Document:

Exhibit 10.1

 

JOINT SALES AND MARKETING AGREEMENT

 

This
Joint Sales and Marketing Agreement (“Agreement) is entered into this 16 day of
July 2004 by and between North Electric Company, Inc., a North Carolina
corporation with a principal place of business at One Springfield Center, 6131
Falls of Neuse Road, Suite 205, Raleigh, North Carolina 27609 (“NECI”), and
Tekno Telecom LLC, a limited liability company with a principal place of
business at 1250 Shore Road, Naperville, Illinois (“Tekno”).

 

WHEREAS,
the parties have independently developed certain products, services, and
capabilities for marketing in and to the telecommunications and related
markets;

 

WHEREAS,
Tekno and NECI believe that certain of their respective products, services, and
capabilities are complimentary and may be more attractive to potential
purchasers when marketed together; and

 

WHEREAS,
the parties are interested in entering into an agreement to jointly market and
sell their respective products, services, and capabilities.

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants set forth
herein, the sufficiency of which consideration is acknowledged to be adequate,
the parties agree to the terms set forth below.

 

A.                                    Definitions

 

1.                                       “Tekno Competitive Products” means any products developed by
NECI at any time which perform functions identical or similar to, or which can
be used for purposes identical or similar to, any one or more Tekno Products.

2.                                       “Tekno Products” means Tekno’s NetAnalzer and NetQuest
products; the services associated with the sale, supply, maintenance, repair,
and support thereof, and any other capabilities of Tekno associated therewith.

3.                                       “NECI Competitive Products” means any products developed by
Tekno at any time which perform functions identical or similar to, or which can
be used for purposes identical or similar to, any one or more NECI Products.

4.                                       “NECI Products” means NECI’s NAS-6131 Network Assurance
Product; the services associated with the sale, supply, maintenance, repair and
support thereof, and any other capabilities of NECI associated therewith.

5.                                       “Solution Set”  is provided as a
placeholder but not included in the initial Agreement.  It is anticipated that this Joint Sales and
Marketing Agreement will result in the Tekno Products and the NECI Products
being integrated and/or operated together to provide a more powerful “Solution
Set” than either product can do in a standalone mode.  When that occurs, this Agreement will be
updated to reflect that “Solution Set”.

 

B.                                    Basic
Agreements

 

1.                                       Non-exclusivity.  The
marketing and sales agreements set forth in this Agreement are non-exclusive on
the part of both parties.

2.                                       Duration.  The term of
this Agreement shall begin on the date first marked above and shall continue
until the date which is thirty (30) calendar days after the date any party
hereto delivers written notice of termination to the other party.

3.                                       Costs.  Each party
agrees to bear its own costs in respect of the negotiation, execution, and
performance of this Agreement.

4.                                       Confidentiality. The terms of the MUTUAL NON-DISCLOSURE
AGREEMENT executed on or about 7/20, 2004 by NECI and on or about 7/20, 2004 by
Tekno (“Confidentiality Agreement”) are incorporated herein by reference as if
repeated verbatim.  In addition, the
purposes of the Confidentiality Agreement shall be deemed to include the
performance of this Agreement.

5.                                       Marketing of Competitive Products. During the term of this
Agreement and for a period of twenty-four months after the termination of this
Agreement (1) Tekno shall not develop 

 

 

any NECI competitive product and
(2) NECI shall not develop any Tekno Competitive Product.

 

C.                                    Marketing
Agreements

 

1.                                       Marketing of Solution Set.  Not included in the initial agreement..

2.                                       Marketing Preparation.  Both
parties agree to provide support for the joint marketing and sales efforts
including, but not limited to, pre-customer meeting discussions, preparation of
presentation material, attendance at marketing presentations and/or customer
discussion meeting, and completion and support for RFIs/RFQs.

3.                                       Pricing. Tekno shall be responsible for establishing all
pricing for Tekno Products.  NECI shall
be responsible for establishing all pricing for NECI Products.

4.                                       Customer Choice and Prime Contact. Customers will be jointly
chosen and agreed to by both parties. 
Depending on the situation, Tekno and NECI will agree jointly on how the
marketing contacts will be structured for each deal.

5.                                       Support Contact.  For
all customers who purchase Tekno Products, Tekno will be the primary contact
for all product support calls.  For all
customers who purchase NECI Products, NECI will be the primary contact for all
product support calls.

6.                                       Delivery and Performance. Tekno shall be responsible for the
on time delivery, operational performance, product quality, and ongoing
customer product support in respect to Tekno Products.  NECI shall be responsible for the on time
delivery, operational performance, product quality, and ongoing customer
product support in respect of NECI Products.

7.                                       Maintenance and Repair Costs.  Tekno shall be responsible for all costs
associated with the maintenance and repair of Tekno Products.  NECI shall be responsible for all costs
associated with the maintenance and repair of NECI Products.  Nothing herein shall prohibit any party from
passing any maintenance and repair costs on to a customer.

8.                                       Revenues. All revenue generated from the sale of Tekno
Products shall be paid to Tekno.  Quoting
and billing for Tekno Products and the collection of revenues will be the sole
responsibility of Tekno.  All revenue
generated from the sale of NECI Products shall be paid to NECI.  Quoting and billing for NECI Products and the
collection of revenues will be the sole responsibility of NECI.

9.                                       Liability. Tekno shall not be liable for the failure to
perform or any fault in any NECI Product. 
NECI shall not be liable for the failure to perform or any fault in any
Tekno Product.

10.                                 Indemnification.  Each
party (the “Indemnifying Party”) agrees to indemnify, defend, and hold harmless
the other party (the “Indemnified Party”) from any and all costs, expenses,
judgments, awards, fines, taxes, attorney and other professional fees, court
costs, and other charges associated with any action, suit, claim investigation,
arbitration, or mediation of any matter involving an Indemnified Party brought
as the result of any matter related to or involving any Tekno Product if Tekno
is the Indemnifying Party or any NECI Product if NECI is the Indemnifying
Party.

 

D.                                    Technology
Agreements

 

1.                                       Technology Ownership.  Notwithstanding any other provision of this
Agreement or the Confidentiality Agreement, at all times during the term of
this Agreement and after the termination of this Agreement, unless agreed
otherwise in writing by both parties (a) Tekno shall have no ownership interest
in any of the NECI Products and (b) NECI shall have no ownership interest in
any of the Tekno Products.

2.                                       Limited License.  In
respect to the joint marketing and sales activities further described in this
Agreement, (a) Tekno grants to NECI a limited, non-exclusive, nontransferable
license to use the trademarks and trade names associated with the Tekno
Products and (b) NECI grants to Tekno a limited, non-exclusive, nontransferable
license to use the trademarks and trade names associated with the NECI
Products.

3.                                       Technology Interface.  It
is anticipated that this will be required to integrate and/or operate the NECI
and Tekno Products as a “Solution Set” and will be defined at such time as that
need is agreed to by the Parties.

 

 

E.                                      Miscellaneous
Provision

 

1.                                       Relationship of the Parties.  The Parties intend that this Agreement shall
not create, and shall be construed so as not to create, an agency, employment,
joint venture, or partnership relationship between them, nor shall it create an
association or any other organized form of relationship.  Neither party is authorized to make any
warranty nor representation on behalf of the other except as specifically
authorized in this Agreement or by some other writing.

2.                                       Amendment.  This Agreement
may be amended only by a written instrument executed by both parties.

3.                                       Assignment.  This
Agreement and the covenants of the parties set forth herein may not be assigned
by any party except with the prior written consent of the other party.  For the purposes of this Section, any
purchase of ownership interests in a party representing fifty percent or more
of the voting control of that party or rights to receive dividends or
distributions of cash and/or property from that party shall be deemed to be an
assignment of the Agreement.

