Document:

Securities Purchase Agreement

 Exhibit 10.3 
 SECURITIES PURCHASE AGREEMENT 
 SECURITIES PURCHASE AGREEMENT (the
“Agreement”), dated as of August 14, 2008, by and among Nanogen, Inc., a Delaware corporation, with headquarters located at 10398 Pacific Center Court, San Diego, California 92121 (the “Company”),
and Financière Elitech S.A.S., a société par actions simplifiée incorporated under the laws of France and registered with the Clerk of the Commercial Court of Nanterre under the number 481 676 062 (the
“Investor”). 
 WHEREAS: 
 A. The Company and the Investor is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the
“1933 Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act. 
 B. The Company has authorized the issuance of a new series of senior secured convertible notes of the Company, in the form attached hereto as Exhibit
A (the “Notes”), which Notes shall be convertible into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) (as converted, the “Conversion Shares”), in
accordance with the terms of the Notes. 
 C. Concurrently with the execution of this Agreement, the Company is entering into securities
purchase agreements (the “Other Securities Purchase Agreements”) with certain of its existing investors (the “Other Investors”) holding its 9.75% Senior Secured Convertible Notes, pursuant to which the Company
agrees to issue and sell, and the Other Investors agree to purchase, on the closing date set forth in the Other Securities Purchase Agreements (the “Initial Closing Date” and the closing of the transactions contemplated on the
Initial Closing Date, the “Initial Closing”), that aggregate principal amount of Notes set forth opposite such Other Investor’s name in column (3) on the Schedule of Investors thereto, a copy of which the Company is
providing to the Investor concurrently with the execution of this Agreement. 
 D. Subject to the terms and conditions set forth in this
Agreement, the Investor wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, that aggregate principal amount of Notes and on such dates as set forth on the Schedule of Investor attached hereto.

 E. The Notes and the Conversion Shares collectively are referred to herein as the “Securities”. 
 F. The Notes will rank senior to all outstanding and future indebtedness of the Company, other than the New Exchanged Notes (as defined below) which will
rank pari passu with the Notes, and will be secured by a second priority, perfected security interest in all of the assets of the Company, a first priority security interest in all of the assets of the Company’s domestic subsidiaries, a second
priority security interest in all of the stock of the Company’s domestic subsidiaries, a second priority security interest in 65% of the stock of all of the Company’s non-U.S. subsidiaries (other than Nanogen Advanced Diagnostics, Srl, a
company 

 
with limited liability (società a responsabilità limitata), incorporated under the laws of Italy, with registered office in Italy,
Trezzano sul Naviglio (MI), having registered share capital of €50,000.00 and shared capital subscribed and paid in of €50,000.00, registered in the Companies Registry at n. 05239350969, Italian tax payer code n. 05239350969 (the
“NAD Sub”)), as evidenced by (i) the U.S. Security Agreement of the Company attached hereto as Exhibit B-1 and the U.S. Security Agreement of the Subsidiaries attached hereto as Exhibit B-2 (collectively, the
“US Security Agreements”), (ii) the guarantees of certain Subsidiaries of the Company in the form attached hereto as Exhibit C (the “Guarantees”) and (iii) the guarantee of the Investor in the form
attached hereto as Exhibit D (the “Elitech Guarantee”), and a first priority perfected security interest in all of the stock of the NAD Sub, having a total face value of €50,000.00, and in certain of the assets of NAD
Sub, including, without limitation, the balance of the bank account number 100000061933, at Intesa San Paolo, Agenzia 3, Corso Sempione 65/A, Milan, the balance of the bank account number 000000005083 at Banca Popolare di Bergamo, Agenzia Via Foppa,
Via Foppa 26, Milan, as will be evidenced by the Italian Security Agreements which will be executed and perfected, upon accomplishment of all the formalities required by Italian law, by the Company and NAD Sub no later than September 5, 2008, a
form of which is attached hereto as Exhibit E and the form and substance of which shall be reasonably satisfactory to the Investors (the “Italian Security Agreements” and together with the Guarantees, the US Security
Agreement, the Italian Security Agreements, any ancillary documents related thereto and the Intercreditor Agreement (as defined below), collectively the “Security Documents”). 
 G. The Company and the Other Investors (the “Original Investors”) are parties to that certain Securities Purchase Agreement, dated as of
August 26, 2007 (the “Existing Securities Purchase Agreement”), pursuant to which, among other things, the Original Investors purchased from the Company (i) 6.25% senior convertible notes due 2010 (the “Existing
Notes”), which are convertible into shares (the “Existing Conversion Shares”) of the Common Stock, pursuant to that certain first supplemental indenture, dated August 27, 2007 (the “First Supplemental
Indenture”) and that certain second supplemental indenture, dated March 27, 2008 (the “Second Supplemental Indenture”), which supplement the Indenture dated August 27, 2007, by and between the Company and Bank of
New York Trust Company, N.A., as trustee (the “Trustee”) (such indenture, as modified by any supplement and amendment thereto as of the date hereof, the “Indenture”) and (ii) three series of warrants, which are
exercisable into shares of Common Stock (the “Existing Warrants”). 
 H. On March 13, 2008, the Company entered into
Amendment and Exchange Agreements (the “Existing Exchange Agreements”) with the Other Investors, pursuant to which the Company and each Other Investor (x) exchanged a portion of such Other Investor’s Existing Notes for the
Company’s 9.75% Senior Secured Convertible Notes (the “Existing Exchanged Notes”), which are convertible into shares of Common Stock (the “Existing Exchanged Conversion Shares”) and are secured by a first
priority, perfected security interest in certain of the assets of the Company and the stock and assets of each of the Company’s subsidiaries, as evidenced by the security agreement, dated March 27, 2008 (the “Existing Security
Agreement” and together with any ancillary documents related thereto, collectively the “Existing Security Documents”), by and between the Company and Portside Growth and Opportunity Fund, as collateral agent (the
“Original Collateral Agent”). 
  

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 I. Concurrently with the transactions contemplated hereby, the Company has entered into separate Second
Amendment and Exchange Agreements (each, the “Second Amendment and Exchange Agreement”) with the Other Investors, pursuant to which on the Closing Date (as defined in the Second Amendment and Exchange Agreement) , the Company and
the Other Investors are exchanging (the “Exchange”) the Existing Exchanged Notes of the Other Investors for (x) certain of the Company’s Amended and Restated 9.75% Senior Secured Convertible Notes, in the form attached
thereto as Exhibit A-1 (the “Amended Exchanged Notes”), which shall be convertible into shares of Common Stock (the “Amended Exchanged Conversion Shares”) and (y) the Company’s 9.75% Senior Secured
Notes (the “Additional Convertible Exchanged Notes”, and together with the Amended Exchanged Notes, the “New Exchanged Notes”), in the form attached thereto as Exhibit A-2. 
 J. The Company desires that Portside Growth and Opportunity Fund, the collateral agent for the Notes (the “Collateral Agent”), enter
into an Intercreditor Agreement in substantially the form attached hereto as Exhibit F (the “Intercreditor Agreement”) with the Original Collateral Agent pursuant to which the Original Collateral Agent shall agree to
subordinate its liens on the capital stock and assets of NAD Sub to the Collateral Agent and the Collateral Agent shall agree to subordinate its liens on the other assets of the Company and its Subsidiaries to the Original Collateral Agent.

 NOW, THEREFORE, the Company and the Investor hereby agree as follows: 
 1. PURCHASE AND SALE OF NOTES. 
 (a)
Purchase of Notes. 
 (i) Notes. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below,
the Company shall issue and sell to the Investor, and the Investor shall purchase from the Company, such principal amount of the Notes on such dates (each, a “Closing Date”) as set forth on the Schedule of Investor attached hereto.

 (ii) Closing. The Closing shall be deemed to have occurred at 10:00 a.m., New York City time on each Closing Date at the offices
of Morgan Lewis & Bockius LLP, One Market, Spear Street Tower, San Francisco, CA 94605 (unless otherwise mutually agreed to by the Company and the Investor). 
 (iii) Purchase Price. The aggregate purchase price for the Notes to be purchased by the Investor at each such Closing (the “Purchase Price”) shall be the amount set forth in the Schedule of
Investor attached hereto. The Investor shall pay $1,000 for each $1,000 of principal amount of Notes to be purchased by such Investor at such Closing. 
 (b) Form of Payment. On each Closing Date, (i) the Investor shall pay its Purchase Price to the Company for the Notes to be issued and sold to the Investor at the Closing, by wire transfer of immediately
available funds in accordance with the Company’s written wire instructions and (ii) the Company shall deliver, or cause to be delivered, to such Investor the Notes (allocated in the principal amounts as such Investor shall request) which
such Investor is then purchasing hereunder duly executed on behalf of the Company and registered in the name of such Investor or its designee. 
  

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 (c) Intercreditor Agreement. The Investor hereby consents to the terms and conditions of the
Intercreditor Agreement and hereby instructs the Collateral Agent to execute and deliver the Intercreditor Agreement to the Original Collateral Agent on the Initial Closing Date. 
 (d) Single Agreement. The Investor and the Company hereby acknowledge and agree that, with respect to the application of any usury law, rule or
regulation, this Agreement and the Other Agreements shall be treated as a single agreement and plan of financing. 
 2. INVESTOR’S
REPRESENTATIONS AND WARRANTIES. The Investor represents and warrants, with respect to only itself, that, as of the date hereof: 
 (a)
No Public Sale or Distribution. Such Investor is acquiring the Notes for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted
under the 1933 Act; provided, however, that by making the representations herein, such Investor does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at
any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act. Such Investor is acquiring the Securities hereunder in the ordinary course of its business. Such Investor does not presently have any agreement
or understanding, directly or indirectly, with any Person to distribute any of the Securities. For the purpose of this Agreement, “Person” means an individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any department or agency thereof. 
 (b) Accredited Investor
Status. Such Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D. 
 (c) Reliance on
Exemptions. Such Investor understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying
in part upon the truth and accuracy of, and such Investor’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Investor set forth herein in order to determine the availability of such
exemptions and the eligibility of such Investor to acquire the Securities. 
 (d) Information. Such Investor and its advisors, if any,
have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by such Investor. Such Investor and its advisors, if
any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by such Investor or its advisors, if any, or its representatives shall modify, amend or affect such
Investor’s right to rely on the Company’s representations and warranties contained herein. Such Investor understands that its investment in the Securities involves a high degree of risk. Such Investor has sought such accounting, legal and
tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities. 
  

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 (e) No Governmental Review. Such Investor 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 Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the
merits of the offering of the Securities. 
 (f) Transfer or Resale. Such Investor understands that: (i) the Securities have not
been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Investor shall have delivered to the
Company an opinion of counsel, in a generally acceptable form, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Investor
provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended, (or a successor rule thereto) (collectively, “Rule
144”); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the
seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder;
and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. The Securities may be
pledged in connection with a bona fide margin account or other loan or financing arrangement secured by the Securities and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no
Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document (as defined in Section 3(b)),
including, without limitation, this Section 2(f). 
 (g) Legends. The Investor understands that the certificates or other
instruments representing the Notes and, until such time as the resale of the Conversion Shares have been registered under the 1933 Act, the stock certificates representing the Conversion Shares, except as set forth below, shall bear any legend as
required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates): 
 [NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
[CONVERTIBLE] HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS 

  

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AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO
RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. 
 The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Securities upon which it is stamped or
issue to such holder by electronic delivery at the applicable balance account at DTC (as defined below), unless otherwise required by state securities laws, (i) such Securities are registered for resale under the 1933 Act, (ii) in
connection with a sale, assignment or other transfer, such holder provides the Company with an opinion of counsel, in a generally acceptable form, to the effect that such sale, assignment or transfer of the Securities may be made without
registration under the applicable requirements of the 1933 Act, or (iii) such holder provides the Company with reasonable assurance, including any representation letter reasonably requested by the Company, that the Securities can be sold,
assigned or transferred pursuant to Rule 144 or Rule 144A. 
 (h) Organization; Authority. Such Investor is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents (as defined
below) and otherwise to carry out its obligations thereunder. The execution, delivery and performance by such Investor of the transactions contemplated by this Agreement has been duly authorized by all necessary action on the part of such Investor.
This Agreement has been duly executed by such Investor, and when delivered by such Investor in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Investor, enforceable against it in accordance with its
terms, except (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (ii) as enforceability of any indemnification and contribution provisions may be
limited under the federal and state securities laws and public policy, and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought. 
 (i) No Conflicts. The execution, delivery and performance by such Investor of
this Agreement and the consummation by such Investor of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of such Investor or (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Investor is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Investor, except in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Investor to perform its obligations hereunder. 
  

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 (j) Residency. Such Investor is a resident of that jurisdiction specified below its address on the
Schedule of Investor. 
 (k) Certain Trading Activities. Other than with respect to this Agreement and the transactions contemplated
herein, since the time that such Investor was first contacted by the Company, the Agent (as defined below) or any other Person regarding this investment in the Company neither the Investor nor any Affiliate of such Investor which (x) had
knowledge of the transactions contemplated hereby, (y) has or shares discretion relating to such Investor’s investments or trading or information concerning such Investor’s investments and (z) is subject to such Investor’s
review or input concerning such Affiliate’s investments or trading (collectively, “Trading Affiliates”) has directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Investor or
Trading Affiliate, effected or agreed to effect any transactions in the securities of the Company. Such Investor hereby covenants and agrees not to, and shall cause its Trading Affiliates not to, engage, directly or indirectly, in any transactions
in the securities of the Company or involving the Company’s securities during the period from the date hereof until such time as (i) the transactions contemplated by this Agreement are first publicly announced as described in
Section 4(g) hereof or (ii) this Agreement is terminated in full pursuant to Section 8 hereof. Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude
any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect short sales or similar transactions in the future. 
 (l) Acquiring Person. Such Investor, after giving effect to the transactions contemplated hereby, will not be the beneficial owner of 20% or more
of the Company’s outstanding Common Stock. For purposes of this Section 2(l), beneficial ownership shall be determined pursuant to a Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “1934 Act”).

