky
	 

	 	 	          Manager

 

-27-

PURCHASERS:

[The rest of this page intentionally left blank]

 

-28-

	 	 	 	 
	 	 	PURCHASERS:

RRC BIO FUND, L.P.
	 
	 	 	 
	 

	 	By:	 
	 

	 	 	 
	 

	 	Name: 	 
	 

	 	 	 
	 

	 	Title:	 
	 

	 	 	 

 

-29-

	 	 	 	 
	 
	 	 	 	 
	 	 	BERLIN CAPITAL GROWTH, L.P.
	 
	 	 	 
	 

	 	By:	 
	 

	 	 	 
	 

	 	Name:	 
	 

	 	Title: 	 
	 
	 	 	 
	 	 	J. GEORGE INVESTMENTS, LLC
	 
	 	 	 
	 

	 	By:	 
	 

	 	 	 
	 

	 	Name:	 
	 

	 	Title:	 

 

-30-

	 	 	 	 
	 	 	CAMBER CAPITAL FUND, L.P.
	 
	 	 	 
	 

	 	By:	 
	 

	 	 	 
	 

	 	Name:	 
	 

	 	Title: 	 

 

-31-

	 	 	 	 
	 
	 	 	 
	 	 	MEDIPHASE OFFSHORE MASTER FUND, L.P.
	 
	 	 	 
	 

	 	By:	 
	 

	 	 	 
	 

	 	Name: 	 
	 

	 	Title:	 

 

-32-

	 	 	 	 
	 	 	BOXER CAPITAL LLC
	 
	 	 	 
	 

	 	By:	 
	 

	 	 	 
	 

	 	Name: 	 
	 

	 	Title: 	 

 

-33-

Schedule 1

Schedule of Purchasers

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Aggregate Purchase
	 	 	No. of Shares of	 	No. of	 	Price of Stock and
	Name	 	Common Stock	 	Warrant Shares	 	Warrants
	RA Capital Biotech Fund, L.P.

111 Huntington Avenue

Suite 610

Boston, MA 02199

	 	 	1,350,267	 	 	 	675,134	 	 	$	8,101,602	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	RA Capital Biotech Fund II, L.P.

111 Huntington Avenue

Suite 610

Boston, MA 02199

	 	 	16,400	 	 	 	8,200	 	 	$	98,400	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	J George Investments LLC

85 N. Main St.

Suite 101

Mt. Clemens, MI 48043

	 	 	83,334	 	 	 	41,667	 	 	$	500,004	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Berlin Capital Growth L.P.

1325 Carnegie Ave 

Cleveland OH 44115

	 	 	83,334	 	 	 	41,667	 	 	$	500,004	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	RRC Bio Fund, LP 

217R Concord Ave 

Cambridge MA 02138

	 	 	83,334	 	 	 	41,667	 	 	$	500,004	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Camber Capital Fund L.P.

575 Boylston St.

4th Floor

Boston MA 02116

	 	 	125,000	 	 	 	62,500	 	 	$	750,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Mediphase Offshore Master Fund, L.P.

3 Newton Executive Park 

Newton MA 02462

	 	 	83,334	 	 	 	41,667	 	 	$	500,004	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Boxer Capital LLC

9381 Judicial Drive, Suite 200

San Diego, CA 92121

	 	 	333,334	 	 	 	166,667	 	 	$	2,000,004	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	  Total:

	 	 	2,158,337	 	 	 	1,079,169	 	 	$	12,950,022	 

 

-34-

EXHIBIT A

Form of Warrant

 

-35-

EXHIBIT B

Disclosure Schedules

 

-36-

EXHIBIT C

Legal Opinion

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}]]