4.                                       Notices. All notices and other communications required or
permitted under this Agreement shall be in writing and shall be delivered by
(i) hand delivery, (ii) prepaid overnight courier, (iii) first class, prepaid
United State mail, or (iv) facsimile to the addresses of the parties set forth
in the preamble to this Agreement.  Any
party may change such address by written notice delivered in accordance with
this Section E.4.  A notice shall be
deemed delivered when actually received if delivered by hand delivery or
prepaid overnight courier, five (5) business days after mailing if sent by
first class, prepaid United States mail, or upon receipt of a successful
transmission by facsimile.

5.                                       Binding Effect.  The
parties agree that the provisions of this Agreement will not be binding on
either party and will not create any legal rights or obligations between the
parties, except for the confidentiality, and intellectual property obligations
set forth herein and the obligations set forth in the Confidentiality Agreement
which shall be binding on the respective successors and assigns of each
party.  Neither party shall have any
liability to the other for discontinuing negotiations (so long as that party
has not breached its confidentiality or intellectual property obligations set
forth herein).

6.                                       Compliance with laws. 
Each party agrees to comply with all applicable federal, state, county,
and local laws, ordinances, regulations, codes, by-laws, and legal orders in
the performance of their respective obligations under this Agreement,
including, without limitation, all laws prohibiting the restraint of trade.

7.                                       Governing Law.  This
Agreement shall be governed by and interpreted in accordance with the laws of
the state of Illinois without giving effect to its laws regarding the conflict
of laws.  Any dispute arising between the
parties shall be referred to a court in Illinois.

 

EXECUTED as of the date first marked above.

 

	
  NORTH ELECTRIC
  COMPANY, INC.

  	
  TEKNO TELECOM
  LLC.

  
	
   

  	
   

  
	
  By:

  	
   /s/ Dan Ference

  	
  7/16/04

  	
   

  	
  By:

  	
  /s/ Ernest C. Kazens

  	
  7/16/04

  	
   

  
	
   

  	
  (Signature)

  	
  (Date)

  	
   

  	
   

  	
  (Signature)

  	
  (Date)

  	
   

  
	
  Name: Dan
  Ference

  	
  Name: Ernest C.
  Kazens

  
	
   

  	
   

  
	
  Title: President

  	
  Title: President

  
	
   

  	
   

  
	
  Hereunto Duly
  Authorized

  	
  Hereunto Duly
  AuthorizedExhibit 10.1

 

SECURITIES PURCHASE
AGREEMENT

 

GENAISSANCE
PHARMACEUTICALS, INC.

Five Science Park

New Haven, Connecticut
06511

 

Ladies & Gentlemen:

 

The undersigned,                                      
(the “Investor”), hereby confirms its agreement with you as follows:

 

1.                                       This
Securities Purchase Agreement (the “Agreement”) is made effective as of
November 18, 2004 between Genaissance Pharmaceuticals, Inc., a  Delaware corporation (the “Company”), and the
Investor.

 

2.                                       The
Company has authorized, subject to adjustment by the Company’s Board of
Directors, the issuance and sale of up to (a) approximately $6.0 million worth
of shares of common stock of the Company, $0.001 par value per share (the “Common
Stock”), and (b) related common stock purchase warrants, a form of which is
attached hereto as Exhibit A, to certain investors in a private
placement (the “Offering”).  The shares
of Common Stock being acquired under this Agreement and by Other Investors (as
hereinafter defined) are referred to herein as the “Shares.”  The warrants to purchase shares of Common
Stock being acquired under this Agreement and by Other Investors (as
hereinafter defined) are collectively referred to herein as the “Warrants.”   The Shares and Warrants being acquired under
this Agreement and by Other Investors are collectively referred to herein as
the “Securities.”  The shares of Common
Stock issuable upon exercise of the Warrants being acquired under this
Agreement any by Other Investors are collectively referred to herein as to “Warrant
Shares.”

 

3.                                       The
Company and the Investor agree that the Investor will purchase from the
Company, and the Company will issue and sell to the Investor,                        
Shares, together with a Warrant to purchase       
Warrant Shares, pursuant to the Terms and Conditions for Purchase of Securities
attached hereto as Annex I and incorporated herein by reference as
if fully set forth herein.  The aggregate
purchase price to be paid to the Company by the Investor for the Securities to
be purchased pursuant to this Agreement shall be $                       
(the “Purchase Price”).  Unless otherwise
requested by the Investor, the Warrants and the certificates representing the
Shares and the Warrant Shares will be registered in the Investor’s name and
address as set forth below.

 

4.                                       The
Investor represents that, except as set forth below, (a) it has had no
position, office or other material relationship within the past three years
with the Company or its affiliates, (b) neither it, nor any group of which it
is a member or to which it is related, beneficially owns (including the right
to acquire or vote) any securities of the Company and (c) it has no direct or
indirect affiliation or association with any NASD member.  Exceptions:

 

 

(If no exceptions,
write “none.”  If left blank, response
will be deemed to be “none.”)

 

 

Please confirm that the
foregoing correctly sets forth the agreement between us by signing in the space
provided below for that purpose.

 

Number of Shares:

 

Purchase price per Share:

 

Total purchase price:

 

	
   

  	
   

  
	
   

  	
  “INVESTOR”

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Tax ID No.:

  	
   

  
	
   

  	
  Contact name:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
	
   

  	
  Name in which shares
  should be registered

  
	
   

  	
  (if
  different):

  
									

 

 

	
  AGREED
  AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
  GENAISSANCE PHARMACEUTICALS,
  INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Ben D. Kaplan

  	
   

  
	
  Senior Vice President
  and

  	
   

  
	
  Chief
  Financial Officer

  	
   

  
			

 

 

Signature Page to Securities Purchase Agreement

 

 

ANNEX I

 

TERMS AND
CONDITIONS FOR PURCHASE OF SECURITIES

 

1.                                       Authorization
and Sale of the Securities.  Subject
to the terms and conditions of the Agreements (as hereinafter defined), the
Company has authorized the issuance and sale of up to approximately $6.0
million worth of Shares, together with associated Warrants.  The Company reserves the right to increase or
decrease this number.

 

2.                                       Agreement
to Sell and Purchase the Securities; Subscription Date.

 

2.1                                 At
the Closing (as defined in Section 3), the Company will sell to the Investor,
and the Investor will purchase from the Company, upon the terms and conditions
hereinafter set forth, the number of Shares and Warrants set forth on the cover
page hereto for the Purchase Price set forth on such cover page.

 

2.2                                 The
Company proposes to enter into this same form of Securities Purchase Agreement
with certain other investors (the “Other Investors”), and the Company expects
to complete sales of Shares and Warrants to them.  The Investor and the Other Investors are
hereinafter sometimes collectively referred to as the “Investors.” This
Agreement and the Warrant executed by the Company and delivered to the
Investor, together with the securities purchase agreements and warrants
pursuant to which the Other Investors are acquiring Securities are hereinafter
sometimes collectively referred to as the “Agreements.”  This Agreement will be effective as of the
date the Company countersigns the cover page hereto (the “Subscription Date”),
but in no event shall the Subscription Date be later than November 19,
2004.  The Company may accept executed
Agreements from Investors for the purchase of Securities commencing upon the
date on which the Company provides the Investors with the proposed purchase
price per Share and concluding upon the Subscription Date and the Company will
notify Legg Mason Wood Walker, Incorporated (in its capacity as placement agent
for the Securities, the “Placement Agent”) in writing on the Subscription Date
that it will no longer accept Agreements for the purchase of Securities in the
Offering.  Each Investor must complete a
Securities Purchase Agreement, a Securities Certificate Questionnaire (in the
form attached as Exhibit B hereto) and an Investor Questionnaire (in the
form attached as Exhibit C hereto) in order to purchase Securities in
the Offering.

 

2.3                                 The
Investor acknowledges that the Company intends to pay to the Placement Agent a
fee in respect of the sale of Securities to the Investor.