 (m) Consents. Each approval, consent, order, authorization, designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with the execution and delivery by such Investor of this Agreement and the consummation of the transactions herein contemplated has been obtained or made and is in full force and
effect. 
 The Company acknowledges and agrees that the Investor does not make or has not made any representations or warranties with respect
to the transactions contemplated hereby other than those specifically set forth in this Section 2. 
 3. REPRESENTATIONS AND
WARRANTIES OF THE COMPANY. The Company represents and warrants to the Investor that, as of the date hereof and as of the Initial Closing Date, except as set forth in (i) the Disclosure Schedule attached to the Second Amendment and Exchange
Agreement or (ii) the Disclosure Schedule attached hereto: 
 (a) Organization. The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own or lease its properties and conduct its business as described in the Registration Statement (as defined in the Existing
Securities Purchase Agreement), the 

  

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General Disclosure Package (as defined in the Existing Securities Purchase Agreement) and the Prospectus (as defined in the Existing Securities Purchase
Agreement). The Company has no significant subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X promulgated by the SEC) other than as listed in Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2007 (the “Annual Report”) (collectively, the “Subsidiaries”). Each of the Subsidiaries has been duly organized and is validly existing as an entity in good standing under the laws of the
jurisdiction of its organization, with corporate power and authority to own or lease its properties and conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus. The Subsidiaries are the only
subsidiaries, direct or indirect, of the Company. The Company and each of the Subsidiaries are duly qualified to transact business in all jurisdictions in which the conduct of their business requires such qualification, except where the failure to
be so qualified would not reasonably be expected to (i) result in any material adverse change, or any development that would reasonably be expected to result in a material adverse change, in or affecting the business, results of operations, or
financial condition of the Company and of the Subsidiaries taken as a whole, whether or not occurring in the ordinary course of business, or (ii) prevent, burden or impair the consummation of the transactions contemplated by this Agreement
(collectively a “Material Adverse Effect”). The outstanding shares of capital stock of each of the Subsidiaries have been duly authorized and validly issued, are fully paid and non-assessable and are owned by the Company or another
Subsidiary free and clear of all liens, encumbrances and equities and claims, except as described in the Registration Statement and the General Disclosure Package; and no options, warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into shares of capital stock or ownership interests in the Subsidiaries are outstanding. 
 (b) Authorization; Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement, the Notes, the Security Documents, the Irrevocable Transfer Agent
Instructions (as defined in Section 5(b)), and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”) and
to issue the Securities in accordance with the terms hereof and thereof. The execution and delivery of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including,
without limitation, the issuance of the Notes, the reservation for issuance and the issuance of the Conversion Shares issuable upon conversion of the Notes have been duly authorized by the Company’s Board of Directors, and no further filing,
consent, or authorization is required by the Company’s Board of Directors or its stockholders. This Agreement and the other Transaction Documents of even date herewith have been duly executed and delivered by the Company, and constitute the
legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. 
 (c) Issuance of Securities. (i) The outstanding shares of Common Stock of the Company have been duly authorized and validly issued and are
fully paid and non-assessable; the Securities to be issued and sold by the Company have been duly authorized and when issued and paid for as contemplated herein will be validly issued, fully paid and non-assessable; 

  

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and no preemptive rights of stockholders exist with respect to any of the Securities or the issue and sale thereof. As of the Closing, a number of shares of
Common Stock shall have been duly authorized and reserved for issuance which equals or exceeds 120% of the aggregate of the maximum number of shares of Common Stock issuable as of the Closing Date upon conversion of the Notes. The offering or sale
of the Securities as contemplated by this Agreement does not give rise to any rights, other than those which have been waived or satisfied, for or relating to the registration of any shares of Common Stock. Upon conversion in accordance with the
terms of the Notes, the Conversion Shares will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens and charges with respect to the issue thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock. 
 (ii) Assuming the accuracy of the representations and warranties of Investor set forth in
Section 2 of this Agreement, the offer, issue, sale and delivery of Securities under the circumstances contemplated by this Agreement constitutes or will constitute an exempt transaction under the Securities Act of 1933 (the “1933
Act”), as now in effect, and registration of the Securities under the Securities Act, is not required. 
 (d) Equity
Capitalization. As of the date hereof and as of the Initial Closing Date, the Company has or will have, as the case may be, an authorized, issued and outstanding capitalization as is set forth in Schedule 3(d) hereto (subject to the
issuance of shares of Common Stock upon exercise of stock options and warrants disclosed as outstanding in the Registration Statement and the Prospectus and the grant or issuance of options or shares under existing equity compensation plans or stock
purchase plans described in the Registration Statement or the Prospectus), and such authorized capital stock conforms to the description thereof set forth in the Registration Statement and the Prospectus. The form of certificates for the Conversion
Shares will conform to the corporate law of the jurisdiction of the Company’s incorporation. 
 (e) Disclosure. The Company
confirms that neither it nor any other Person acting on its behalf has provided the Investor or its agents or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information, that is not
included in the 8-K Filing (as defined below) or other public filing of the Company filed prior to the 8-K Filing Time (as defined below). The Company understands and confirms that the Investor will rely on the foregoing representations in effecting
transactions in securities of the Company. No event or circumstance has occurred or information exists with respect to the Company or any of its 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. 
 (f) Financial Statements. The condensed consolidated financial statements of the Company and the Subsidiaries, together with related notes and schedules as set forth or incorporated by reference in the
Registration Statement, the General Disclosure Package and the Prospectus, present fairly in all material respects the financial position and the results of operations and cash flows of the Company and the consolidated Subsidiaries, at the indicated
dates and for the indicated periods. Such condensed consolidated financial statements and related schedules have been prepared in accordance with generally accepted principles of accounting (“GAAP”), consistently applied throughout
the periods involved, except as disclosed 

  

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therein, and all adjustments necessary for a fair presentation of results for such periods have been made. The summary and selected consolidated financial
and statistical data included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus presents fairly in all material respects the information shown therein, at the indicated dates and for the
indicated periods, and such data has been compiled on a basis consistent with the financial statements presented therein and the books and records of the Company. All disclosures, if any, contained in the Registration Statement, the General
Disclosure Package and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the Rules and Regulations) comply in all material respects with Regulation G of the 1934 Act and Item 10 of Regulation S-K under
the 1933 Act, to the extent applicable. The Company and the Subsidiaries do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations or any “variable interest entities” within the
meaning of Financial Accounting Standards Board Interpretation No. 46), not disclosed in the Registration Statement, the General Disclosure Package and the Prospectus. 
 (g) Accountants. Ernst & Young LLP, who have certified certain of the financial statements filed with the SEC has represented to the
Company that it is an independent registered public accounting firm with respect to the Company and the Subsidiaries within the meaning of the 1933 Act and the applicable Rules and Regulations and the Public Company Accounting Oversight Board
(United States) (the “PCAOB”). 
 (h) Weaknesses or Changes in Internal Accounting Controls. Except as disclosed in
the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company nor any of the Subsidiaries is aware of (i) any material weakness in its internal control over financial reporting or (ii) change in
internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 
 (i) Sarbanes-Oxley. Solely to the extent that the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated by the SEC and
The NASDAQ Capital Market (the “Principal Market”) thereunder (collectively, the “Sarbanes-Oxley Act”) has been applicable to the Company, there is and has been no failure on the part of the Company to comply in all
material respects with any provision of the Sarbanes-Oxley Act. The Company has taken all necessary actions to ensure that it is in compliance in all material respects with all provisions of the Sarbanes-Oxley Act that are in effect with respect to
which the Company is required to comply and is actively taking steps to ensure that it will be in compliance with the other provisions of the Sarbanes-Oxley Act which will become applicable to the Company. 
 (j) Litigation. There is no action, suit, claim or proceeding pending or, to the knowledge of the Company, threatened against the Company or any
of the Subsidiaries before any court or administrative agency or otherwise which if determined adversely to the Company or any of the Subsidiaries would have, individually or in the aggregate, a Material Adverse Effect, except as set forth in the
Registration Statement, the General Disclosure Package and the Prospectus. 
 (k) Title. The Company and the Subsidiaries have good
and marketable title to all of the material properties and assets reflected in the condensed consolidated financial 

  

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statements hereinabove described or described in the Registration Statement, the General Disclosure Package and the Prospectus, subject to no lien, mortgage,
pledge, charge or encumbrance of any kind except those reflected in such financial statements or described in the Registration Statement, the General Disclosure Package and the Prospectus or which are not material in amount or would not materially
interfere with the use to be made of such properties or assets. The Company and the Subsidiaries occupy their leased properties under valid and binding leases conforming in all material respects to the description thereof set forth in the
Registration Statement, the General Disclosure Package and the Prospectus. 
 (l) Taxes. The Company and the Subsidiaries have filed
all Federal, State, local and foreign tax returns which have been required to be filed and have paid all taxes indicated by such returns and all assessments received by them or any of them to the extent that such taxes have become due and are not
being contested in good faith and for which an adequate reserve for accrual has been established in accordance with GAAP. All tax liabilities have been adequately provided for in the condensed consolidated financial statements of the Company in
accordance with GAAP, and the Company does not know of any actual or proposed additional material tax assessments. 
 (m) Absence of
Certain Changes. Since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, as each may be amended or supplemented, there has not been any Material Adverse
Effect, and there has not been any material transaction entered into by the Company or the Subsidiaries, other than transactions in the ordinary course of business and transactions described in the Registration Statement, the General Disclosure
Package and the Prospectus, as each may be amended or supplemented. The Company and the Subsidiaries have no material contingent obligations which are not disclosed in the Company’s condensed consolidated financial statements which are included
in the Registration Statement, the General Disclosure Package and the Prospectus. 
 (n) No Conflicts. Neither the Company nor any of
the Subsidiaries is or with the giving of notice or lapse of time or both, will be in violation of its certificate of incorporation, by-laws, or other organizational documents. The execution and delivery of this Agreement and the consummation of the
transactions herein contemplated and the fulfillment of the terms hereof will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or any of their respective properties is bound, or of the certificate of incorporation or by-laws of the Company or any law, order, rule or
regulation judgment, order, writ or decree applicable to the Company or any Subsidiary of any court or of any government, regulatory body or administrative agency or other governmental body having jurisdiction, except to the extent that such
conflict, breach or default would not have a Material Adverse Effect. 
 (o) Contracts. There is no document, contract or other
agreement required to be described in the Registration Statement or Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed as required by the 1933 Act or the Rules and Regulations. Each description of a
contract, document or other agreement in the Registration Statement and the Prospectus accurately reflects in all material respects the terms of the 

  

 - 11 - 

 
underlying contract, document or other agreement. Each contract, document or other agreement described in the Registration Statement and Prospectus or listed
in the exhibits to the Registration Statement or incorporated by reference is in full force and effect and is valid and enforceable by and against the Company in accordance with its terms (except as rights to indemnity and contribution thereunder
may be limited by federal or state securities laws and matter of public policy and except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principle). Neither the Company nor any of its Subsidiaries nor, to the Company’s knowledge, any other party is in default in the observance or performance of any term or obligation to
be performed by it under any such agreement or any other agreement or instrument to which the Company or its Subsidiaries is a party or by which the Company or its Subsidiaries or their respective properties or businesses may be bound, and no event
has occurred which with notice or lapse of time or both would constitute such a default, in any such case in which the default or event, individually or in the aggregate, would have a Material Adverse Effect. 
 (p) Regulatory Approvals. Each approval, consent, order, authorization, designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with the execution and delivery by the Company of this Agreement and the consummation of the transactions herein contemplated (except such additional steps as may be required by the
SEC, the Financial Industry Regulatory Authority (the “FINRA”) or such additional steps as may be required under state securities or Blue Sky laws) has been obtained or made and is in full force and effect. 
 (q) Intellectual Property. Except as described in the Registration Statement and the General Disclosure Package or in any document incorporated by
reference therein, the Company and each of the Subsidiaries hold all material licenses, certificates and permits from governmental authorities which are necessary to the conduct of their businesses in the manner in which they are being conducted;
the Company and the Subsidiaries each own or possess the right to use all patents, patent rights, trademarks, trade names, service marks, service names, copyrights, license rights, know-how (including trade secrets and other unpatented and
unpatentable proprietary or confidential information, systems or procedures) and other intellectual property rights (“Intellectual Property”) necessary to carry on their business in all material respects in the manner in which it is
being conducted; to the Company’s knowledge, neither the Company nor any of the Subsidiaries has infringed, and none of the Company or the Subsidiaries have received notice of conflict with, any Intellectual Property of any other person or
entity. The Company has taken all steps reasonably necessary to secure ownership interests in Intellectual Property created for it by any contractors. There are no outstanding options, licenses or agreements of any kind relating to the Intellectual
Property of the Company that are required to be described in the Registration Statement, the General Disclosure Package and the Prospectus and are not described therein in all material respects. The Company is not a party to or bound by any options,
licenses or agreements with respect to the Intellectual Property of any other person or entity that are required to be set forth in the Prospectus and are not described therein in all material respects. None of the technology employed by the Company
and material to the Company’s business has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or, to the Company’s knowledge, any of its officers, directors or employees or, to
the Company’s knowledge, otherwise in violation of the 

  

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rights of any persons; the Company has not received any written or oral communications alleging that the Company has violated, infringed or conflicted with,
or, by conducting its business as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, would violate, infringe or conflict with, any of the Intellectual Property of any other person or entity. The Company knows
of no infringement by others of Intellectual Property owned by or licensed to the Company. 
 (r) FDA; Studies. Since the respective
dates as of which information is set forth in the Registration Statement, the General Disclosure Package and the Prospectus, (i) all of the descriptions of the Company’s legal and governmental proceedings and procedures before the United
States Food and Drug Administration (the “FDA”) or any other national, departmental, state or local governmental body exercising comparable authority are true and correct in all material respects, (ii) the studies, tests and
preclinical and clinical trials conducted by or on behalf of the Company and its Subsidiaries that are described in the Registration Statement, the General Disclosure Package and the Prospectus were and, if still pending, are (a) with respect
to the foregoing conducted by employees of the Company or any of its Subsidiaries (“Company Studies”), being conducted in accordance with experimental protocols, procedures and controls pursuant to, where applicable, accepted professional
scientific standards, in each case in all necessary respects and in all material respects; and (b) with respect to the foregoing conducted on behalf of the Company or independently by others using the Company’s or any of its
Subsidiaries’ technologies, products or product candidates (“Independent Studies”), to the Company’s knowledge, being conducted in accordance with experimental protocols, procedures and controls pursuant to, where
applicable, accepted professional scientific standards, in each case in all necessary respects and in all material respects; (iii) the descriptions of the results of the Company Studies, and, to the Company’s knowledge, the Independent
Studies, contained in the Registration Statement, the General Disclosure Package and the Prospectus are true and correct in all material respects; and (iv) except as disclosed in the Registration Statement, the General Disclosure Package and
the Prospectus, neither the Company nor its Subsidiaries have received any notices or correspondence from the FDA, or any national, state or local governmental body exercising comparable authority requiring the termination, suspension or material
modification of any of the Company Studies or Independent Studies. 
 (s) Manipulation of Prices. Neither the Company, nor to the
Company’s knowledge, any of its affiliates, has taken or may take, directly or indirectly, any action designed to cause or result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the sale or resale of the Securities. 
 (t) Investment Company
Act. Neither the Company nor any Subsidiary is or, after giving effect to the offering and sale of the Securities contemplated hereunder and the application of the net proceeds from such sale as described in the Prospectus, will be an
“investment company” within the meaning of such term under the Investment Company Act of 1940 as amended (the “1940 Act”), and the rules and regulations of the SEC thereunder. 
  