 

3.                                       Delivery
of the Securities at Closing.  The
completion of the purchase and sale of the Securities (the “Closing”) is
expected to occur on the business day after the Subscription Date (the “Closing
Date”) (or upon such earlier date as the Company and the Investors shall
agree), but shall occur not later than November 23, 2004 (the “Outside Date”),
at the offices of the Company’s counsel. 
At the Closing, the Company shall deliver to the Investor (a) one or
more stock certificates representing the number of Shares set forth on the
cover page hereto and (b) one or more Warrants evidencing the right to purchase
the number of Warrant Shares set forth on the cover page hereto at an exercise
price set forth therein, each such certificate and 

 

A-1

 

warrant to be registered
in the name of the Investor or, if so indicated on the cover page hereto, in
the name of a nominee designated by the Investor.

 

The Company’s obligation
to issue the Securities to the Investor shall be subject to the following
conditions, any one or more of which may be waived by the Company: (a) prior
receipt of an executed copy of this Agreement; (b) receipt by the Company of a
certified or official bank check or wire transfer of funds in the full amount
of the purchase price for the Securities being purchased hereunder as set forth
on the cover page hereto; (c) completion of the purchases and sales under the
Agreements with the Other Investors such that a minimum of $4.0 million worth
of Securities are sold pursuant to the Agreements;  (d) the accuracy of the representations and
warranties made by the Investors and the fulfillment of those undertakings of
the Investors to be fulfilled prior to the Closing; and (e) the absence of any
order, writ, injunction, judgment or decree that questions the validity of the
Agreements or the right of the Company or any 
Investor to enter into such Agreements or to consummate the transactions
contemplated hereby and thereby.

 

The Investor’s obligation
to purchase the Securities shall be subject to the following conditions, any
one or more of which may be waived by the Investor: (a) receipt by the Investor
or its authorized agent of one or more stock certificates representing the
number of Shares set forth on the cover page hereto; (b) receipt by the
Investor of one or more Warrants evidencing the right to purchase the number of
Warrant Shares set forth on the cover page hereto at an exercise price set
forth therein, (c) receipt by the Investor of an opinion letter, dated as of
the Closing Date, from Wilmer Cutler Pickering Hale and Dorr LLP, counsel to
the Company, in form attached as Exhibit D hereto; (d) the accuracy of
the representations and warranties made by the Company and the fulfillment of
those undertakings of the Company to be fulfilled prior to the Closing; (e) on
the Closing Date, no legal action, suit or proceeding shall be pending or
threatened which seeks to restrain or prohibit the transactions contemplated by
the Agreements; (f) the Company shall have delivered to the Investors its
certificate, dated the Closing Date, duly executed by its Chief Executive
Officer to the effect set forth in clause (d) above; (g) the receipt by the
Investors of a certificate, dated the Closing Date, of the Secretary or
Assistant Secretary of the Company certifying (i) the certificate of
incorporation and bylaws of the Company as in effect on the Closing Date, (ii)
all resolutions of the board of directors (and committees thereof) of the
Company relating to the Agreements and the transactions contemplated thereby
and (iii) the incumbency of all officers of the Company executing the
Agreements and any other agreement or document contemplated thereby.

 

In the event that the
Closing does not occur on or before the Outside Date as a result of the Company’s
failure to satisfy any of the conditions set forth above (and such condition
has not been waived by the Investor), the Company shall return any and all
funds paid hereunder to the Investor no later than one Business Day following
the Outside Date and the Investors shall have no further obligations
hereunder.  For purposes of this
Agreement, “Business Day” shall mean any day other than a Saturday, Sunday or
other day on which the New York Stock Exchange or commercial banks located in
Boston, Massachusetts are permitted or required by law to close.

 

4.                                       Representations,
Warranties and Covenants of the Company. 
Except as otherwise described in the Company’s SEC Documents (as defined
in Section 4.4), which qualify the 

 

A-2

 

following
representations, warranties and covenants in their entirety, the Company hereby
represents and warrants to, and covenants with, the Investor, as of the date
hereof and as of the Closing Date, as follows:

 

4.1                                 Organization.  Each of the Company and its Subsidiaries is
duly organized and validly existing in good standing under the laws of the
jurisdiction of its organization.  Each
of the Company and its Subsidiaries (as defined in Rule 405 under the
Securities Act of 1933, as amended (the “Securities Act”)) has full power and
authority to own, operate and occupy its properties and to conduct its business
as presently conducted and is registered or qualified to do business and in
good standing in each jurisdiction in which it owns or leases property or
transacts business and where the failure to be so qualified would have a
material adverse effect upon the financial condition or business, operations or
assets of the Company and its Subsidiaries, considered as one enterprise (a “Material
Adverse Effect”), and no proceeding has been instituted in any such
jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification.

 

4.2                                 Due
Authorization.  The Company has all
requisite power and authority to execute, deliver and perform its obligations
under the Agreements, and the Agreements have been duly authorized and validly
executed and delivered by the Company and constitute legal, valid and binding
agreements of the Company enforceable against the Company in accordance with
their terms, except as rights to indemnity and contribution may be limited by
state or federal securities laws or the public policy underlying such laws,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

 

4.3                                 Non-Contravention.  The execution and delivery of the Agreements
by the Company, the issuance and sale of the Securities to be sold by the
Company under the Agreements, the fulfillment of the terms of the Agreements on
the part of the Company and the consummation of the transactions contemplated
thereby will not (A) conflict with or constitute a violation of, or
default (with or without the giving of notice or the passage of time or both)
under, (i) any material bond, debenture, note or other evidence of
indebtedness, or under any material lease, indenture, mortgage, deed of trust,
loan agreement, joint venture or other agreement or instrument to which the
Company or any Subsidiary is a party or by which it or any of its Subsidiaries
or their respective properties are bound, (ii) the charter, by-laws or
other organizational documents of the Company or any Subsidiary, or
(iii) any law, administrative regulation, ordinance or order of any court
or governmental agency, arbitration panel or authority applicable to the
Company or any Subsidiary or their respective properties, except where such conflict,
violation or default has been waived or would not have a Material Adverse
Effect, (B) result in the creation or imposition of any lien, encumbrance,
claim, security interest or restriction whatsoever upon any of the material
properties or assets of the Company or any Subsidiary or an acceleration of
indebtedness pursuant to any obligation, agreement or condition contained in
any material bond, debenture, note or any other evidence of indebtedness or any
material indenture, mortgage, deed of trust or any other agreement or
instrument to which the Company or any Subsidiary is a party or by which any of
them is bound or to which any of the 

 

A-3

 

property or assets of the
Company or any Subsidiary is subject.  No
consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency,
self-regulatory organization, stock exchange or market, or other governmental
body in the United States is required for the execution and delivery of the
Agreements and the valid issuance and sale of the Securities to be sold
pursuant to the Agreements, other than such as have been made or obtained, and
except for any securities filings required to be made under federal or state
securities laws.

 

4.4                                 Reporting
Status.  The Company has filed in a
timely manner all documents that the Company was required to file under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), during the 12
months preceding the date of this Agreement. 
The following documents complied in all material respects with the U.S.
Securities and Exchange Commission’s (“SEC”) requirements as of their
respective filing dates, and the information contained therein as of the date
thereof did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under where they were made not
misleading, except to the extent that information contained in any such
document has been revised or superseded by a later filed SEC Document (as
defined below):

 

(i)                         The
Company’s Annual Report on Form 10-K for the year ended December 31, 2003,
including the exhibits thereto (the “Form 10-K”);

 

(ii)                      The Company’s
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2004, June 30,
2004 and September 30, 2004;

 

(iii)                   The Company’s
Current Reports on Form 8-K, dated June 29, 2004, September 22, 2004 (as
amended by Amendment No. 1 on Form 8-K/A filed with the SEC on October 13,
2004), October 1, 2004, October 21, 2004, November 8, 2004 and November 15,
2004;

 

(iv)                  The Company’s
definitive proxy statement for the 2004 Annual Meeting of Stockholders; and

 

(v)                     The Company’s
joint proxy statement/prospectus dated February 17, 2004, filed pursuant to
Rule 424(b) (the documents listed in subparagraphs (i) through (v) are
collectively referred to herein as the “SEC Documents”)

 

The SEC Documents, when
taken together as a whole, as of the date hereof, do not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading.

 

4.5                                 Capitalization.  As of the date hereof, the authorized capital
stock of the Company consists of 58,000,000 shares of Common Stock, 2,000,000
shares of non-voting common stock, par value $.001 per share (the “Non-Voting
Common Stock”), and one million shares of preferred stock, par value $.001 per
share, of the Company (the “Preferred Stock”), of 

 

A-4

 

which 460,000 shares have
been designated as Series A Preferred Stock. 
As of November 1, 2004, there were approximately (i) 31,132,084
shares of Common Stock issued and outstanding, (ii) no shares of
Non-Voting Common Stock issued and outstanding, (iii) 460,000 shares of Series
A Preferred Stock issued and outstanding which are currently convertible into
4,600,000 shares of Common Stock, (iv) 8,155,646 shares of Common Stock
reserved for issuance under the Company’s Stock Option and Stock Incentive and
Employee Stock Purchase Plans, including 5,530,539 shares issuable upon
exercise of outstanding stock options or restricted stock awards issued by the
Company to current or former employees, consultants and directors of the
Company and its Subsidiaries and (v) 837,507 shares issuable upon exercise
of warrants to acquire shares of Common Stock. 
All outstanding shares of Common Stock are duly authorized, validly
issued, fully paid and nonassessable, free from any liens or any other
encumbrances created by the Company with respect to the issuance and delivery
thereof and not subject to preemptive rights (except for such rights as have
been waived in connection with the Offering). There are no outstanding rights,
options, warrants, preemptive rights, rights of first refusal agreements,
commitments or similar rights for the purchase or acquisition from the Company
of any securities of the Company (except for such rights as have been waived in
connection with the Offering).  The
Securities and the Warrant Shares have been duly authorized, and when issued
and paid for in accordance with the terms of the Agreements or the Warrants, as
the case may be, will be duly and validly issued, fully paid and nonassessable,
free and clear of all pledges, liens, encumbrances and other restrictions
(other than those arising under federal or state securities laws).  No preemptive right, co-sale right, right of
first refusal or other similar right exists with respect to the Securities or
the Warrant Shares or the issuance and sale thereof (except for such rights as
have been waived in connection with the Offering).  No further approval or authorization of any
stockholder or the Board of Directors of the Company is required for the
issuance and sale of the Securities or the Warrant Shares.  No holder of any of the securities of the
Company or any of its Subsidiaries has any rights (“demand,” “piggyback” or
otherwise) to have such securities registered by reason of the intention to
file, filing or effectiveness of a Registration Statement (as defined in
Section 7.1 hereof), except pursuant to those agreements set forth on Exhibit
E attached hereto.

 

4.6                                 Legal
Proceedings.  There is no material
legal or governmental proceeding pending or, to the knowledge of the Company,
threatened to which the Company or any Subsidiary or any officer or director of
the Company or any Subsidiary in their capacity as such officer or director is
or may be a party or of which the business or property of the Company or any
Subsidiary is subject.  There is no
action, suit, proceeding, inquiry or investigation before or by any court,
public board or body (including, without limitation, the SEC) pending or, to
the knowledge of the Company, threatened against or affecting the Company or
any of its Subsidiaries wherein an unfavorable decision, ruling or finding
could materially adversely affect the financial position of the Company or the
validity or enforceability of, or the authority or ability of the Company to
perform its obligations under the Agreements.

 

4.7                                 No
Violations.  Neither the Company nor
any Subsidiary is in violation of its charter, bylaws, or other organizational
document, or in violation of any law, administrative regulation, ordinance or
order of any court or governmental agency, arbitration panel or authority
applicable to the Company or any Subsidiary, including the rules, regulations
and policies of the SEC and the Food and Drug Administration of the U.S.
Department of Health 

 

A-5

 

and Human Services (the “FDA”)
and which violation, individually or in the aggregate with other violations,
would be reasonably likely to have a Material Adverse Effect, or is in default
(and there exists no condition which, with or without the passage of time or
giving of notice or both, would constitute a default) in any material respect
in the performance of any bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust or any other material
agreement or instrument to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary is bound or by which the properties of the
Company or any Subsidiary are bound, which would be reasonably likely to have a
Material Adverse Effect.

 

4.8                                 Governmental
Permits, Etc.  (a) With the exception
of the matters which are dealt with separately in Sections 4.1, 4.4, 4.13
and 4.14 and except for matters which are not reasonably likely to have a
Material Adverse Effect, the Company and each Subsidiary possesses such
permits, licenses, approvals, consents and other authorizations (including,
licenses, pharmacy licenses, accreditation and other similar documentation or
approvals of any local health departments) (collectively, “Governmental
Licenses”) issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies, including, without limitation, the Food and Drug
Administration (“FDA”), necessary to conduct its business in each respective
jurisdiction; the Company is in compliance with the terms and conditions of all
such Governmental Licenses and all applicable FDA statutes and regulations,
except where the failure so to comply would not, singly or in the aggregate,
result in a Material Adverse Effect; all of the Governmental Licenses are valid
and in full force and effect, except where the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force and
effect would not  result in a Material
Adverse Effect; and the Company has not received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, would 
result in a Material Adverse Effect.

 

(b) To the knowledge of the Company, the
clinical trials conducted by the Company or in which the Company has
participated were and, if still pending, are being conducted in accordance with
experimental protocols, procedures and controls pursuant to accepted
professional scientific standards.  The
Company has not received any notices or correspondence from the FDA or any
other governmental agency requiring the termination or suspension of any
clinical trials conducted by, or on behalf of, the Company or in which the
Company has participated.

 

4.9                                 Intellectual
Property.

 

(a)                                  Except
for matters which are not reasonably likely to have a Material Adverse Effect,
(i) each of the Company and the Subsidiaries has ownership of, or a license or
other legal right to use, all patents, copyrights, trade secrets, trademarks,
customer lists, designs, manufacturing or other processes, computer software,
systems, data compilation, research results or other proprietary rights used in
the business of the Company (collectively, “Intellectual Property”) and (ii)
all of the Intellectual Property owned by the Company or by the Subsidiaries
consisting of patents, registered trademarks and registered copyrights have
been duly registered in, filed in or issued by the United States Patent and
Trademark Office, the United States Register of Copyrights or the corresponding
offices of other jurisdictions and have been

 

A-6

 

maintained and renewed in
accordance with all applicable provisions of law and administrative regulations
in the United States and/or such other jurisdictions.

 

(b)                                 Except
for matters which are not reasonably likely to have a Material Adverse Effect,
all material licenses or other material agreements under which (i) the Company
or any Subsidiary employs rights in Intellectual Property, or (ii) the Company
or any Subsidiary has granted rights to others in Intellectual Property owned
or licensed by the Company or any Subsidiary are in full force and effect, and
there is no default by the Company with respect thereto.

 

(c)                                  The
Company believes that it has taken all steps reasonably required in accordance
with sound business practice and business judgment to establish and preserve
the ownership of all material Intellectual Property owned by the Company or any
Subsidiary.

 

(d)                                 Except
for matters which are not reasonably likely to have a Material Adverse Effect,
to the knowledge of the Company, (i) the present business, activities and
products of the Company or any Subsidiary do not infringe any intellectual
property of any other person; (ii) neither the Company nor any Subsidiary is
making unauthorized use of any confidential information or trade secrets of any
person; and (iii) the activities of any of the employees of the Company or any
Subsidiary, acting on behalf of the Company or such Subsidiary, do not violate
any agreements or arrangements related to confidential information or trade
secrets of third parties.

 

No proceedings are
pending, or to the knowledge of the Company, threatened, which challenge the
rights of the Company or any Subsidiary to the use of Intellectual Property,
except for matters which are not reasonably likely to have a Material Adverse
Effect.

 

4.10                           Environmental
Matters.  The Company and its
Subsidiaries (i) are in compliance in all material respects with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants (“Environmental Laws”),
(ii) have received all material permits, licenses or other approvals required
of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any
permit, license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a Material Adverse
Effect.