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 (u) Internal Accounting Controls. 
 (i) The Company and each of the Subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. 
 (ii) The Company has established and maintains
“disclosure controls and procedures” (as defined in Rules 13a-15e and 15d-15e under the 1934 Act); the Company’s “disclosure controls and procedures” are reasonably designed to ensure that all information (both financial and
non-financial) required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the rules and regulations of the 1934 Act, and
that all such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the Chief Executive Officer and Chief Financial
Officer of the Company required under the 1934 Act with respect to such reports. 
 (v) Money Laundering Laws. The operations of the
Company and the Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money
laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any or its subsidiaries with respect to the Money Laundering Laws is pending or, to the Company’s knowledge, threatened. 
 (w) Office of Foreign Assets Control. Neither the Company nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC. 
 (x) Insurance. The Company and each of the Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as is adequate
for the conduct of their respective businesses and the value of their respective properties and as is customary for companies engaged in similar businesses. 
 (y) Employee Benefits. The Company and each Subsidiary is in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published 

  

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interpretations thereunder (“ERISA”); no “reportable event” (as defined in ERISA) has occurred with respect to any “pension
plan” (as defined in ERISA) for which the Company and each Subsidiary would have any material liability; the Company and each Subsidiary has not incurred and does not expect to incur material liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the
“Code”); and each “pension plan” for which the Company or any Subsidiary would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would cause the loss of such qualification. 
 (z) Transactions with
Affiliates. To the Company’s knowledge, there are no affiliations or associations between any member of the FINRA and any of the Company’s officers, directors or 5% or greater securityholders, except as set forth in the Registration
Statement. There are no relationships or related-party transactions involving the Company or any of the Subsidiaries or, to the knowledge of the Company, any other person required to be described in the Prospectus which have not been described as
required. 
 (aa) Environmental Laws. Neither the Company nor any of the Subsidiaries is in violation of any statute, rule,
regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human
exposure to hazardous or toxic substances (collectively, “environmental laws”), owns or operates any real property contaminated with any substance that is subject to environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any claim relating to any environmental laws, which violation, contamination, liability or claim would, individually or in the aggregate, have a Material Adverse Effect; and the
Company is not aware of any pending investigation which would reasonably be expected to lead to such a claim. 
 (bb) Listing; 1934 Act
Registration. The Common Stock has been approved for listing subject to notice of issuance on the Principal Market. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock
under the 1934 Act or the quotation of the Common Stock on the Principal Market, nor, has the Company received any notification that the SEC or The NASDAQ Capital market (the “Principal Market”) is contemplating terminating such
registration or quotation. 
 (cc) Contributions; Foreign Corrupt Practices. Neither the Company nor any of the Subsidiaries has made
any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law which violation is required to be disclosed in the Prospectus. 
 (dd) No Integrated Offering. The Company has not sold or issued any securities that would be integrated with the offering of the Securities
contemplated by this Agreement pursuant to the 1933 Act, the Rules and Regulations or the interpretations thereof by the SEC. None of the Company, its Subsidiaries, any of their affiliates, and any Person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any 

  

 - 15 - 

 
offers to buy any security, under circumstances that would cause this offering of the Securities to require approval of stockholders of the Company for
purposes of any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated. None of
the Company, its Subsidiaries, their affiliates and any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would cause the offering of the Securities to be integrated with other offerings for
purposes of any such applicable stockholder approval provisions. 
 (ee) No General Solicitation; Brokerage Fees; Commissions. Neither
the Company, nor any of its Subsidiaries or affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of
the Securities. Except as described on Schedule 3(ee), neither the Company nor any of its Subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim against the Company or the
Investor for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Securities. The Company shall pay, and hold the Investor harmless against, any liability, loss or expense (including, without
limitation, attorneys’ fees and out-of-pocket expenses) arising in connection with any such claim. 
 (ff) Consents. Other than
as described in Section 3(p) hereof, or as have been obtained, filed or made, neither the Company nor any of its Subsidiaries is required to obtain any consent, authorization or order of, or make any filing or registration with, any court,
governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms
hereof or thereof (other than any filings which may be required to be made by the Company with the SEC or the Principal Market subsequent to the date hereof, including but not limited to the Prospectus Supplement and any blue sky filings which may
be required to be made). The Company is not in violation of the listing requirements of the Principal Market and has no knowledge of any facts that would reasonably lead to delisting or suspension of the Common Stock in the foreseeable future.

 (gg) Acknowledgment Regarding Investor’s Purchase of Securities. The Company acknowledges and agrees that the Investor is
acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that no Investor is (i) an officer or director of the Company, (ii) to the
knowledge of the Company, an “affiliate” of the Company or any of its Subsidiaries (as defined in Rule 144 of the 1933 Act) or (iii) to the knowledge of the Company, a “beneficial owner” of more than 10% of the shares of
Common Stock (as defined for purposes of Rule 13d-3 of the 1934 Act). The Company further acknowledges that no Investor is acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect
to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by an Investor or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and
thereby is merely incidental to such Investor’s purchase of the Securities. The Company further represents to the Investor that the Company’s decision to enter into the Transaction Documents has been based solely on the independent
evaluation by the Company and its representatives. 
  

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 (hh) Dilutive Effect. The Company understands and acknowledges that the number of Conversion
Shares issuable upon conversion of the Notes will increase in certain circumstances. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Notes in accordance with this Agreement, the Notes is
absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company. 
 (ii) Application of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any, in order to exempt the Company’s issuance of the Securities and
any Investor’s ownership of the Securities from the provisions of any control share acquisition, business combination or other similar anti-takeover provision under the Certificate of Incorporation of the Company or the laws of the state of its
incorporation which is or could become applicable to any Investor as a result of the transactions contemplated by this Agreement. Except as described in the Registration Statement and the General Disclosure Package, the Company does not have any
stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of the Company. 
 (jj) Subsidiary Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital
securities of its Subsidiaries as owned by the Company or such Subsidiary. 
 (kk) Off Balance Sheet Arrangements. There is no
transaction, arrangement, or other relationship between the Company and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings and is not so disclosed or that otherwise would be
reasonably likely to have a Material Adverse Effect. 
 (ll) Transfer Taxes. On the Closing Date, all stock transfer or other similar
taxes (other than income or similar taxes) which are required to be paid in connection with the sale and transfer of the Securities to be sold to the Investor hereunder will be, or will have been, fully paid or provided for by the Company, and all
laws imposing such taxes will be or will have been complied with. 
 (mm) Intentionally Omitted. 
 (nn) U.S. Real Property Holding Corporation. The Company is not, nor has it ever been, a U.S. real property holding corporation within the meaning
of Section 897 of the Code and the Company shall so certify upon any Investor’s request. 
 (oo) Disclosure. All disclosure
provided to the Investor regarding the Company, or any of its Subsidiaries, their business and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf of the Company is true and correct and does not
contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No event or circumstance has
occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, 

  

 - 17 - 

 
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. As of their respective filing dates, all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of
the 1934 Act (all of the foregoing filed prior to the date hereof or prior to the date of the Closing, and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the “SEC Documents”) complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the
SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Each press release issued by the Company or any of its Subsidiaries during the twelve (12) months preceding the date of this Agreement did not at the time of release contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 
 4. COVENANTS. 
 (a) Reasonable Best
Efforts. Each party shall use its reasonable best efforts timely to satisfy each of the conditions to be satisfied by it as provided in Sections 6 and 7 of this Agreement. 
 (b) Blue Sky. If required, the Company, on or before each applicable Closing Date, shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for or to qualify the Securities for sale to the Investor at such Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States
(or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Investor on or prior to such Closing Date. The Company shall make all filings and reports relating to the offer and sale of the
Securities required under applicable securities or “Blue Sky” laws of the states of the United States following such Closing Date. 
 (c) Use of Proceeds. The Company will use the proceeds from the sale of the Securities for general corporate purposes, except as otherwise limited by any prohibitions contained in the Notes for so long as such Notes are outstanding.

 (d) Listing. The Company shall promptly secure the listing of all of the Conversion Shares upon each national securities exchange
and automated quotation system, if any, upon which the Common Stock is then listed (subject to official notice of issuance) and shall use its reasonable best efforts to maintain, in accordance with the Notes, such listing of all Conversion Shares
from time to time issuable under the terms of the Transaction Documents. The Company use reasonable best efforts to maintain the Common Stocks’ authorization for quotation on the Principal Market or if such authorization is not able to be
maintained, on another Eligible Market (as defined in the Notes). Neither the Company nor any of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal
Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(d). 
  

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 (e) Fees. The Company shall be responsible for the payment of any placement agent’s fees,
financial advisory fees, or broker’s commissions (other than for Persons engaged by any Investor) relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold the Investor harmless against, any liability,
loss or expense (including, without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment. 
 (f) Pledge of Securities. The Company acknowledges and agrees that the Securities may be pledged in compliance with applicable law by any holder
of Securities (an “Holder”) in connection with a bona fide margin agreement or (but not the enforcement of any pledge) other loan or financing arrangement that is secured by the Securities. The pledge of Securities shall not be
deemed to be a transfer, sale or assignment of the Securities hereunder, and no Holder effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this
Agreement or any other Transaction Document. The Company hereby agrees, subject to applicable securities laws, to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the
Securities to such pledgee by a Holder. 
 (g) Disclosure of Transactions and Other Material Information. On or before 8:30 a.m., New
York City time, on the first Business Day following the date of this Agreement (the “8-K Filing Time”), the Company shall issue a press release and file a Current Report on Form 8-K describing the terms of the transactions
contemplated by the Transaction Documents in the form required by the 1934 Act and attaching the material Transaction Documents (including, without limitation, this Agreement, the form of the Notes and the Security Documents) as exhibits to such
filing (including all attachments, the “8-K Filing”). As of immediately following the filing of the 8-K Filing with the SEC, no Investor shall be in possession of any material, nonpublic information received from the Company, any of
its Subsidiaries or any of their respective officers, directors, employees or agents, that is not disclosed in the 8-K Filing or in prior filings with the SEC. For so long as the Notes are outstanding, other than notices required to be delivered
pursuant to Section 4(p), the Company shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors, employees and agents, not to, provide any Investor with any material, nonpublic information
regarding the Company or any of its Subsidiaries from and after the filing of the 8-K Filing with the SEC without the express written consent of such Investor. For so long as the Notes are outstanding, if an Investor has, or believes it has,
received any such material, nonpublic information regarding the Company or any of its Subsidiaries provided in breach of the preceding sentence, it shall provide the Company with written notice thereof in which case the Company shall, within five
(5) Trading Days (as defined in the Notes) of receipt of such notice, make public disclosure of any such material, nonpublic information provided in breach of the preceding sentence. In the event of a breach of the foregoing covenant by the
Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees and agents, in addition to any other remedy provided herein or in the Transaction Documents, an Investor shall have the right to make a public
disclosure, in the form of a press release, public advertisement or otherwise, of such material, nonpublic information without the prior approval by the Company, 

  

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its Subsidiaries, or any of its or their respective officers, directors, employees or agents. No Investor shall have any liability to the Company, its
Subsidiaries, or any of its or their respective officers, directors, employees, stockholders or agents for any such disclosure. Subject to the foregoing, neither the Company, its Subsidiaries nor any Investor shall issue any press releases or any
other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of any Investor, to make any press release or other public disclosure with respect to
such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law, regulation or any Eligible Market on which the Company’s securities are then listed or
quoted (provided that in the case of clause (i) the Investor shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release). Without the prior written consent of any applicable
Investor, neither the Company nor any of its Subsidiaries or affiliates shall disclose the name of such Investor in any filing, announcement, release or otherwise other than in connection with the Registration Statement unless such disclosure is
required by law, regulation or any Eligible Market on which the Company’s securities are then listed or quoted. As used herein “Business Day” means any day other than a Saturday, Sunday or other day on which commercial
banks in The City of New York, New York, are authorized or required by law to remain closed. 
 (h) Additional Notes; Variable Securities;
Dilutive Issuances. For so long as any Notes remain outstanding, the Company will not issue any Notes other than to the Investor as contemplated hereby or pursuant to the Other Agreements and the Company shall not issue any other securities that
would cause a breach or default under the Notes. For so long as any Notes remain outstanding, the Company shall not, in any manner, issue or sell any rights, warrants or options to subscribe for or purchase Common Stock or directly or indirectly
convertible into or exchangeable or exercisable for Common Stock at a price which varies or may vary with the market price of the Common Stock, including by way of one or more reset(s) to any fixed price unless the conversion, exchange or exercise
price of any such security cannot be less than the then applicable Conversion Price (as defined in the Notes) with respect to the Common Stock into which any Note is convertible. For so long as any Notes remain outstanding, the Company shall not, in
any manner, enter into or affect any Dilutive Issuances (as defined in the Notes) if the effect of such Dilutive Issuance is to cause, or but for the Securities Limitations (as defined below) would cause, the Company to be required to issue upon
conversion of any Note any shares of Common Stock in excess of that number of shares of Common Stock which the Company may issue upon conversion of the Notes without breaching the Company’s obligations under the rules or regulations of the
Principal Market, in each case without giving effect to (x) the limitations on conversion contained in the Notes and (y) the application of any Conversion Floor Price (as defined in the Notes), (the “Securities
Limitations”). For so long as any Notes are outstanding, unless or until the stockholder approval required by the Principal Market (as defined below) has been obtained, the Company shall not take any action if the effect of such action
would be to cause the Conversion Price to be reduced below the Conversion Floor Price without giving effect to any Securities Limitations. 
 (i) Corporate Existence. For so long as any Notes remain outstanding, the Company shall not be party to any Fundamental Transaction (as defined in the Notes) unless the Company is in compliance with the applicable provisions
governing Fundamental Transactions set forth in the Notes. 
  

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 (j) Reservation of Shares. The Company shall take all action necessary to at all times have
authorized, and reserved for the purpose of issuance, no less than 120% of the sum of the number of shares of Common Stock issuable upon conversion of the Notes issued at the Closing (without taking into account any limitations on the Conversion of
the Notes set forth in the Notes). 
 (k) Conduct of Business. The business of the Company and its Subsidiaries shall not be conducted
in violation of any law, ordinance or regulation of any governmental entity, except where such violations would not result, either individually or in the aggregate, in a Material Adverse Effect. 
 (l) Public Information. At any time during the period commencing on the six month anniversary of the first Closing Date as set forth in the
Schedule of Investor attached hereto and ending at such time that all of the Securities can be sold without the requirement to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if a
registration statement is not available for the resale of all of the Securities and the Company shall fail for any reason to satisfy the current public information requirement under Rule 144(c)(1) (a “Public Information Failure”)
then, as partial relief for the damages to any holder of Securities by reason of any such delay in or reduction of its ability to sell the Securities (which remedy shall not be exclusive of any other remedies available at law or in equity), the
Company shall pay to each such holder an amount in cash equal to two percent (2.0%) of the aggregate Purchase Price of such holder’s Securities on the day of a Public Information Failure and on every thirtieth day (pro rated for periods
totaling less than thirty days) thereafter until the earlier of (i) the date such Public Information Failure is cured and (ii) such time that such public information is no longer required pursuant to Rule 144. The payments to which a
holder shall be entitled pursuant to this Section 4(l) are referred to herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (I) the last day of the calendar
month during which such Public Information Failure Payments are incurred and (II) the third Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public
Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. 
 (m) Collateral Agent. The Investor hereby (a) appoints Portside Growth and Opportunity Fund, as the collateral agent hereunder, under the
Notes and under the other Security Documents (in such capacity, the “Collateral Agent”), and (b) authorizes the Collateral Agent (and its officers, directors, employees and agents) to take such action on such Investor’s
behalf in accordance with the terms hereof and thereof. The Collateral Agent shall not have, by reason hereof or any of the other Transaction Documents, a fiduciary relationship in respect of any Investor. Neither the Collateral Agent nor any of its
officers, directors, employees and agents shall have any liability to any Investor for any action taken or omitted to be taken in connection hereof or any other Transaction Document except to the extent caused by its own gross negligence or willful
misconduct, and the Investor agrees to defend, protect, indemnify and hold harmless the Collateral Agent and all of its officers, directors, employees and agents (collectively, the “Collateral Agent Indemnitees”) from and against
any losses, damages, liabilities, obligations, penalties, actions, judgments, suits, fees, costs and expenses (including, without limitation, reasonable attorneys’ fees, costs and expenses) incurred by such Collateral 

  

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Agent Indemnitee, whether direct, indirect or consequential, arising from or in connection with the performance by such Collateral Agent Indemnitee of the
duties and obligations of Collateral Agent pursuant hereto or any of the Transaction Documents. The Collateral Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the instructions of the holders of a majority in principal amount of the Notes then outstanding, and such instructions shall be binding upon all holders of Notes; provided,
however, that the Collateral Agent shall not be required to take any action which, in the reasonable opinion of the Agent, exposes the Agent to liability or which is contrary to this Agreement or any other Transaction Document or applicable law. The
Collateral Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any telephone message believed by it in good faith to be genuine and correct and to have been signed, sent or made by the
proper Person, and with respect to all matters pertaining to this Agreement or any of the other Transaction Documents and its duties hereunder or thereunder, upon advice of counsel selected by it. 
 (n) Successor Collateral Agent. 
 (i) The Collateral Agent may resign from the performance of all its functions and duties hereunder and under the other Transaction Documents at any time by giving at least thirty (30) Business Days’ prior
written notice to the Company and each holder of Notes. Such resignation shall take effect upon the acceptance by a successor Collateral Agent of appointment pursuant to clauses (ii) and (iii) below or as otherwise provided below. In
addition, at any time and from time to time following the repayment by Elitech of all “Guaranteed Obligations” as defined in the Elitech Guarantee in accordance with the terms of thereof, the holders of a majority in principal amount of
the Notes may, by giving at least ten (10) Business Days’ prior written notice to the Company and the Collateral Agent, remove the Collateral Agent as collateral agent and appoint a successor collateral agent. 
 (ii) Upon any such notice of resignation, the holders of a majority in principal amount of the Notes then outstanding shall appoint a
successor collateral agent. Upon the acceptance of any appointment as collateral agent hereunder by a successor collateral agent, such successor collateral agent shall thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the collateral agent, and the Collateral Agent shall be discharged from its duties and obligations under this Agreement and the other Transaction Documents. After the Collateral Agent’s resignation hereunder as the collateral
agent or the removal of the Collateral Agent and appointment of a successor collateral agent, the provisions of this Section 4(n) shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Collateral Agent
under this Agreement and the other Transaction Documents. 
 (iii) If a successor collateral agent shall not have been so
appointed within said thirty (30) Business Day period, the Collateral Agent shall then appoint a successor collateral agent who shall serve as the collateral agent until such time, if any, as the holders of a majority in principal amount of the
Notes then outstanding appoint a successor collateral agent as provided above. 
  