 

4.11                           Financial
Statements.  The financial statements
of the Company and the related notes thereto included in the SEC Documents
present fairly in all material respects, in accordance with generally accepted
accounting principles, the financial position of the Company and its
Subsidiaries as of the dates indicated, and the results of its operations and
cash flows for the periods therein specified. 
Such financial statements (including the related notes) have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods therein specified, except that
unaudited financial statement may not contain all footnotes required by
generally accepted accounting principles.

 

A-7

 

4.12                           No
Material Adverse Change.  Except as
disclosed in the SEC Documents or in any press releases issued by the Company
at least one (1) Business Day prior to the date of this Agreement, since
September 30, 2004, there has not been (i) any material adverse change in
the financial condition or earnings of the Company and its Subsidiaries,
considered as one enterprise, (ii) any uncured event, circumstance or
change that is reasonably like to have a Material Adverse Effect,
(iii) any obligation, direct or contingent, that is material to the
Company and its Subsidiaries considered as one enterprise, incurred by the
Company, except obligations incurred in the ordinary course of business,
(iv) any dividend or distribution of any kind declared, paid or made on
the capital stock of the Company or any of its Subsidiaries, or (v) any
loss or damage (whether or not insured) to the physical property of the Company
or any of its Subsidiaries which has been sustained which has a Material
Adverse Effect.   Neither the Company nor
any of its Subsidiaries has (i) sold, assigned, transferred, abandoned,
mortgaged, pledged or subjected to lien any of its material properties,
tangible or intangible, or rights under any material contract, permit, license,
franchise or other agreement or (ii) waived or cancelled any material
indebtedness or other obligations owed to the Company or any such Subsidiary.

 

4.13                           NASDAQ
Listing.  The Company’s Common Stock
is registered pursuant to Section 12(g) of the Exchange Act and is listed
on The Nasdaq Stock Market, Inc. National Market (the “Nasdaq National Market”),
and the Company has taken no action designed to, or likely to have the effect
of, terminating the registration of the Common Stock under the Exchange Act or
de-listing the Common Stock from the Nasdaq National Market, nor to the Company’s
knowledge is the National Association of Securities Dealers, Inc. (“NASD”)
currently contemplating terminating such listing; provided, however, that the
trading price of the Common Stock is not deemed to be an action of the Company
for purposes of this Section 4.13.  The
Company and the Common Stock meet the criteria for continued listing and
trading on the Nasdaq National Market.

 

4.14                           Listing
of the Shares and Warrant Shares; Reservation of Common Stock.  The Company shall comply with all
requirements of the NASD with respect to the issuance of the Shares and the listing
thereof and of the Warrant Shares on the Nasdaq National Market.  In furtherance thereof, the Company shall use
its best efforts to take such actions as may be necessary and as soon as
practicable and in no event later than 20 days after the Closing Date to file
with the Nasdaq National Market an application or other document required by
the Nasdaq National Market and pay all applicable fees for the listing of the
Shares and the Warrant Shares with the Nasdaq National Market and, upon
request, shall provide evidence of such filing to the Investors.  The Company knows of no reason why the Shares
and the Warrant Shares will not be eligible for listing on the Nasdaq National
Market.  The Company shall at all times
reserve and keep available out of its authorized but issued shares of Common
Stock, solely for the purpose of issuance upon the exercise of the Warrants,
such number of shares of Common Stock as shall from time to time be sufficient
to effect the full exercise of all outstanding Warrants.

 

4.15                           No
Manipulation of Stock.  The Company
has not taken and will not, in violation of applicable law, take, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares or the Warrant Shares.

 

A-8

 

4.16                           S-3
Status.  The Company currently meets
the requirements for filing Form S-3 for the registration of the resale of the
Shares and the Warrant Shares by the Investors and will use its best efforts to
maintain S-3 status with the SEC during the Registration Period (as defined in
Section 7.1(d)).

 

4.17                           Insurance.  The Company maintains and will continue to
maintain insurance against loss or damage by fire or other casualty and such
other insurance, including, but not limited to, product liability insurance, in
such amounts and covering such risks as is reasonably adequate consistent with
industry practice for the conduct of its business and the value of its
properties, all of which insurance is in full force and effect.

 

4.18                           Tax
Matters.  The Company has filed all
material federal, state and local income and franchise and other tax returns
required to be filed and has paid or accrued all taxes due in accordance
therewith, and no tax deficiency has been determined adversely to the Company
which has had (nor does the Company have any knowledge of any tax deficiency
which, if determined adversely to the Company, might have) a Material Adverse
Effect .

 

4.19                           Investment
Company.  The Company is not an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for an investment company, within the meaning of such terms under the
Investment Company Act of 1940 and the rules and regulations of the SEC
thereunder and will not be deemed an investment company upon the consummation
of the transactions contemplated by this Agreement.

 

4.20                           No
Registration.  Assuming the accuracy
of the representations and warranties made by, and compliance with the
covenants of, the Investors in Section 5 hereof, no registration under the
Securities Act is required in connection with the (a) offer and sale of the
Securities by the Company to the Investors as contemplated by the Agreements or
(b) issuance of the Warrant Shares upon exercise of the Warrants by the
Investors in accordance with the terms thereof.

 

4.21                           Intentionally
Omitted. 

 

4.22                           Form
D.  The Company agrees to file one or
more Forms D with respect to the Securities on a timely basis as required under
Regulation D under the Securities Act to claim the exemption provided by Rule
506 of Regulation D and to, upon request, provide a copy thereof to the
Investors and their counsel.

 

4.23                           Certain
Future Financings and Related Actions.

 

(a)                                  The
Company will not sell, offer to sell, solicit offers to buy or otherwise
negotiate in respect of any “security” (as defined in the Securities Act) that
is or could be integrated with the sale of the Securities in a manner that
would require the registration of the Securities under the Securities Act.

 

(b)                                 The
Company shall not offer, sell, contract to sell or issue (or engage any person
to assist the Company in taking any such action) any equity securities or 

 

A-9

 

securities convertible
into, exchangeable for or otherwise entitling the holder to acquire, any Common
Stock at a price below the market price of the Common Stock during the period
from the date of this Agreement to the effective date of the Registration
Statement; provided, however, that nothing in this Section 4.23(b) shall
prohibit the Company from issuing securities: (v) as compensation to employees,
directors, officers, advisors or consultants of the Company; (w) upon exercise
of conversion, exchange, purchase or similar rights issued, granted or given by
the Company and outstanding as of the date of this Agreement; (x) pursuant to a
public offering underwritten on a firm commitment basis registered under the
Securities Act; (y) for the purpose of funding the acquisition of securities or
assets of any entity in a single transaction or a series of related
transactions; or (z) pursuant to a strategic partnership or alliance agreement,
loan agreement, equipment lease or similar commercial agreement (including
licensing and similar arrangements).

 

4.24                           Use
of Proceeds.  The Company will use
the net proceeds from the sale of the Securities for working capital and other
general corporate purposes, including repayment of debt.  On November 15, 2004, the Company entered
into an Agreement and Acknowledgement (the “RAM Agreement”) with RAM Trading,
Ltd. (“RAM”), pursuant to which RAM agreed to purchase and assume (the “Purchase”),
on or before November 24, 2004, all rights and obligations of Comerica Bank
under that certain Loan and Security Agreement by and between the Company and
Comerica Bank, dated as of September 30, 2003 and as amended, restated,
supplemented, assigned or otherwise modified from time to time, and all
documents related thereto (collectively, the “Loan Agreement”), subject to the
terms and conditions of the RAM Agreement. 
Effective upon the date of the Purchase, the Loan Agreement will be
amended to provide, among other things, that at any time, and from time to
time, on or after January 15, 2005, the Company will make a mandatory
prepayment under the Loan Agreement to RAM in an amount equal to:  (i) $1.0 million if the Company’s cash
balance is greater than $5.0 million at any such time; and (ii) $3.0 million if
the Company’s cash balance is greater than $9.0 million at any such time;
provided, that, if the Company’s cash balance is greater than $5.0 million but
less than $9.0 million at any such time, then the prepayment amount will be an
amount between $1.0 million and $3.0 million to be determined in proportion to
such cash balance.

 

5.                                       Representations,
Warranties and Covenants of the Investor. 
The Investor hereby represents and warrants to, and covenants with, the
Company as follows:

 

5.1                                 (i) The
Investor is an “accredited investor” as defined in Regulation D under the
Securities Act and the Investor has the knowledge, sophistication and
experience necessary to make, and is qualified to make decisions with respect
to, investments in securities presenting an investment decision like that
involved in the purchase of the Securities, including investments in securities
issued by the Company and investments in comparable companies, and has
requested, received, reviewed and considered all information it deemed relevant
in making an informed decision to purchase the Securities, including without
limitation, the Confidential Private Placement Memorandum dated November 18,
2004, and all exhibits attached thereto and incorporated by reference therein
(the “Memorandum”), including the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2003; (ii) the Investor is acquiring the
number of Shares and Warrants set forth on the cover page hereto for its own
account for investment only and with no present intention of distributing any
of such Securities in violation 

 

A-10

 

of the Securities Act nor
has the Investor entered into any arrangement or understanding with any other
persons regarding the distribution of such Securities; (iii) the Investor will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Securities except
in compliance with the Securities Act, applicable state securities laws and the
respective rules and regulations promulgated thereunder; (iv) the Investor
has filled in all requested information on the cover page hereto and the
Investor Questionnaire for use, in part, in preparation of the Registration
Statement and the answers thereto are true and correct as of the date hereof
and will be true and correct as of the Closing Date; (v) the Investor will
notify the Company promptly of any change in any of such information until such
time as the Investor has sold all of its Shares or Warrant Shares or until the
Company is no longer required to keep the Registration Statement effective; and
(vi) the Investor has, in connection with its decision to purchase the number
of Shares and Warrants set forth on the cover page hereto, relied only upon the
SEC Documents, other publicly available information and the representations and
warranties of the Company contained herein. 
The Investor understands that the Securities and the Warrant Shares are “restricted
securities” and that neither its acquisition of the Securities or the Warrant
Shares has been registered under the Securities Act or registered or qualified
under any state securities laws in reliance on specific exemptions therefrom,
which exemptions may depend upon, among other things, the truth and accuracy
of, and the Investor’s compliance with, the representations, warranties,
agreements and covenants of the Investor set forth in this Agreement and the
bona fide nature of the Investor’s investment intent as expressed herein.  No person (including the Placement Agent) is
authorized by the Company to provide any representation that is inconsistent
with or in addition to those contained herein or in the SEC Disclosures, and
the Investor acknowledges that it has not received  or relied on any such representations.

 

5.2                                 The
Investor acknowledges that the Company has represented that no action has been
or will be taken in any jurisdiction outside the United States by the Company
that would permit an offering of the Securities, or possession or distribution
of offering materials in connection with the issue of the Securities, in any
jurisdiction outside the United States where action for that purpose is
required.  If the Investor is located or
domiciled outside the United States it agrees to comply with all applicable
laws and regulations in each foreign jurisdiction in which it purchases,
offers, sells or delivers Securities or has in its possession or distributes
any offering material, in all cases at its own expense.

 

5.3                                 The
Investor hereby covenants with the Company not to make any sale, transfer or
other disposition of the Securities or the Warrant Shares without complying
with the provisions of this Agreement, including Section 7.2 hereof,
provided that the Company complies with its obligations under Section 7.1,
without effectively causing the prospectus delivery requirement under the
Securities Act to be satisfied, if applicable, and the Investor acknowledges
that the certificates evidencing the Shares and any Warrant Shares will be
imprinted with a legend that prohibits their transfer except in accordance
therewith.  The Investor acknowledges
that there may occasionally be times when the Company, based on the advice of
its counsel, determines that, subject to the limitations of Section 7.2, it
must suspend the use of the Prospectus forming a part of the Registration
Statement until such time as an amendment to the Registration Statement has
been filed by the Company and declared effective by the SEC or until the
Company has amended or supplemented such Prospectus.

 

A-11

 

5.4                                 The
Investor further represents and warrants to, and covenants with, the Company
that (i) the Investor has full right, power, authority and capacity to
enter into this Agreement and the Warrant and to consummate the transactions
contemplated hereby and thereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement and the Warrant and
(ii) this Agreement and the Warrant constitute the valid and binding
obligations of the Investor enforceable against the Investor in accordance with
their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification and contribution agreements of the Investors
herein may be legally unenforceable.

 

5.5                                 Investor
will not, prior to the effectiveness of the Registration Statement, directly or
indirectly, sell, offer to sell, solicit offers to buy, dispose of, loan,
pledge or grant any right with respect to (collectively, a “Disposition”), the
Common Stock of the Company in violation of the Securities Act.  The Investor has not, during the 15 days
prior to the date of this Agreement, directly or indirectly, traded in the
Common Stock or established any hedge or other position in the Common Stock
that is outstanding on the Closing Date and that is designed to or could
reasonably be expected to lead to or result in a Disposition by the Investor or
any other person or entity. For purposes of this Section 5.5, hedging or other
position would include without limitation effecting any short sale or having in
effect any short position (whether or not such sale or position is against the box
and regardless of when such position was entered into) or any purchase, sale or
grant of any right (including without limitation any put or call option) with
respect to the Common Stock of the Company or with respect to any security
(other than a broad-based market basket or index) that includes, relates to or
derives any significant part of its value from the Common Stock of the
Company.  The Investor acknowledges that
the Warrant and the certificates representing the Shares and the Warrant Shares
shall bear a restrictive legend to the effect that the such Securities or
Warrant Shares, as the case may be, have not been registered under the
Securities Act of 1933, as amended and such Securities or Warrant Shares, as
the case may be, may not be sold or transferred in the absence of an effective
registration statement or pursuant to an available exemption from registration.

 

5.6                                 The
Investor understands that nothing in this Agreement or any other materials
presented to the Investor in connection with the purchase and sale of the
Securities constitutes legal, tax or investment advice.  The Investor has consulted such legal, tax
and investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of Securities.

 

5.7                                 The
Investor shall hold in strict confidence all information concerning this
Agreement and the Offering until the earlier of such time as the Company has
made a public announcement concerning this Agreement or the Offering.

 

5.8                                 The
Investor acknowledges that the Placement Agent has acted solely as placement
agent for the Company in connection with the Offering, and that the Placement
Agent

 

A-12

 

has made no
representation or warranty whatsoever with respect to the accuracy or
completeness of information, data or other related disclosure material that has
been provided to the Investor.  The
Investor further acknowledges that in making its decision to enter into this
Agreement and purchase the Securities, it has relied on its own examination of
the Company and the terms of, and consequences of holding, the Securities.  The Investor further acknowledges that the
provisions of this Section 5.8 are for the benefit of, and may be enforced by,
the Placement Agent.

 

5.9                                 The
Investor acknowledges that it has independently evaluated the merits of the
transactions contemplated by this Agreement, that it has independently
determined to enter into the transactions contemplated hereby, that it is not
relying on any advice from or evaluation by any Other Investor, and that it is
not acting in concert with any Other Investor in making its purchase of the
Securities hereunder.  The Investor and,
to its knowledge, the Company acknowledge that the Investors have not taken any
actions that would deem the Investors to be members of a “group” for purposes
of Section 13(d) of the Exchange Act.

 

6.                                       Survival
of Representations, Warranties and Agreements.  Notwithstanding any investigation made by any
party to this Agreement, all covenants, agreements, representations and
warranties made by the Company and the Investor herein shall survive the
execution of this Agreement, the delivery to the Investor of the Securities
being purchased and the payment therefor for a period of two (2) years from the
Closing Date.

 

7.                                       Registration
of the Shares and the Warrant Shares; Compliance with the Securities Act.