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 (o) Appointment of Special Co-Collateral Agent. 
 (i) Notwithstanding any other provisions of this Agreement, for the purpose of holding and or liquidating any Collateral in a foreign
jurisdiction or following the occurrence of, and during the continuation of, an Event of Default under the Notes and any other actions permitted to be taken by the Collateral Agent pursuant to the Security Documents, if the Collateral Agent
reasonably believes that such action is either (A) required by applicable law, rule or regulation or (B) is otherwise in the best interests of the holders of the Notes, the Collateral Agent shall have the power and may execute and deliver
all instruments necessary to appoint one or more Persons to act as a co-collateral agent or co-collateral agents hereunder, or separate collateral agent or separate collateral agents hereunder (the “Special Co-Collateral Agent”), in
each case exclusively in such jurisdiction or jurisdictions, and to vest in such Special Co-Collateral Agent, in such capacity and for the benefit of the Investor, such title hereunder, or any part hereof, in each case exclusively in such
jurisdiction or jurisdictions, and subject to the other provisions of this Section 4(o), such powers, duties, obligations, rights and trusts in such jurisdiction or jurisdictions as the Collateral Agent, as applicable may reasonably consider
necessary or desirable. Each Special Co-Collateral Agent hereunder shall be authorized under applicable law to act as the Special Co-Collateral Agent. Any Special Co-Collateral Agent may be removed at any time by the written direction of either
(x) the Collateral Agent or (y) the Required Holders (as defined in the Notes). If at any time a Special Co-Collateral Agent shall cease to be eligible to perform its obligations as a Special Co-Collateral Agent in accordance with the
provisions of this Section, it shall resign immediately in the manner and with the effect specified in Section 4(n) above. If any Special Co-Collateral Agent shall cease to exist, become insolvent, resigns or is removed, all of its estates,
properties, rights, remedies and trusts grated hereunder shall vest in and be exercised by the Collateral Agent to the extent permitted by law, without the appointment of a new or successor Special Co-Collateral Agent. The Investor hereby consents
to the appointment of the Investor as the Special Co-Collateral Agent with respect to the assets of the NAD Sub. 
 (ii) Any
notice, request or other writing given to the Collateral Agent shall be deemed to have been given to each of the then Special Co-Collateral Agent as effectively as if given to each of them. Every instrument appointing any Special Co-Collateral Agent
shall refer to this Agreement or the Security Documents, if applicable, and the conditions of this Section 4(o). Each Special Co-Collateral Agent upon its acceptance of the trusts conferred, shall, subject to the provisions of this
Section 4(o) hereof, be vested with the estates or property specified in its instrument of appointment, either jointly with the Collateral Agent, or separately, as may be provided therein, subject to all the provisions of this Agreement or the
Security Documents, as applicable. Every such instrument shall be filed with the Collateral Agent. 
 (iii) The Special
Co-Collateral Agent shall not have, by reason hereof or any of the other Transaction Documents, a fiduciary relationship in respect of any Investor. Neither the Special Co-Collateral Agent nor any of its officers, directors, employees and agents
shall have any liability to any Investor for any action taken or omitted to be taken in connection hereof or any other Transaction Document except to the 

  

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extent caused by its own gross negligence or willful misconduct, and the Investor agrees to defend, protect, indemnify and hold harmless the Special
Co-Collateral Agent and all of its officers, directors, employees and agents (collectively, the “Special Co-Collateral Indemnitees”) from and against any losses, damages, liabilities, obligations, penalties, actions, judgments,
suits, fees, costs and expenses (including, without limitation, reasonable attorneys’ fees, costs and expenses) incurred by such Special Co-Collateral Indemnitee, whether direct, indirect or consequential, arising from or in connection with the
performance by such Special Co-Collateral Indemnitee of the duties and obligations of Special Co-Collateral Agent pursuant hereto or any of the Transaction Documents. The Special Co-Collateral Agent shall not be required to exercise any discretion
or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the holders of a majority in principal amount of the Notes then outstanding,
and such instructions shall be binding upon all holders of Notes; provided, however, that the Special Co-Collateral Agent shall not be required to take any action which, in the reasonable opinion of the Agent, exposes the Agent to liability or which
is contrary to this Agreement or any other Transaction Document or applicable law. The Special Co-Collateral Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any telephone message
believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person, and with respect to all matters pertaining to this Agreement or any of the other Transaction Documents and its duties hereunder or
thereunder, upon advice of counsel selected by it. 
 (p) Intentionally Omitted 
 (q) Intentionally Omitted 
 (r)
Stockholder Approval. The Company shall provide each stockholder entitled to vote at the next meeting of stockholders of the Company (the “Stockholder Meeting”), which shall be promptly called and held not later than the
earlier of (i) the date of the special meeting of stockholders of the Company as set forth in the proxy statement to be filed in connection with the transactions contemplated under the Share Exchange Agreement, dated as of the date hereof
between the Company, Elitech and the stockholders of Elitech and (ii) March 31, 2009 (the “Stockholder Meeting Deadline”), a proxy statement, substantially in the form which has been previously reviewed by the Investor and
a counsel of its choice, soliciting each such stockholder’s affirmative vote at the Stockholder Meeting for approval of resolutions (the “Stockholder Resolutions”) providing for the Company’s issuance of all of the
Securities as described in the Transaction Documents in accordance with applicable law and the rules and regulations of the Principal Market (such affirmative approval being referred to herein as the “Stockholder Approval”), and the
Company shall use its best efforts to solicit its stockholders’ approval of such resolutions (which efforts shall include, without limitation, the requirement to hire a nationally recognized proxy solicitor) and to cause the Board of Directors
of the Company to recommend to the stockholders that they approve such resolutions. The Company shall be obligated to seek to obtain the Stockholder Approval by the Stockholder Meeting Deadline. 
 (s) Italian Security. As soon as reasonably practicable but in no event later than October 15, 2008, (i) the Company shall grant a
pledge in 100% of the capital stock of the 

  

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NAD Sub pursuant to the Pledge As Collateral On Share of a Limited Company Agreement, whereby the Company establishes a valid, effective and perfected
pledge, pursuant to Italian law, over the entire quota held by the Company, having a total face value of €50,000.00 and representing a 100% stake in the entire share capital of the NAD Sub, and over all the new quotas as may be issued from time
to time by the NAD Sub, the form and substance of which shall be reasonably satisfactory to the Investor (the “NAD Sub Pledge Agreement”), which shall be executed before a notary public in Italy and the Company shall carry out all
such other actions as are required by Italian law to perfect and ensure the effectiveness of such pledge no later than October 15, 2008, (ii) the Company shall cause the NAD Sub to grant a pledge pursuant to the Pledge over Bank Account
Agreement whereby the NAD Sub shall grant a pledge over the account, the amounts at any time credited on the account and the claims of the Company from the restitution of the balance from time to time existing on the account, jointly and pro
indiviso basis, the form and substance of which shall be reasonably satisfactory to the Investor (the “Bank Account Pledge Agreement”) in (x) the balance of bank account number 100000061933 at Intesa San Paolo, Agenzia 3,
Corso Sempione 65/A, Milan and (y) the balance of bank account number 000000005083 at Banca Popolare di Bergamo, Agenzia Via Foppa, Via Foppa 26, Milan, and the Company shall cause the NAD Sub to carry out all such other actions as are required
by Italian law to perfect and ensure the effectiveness of such pledges (collectively, the “Bank Account Pledge Agreements”) no later than October 15, 2008 and (iii) the Company shall cause Ughi e Nunziante, the
Company’s Italian law firm, to deliver an opinion to the Investor, dated as of the October 15, 2008, in form and substance acceptable to the Investor. 
 5. REGISTER; TRANSFER AGENT INSTRUCTIONS. 
 (a) Register. The Company shall maintain at its
principal executive offices (or such other office or agency of the Company as it may designate by notice to each holder of Securities), a register for the Notes in which the Company shall record the name and address of the Person in whose name the
Notes have been issued (including the name and address of each transferee), the principal amount of Notes held by such Person, the number of Conversion Shares issued and issuable upon conversion of the Notes held by such Person. The Company shall
keep the register open and available at all times during business hours for inspection of any Investor or its legal representatives. 
 (b)
Transfer Agent Instructions. The Company shall issue irrevocable instructions to the Transfer Agent, and any subsequent transfer agent, in the form of Exhibit G attached hereto (the “Irrevocable Transfer Agent
Instructions”). The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5 will be given by the Company to the Transfer Agent, and any subsequent
transfer agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the other Transaction Documents. The Company
acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to an Investor. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 will be inadequate and
agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5, that the Investor shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and
requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required. 
  

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 6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL. 
 The obligation of the Company hereunder to issue and sell the Notes to the Investor at each Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing the Investor with prior written notice
thereof: 
 (i) The Investor shall have executed each of the Transaction Documents to which it is a party and delivered the
same to the Company. 
 (ii) The Initial Closing shall have occurred. 
 (iii) Such Investor and each other Investor shall have delivered to the Company the Purchase Price for the Notes being purchased by the
Investor at such Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company. 
 (iv) The representations and warranties of the Investor shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true
and correct in all respects) as of the date when made and as of the Initial Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specified
date), and such Investor shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Investor at or prior to the
Initial Closing Date. 
 7. CONDITIONS TO INVESTOR’S OBLIGATION TO PURCHASE. 
 The obligation of the Investor hereunder to purchase the Notes at the Closing is subject to the satisfaction, at or before the Closing Date, of each of
the following conditions, provided that these conditions are for the Investor’s sole benefit and may be waived by such Investor at any time in its sole discretion by providing the Company with prior written notice thereof: 
 (i) The Company shall have duly executed and delivered to the Investor (i) each of the Transaction Documents and (ii) the Notes
being purchased by such Investor at the Closing pursuant to this Agreement. 
 (ii) The Initial Closing shall have occurred.

 (iii) The representations and warranties of the Company shall be true and correct in all material respects (except for
those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all 

  

 - 26 - 

 
respects) as of the Initial Closing Date (except for representations and warranties that speak as of a specific date, which shall be true and correct as of
such specified date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Initial Closing Date. The Investor shall have received a certificate, executed by the Chief Executive Officer or Chief Financial Officer of the Company, dated as of the Initial Closing Date, to the foregoing effect in the form
attached hereto as Exhibit B. 
 (iv) The Collateral Agent and the Original Collateral Agent shall have executed
and delivered to such Investor the Intercreditor Agreement. 
 8. TERMINATION. In the event that the Closing shall not have occurred
with respect to the Investor on or before five (5) Business Days from the date hereof due to the Company’s or such Investor’s failure to satisfy the conditions set forth in Sections 6 and 7 above (and the nonbreaching party’s
failure to waive such unsatisfied condition(s)), the nonbreaching party shall have the option to terminate this Agreement with respect to such breaching party at the close of business on such date without liability of any party to any other party;
provided, however, that if this Agreement is terminated pursuant to this Section 8, the Company shall remain obligated to reimburse the non-breaching Investor for the expenses described in Section 4(e) above. 
 9. MISCELLANEOUS. 
 (a) Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or
that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at
the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.  
  

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 (b) Counterparts. This Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be
binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature. 
 (c)
Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. 
 (d) Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder
of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. 
 (e)
Entire Agreement; Amendments. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company, the Investor and each Other Investor, and any amendment to this Agreement made in conformity with the
provisions of this Section 9(e) shall be binding on the Company and the Investor. No provision hereof may be waived other than by an instrument in writing signed by the Company, the Investor and each Other Investor. No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration also is offered to all of the parties to the Transaction Documents or holders of Notes.
The Company has not, directly or indirectly, made any agreements with the Investor relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting
the foregoing, the Company confirms that, except as set forth in this Agreement, the Investor has not made any commitment or promise or has any other obligation to provide any financing to the Company or otherwise. 
 (f) Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file
by the sending party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

  

					
	 If to the Company:

		
		 	Nanogen Inc.
		 	10398 Pacific Center Court
		 	San Diego, California 92121
		 	Telephone:	  	(858) 410-4600
		 	Facsimile:	  	(858) 410-4949
		 	Attention:	  	Nick Venuto

  

 - 28 - 

					
	 with a copy (for informational purposes only) to:

		
		 	Morgan, Lewis & Bockius LLP
		 	One Market, Spear Street Tower
		 	San Francisco, CA 94605
		 	Telephone:	  	(415) 442-1091
		 	Facsimile:	  	(415) 442-1001
		 	Attention:	  	Scott D. Karchmer, Esq.
	
	 If to the Transfer Agent:

		
		 	Computershare Investor Services
		 	250 Royall Street
		 	Canton, MA 02021
		 	Telephone:	  	(877) 282-1168
		 	Facsimile:	  	(781) 575-3606
		 	Attention:	  	Jeff Seiders
	
	 If to the Investor:

		
		 	Financière Elitech SAS
		 	12-12 bis, rue Jean Jaurès
		 	92800 Puteaux
		 	France
		 	Attn:	  	Pierre Debiais
		 	Facsimile:	  	+33 (1) 41 45 07 19
		
		 	With a required copy to:
		
		 	Jackson Walker, L.L.P.
		 	901 Main Street, Suite 6000
		 	Dallas, Texas 75202
		 	Attn:	  	L. Scott Brown
		 	Facsimile:	  	214-661-6869

 or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient
party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service
shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively. 
 (g) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Notes. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the holders of at least a majority of the aggregate 

  

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number of Conversion Shares issued and issuable hereunder, including by way of a Fundamental Transaction (unless the Company is in compliance with the
applicable provisions governing Fundamental Transactions set forth in the Notes). 
 (h) No Third Party Beneficiaries. This Agreement
is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 
 (i) Survival. Unless this Agreement is terminated under Section 8, the representations and warranties of the Company and the Investor
contained in Sections 2 and 3, and the agreements and covenants set forth in Sections 4, 5 and 9 shall survive the Closing. The Investor shall be responsible only for its own representations, warranties, agreements and covenants hereunder.