 

7.1                                 Registration
Procedures and Expenses.  The Company
shall:

 

(a)                                  subject
to receipt of necessary information from the Investors, use its commercially
reasonable best efforts to prepare and file with the SEC, within 30 days after
the Closing Date, a registration statement (the “Registration Statement”) on
Form S-3 to enable the resale of the Registrable Shares (as defined below) by
the Investors on a delayed or continuous basis under Rule 415 of the Securities
Act.  The Registration Statement may
include shares of common stock other than those held by the Investor and the
Other Investors, provided that the inclusion of those shares would not affect
the plan of distribution included in the Registration Statement.  “Registrable Shares” means (a) all shares of
Common Stock purchased in the Offering, (b) all shares of Common Stock issuable
upon exercise of the Warrants, (c) Penalty Shares (as defined below), if any,
and (d) any shares of capital stock issued or issuable, from time to time, upon
any reclassification, share combination, share subdivision, stock split, share
dividend, merger, consolidation or similar transaction or event or otherwise as
a distribution on, in exchange for or with respect to any of the foregoing, in
each case held at the relevant time by an Investor;

 

(b)                                 use
its commercially reasonable best efforts, subject to receipt of necessary
information from the Investors, to cause the Registration Statement to become
effective within 90 days after the Closing Date;

 

A-13

 

(c)                                  cause
to be delivered to Legg Mason Wood Walker, Inc. on behalf of the Investors, a
confirmation as of the time the Registration Statement becomes effective that
the Registration Statement does not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;

 

(d)                                 use
its best efforts to prepare and file with the SEC such amendments and
supplements to the Registration Statement and the Prospectus used in connection
therewith and take all such other actions as may be necessary to keep the
Registration Statement current and effective for a period (the “Registration
Period”) not exceeding, with respect to each Investor’s Registrable Shares, the
earlier of (i) the second anniversary of the Closing Date, (ii) the
date on which the Investor may sell all Registrable Shares then held by the
Investor without restriction by the volume limitations of Rule 144(e) of
the Securities Act, and (iii) such time as all Registered Shares (as
hereinafter defined) held by such Investor have been sold (A) pursuant to a
registration statement, (B) to or through a broker or dealer or underwriter in
a public distribution or a public securities transaction, and/or (C) in a
transaction exempt from the registration and prospectus delivery requirements
of the Securities Act under Section 4(1) thereof so that all transfer
restrictions and restrictive legends with respect thereto, if any, are removed
upon the consummation of such sale;

 

(e)                                  promptly
furnish to the Investor with respect to the Registrable Shares registered under
the Registration Statement (the “Registered Shares”) such number of copies of
the Registration Statement, Prospectuses and Preliminary Prospectuses in
conformity with the requirements of the Securities Act and such other documents
as the Investor may reasonably request, in order to facilitate the public sale
or other disposition of all or any of the Registered Shares by the Investor;

 

(f)                                    promptly
take such action as may be necessary to qualify, or obtain, an exemption for
the Registered Shares under such of the state securities laws of United States
jurisdictions as shall be necessary to qualify, or obtain an exemption for, the
sale of the Registered Shares in states specified in writing by the
Investor;  provided, however, that the
Company shall not be required to qualify to do business or consent to service
of process in any jurisdiction in which it is not now so qualified or has not
so consented;

 

(g)                                 bear
all expenses in connection with the procedures in paragraph (a) through (f) of
this Section 7.1 and the registration of the Registrable Shares pursuant
to the Registration Statement, regardless of whether a Registration Statement
becomes effective, including without limitation: (i) all registration and
filing fees and expenses (including filings made with the NASD); (ii) fees and
expenses of compliance with federal securities and state “blue sky” or
securities laws; (iii) expenses of printing (including printing certificates
for the Registered Securities and Prospectuses), transfer agent, messenger and
delivery services and telephone; (iv) all application and filing fees in
connection with listing the Registered Securities on a national securities
exchange or automated quotation system pursuant to the requirements hereof; and
(v) all fees and disbursements of counsel of the Company and independent
certified public accountants of the Company; provided, however, that each
Investor shall be responsible 

 

A-14

 

for paying the
underwriting commissions or brokerage fees, and taxes of any kind (including,
without limitation, transfer taxes) applicable to any disposition, sale or
transfer of such Investor’s Registered Securities and any fees and expenses of
counsel or other advisors to the Investor or Other Investors.  The Company shall, in any event, bear its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit, rating agency fees and the fees and expenses of any
person, including special experts, retained by the Company;

 

(h)                                 advise
the Investors, within two business days by e-mail, fax or other type of
communication, and, if requested by such person, confirm such advice in
writing: (i) after it shall receive notice or obtain knowledge of the issuance
of any stop order by the SEC delaying or suspending the effectiveness of the
Registration Statement or of the initiation or threat of any proceeding for
that purpose, or any other order issued by any state securities commission or
other regulatory authority suspending the qualification or exemption from
qualification of such Registered Securities under state securities or “blue sky”
laws; and it will promptly use its best efforts to prevent the issuance of any stop
order or other order or to obtain its withdrawal at the earliest possible
moment if such stop order or other order should be issued; (ii) when the
Prospectus or any Prospectus Supplement or post-effective amendment has been
filed, and, with respect to the Registration Statement or any post-effective
amendment thereto, when the same has become effective; and (iii) after the
Company shall receive notice or obtain knowledge of the existence of any fact
or the happening of any event that makes any statement of a material fact made
in the Registration Statement, the Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the Registration Statement
or the Prospectus in order to make the statements therein not misleading;

 

(i)                                     otherwise
use its  best efforts to comply with all
applicable rules and regulations of the SEC which could affect the sale of the
Registrable Shares;

 

(j)                                     use
its best efforts to cause all Registered Shares to be listed on each securities
exchange or market, if any, on which equity securities issued by the Company
are then listed;

 

(k)                                  use
its best efforts to take all other steps necessary to effect the registration
of the Registrable Shares contemplated hereby and to enable the Investors to
sell the Shares and the Warrant Shares under Rule 144; and

 

(l)                                     The
Company further agrees that, in the event that the Registration Statement has
not (i) been filed with the SEC within 30 days after the Closing Date or
(ii) been declared effective by the SEC within 90 days after the Closing
Date (each such event referred to in clauses (i) and (ii), a “Registration
Default”), for all or part of each 30-day period (a “Penalty Period”) during
which the Registration Default remains uncured, the Company shall issue or pay,
as applicable, to each Investor 1% for each Penalty Period of the aggregate
purchase price paid by the Investor for its Securities, payable in validly
issued, fully paid and nonassessable shares of Common Stock (valued at the
average of the closing price of the Common Stock for the three trading days
ending on the last trading day of such Penalty Period) (the “Penalty Shares”)
or cash, or a combination thereof, at the option of the Company; provided,
however, that the

 

A-15

 

maximum aggregate payment
of cash, or issuance of Penalty Shares to each Investor, as the case may be, in
respect of a Registration Default shall not exceed 5% of the aggregate purchase
price paid by such Investor for its Securities and provided further, that if
the issuance of Penalty Shares by the Company would result in the Company being
required under NASDAQ rules or other applicable rules to obtain the approval of
the Company’s stockholders, then the Company shall pay cash rather than issue
such Penalty Shares to the extent needed to avoid such stockholder
approval.  The Company shall deliver said
shares or cash payment to the Investor by the fifth business day after the end
of each such Penalty Period. 
Notwithstanding anything to the contrary in Section 7.3 or any
other provision of this Agreement, the issuance of the Penalty Shares or cash
as provided in this Section 7.1(m) shall be the Investor’s sole and exclusive
remedy in the event of any Registration Default; provided, however, that if the
foregoing remedy is deemed unenforceable by a court of competent jurisdiction
then the Investor shall have all other remedies available at law or in equity.

 

It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Section 7.1 that the Investor shall furnish to the Company such information
regarding itself, the Shares or Warrant Shares to be sold by Investor, and the
intended method of disposition of such securities as shall be required to
effect the registration of the Shares and/or the Warrant Shares.

 

7.2                                 Transfer
of Registered Shares; Suspension.

 

(a)                                  The
Investor agrees that it will not effect any Disposition of the Shares, the
Warrants or any Registered Shares that would constitute a sale within the
meaning of the Securities Act except as contemplated in the Registration
Statement referred to in Section 7.1 and as described below or otherwise
in accordance with the Securities Act, and that it will promptly notify the
Company of any changes in the information set forth in the Registration
Statement regarding the Investor or its plan of distribution.