 (j) Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as are reasonably necessary in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby. 
 (k) Indemnification. (i) In consideration of the Investor’s execution and delivery of the
Transaction Documents and acquiring the Securities thereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless the Investor and each other
holder of the Securities and all of their stockholders, partners, members, officers, directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made against such Indemnitee by a third party that is not an Affiliate of such Indemnitee (including for these purposes a derivative action brought on behalf of
the Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (ii) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, or (iii) the status of such Investor or holder of the Securities as an investor in the Company. To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. 

 

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 (ii) Promptly after receipt by an Indemnitee under this Section 9(k) of notice of the commencement
of any action or proceeding (including any governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim for indemnification in respect thereof is to be made against any indemnifying party under this
Section 9(k), deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnitee; provided, however, that an Indemnitee shall have the right to retain its own counsel with
the fees and expenses of not more than one counsel for such Indemnitee to be paid by the indemnifying party, if, in the reasonable opinion of the Indemnitee, the representation by such counsel of the Indemnitee and the indemnifying party would be
inappropriate due to actual or potential differing interests between such Indemnitee and any other party represented by such counsel in such proceeding. Legal counsel referred to in the immediately preceding sentence shall be selected by the
Investor holding at least a majority of the Purchased Shares. The Indemnitee shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or Indemnified Liabilities by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to the Indemnitee that relates to such action or Indemnified Liabilities. The indemnifying party shall keep the Indemnitee fully apprised at all times as to the status of
the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party
shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnitee, which consent shall not be unreasonably withheld conditioned or delayed, consent to entry of any
judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified Liabilities
or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification
has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnitee under this Section 9(k),
except to the extent that the indemnifying party is prejudiced in its ability to defend such action. 
 (iii) The indemnification required
by this Section 9(k) shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Liabilities are incurred. 
 (iv) The indemnity agreements contained herein shall be in addition to (x) any cause of action or similar right of the Indemnitee against the
indemnifying party or others, and (y) any liabilities the indemnifying party may be subject to pursuant to the law. 
 (l) No Strict
Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. 
  

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 (m) Remedies. The Investor and each holder of the Securities shall have all rights and remedies
set forth in the Transaction Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any rights under
any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted
by law. Furthermore, the Company recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents, any remedy at law may prove to be inadequate relief to the Investor. The
Company therefore agrees that the Investor shall be entitled to seek temporary and permanent injunctive relief in any such case without the necessity of proving actual damages and without posting a bond or other security. 
 (n) Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Investor exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Investor may
rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights. 
 (o) Payment Set Aside. To the extent that the Company makes a payment or payments to the Investor hereunder or pursuant to any of the other
Transaction Documents or the Investor enforce or exercise their rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign,
state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment
had not been made or such enforcement or setoff had not occurred. 
 (p) Independent Nature of Investor’s Obligations and Rights.
The obligations of the Investor under this Agreement or any other Transaction Document are several and not joint with the obligations of any Other Investor, and the Investor shall not be responsible in any way for the performance of the obligations
of any Other Investor under any Transaction Document. Nothing contained herein or in this Agreement or any other Transaction Document, and no action taken by the Investor pursuant hereto, shall be deemed to constitute the Investor and Other
Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investor and the other Investors are in any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement or any other Transaction Document and the Company acknowledges that the Investor and the Other Investors are not acting in concert or as a group with respect to such obligations or the transactions
contemplated by Agreement and any other Transaction Document. The Company and the Investor confirms that the Investor has independently participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and
advisors. The 

  

 - 32 - 

 
Investor shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of
any other Transaction Document, and it shall not be necessary for any Other Investor to be joined as an additional party in any proceeding for such purpose. 
 [Signature Page Follows] 
  

 - 33 - 

 IN WITNESS WHEREOF, the Investor and the Company have caused their respective signature page to
this Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	COMPANY:
	
	NANOGEN INC.
		
	By:	 	 /s/ Nicholas Venuto

	Name:	 	Nicholas Venuto
	Title:	 	Chief Financial Officer

 IN WITNESS WHEREOF, the Investor and the Company have caused their respective signature page to
this Securities Purchase Agreement to be duly executed as of the date first written above. 
  

					
	INVESTOR:
	
	FINANCIERE ELITECH S.A.S.
			
	By:	 		 	 /s/ Pierre Debiais

	Name:	 		 	Pierre Debiais
	Title:	 		 	President

 SCHEDULE OF INVESTOR 
  

							
	 Closing Date
	  	Principal Amount of Notes
to be Purchased
	  	Aggregate Purchase
Price
	 October 15, 2008
	  	$	1,000,000.00	  	$	1,000,000.00
	 November 15, 2008
	  	$	1,000,000.00	  	$	1,000,000.00
	 December 31, 2008
	  	$	1,000,000.00	  	$	1,000,000.00

 EXHIBITS 
  

			
	Exhibit A	  	Form of Note
	Exhibit A-1	  	Form of Amended Exchanged Notes
	Exhibit A-2	  	Form of Additional Convertible Exchanged Notes
	Exhibit B	  	Form of Officer’s Certificate
	Exhibit B-1	  	Form of US Security Agreement with the Company
	Exhibit B-2	  	Form of US Security Agreement with the Subsidiaries
	Exhibit C	  	Form of Guarantees
	Exhibit D	  	Form of Elitech Guarantee
	Exhibit E	  	Form of Italian Security Agreements
	Exhibit F	  	Form of Intercreditor Agreement
	Exhibit G	  	Form of Irrevocable Transfer Agent Instructions

  
 DISCLOSURE SCHEDULE

 The disclosure schedule to the Securities Purchase Agreement 
 filed as Exhibit 10.2 of this Form 8-K 
 is incorporated herein by referenceSecond Amendment and Exchange Agreement

 Exhibit 10.4 
 SECOND AMENDMENT AND EXCHANGE AGREEMENT 
 SECOND AMENDMENT AND EXCHANGE AGREEMENT (the
“Agreement”), dated as of August 14, 2008, by and among Nanogen Inc., a Delaware corporation, with headquarters located at 10398 Pacific Center Court, San Diego, California 92121 (the “Company”), and
Portside Growth and Opportunity Fund (the “Investor”). 
 WHEREAS: 
 A. The Company, the Investor and certain other investors (the “Other Investors”, and collectively with the Investor, the
“Investors”) are parties to that certain Securities Purchase Agreement, dated as of August 26, 2007 (the “Existing Securities Purchase Agreement”), pursuant to which, among other things, the Investors purchased
from the Company (i) 6.25% senior convertible notes due 2010 (the “Existing Notes”), which are convertible into shares (the “Existing Conversion Shares”) of the Company’s common stock, par value $0.001 per
share (the “Common Stock”), pursuant to that certain First Supplemental Indenture, dated August 27, 2007 (the “First Supplemental Indenture”) and that certain Second Supplemental Indenture, dated March 27,
2008 (the “Second Supplemental Indenture”), which supplement the Indenture dated August 27, 2007, by and between the Company and Bank of New York Trust Company, N.A., as trustee (the “Trustee”) (such indenture,
as modified by any supplement and amendment thereto as of the date hereof, the “Indenture”) and (ii) three series of warrants, which are exercisable into shares of Common Stock (the “Existing Warrants”).

 B. On March 13, 2008, the Company entered into Amendment and Exchange Agreements (the “Existing Exchange
Agreements”) with the Investor and certain other Investors (the “Exchange Investors”), pursuant to which the Company and each Exchange Investor (x) exchanged a portion of such Exchange Investor’s Existing Notes
for the Company’s 9.75% Senior Secured Convertible Notes (the “Existing Exchanged Notes”), which are convertible into shares of Common Stock (the “Existing Exchanged Conversion Shares”) and are secured by a
first priority, perfected security interest in certain of the assets of the Company and the stock and assets of each of the Company’s subsidiaries, as evidenced by the security agreement, dated March 13, 2008 (the “Existing
Security Agreement” and together with any ancillary documents related thereto, collectively the “Existing Security Documents”), by and between the Company and Portside Growth and Opportunity Fund, as collateral agent (the
“Collateral Agent”). 
 C. The Company and the Investor desire to enter into this Agreement, pursuant to which, among other
things, on the Closing Date (as defined below), the Company and the Investor shall exchange the Investor’s Existing Exchanged Notes in an aggregate principal amount as set forth opposite the Investor’s name in column (3) on the
Schedule of Investors attached hereto for (x) the Company’s Amended and Restated 9.75% Senior Secured Convertible Notes in an aggregate principal amount as is set forth opposite the Investor’s name in column (4) of the Schedule
of Investors attached hereto and in the form attached hereto as Exhibit A-1 (the “Amended Exchanged Notes”), which shall be convertible into shares of Common Stock (the “Amended Exchanged  

 
Conversion Shares”) and (y) the Company’s 9.75% Senior Secured Convertible Notes in an aggregate principal amount as is set forth
opposite the Investor’s name in column (5) of the Schedule of Investors attached hereto and in the form attached hereto as Exhibit A-2 (the “Additional Exchanged Notes”, and together with the Amended Exchanged
Notes, the “New Exchanged Notes”). 
 D. The exchange of the Existing Exchanged Notes of the Investor for the New Exchanged
Notes is being made in reliance upon the exemption from registration provided by Section 3(a)(9) of the 1933 Act. 
 E. As additional
consideration for the transactions contemplated hereby, any New Exchanged Notes issued hereunder will be secured by (x) a first priority, perfected security interest in all of the assets of the Company, (y) a first priority, perfected
security interest in all of the stock of all of the Company’s domestic subsidiaries and 65% of the stock of the Company’s non-United States subsidiaries other than Nanogen Advanced Diagnostics, Srl, a company with limited liability
(società a responsabilità limitata), incorporated under the laws of Italy, with registered office in Italy, Trezzano sul Naviglio (MI), having registered share capital of €50,000.00 and shared capital subscribed and paid in
of €50,000.00, registered in the Companies Registry at n. 05239350969, Italian tax payer code n. 05239350969 (the “NAD Sub”) and (z) a second priority perfected security interest in all of the stock of NAD Sub, as
evidenced by the Amended and Restated U.S. Security Agreement attached hereto as Exhibit B-1 (the “US Security Agreement”), which amends and restates the Existing Security Agreement, and as will be evidenced by the Italian
Security Agreement in the form attached hereto as Exhibit C-1 (the “Italian Security Agreement”, and together with the US Security Agreement, any ancillary documents related thereto and the Intercreditor Agreement (as defined
below), collectively the “Security Documents”). 
 F. Any accrued and unpaid interest under the Existing Exchanged Notes
prior to the issuance of the New Exchanged Notes will be included as additional interest obligations under the Amended Exchange Notes, and the Company will pay such additional interest pursuant to the terms of the Amended Exchanged Notes.

 G. In connection with the transactions contemplated hereby, the Investor is also entering into a Consent and Agreement with the Company in
the form attached hereto as Exhibit E (the “Indenture Consent”), pursuant to which the Investor shall consent to the Trustee’s execution and delivery to the Company of the Third Supplemental Indenture (the “Third
Supplemental Indenture”) to the Indenture in the form attached hereto as Exhibit F. 
 H. Concurrently with the transactions
contemplated hereby, Financière Elitech S.A.S., a société par actions simplifiée incorporated under the laws of France and registered with the Clerk of the Commercial Court of Nanterre under the number 481 676 062
(“Elitech”) and certain of the Buyers (such Buyers, the “Initial Bridge Buyers” and together with Elitech, the “Bridge Buyers”) have each entered into Securities Purchase Agreements with the Company
in the form attached hereto as Exhibit G (each, a “Bridge Securities Purchase Agreement”, and collectively, the “Bridge  

  

 2 

 
Securities Purchase Agreements”), pursuant to which (x) on the Closing Date the Company has agreed to sell, and the Initial Bridge Buyers
have agreed purchase, subject to the satisfaction of certain conditions set forth therein, $5 million in secured convertible notes (the “Initial Bridge Notes”) and (y) at one or more additional closings to occur on or prior to
December 31, 2008, the Company has agreed to sell, and Elitech has agreed to purchase, subject to the satisfaction of certain conditions set forth therein, $3 million in secured convertible notes (the “Additional Bridge Notes”,
and together with the Initial Bridge Notes, the “Bridge Notes”). 
 I. As additional consideration for the transactions
contemplated by the Bridge Securities Purchase Agreement, any Bridge Notes issued thereunder will be secured by (x) a second priority, perfected security interest in all of the assets of the Company, (y) a first priority security interest
in all of the stock of the Company’s United States subsidiaries and (z) a first priority perfected security interest in all of the stock and assets of NAD Sub, as evidenced by the U.S. Security Agreement attached hereto as Exhibit
B-2 (the “US Bridge Security Agreement”) and as will be evidenced by the Italian Bridge Security Agreements in the form attached hereto as Exhibit C-2 (the “Italian Bridge Security Agreements”),
(ii) the guarantee of Elitech with respect to $5 million principal amount of the Initial Bridge Notes plus interest in the form attached hereto as Exhibit D-1 (the “Elitech Guarantee”) and (iii) the guarantees of
the Subsidiaries of the Company in the form attached hereto as Exhibit D-2 (the “Bridge Guarantees”, and together with the Elitech Guarantee, the US Bridge Security Agreement, the Italian Bridge Security Agreement, any
ancillary documents related thereto and the Intercreditor Agreement, collectively the “Bridge Security Documents”). 
 J.
The Company desires that the Collateral Agent, as agent for the Exchange Investors, enter into an Intercreditor Agreement in the form attached hereto as Exhibit G (the “Intercreditor Agreement”) with Portside Growth and
Opportunity Fund, as the collateral agent for the Bridge Notes (the “Bridge Collateral Agent”), pursuant to which the Collateral Agent shall agree to subordinate its liens on the capital stock of NAD Sub as will be secured pursuant
to the Italian Security Agreements to the Bridge Collateral Agent and the Bridge Collateral Agent shall agree to subordinate its liens on the other assets of the Company and its subsidiaries pursuant to the US Bridge Security Agreement and the
Bridge Guarantees to the Collateral Agent. 
 K. Concurrently herewith certain other investors (the “Other Investors”) is
also entering into agreements identical to this Agreement (the “Other Agreements”) and the Bridge Securities Purchase Agreement (the “Other Bridge Agreements”) (in each case, other than proportional changes (the
“Proportionate Changes”) in the numbers reflecting (x) with respect to the Other Agreements, the different principal amount of the Investor’s Existing Exchanged Notes) with the Company and surrendering its Existing
Exchanged Notes for New Exchanged Notes and identical to New Exchanged Notes of the Investor hereunder (other than the Proportionate Changes) and (y) with respect to the Other Bridge Agreements, the principal amount of the Initial Bridge Note
of each such Other Investor being purchased pursuant to the Bridge Securities Purchase Agreement of each such Other Investor). 
  

 3 

 L. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings
ascribed to them in the Existing Securities Purchase Agreement, as amended by the Existing Exchange Agreements, and as further amended hereby. 
 NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the Company and the Investor hereby agree as follows: 
  

	 	1.	EXCHANGE OF EXISTING EXCHANGED NOTE AND ISSUANCE OF NEW EXCHANGED NOTES. 

 (a) Exchange. Subject to satisfaction (or waiver) of the conditions set forth in Sections 5 and 6 below, at the Closing, the Investor shall surrender to the Company its Existing Exchanged Note (or such other
documentation reasonably satisfactory to the Company that the Investor held such Existing Exchanged Note as a Physical Security and that the Investor’s Existing Exchanged Note has been lost or destroyed) in an aggregate principal amount as set
forth opposite the Investor’s name in column (3) on the Schedule of Investors attached hereto and the Company shall issue and deliver to the Investor (x) an Amended Exchanged Note with that aggregate principal amount set forth
opposite the Investor’s name in column (4) of the Schedule of Investors attached hereto and (y) a Additional Exchanged Note with that aggregate principal amount set forth opposite the Investor’s name in column (5) of the
Schedule of Investors attached hereto. The Investor acknowledges that the Amended Exchanged Note shall include all Interest, Late Charges, fees and other amounts payable in respect of the portion of the Existing Exchanged Note cancelled upon
issuance of the Amended Exchanged Note (the “Exchanged Interest”) and that notwithstanding anything to the contrary in the terms of the Existing Exchanged Notes no such Exchanged Interest shall be payable in respect of the Existing
Exchanged Notes (as reduced pursuant to the foregoing exchange) or the Indenture but shall be payable solely upon the terms of the Amended Exchanged Note. 
 (b) Closing Date. The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., New York Time, on the date hereof, subject to notification of satisfaction (or waiver) of the
conditions to the Closing set forth in Sections 5 and 6 below (or such earlier or later date as is mutually agreed to by the Company and the Investor). The Closing shall occur on the Closing Date at the offices of Schulte Roth & Zabel LLP,
919 Third Avenue, New York, New York 10022. 
 (c) Waiver of Right of First Refusal. Solely with respect to the issuance by the
Company of the New Exchanged Notes contemplated hereunder and the issuance of the Bridge Notes pursuant to the Bridge Securities Purchase Agreements, the Investor hereby waives its rights pursuant to Section 4(m) of the Existing Securities
Purchase Agreement, and the Company shall not be obligated to make any offer to the Investor pursuant to Section 4(m) thereof. 
  

 4 

 (d) Intercreditor Agreement. The Investor hereby consents to the terms and conditions of the
Intercreditor Agreement and hereby instructs the Collateral Agent to execute and deliver the Intercreditor Agreement to the Bridge Collateral Agent on the Closing Date. 
 (e) Waiver of Indenture and Existing Warrant Antidilution. Each of the Buyer hereby waives any adjustments to the number of shares issuable upon exercise of the Existing Warrants arising from the issuance of
the Bridge Notes and the New Exchanged Notes. 
  

	 	2.	AMENDMENTS TO TRANSACTION DOCUMENTS. 

 (a)
Amendment to Existing Securities Purchase Agreement. Subject to the modifications set forth in Schedules 2(a) and 3(b) hereof, and except for Section 1, 6 and 7 of the Existing Securities Purchase Agreement, the Existing Securities
Purchase Agreement is hereby amended as follows: 
 (i) All references to “Notes” shall include the “New
Exchanged Notes (as defined in those certain Amendment and Exchange Agreements, each by any between the Company and a Buyer, dated as of the date hereof (the “Second Amendment Agreements”)”; 
 (ii) All references to “Conversion Shares” shall include the shares of Common Stock issuable upon conversion of the New
Exchanged Notes; 
 (iii) The defined term “Transaction Documents” is hereby amended to include the Second
Amendment Agreements and the Security Documents (as defined in the Second Amendment Agreements); 
 (iv) All references to
“Securities Purchase Agreement” shall mean, and are hereby replaced by “Securities Purchase Agreement, as amended by the Amendment Agreements and the Second Amendment Agreements”; 
 (v) On the Closing Date, Section 4(q) of the Existing Securities Purchase Agreement is hereby amended and restated as follows:

 “(p) Collateral Agent. Each Buyer hereby (a) appoints Portside Growth and Opportunity Fund, as the
collateral agent hereunder, under the New Exchanged Notes and under the other Security Documents (in such capacity, the “Collateral Agent”), and (b) authorizes the Collateral Agent (and its officers, directors, employees and
agents) to take such action on such Buyer’s behalf in accordance with the terms hereof and thereof. The Collateral Agent shall not have, by reason hereof or any of the other Transaction Documents, a fiduciary relationship in respect of any
Buyer. Neither the Collateral Agent nor any of its officers, 

  

 5 

 
directors, employees and agents shall have any liability to any Buyer for any action taken or omitted to be taken in connection hereof or any other
Transaction Document except to the extent caused by its own gross negligence or willful misconduct, and each Buyer agrees to defend, protect, indemnify and hold harmless the Collateral Agent and all of its officers, directors, employees and agents
(collectively, the “Indemnitees”) from and against any losses, damages, liabilities, obligations, penalties, actions, judgments, suits, fees, costs and expenses (including, without limitation, reasonable attorneys’ fees, costs
and expenses) incurred by such Indemnitee, whether direct, indirect or consequential, arising from or in connection with the performance by such Indemnitee of the duties and obligations of Collateral Agent pursuant hereto or any of the Transaction
Documents. The Collateral Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions
of the holders of a majority in principal amount of the New Exchanged Notes then outstanding, and such instructions shall be binding upon all holders of New Exchanged Notes; provided, however, that the Collateral Agent shall not be
required to take any action which, in the reasonable opinion of the Agent, exposes the Agent to liability or which is contrary to this Agreement or any other Transaction Document or applicable law. The Collateral Agent shall be entitled to rely upon
any written notices, statements, certificates, orders or other documents or any telephone message believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the other Transaction Documents and its duties hereunder or thereunder, upon advice of counsel selected by it. 
 (q) Successor Collateral Agent. 
 (i) The Collateral Agent may resign from the
performance of all its functions and duties hereunder and under the other Transaction Documents at any time by giving at least thirty (30) Business Days’ prior written notice to the Company and each holder of New Exchanged Notes. Such
resignation shall take effect upon the acceptance by a successor Collateral Agent of appointment pursuant to clauses (ii) and (iii) below or as otherwise provided below. 
 (ii) Upon any such notice of resignation, the holders of a majority in principal amount of the New Exchanged Notes then outstanding shall
appoint a successor collateral agent. 

  

 6 

 
Upon the acceptance of any appointment as collateral agent hereunder by a successor agent, such successor collateral agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the collateral agent, and the Collateral Agent shall be discharged from its duties and obligations under this Agreement and the other Transaction Documents. After the Collateral
Agent’s resignation hereunder as the collateral agent, the provisions of this Section 4(q) shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Collateral Agent under this Agreement and the other
Transaction Documents. 
 (iii) If a successor collateral agent shall not have been so appointed within said thirty
(30) Business Day period, the Collateral Agent shall then appoint a successor collateral agent who shall serve as the collateral agent until such time, if any, as the holders of a majority in principal amount of the New Exchanged Notes then
outstanding appoint a successor collateral agent as provided above.” 
 (vi) On the Closing Date, Section 4 of the
Existing Securities Purchase Agreement is hereby amended by adding new clause (r) to read as follows: 
 “(r)
Stockholder Approval. The Company shall provide each stockholder entitled to vote at the next annual meeting of stockholders of the Company (the “Stockholder Meeting”), which shall be promptly called and held not later than
the earlier of (i) the date of the special meeting of stockholders of the Company as set forth in the proxy statement to be filed in connection with the transactions contemplated under the Share Exchange Agreement, dated as of the date hereof
between the Company, Elitech and the stockholders of Elitech (the “Elitech Merger Agreement”) and (ii) March 15, 2009 (the “Stockholder Meeting Deadline”), a proxy statement, substantially in the form
which has been previously reviewed by the Buyers and a counsel of their choice, at the expense of the Company, not to exceed $10,000, soliciting each such stockholder’s affirmative vote at the Stockholder Meeting for approval of resolutions
(the “Stockholder Resolutions”) providing for the Company’s issuance of all of the New Exchanged Notes, the Amended Exchanged Conversion Shares (as such terms are defined in those certain Second Amendment Agreements) in
accordance with applicable law and the rules and regulations of the Principal Market (such affirmative approval being referred to herein as the “Stockholder Approval”), and the Company shall use its best efforts to solicit its
stockholders’ approval of such resolutions (which efforts shall 

  

 7 

 
include, without limitation, the requirement to hire a nationally recognized proxy solicitor) and to cause the Board of Directors of the Company to recommend
to the stockholders that they approve such resolutions. The Company shall be obligated to seek to obtain the Stockholder Approval by the Stockholder Meeting Deadline. 
 (b) Ratifications. Except as otherwise expressly provided herein, (i) the Securities Purchase Agreement and each other Transaction Document is, and shall continue to be, in full force and effect and is
hereby ratified and confirmed in all respects, except that on and after the Closing Date (A) all references in the Existing Securities Purchase Agreement to the “Securities Purchase Agreement”, “hereto”, “hereof”,
“this Agreement”, “hereunder” or words of like import referring to the Securities Purchase Agreement shall mean the Existing Securities Purchase Agreement as amended by this Agreement and the Other Agreements, and (B) all
references in the other Transaction Documents to the “Securities Purchase Agreement”, “thereto”, “thereof”, “thereunder” or words of like import referring to the Securities Purchase Agreement shall mean the
Existing Securities Purchase Agreement as amended by this Agreement and the Other Agreements, (ii) the execution, delivery and effectiveness of this Agreement shall not operate as an amendment of any right, power or remedy of the Investor under
any Transaction Document, nor constitute an amendment of any provision of any Transaction Document, (iii) the Company hereby (x) confirms and agrees that, except as expressly amended or modified by the Existing Exchange Agreements, this
Agreement or the Other Agreements, the Existing Securities Purchase Agreement, the Existing Security Documents and each of the other Transaction Document to which it is a party is, and shall continue to be, in full force and effect and is hereby
ratified and confirmed in all respects, except that on and after the Closing Date all references in any such Transaction Document to “the Note”, “thereto”, “thereof”, “thereunder” or words of like import
referring to the Existing Exchanged Notes shall be deemed to refer to the New Exchanged Notes; and (y) confirms and agrees that to the extent that any of the Existing Security Documents or other Transaction Documents purports to assign or
pledge to the Collateral Agent, or to grant to the Collateral Agent a security interest in or lien on, any collateral as security for the obligations of the Company from time to time existing in respect of the Existing Exchanged Notes and any other
Transaction Document, such pledge, assignment and/or grant of the security interest or lien is hereby ratified and confirmed in all respects, and shall apply with respect to the obligations under the New Existing Exchanged Notes and
(z) ratifies and confirms its obligations under each of the Existing Security Documents to which it is a party. 
  

	 	3.	REPRESENTATIONS AND WARRANTIES 

 (a) Investor
Representations. The Investor hereby represents and warrants to the Company as to the New Exchanged Notes and the Amended Exchanged Conversion Shares as set forth in Section 2 of the Securities Purchase Agreement as if such representations
and warranties were made as of the date hereof (except for representations and warranties that speak as of a specific date, which shall remain true and correct as of such specific date) and set forth in their entirety in this Agreement. 

 

 8 

 (b) Company Representations. 
 (i) The Company represents and warrants to the Investor as set forth in Section 3 of the Securities Purchase Agreement as if such
representations and warranties were made as of the date hereof (except for representations and warranties that speak as of a specific date, which shall remain true and correct as of such specific date, and except as set forth in a Disclosure
Schedule attached hereto) and set forth in their entirety in this Agreement. Such representations and warranties to the transactions thereunder and the securities issued thereby are hereby deemed for purposes of this Agreement to be references to
the transactions hereunder and the issuance of the securities hereby, references therein to “Closing Date” being deemed references to the Closing Date as defined in Section 1(b) above, and references to “the date hereof”
being deemed references to the date of this Agreement. 
 (ii) The Company further represents and warrants to the Investor as
of the date hereof as follows: 
 (1) Neither the Company nor any Subsidiary is or, after giving effect to the issuance of
the New Exchanged Notes and the offer and sale of the Amended Exchanged Conversion Shares contemplated hereunder and the application of the net proceeds from such sale, will be an “investment company” within the meaning of such term under
the 1940 Act, and the rules and regulations of the SEC thereunder. 
 (2) Other than the sale and issuance of the Securities
(as defined in the Existing Securities Purchase Agreement), the Company has not sold or issued any securities that would be integrated with the issuance and offering of the Securities (as defined in the Securities Purchase Agreement) contemplated by
this Agreement pursuant to the 1933 Act, the Rules and Regulations or the interpretations thereof by the SEC. None of the Company, its Subsidiaries, any of their affiliates, and any Person acting on their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this issuance and offering of the Securities (as defined in the Securities Purchase Agreement) to require approval of stockholders of
the Company for purposes of any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or
designated. Other than the sale and issuance of the Securities (as defined in the Existing Securities Purchase Agreement), none of the Company, its Subsidiaries, their affiliates and any Person acting on their behalf will take any action or steps
referred to in the preceding sentence that would cause 

  

 9 

 
the issuance and offering of the Securities (as defined in the Securities Purchase Agreement) to be integrated with other offerings for purposes of any such
applicable stockholder approval provisions. 
 (3) The aggregate Indebtedness owed by all Subsidiaries to the Company as of
July 31, 2008 is approximately $143,632,000. 
 (4) The aggregate receivables of the Company or any of its Subsidiaries
subject to the factoring arrangement with GE Capital Finance S.p.A. as of July 31, 2008 does not exceed $7,600,000. 
 (5) The aggregate receivables of NAD Sub as of July 31, 2008 is approximately $13,800,000. 
 (c) No Event of Default.
The Company represents and warrants to the Investor that after giving effect to the terms of this Agreement, the Indenture Consent, the Third Supplemental Indenture and the Other Agreements, no Default or Event of Default (as defined in the
Indenture) or Event of Default (as defined in the Existing Exchanged Notes) shall have occurred and be continuing as of the date hereof. 
 (d) Public Information. At any time during the period commencing on the Closing Date and ending at such time that all of the Securities can be sold without the requirement to be in compliance with Rule 144(c)(1) and otherwise without
restriction or limitation pursuant to Rule 144, if a registration statement is not available for the resale of all of the Securities and the Company shall fail for any reason to satisfy the current public information requirement under Rule 144(c)(1)
(a “Public Information Failure”) then, as partial relief for the damages to any holder of Securities by reason of any such delay in or reduction of its ability to sell the Securities (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each such holder an amount in cash equal to two percent (2.0%) of the aggregate Purchase Price of such holder’s Securities on the day of a Public Information Failure and on
every thirtieth day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (i) the date such Public Information Failure is cured and (ii) such time that such public information is no longer required pursuant
to Rule 144. The payments to which a holder shall be entitled pursuant to this Section 3(d) are referred to herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of
(I) the last day of the calendar month during which such Public Information Failure Payments are incurred and (II) the third Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event
the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. 
 (e) Holding Period. For the purposes of Rule 144(d), the Company acknowledges that the holding period of the New Exchanged Notes (including

  

 10 

 
the corresponding Amended Exchanged Conversion Shares with respect to the Amended Exchanged Notes) may be tacked onto the holding period of the Existing
Exchanged Notes (including the corresponding Existing Exchanged Conversion Shares). The Company agrees not to take a position contrary to this Section 3(e). The Company agrees to take all actions, including, without limitation, the issuance by
its legal counsel of any necessary legal opinions, necessary to issue to the Amended Exchanged Conversion Shares that are freely tradable on an Eligible Market without restriction and not containing any restrictive legend without the need for any
action by the Investor. 
  

	 	4.	FEES AND EXPENSES 

 (a) On the Closing Date, the
Company shall reimburse the Investor for [ALL INVESTORS OTHER THAN PORTSIDE: its legal and due diligence fees and expenses in connection with the preparation and negotiation of this Agreement in an amount up to
$[            ] subject to the provision documents and other evidence reasonably satisfactory to Company of the fees and expenses so incurred.] [PORTSIDE ONLY its legal and due
diligence fees and expenses in connection with the preparation and negotiation of this Agreement and the related documents by paying such amount to Schulte Roth & Zabel LLP. In addition, the Company shall reimburse the Investor for all
other legal fees and expenses of the Investor, including those incurred after the Closing, such payment to be made upon receipt of a written invoice from Portside Growth and Opportunity Fund or its legal counsel, but in no event later than three
(3) Business Days after such receipt.] Except as otherwise set forth in this Agreement, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. 
 (b) On the Closing Date, the
Company shall reimburse the Investor for United States taxes payable by the Investor or any of its affiliates, shareholders or members as a consequence of the exchange of the Existing Exchanged Notes for the New Exchanged Notes (but not including
any taxes payable as a consequence of payments under the New Exchanged Notes), based on an estimate (the “Estimate”) made by the Investor of the amount of taxable gains or income subject to taxation, the rate of taxation, relative
proportion of domestic and foreign tax payers, and the amount of taxes so payable; provided, however, that (i) in the event the Estimate is lower than the actual United Stated taxes payable by the Investor, the Company shall promptly pay to the
Investor after such actual amount has been determined and certified by the Investor within ten (10) Business Days after the Closing Date the difference between the Estimate and the actual United Stated taxes payable by the Investor, but in no
event later than three (3) Business Days after such determination or (ii) in the event the Estimate is greater than the actual United Stated taxes payable by the Investor, the Investor shall promptly pay to the Company after such actual
amount has been determined and certified by the Investor within ten (10) Business Days after the Closing Date the difference between the Estimate and the actual United Stated taxes payable by the Investor, but in no event later than three
(3) Business Days after such determination; provided, further that the maximum amount of taxes reimbursable pursuant to this paragraph (b) shall not exceed an amount, in the aggregate, equal to 0.5% of the principal 

  

 11 

 
amount of the New Exchanged Notes and Existing Exchanged Notes held by the Investor immediately following the Closing, which aggregate amount is set forth
opposite the Investor’s name in column (6) of the Schedule of Investors attached hereto. The Company shall pay all stamp and other non-income taxes and duties levied in connection with the issuance of the New Exchanged Notes. 

 

	 	5.	CONDITIONS TO COMPANY’S OBLIGATIONS HEREUNDER. 

 The obligations of the Company to the Investor hereunder are subject to the satisfaction of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any
time in its sole discretion by providing the Investor with prior written notice thereof: 
 (a) The Investor shall have
executed this Agreement and the Bridge Securities Purchase Agreement of the Investor and delivered the same to the Company. 
 (b) The Investor shall have delivered to the Company, pursuant to the terms of the Existing Exchanged Notes and this Agreement, such principal amount of its Existing Exchanged Note being exchanged at the Closing or such other documentation
reasonably satisfactory to the Company that the Investor held such Existing Exchanged Note as a Physical Security and that the Investor’s Existing Exchanged Note has been lost or destroyed. 
 (c) The representations and warranties of the Investor in Section 3(a) hereof shall be true and correct as of the date when
made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date). 
 (d) The Investor shall have executed and delivered the Indenture Consent. 
  

	 	6.	CONDITIONS TO THE INVESTOR’S OBLIGATIONS HEREUNDER. 

 The obligations of the Investor hereunder are subject to the satisfaction of each of the following conditions, provided that these conditions are for the Investor’s sole benefit and may be waived by the Investor at any time in its sole
discretion by providing the Company with prior written notice thereof: 
 (a) The Company shall have duly executed and
delivered to the Investor (i) this Agreement, the Other Agreements and the Bridge Securities Purchase Agreements, (ii) each of the Security Documents and Bridge Security Documents, and (iii) the New Exchanged Notes (allocated in such
principal amounts as the Investor shall request) being issued to the Investor at the Closing pursuant to this Agreement. 
  

 12 

 (b) Each of the Other Investors shall have (i) executed the Other Agreements and the
Other Bridge Agreements, (ii) satisfied or waived all conditions to the closings contemplated by the Other Agreements and the Other Bridge Agreements and (iii) surrendered such principal amount of their Existing Exchanged Notes being
exchanged at the Closing or such other documentation reasonably satisfactory to the Company that such Other Investor held such Existing Exchanged Note as a Physical Security (as defined in the First Supplemental Indenture) and that such Other
Investor’s Existing Exchanged Note has been lost or destroyed. 
 (c) The Investor shall have received the opinion of
Morgan, Lewis & Bockius LLP, the Company’s counsel, dated as of the Closing Date, in substantially the form of Exhibit F attached hereto. 
 (d) The Company shall have delivered to the Holder all Schedules to the Security Agreement. 
 (e) The Company shall have delivered to the Investor a copy of the Irrevocable Transfer Agent Instructions, in the form of Exhibit
G attached hereto, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent. 
 (f) The Company shall have delivered to the Investor a certificate (or a fax or pdf copy of such certificate) evidencing the formation and good standing of the Company and each of its Subsidiaries in such
entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction, as of a date within ten (10) days of the Closing Date. 
 (g) The Company shall have delivered to the Investor a certificate (or a fax or pdf copy of such certificate) evidencing the
Company’s qualification as a foreign corporation and good standing issued by the Secretary of State of California, which is the only jurisdiction in which the Company conducts business and is required to so qualify, as of a date within ten
(10) days of the Closing Date. 
 (h) The Company shall have delivered to the Investor a certified copy of the
Certificate of Incorporation as certified by the Secretary of State of the State of Delaware (or a fax or pdf copy of such certificate) within ten (10) days of the Closing Date. 
 (i) The Company shall have delivered to the Investor a certificate, executed by the Secretary of the Company and dated as of the Closing
Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s Board of Directors in a form reasonably acceptable to the Investor, (ii) the Certificate of Incorporation and (iii) the Bylaws, each as
in effect at the Closing, in the form attached hereto as Exhibit H. 
  

 13 

 (j) The representations and warranties of the Company in Section 3(b) shall
be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the
Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specified date) and the Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Investor shall have received a certificate,
executed by the Chief Executive Officer or Chief Financial Officer of the Company, dated as of the Closing Date, to the foregoing effect in the form attached hereto as Exhibit I. 
 (k) The Company shall have delivered to the Investor a letter from the Company’s transfer agent certifying the number of shares of
Common Stock outstanding as of a date within five days of the Closing Date. 
 (l) The Common Stock (I) shall be
designated for quotation or listed on the Principal Market and (II) shall not have been suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor, except as set forth in the Company’s filings
with the SEC, shall suspension by the SEC or the Principal Market have been threatened, as of the Closing Date, either (A) in writing by the SEC or the Principal Market or (B) by falling below the minimum listing maintenance requirements
of the Principal Market. 
 (m) In accordance with the terms of the Security Documents, the Company shall have delivered to
the Collateral Agent (i) certificates representing the Pledged Shares (as defined in the Security Agreement) to the extent such subsidiary is a corporation or otherwise has certificated capital stock, along with duly executed blank stock powers
and (ii) appropriate financing statements on Form UCC-I to be duly filed in such office or offices as may be necessary or, in the opinion of the Collateral Agent, desirable to perfect the security interests purported to be created by each
Security Document. 
 (n) Within two (2) Business Days prior to the Closing, the Company shall have delivered or caused
to be delivered to the Investor (i) true copies of UCC search results, listing all effective financing statements which name as debtor the Company or any of its Subsidiaries filed in the prior five years to perfect an interest in any assets
thereof, together with copies of such financing statements, none of which, except as otherwise agreed in writing by the Investor, shall cover any of the Collateral (as defined in the Security Documents) and the results of searches for any tax lien
and judgment lien filed against such Person or its property, which results, except as otherwise agreed to in writing by the Investors and except with respect to any Permitted Liens (as defined in the New Exchanged Notes) shall not show any such
Liens (as defined in the Security Documents). 
  

 14 

 (o) The Bridge Collateral Agent and the Collateral Agent shall have executed and
delivered to the Investor the Intercreditor Agreement. 
 (p) The Company shall have delivered to the Investor written notice
as to the Conversion Price (as defined in the Indenture) of each of the Existing Notes that will be in effect immediately following the Closing Date (after giving effect to antidilution adjustments set forth in such Existing Notes). 
 (q) The Trustee and the Company shall have duly executed and delivered to the Investor the Indenture Consent and the Third Supplemental
Indenture. 
 (r) Concurrently with the Closing, (i) the Company and Elitech shall have executed and delivered
(x) the Bridge Securities Purchase Agreement with respect to the issuance of the Additional Bridge Note and (y) the Elitech Merger Agreement in form and substance reasonably satisfactory to the Investor and (ii) the Company shall have
consummated the transactions contemplated by the Bridge Securities Purchase Agreements to occur at the Initial Closing (as defined in the Bridge Securities Purchase Agreements), including, without limitation, the issuance of the Initial Bridge
Notes. 
 (s) Howard Birndorf shall have entered into a Cash Compensation Suspension Agreement, substantially in the form
attached hereto as Exhibit J. 
 (t) The Company shall have delivered to the Investor such other documents relating to
the transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request. 
  

	 	7.	MISCELLANEOUS. 

 (a) Disclosure of Transactions
and Other Material Information. On or before 8:30 a.m., New York City time, on the first Business Day following the date of this Agreement (the “8-K Filing Time”), the Company shall issue a press release and file a Current
Report on Form 8-K describing the terms of the transactions contemplated hereby and pursuant to the Bridge Securities Purchase Agreements and Elitech Merger Agreement in the form required by the 1934 Act and attaching the material Transaction
Documents that have not previously been filed with the SEC by the Company (including, without limitation, this Agreement, the Other Agreements, the Security Documents, the Indenture Consent, the Third Supplemental Indenture, the form of the New
Exchanged Notes and all the financial statements of Elitech delivered to the Investors) and the Bridge Notes, the Bridge Securities Purchase Agreement, the Bridge Security Documents and the Elitech Merger Agreement as exhibits to such filing
(including all attachments, the “8-K Filing”). As of immediately following the filing of the 8-K Filing with the SEC, the Investor shall not be in possession of any material, nonpublic information received 

  

 15 

 
from the Company, any of its Subsidiaries or any of their respective officers, directors, employees or agents, that is not disclosed in the 8-K Filing or in
prior filings with the SEC. For so long as the New Exchanged Notes and the Warrants (as defined in the Securities Purchase Agreement) are outstanding, other than notices required to be delivered pursuant to Section 4(m) of the Securities
Purchase Agreement, the Company shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors, employees and agents, not to, provide the Investor with any material, nonpublic information regarding the
Company or any of its Subsidiaries from and after the filing of the 8-K Filing with the SEC without the express written consent of the Investor. For so long as the New Exchanged Notes and the Warrants are outstanding, if the Investor has, or
believes it has, received any such material, nonpublic information regarding the Company or any of its Subsidiaries provided in breach of the preceding sentence, it shall provide the Company with written notice thereof in which case the Company
shall, within five (5) Trading Days (as defined in the New Exchanged Notes) of receipt of such notice, make public disclosure of any such material, nonpublic information provided in breach of the preceding sentence. In the event of a breach of
the foregoing covenant by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees and agents, in addition to any other remedy provided herein or in the Transaction Documents, the Investor shall have the
right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material, nonpublic information without the prior approval by the Company, its Subsidiaries, or any of its or their respective officers,
directors, employees or agents. The Investor shall not have any liability to the Company, its Subsidiaries, or any of its or their respective officers, directors, employees, stockholders or agents for any such disclosure. Subject to the foregoing,
neither the Company, its Subsidiaries nor the Investor shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior
approval of the Investor, to make any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law,
regulation or any Eligible Market on which the Company’s securities are then listed or quoted (provided that in the case of clause (i) the Investor shall be consulted by the Company in connection with any such press release or other public
disclosure prior to its release). Without the prior written consent of the Investor, neither the Company nor any of its Subsidiaries or affiliates shall disclose the name of the Investor in any filing, announcement, release or otherwise other than
in connection with the Registration Statement unless such disclosure is required by law, regulation or any Eligible Market on which the Company’s securities are then listed or quoted. 
 (b) Blue Sky. If required, the Company, on or before the Closing Date, shall take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for or to qualify the Securities for sale to the Investor at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain
an exemption from such qualification), and shall provide evidence of any such action so taken to the Investor on or prior to the Closing Date. The Company shall make all filings and reports relating to the offer and sale of the Securities required
under applicable securities or “Blue Sky” laws of the states of the United States following the Closing Date. 
  

 16 

 (c) Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.  
 (d) Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the
same force and effect as if the signature were an original, not a facsimile signature. 
 (e) Headings. The headings of this
Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. 
 (f)
Severability. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable
shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this
Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of the parties or the practical 

  

 17 

 
realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the
prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). 
 (g) No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 
 (h) Further Assurances.
Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in
order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 
 (i) No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 (j) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and assigns in accordance with the terms of the Existing Securities Purchase Agreement. 
 (k) Notices. Any notices,
consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt,
when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 
 If to the Company:

 Nanogen Inc. 
 10398 Pacific
Center Court 
 San Diego, California 92121 
 Telephone: (858) 410-4600 
 Facsimile: (858) 410-4949 
 Attention: David Ludvigson 
 with a copy
(for informational purposes only) to: 
 Morgan, Lewis & Bockius LLP 
 One Market, Spear Street Tower 
 San
Francisco, CA 94605 
  

 18 

 Telephone: (415) 442-1091 
 Facsimile: (415) 442-1001 
 Attention: Scott D. Karchmer, Esq. 
 If to the Transfer Agent: 
 Computershare
Investor Services 
 250 Royall Street 
 Canton, MA 02021 
 Telephone: (877) 282-1168 
 Facsimile: (781) 575-3606 
 Attention: Jeff Seiders 
 If to the Investor, to its address and facsimile number set forth on the Schedule of Investors, with copies to the Investor’s representatives as set
forth on the Schedule of Investors, 
 with a copy (for informational purposes only) to: 
 Schulte Roth & Zabel LLP 
 919
Third Avenue 
 New York, New York 10022 
 Telephone: (212) 756-2000 
 Facsimile: (212) 593-5955 
 Attention: Eleazer N. Klein, Esq. 
 or to such other address
and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt
(A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of
the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or
(iii) above, respectively. 
 (l) Remedies. The Investor and each holder of the Securities shall have all rights and remedies
set forth in the Transaction Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any rights under
any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted
by law. Furthermore, the Company recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Investor. The 

  

 19 

 
Company therefore agrees that the Investor shall be entitled to seek temporary and permanent injunctive relief in any such case without the necessity of
proving actual damages and without posting a bond or other security. 
 (m) Independent Nature of Investor’s Obligations and
Rights. The obligations of the Investor under this Agreement or any other Transaction Document are several and not joint with the obligations of any other Investor, and the Investor shall not be responsible in any way for the performance of the
obligations of any other Investor under any Transaction Document. Nothing contained herein or in this Agreement or any other Transaction Document, and no action taken by the Investor pursuant hereto, shall be deemed to constitute the Investor and
other Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investor and the other Investors are in any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement or any other Transaction Document and the Company acknowledges that the Investors are not acting in concert or as a group with respect to such obligations or the transactions contemplated by Agreement and
any other Transaction Document. The Company and the Investor confirms that the Investor has independently participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors. The Investor shall be
entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Document, and it shall not be necessary for any other Investor to be joined as an
additional party in any proceeding for such purpose. 
 (n) Most Favored Nation. The Company hereby represents and warrants as of the
date hereof and covenants and agrees from and after the date hereof that none of the terms offered to any Person with respect to any amendment, settlement or waiver (each a “Settlement Document”) relating to the terms, conditions
and transactions contemplated hereby, is or will be more favorable to such Person than those of the Investor and this Agreement shall be, without any further action by the Investor or the Company, deemed amended and modified in an economically and
legally equivalent manner such that the Investor shall receive the benefit of the more favorable terms contained in such Settlement Document. Notwithstanding the foregoing, the Company agrees, at its expense, to take such other actions (such as
entering into amendments to the Transaction Documents) as the Investor may reasonably request to further effectuate the foregoing. 
 [Signature Page Follows] 
  

 20 

 IN WITNESS WHEREOF, the Investor and the Company have caused their respective signature page to
this Second Amendment and Exchange Agreement to be duly executed as of the date first written above. 
  

			
	COMPANY:
	
	NANOGEN, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	

 [Signature Page to Second Amendment and Exchange Agreement] 

 IN WITNESS WHEREOF, the Investor and the Company have caused their respective signature page to
this Second Amendment and Exchange Agreement to be duly executed as of the date first written above. 
  

			
	INVESTOR:
		
	By:	 	  

	Name:	 	
	Title:	 	

 Schedule 2(a) and 3(b) 
 Modification to the Company’s Covenants in Section 4 of Securities Purchase Agreement. 
  

	•	 	 The term “Notes” in Section 4(b) shall mean the Existing Notes and the Existing Exchanged Notes. 

  

	•	 	 The term “Securities” in Section 4(c) shall have the meaning as set forth in the Existing Securities Purchase Agreement as amended by the Amendment
and Exchange Agreements dated March 13, 2008 between the Company and each of the Buyers, the Amendment and Consent Agreement dated March 27, 2008 and the Second Amendment and Exchange Agreement dated August 14, 2008 between the
Company and each of the Buyers (the “Amendment Agreements”). 

  

	•	 	 The term “Securities” in Section 4(d) shall have the meaning as set forth in the Existing Securities Purchase Agreement as amended by the Amendment
Agreements. 

 Modification to Company Representations in Section 3 of Securities Purchase Agreement 

 

	•	 	 Insert the phrase “except as set forth in the Disclosure Schedule attached to the Amendment and Exchange Agreements, dated March 13, 2008 between the
Company and each of the Buyers and the Disclosure Schedules attached to the Second Amendment and Exchange Agreement dated August 14, 2008, between the Company and each Buyer, provided that any schedules to the Second Amendment and Exchange
Agreement shall only modify the representations and warranties as of the date as of such Second Amendment and Exchange Agreement and as of the consummation of the transactions contemplated thereby” immediately after the sentence “The
Company represents and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date” in Section 3. 

  

	•	 	 The term “Securities” in Section 3(a) shall have the meaning as set forth in the Existing Securities Purchase Agreement as amended by the Amendment
Agreements. 

  

 23 

	•	 	 The term “Securities” in Section 3(b)(ii) shall have the meaning as set forth in the Existing Securities Purchase Agreement as amended by the
Amendment Agreements. 

  

	•	 	 The term “Irrevocable Transfer Agent Instruction” in Section 3(d) shall refer to the Irrevocable Transfer Agent Instruction attached as Exhibit G in
this Agreement. 

  

	•	 	 The first sentence of Section 3(f) shall read as follows: 

 As of the date hereof and as of the Closing Date, the Company has or will have, as the case may be, an authorized, issued and outstanding capitalization as is set forth in Schedule 3(f) to the Amendment Agreement
(subject to the issuance of shares of Common Stock upon exercise of stock options and warrants disclosed as outstanding in the Registration Statement and the Prospectus and the grant or issuance of options or shares under existing equity
compensation plans or stock purchase plans described in the Registration Statement or the Prospectus), and such authorized capital stock conforms to the description thereof set forth in the Registration Statement and the Prospectus. 
  

	•	 	 The term “Securities” in Section 3(g)(i) shall have the meaning as set forth in the Existing Securities Purchase Agreement as amended by the
Amendment Agreements. 

  

	•	 	 The term “Securities” in Section 3(g)(ii) shall have the meaning as set forth in the Existing Securities Purchase Agreement as amended by the
Amendment Agreements. 

  

	•	 	 The term “Securities” in Section 3(h) shall have the meaning as set forth in the Existing Securities Purchase Agreement as amended by the Amendment
Agreements. 

  

	•	 	 The term “Securities” in Section 3(x) shall have the meaning as set forth in the Existing Securities Purchase Agreement as amended by the Amendment
Agreements. 

  

 24 

	•	 	 The term “Securities” in Section 3(hh) shall have the meaning as set forth in the Existing Securities Purchase Agreement as amended by the Amendment
Agreements. 

  

 25 

 Schedule of Exceptions to the Securities Purchase Agreement as Referenced in the Second 

Amendment and Exchange Agreement 
  

 26 

 3(a) 
 Nanogen
Recognomics GmbH joint venture with Aventis, which has been inactive since 2004, is owned 60% by Nanogen and 40% by Aventis. 
 3(b) 
 Nanogen’s 6.25% senior convertible notes and 9.75% senior secured convertible notes and related indenture and warrants (the “Note Transaction Documents”)
currently provide the note and warrant holders require such holders’ consent to the interim financing contemplated by the Agreement. Concurrent with the signing of the Agreement, the parties will enter into a restructuring transaction in which
the Note Transaction Documents will be amended to permit the interim financing. 
 3(d) 
 There are stock options, warrants and convertible debt that may become outstanding shares of Nanogen. The terms of such options, warrants and convertible debt are disclosed in SEC Reports. 
 In addition, as a result of the restructuring of the Company’s 6.25% Senior Convertible Notes in March 2008, the anti-dilution provisions of certain warrants issued
in the August 2007 debt financing (the “Warrants”) were triggered, which increased the number of shares of common stock issuable upon exercise of such Warrants by approximately 11.7 million shares. Such increase was not reflected in
the Company’s financial statement for the first quarter Form 10Q and will be reflected in the Company’s next Form 10Q filings. See Form 8-K filed by the Company on August 5, 2008 regarding the restatement of financial statements and
the amended Form 10Q for fiscal quarter 2008 filed on August 8, 2008. 
 All equity awards granted by Nanogen prior to December 12, 2006 provide
for accelerated vesting of all of the shares subject to the award upon a change in control of Nanogen. Certain equity awards granted by Nanogen on or after December 12, 2006 provide for accelerated vesting of all or part of the shares subject
to the award upon a change in control of Nanogen, or upon the holder’s termination of employment under designated circumstances following a change in control. In addition, Nanogen has entered into employment agreements with certain employees
that provide for accelerated vesting of all or part of the employee’s outstanding equity awards upon a change in control of Nanogen, or upon the holder’s termination of employment under designated circumstances following a change in
control. 
 All equity awards granted under our 1997 Stock Incentive Plan (the “Plan”) prior to December 12, 2006, and certain equity awards
granted after such date, contain a special Section 280G tax gross-up provision. 
 Nanogen has an Employee Stock Purchase Plan that allows employees
twice a year to purchase up to 1,666 shares of our common stock at a discount to the market price. 
 See the August 2007 convertible debt agreements,
including related March 2008 restructuring agreement of such debt, which were disclosed in the SEC Reports. 
 [Signature Page to Second
Amendment and Exchange Agreement] 

 3(f) 
 As a result of
the restructuring of the Company’s 6.25% Senior Convertible Notes in March 2008, the anti-dilution provision of certain warrants issued in the August 2007 debt financing (the “Warrants”) was triggered, which increased the number of
shares of common stock issuable upon exercise of such Warrants by approximately 11.7 million shares. Such increase was not reflected in the Company’s financial statement for the first quarter Form 10Q and will be reflected in the
Company’s next Form 10Q filings. See Form 8-K filed by the Company on August 5, 2008 regarding the restatement of financial statements and the amended Form 10Q for fiscal quarter 2008 filed on August 8, 2008. 
 As disclosed in the Form 10-K filed by the Company on March 31, 2008, in response to SEC’s review of certain accounting treatment of Jurilab Ltd., a variable
interest entity originally consolidated in the quarter ending September 30, 2005, the Company has restated its consolidated financial statements to its Form 10-K for the fiscal year ended December 31, 2006 and its Form 10-Q for
the three and nine-month periods ended September 30, 2007. The SEC continues to comment on the question as to whether a separate financial statement of Jurilab should be filed pursuant to Regulation S-X of the Securities Act of 1933, as
amended. While the Company does not believe that such separate financial statement is required and has responded to the SEC with its position, the Company has not received final confirmation that such SEC comment has been resolved. 
 3(j) 
 We have received a letter claiming damages from Montwell, a
Turkish distributor of our micro array product that has been discontinued. The claim is unresolved. 
 3(k) 
 In connection with the debt restructuring completed in March 2008, we granted a first priority lien on substantially all of our assets to holders of the 9.75% Senior
Secured Convertible Notes to secure our obligations under such notes. In addition, there are some specific asset liens supporting fixed asset financing provided by GE in North America and specific liens on accounts receivable in Italy supporting a
working capital facility. 
 3(m) 
 We entered into an
employment agreement with Nicholas Venuto, our CFO, subsequent to the Balance Sheet Date. A copy of this agreement has been made available and filed in the SEC Report. 
 We created a general lien on the majority of our assets as part of the March 2008 debt restructuring. Copies of the related documents have been made available and filed in the SEC Report. 
 We entered into a Share Exchange Agreement dated August 14, 2008 with Financière Elitech S.A.S., a société par actions simplifiée
incorporated under the laws of France and registered with the Clerk of the Commercial Court of Nanterre under the number 481 676 062 (“Elitech”), and the shareholders of Elitech, as listed on Schedule 1 attached thereto.

 All equity awards granted by Nanogen prior to December 12, 2006 provide for accelerated vesting of all of the shares
subject to the award upon a change in control of Nanogen. Certain equity awards granted by Nanogen on or after December 12, 2006 provide for accelerated vesting of all or part of the shares subject to the award upon a change in control of
Nanogen, or upon the holder’s termination of employment under designated circumstances following a change in control. In addition, Nanogen has entered into employment agreements with certain employees that provide for accelerated vesting of all
or part of the employee’s outstanding equity awards and for the payment of certain severance benefits upon a change in control of Nanogen, or upon the holder’s termination of employment under designated circumstances following a change in
control. 
 The accelerated vesting of the outstanding equity awards, and the payment of severance benefits may result in the payment of an excess parachute
payment within the meaning of Section 280G of the Code. All equity awards granted under the Plan prior to December 12, 2006, and certain equity awards granted after such date, contain a special Section 280G tax gross-up provision.

 3(o) 
 Our material agreements are filed as exhibits to
various SEC Reports. A list of current material agreements can be found in the exhibit list included in our 2007 Annual Report on Form 10K filed with the SEC on March 31, 2008. 
 Nanogen and Epoch are late in making rent payments for June, July and August of 2008 and related common area maintenance payments for facility leases in San Diego and Bothell. Nanogen has received a notice of default
from its landlord for the San Diego facility. 
 Nanogen is currently in negotiations with its noteholders with respect to restructuring its outstanding
convertible notes and, in connection therewith, has not pay the quarterly interest due on June 30, 2008 and principal payments due for the month of July 2008 with respect to such convertible notes. 
 Nanogen, Inc. and Epoch BioSciences, Inc. entered into to a License and Supply Agreement with Mirina Corporation, a Delaware corporation focused on developing a
therapeutic use of the MGB technology of Epoch., in August 2008. Pursuant to the License and Supply Agreement, Mirina Corporation issued to Nanogen 1,300,000 shares of its common stock. In connection with the License and Supply Agreement and the
issuance of shares of common stock to it, Nanogen also entered into the following agreements with Mirina Corporation and, in some cases, certain investors in Mirina Corporation: Subscription Agreement, Stock Restriction Agreement, , Stockholders
Agreement and Investors’ Rights Agreement. 
 Concurrently with the execution of this Agreement, Nanogen and Howard Birndorf are entering into a Salary
Suspension Agreement. pursuant to which Nanogen agrees to indemnify Mr. Birndorf for any taxes and penalties incurred as a result of the suspension of his salary. 
 3(q) 
 See annex 3(q) attached hereto. 

 Nanogen is aware that Biosite Inc. has been developing certain product in the cardiac diagnostics market that may be
related to Nanogen’s Stanton patent for cardiac testing, 3-in-1 patents relating to 3 or more markers per cardiac test and certain stroke patents. On or about July 1, 2008, Nanogen sent an letter to Biosite, Inc., making an offer to grant
a license of such patents to Biosite Inc., and we have not yet received a response. 
 We are party to a joint venture agreement with Aventis. The agreement
relates to Nanogen Recognomics, GmbH, which has been inactive since 2004 but contains some joint intellectual property. We own 60% and Aventis owns 40% of this entity. 
 3(z) 
 We are party to the following Related Party Transactions: 
  

					
	 Entity
	  	 Relationship
	  	 Transaction

	Heiner Dreismann	  	BOD member	  	Consulting agreement up to $60,000 per year
			
	ThermoFisher	  	5%+ stockholder	  	Distribution and License Agreement, February 2008 & Distribution Agreement, August 2006.
			
	Hx Diagnostics	  	We hold minority interest in stock	  	Assay Development and License Agreement dated July 23, 2008; Equity Purchase Agreement dated July 23, 2008; Development and License Agreement, June 2006; and related interim funding letter
agreement dated May 23, 2008.
			
	Hx Diagnostics	  	We hold minority interest in stock	  	Development and License Agreement, June 2006, and related interim funding letter agreement dated May 23, 2008.
			
	Vectrant	  	Our BOD member is CEO	  	Facility sublease (one office and portion of lab in San Diego)
			
	Oy Jurilab Ltd	  	We hold minority interest in stock	  	Type 2 Diabetes Collaboration Agreement, May 2006

 3(bb) 
 As previously announced on November 27, 2007, the Company received a letter from the NASDAQ Stock Market advising that the Company did not meet the minimum $1.00 per share bid price requirement for continued inclusion on the
NASDAQ Global Market pursuant to NASDAQ Marketplace Rule 4450(a)(5). The letter stated that the Company has until May 27, 2008 to regain compliance. If the Company does not regain compliance by May 27, 2008, the Company may transfer the
listing of its common stock to the NASDAQ Capital Market if the common stock satisfies all criteria, other than compliance with the minimum bid price requirement, for initial inclusion on such market. Upon such transfer, Company will be afforded an
additional 180 calendar days from May 27, 2008 to comply with the minimum bid price requirement while listed on the NASDAQ Capital Market. On May 27, 2008, the listing of the Company’s common stock was transferred from the NASDAQ
Global Market to the NASDAQ 

 
Capital Market, and the Company is afforded an additional compliance period of 180 calendar days, or until the end of November 2008, to comply with the
minimum bid price requirement of the NASDAQ Capital Market. 
 3(ff) 
 See disclosure under Section 3(bb) regarding NASDAQ minimum bid price requirement. In addition, certain filings are required under the U.S. Security Agreements to perfect the security interests granted
thereunder. 
 3(oo) 
 As a result of the restructuring of
the Company’s 6.25% Senior Convertible Notes in March 2008, the anti-dilution provisions of certain warrants issued in the August 2007 debt financing (the “Warrants”) were triggered, which increased the number of shares of common
stock issuable upon exercise of such Warrants by approximately 11.7 million shares. Such increase was not reflected in the Company’s financial statement for the first quarter Form 10Q and will be reflected in the Company’s next Form
10Q filings. See Form 8-K filed by the Company on August 5, 2008 regarding the restatement of financial statements and the amended Form 10Q for fiscal quarter 2008 filed on August 8, 2008. 
 As disclosed in the Form 10-K filed by the Company on March 31, 2008, in response to SEC’s review of certain accounting treatment of Jurilab Ltd., a variable
interest entity originally consolidated in the quarter ending September 30, 2005, the Company has restated its consolidated financial statements to its Form 10-K for the fiscal year ended December 31, 2006 and Form 10-Q for the
three and nine-month periods ended September 30, 2007. 

 SCHEDULE OF INVESTORS

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