 

(b)                                 Except
in the event that paragraph (c) below applies, the Company shall (i) if deemed
necessary by the Company,  prepare and file from time to time with the SEC
a post-effective amendment to the Registration Statement or a supplement to the
related Prospectus or a supplement or amendment to any document incorporated therein
by reference or file any other required document so that such Registration
Statement will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and so that, as thereafter delivered to
purchasers of the Registered Shares being sold thereunder, such Prospectus will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(ii) upon request, provide the Investor copies of any documents filed
pursuant to Section 7.2(b)(i); and (iii) inform each Investor that
the Company has complied with its obligations in Section 7.2(b)(i) (or
that, if the Company has filed a post-effective amendment to the Registration
Statement which has not yet been declared effective, the Company will notify
the Investor to that effect, will use its best efforts to secure the
effectiveness of such post-effective amendment as promptly as possible and will
promptly notify the Investor pursuant to Section 7.2(b)(i) hereof
when the amendment has become effective).

 

A-16

 

(c)                                  Subject
to paragraph (d) below, in the event (i) of any request by the SEC or any
other federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or supplements to a
Registration Statement or related Prospectus or for additional information;
(ii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose; (iii) of
the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registered
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; or (iv) of any event or circumstance which
necessitates the making of any changes in the Registration Statement or
Prospectus, or any document incorporated or deemed to be incorporated therein
by reference, so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; then the Company shall deliver a certificate in writing to the
Investor (the “Suspension Notice”) to the effect of the foregoing and, upon
receipt of such Suspension Notice, the Investor will refrain from selling any
Registered Shares pursuant to the Registration Statement (a “Suspension”) until
the Investor’s receipt of copies of a supplemented or amended Prospectus
prepared and filed by the Company, or until it is advised in writing by the
Company that the current Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in any such Prospectus.  In
the event of any Suspension, the Company will use its best efforts to cause the
use of the Prospectus so suspended to be resumed as soon as reasonably
practicable after the delivery of a Suspension Notice to the Investor.  In addition to and without limiting any other
remedies (including, without limitation, at law or at equity) available to the
Investor, the Investor shall be entitled to specific performance in the event
that the Company fails to comply with the provisions of this
Section 7.2(c).

 

(d)                                 Notwithstanding
the foregoing paragraphs of this Section 7.2, the Investor shall not be
prohibited from selling Registered Shares under the Registration Statement as a
result of Suspensions on more than two occasions (for two separate suspension
events) of not more than 20 days each in any twelve month period.

 

(e)                                  Provided
that a Suspension is not then in effect, the Investor may sell Registered
Shares under the Registration Statement, provided that it arranges for delivery
of a current Prospectus to the transferee of such Registered Shares.  Upon receipt of a request therefor, the
Company has agreed to provide, at its own expense, an adequate number of
current Prospectuses (including documents incorporated by reference therein) to
the Investor and to supply copies to any other parties requiring such
Prospectuses.

 

(f)                                    In
the event of a sale of Registered Shares by the Investor under the Registration
Statement, the Investor must also deliver to the Company’s transfer agent, with
a copy to the Company, a Certificate of Subsequent Sale substantially in the
form attached hereto as Exhibit F, so that the Registered Shares
may be properly transferred.

 

A-17

 

7.3                                 Indemnification.  For the purpose of this Section 7.3:

 

(i)                                     the
term “Selling Stockholder” shall include the Investor and any affiliate of such
Investor;

 

(ii)                                  the
term “Registration Statement” shall include any final Prospectus, exhibit,
supplement or amendment included in or relating to the Registration Statement
referred to in Section 7.1; and

 

(iii)                               the
term “untrue statement” shall include any untrue statement or alleged untrue
statement, or any omission or alleged omission to state in the Registration
Statement or Prospectus a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

 

(a)                                  The
Company agrees to indemnify and hold harmless each Selling Stockholder from and
against any losses, claims, damages, liabilities or expenses to which such
Selling Stockholder may become subject (under the Securities Act or otherwise)
insofar as such losses, claims, damages, liabilities or expenses (or actions or
proceedings in respect thereof) arise out of, or are based upon (i) any
untrue statement of a material fact contained in the Registration Statement or
Prospectus, (ii) any failure by the Company to fulfill any undertaking
included in the Registration Statement, or (iii) any breach of any
representation, warranty or covenant made by the Company in this Agreement, and
the Company will promptly reimburse such Selling Stockholder for any reasonable
legal or other expenses incurred in investigating, defending or preparing to
defend, settling, compromising or paying any such action, proceeding or claim, provided,
however, that the Company shall not be liable in any such case to the
extent that such loss, claim, damage, liability or expense arises solely out
of, or is based solely upon, an untrue statement made in such Registration
Statement in reliance upon and in conformity with written information furnished
to the Company by such Selling Stockholder specifically for use in preparation
of the Registration Statement or the failure of such Selling Stockholder to
comply with its covenants and agreements contained in Sections 5.3 or 7.2
hereof respecting sale of the the Registered Shares or any statement or
omission in any Prospectus that is corrected in any subsequent Prospectus that
was delivered to the Investor at least three business days prior to the
pertinent sale or sales by the Investor. 
Notwithstanding the foregoing, the Company shall not be liable to any
Selling Stockholder for any consequential damages, including lost profits,
solely with respect to losses, claims, damages, liabilities or expenses to
which such Selling Stockholder may become subject arising out of, or based
upon, any breach of any representation, warranty or covenant made by the
Company in this Agreement.

 

(b)                                 The
Investor agrees (severally and not jointly with any other Investor) to
indemnify and hold harmless the Company (and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act, each
officer of the Company who signs the Registration Statement and each director
of the Company) from and against any losses, claims, damages, liabilities or
expenses to which the Company (or any such officer, director or controlling
person) may become subject (under the Securities Act or otherwise), insofar as
such losses, claims, damages, liabilities or expenses (or actions or 

 

A-18

 

proceedings in respect
thereof) arise solely out of, or are based solely upon, (i) any failure to
comply with the covenants and agreements contained in Section 5.3 or 7.2
hereof respecting sale of the Registered Shares, or (ii) any untrue statement
of a material fact contained in the Registration Statement if such untrue
statement was made in reliance upon and in conformity with written information
furnished by the Investor specifically for use in preparation of the
Registration Statement (provided, however, that no Investor shall
be liable in any such case for any untrue statement in any Registration
Statement or Prospectus if such statement has been corrected in writing by such
Investor and delivered to the Company at least three business days prior to the
pertinent sale or sales by the Investor), and the Investor will reimburse the
Company (or such officer, director or controlling person), as the case may be,
for any legal or other expenses reasonably incurred in investigating, defending
or preparing to defend, settling, compromising or paying any such action,
proceeding or claim.  Notwithstanding the
foregoing, (x) the Investor’s aggregate liability pursuant to this subsection
(b) and subsection (d) shall be limited to the net amount received by the
Investor from the sale of the Registered Shares and (y) the Investor shall not
be liable to the Company for any consequential damages, including lost profits,
solely with respect to losses, claims, damages, liabilities or expenses to
which the Company (or any officer, director or controlling person as set forth
above) may become subject (under the Securities Act or otherwise), arising out
of, or based upon, any failure to comply with the covenants and agreements
contained in Section 5.3 or 7.2 hereof respecting sale of the Registered
Shares.

 

(c)                                  Promptly
after receipt by any indemnified person of a notice of a claim or the beginning
of any action in respect of which indemnity is to be sought against an
indemnifying person pursuant to this Section 7.3, such indemnified person
shall notify the indemnifying person in writing of such claim or of the
commencement of such action, but the omission to so notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party under this Section 7.3 (except to the extent that such
omission materially and adversely affects the indemnifying party’s ability to
defend such action) or from any liability otherwise than under this
Section 7.3.  Subject to the
provisions hereinafter stated, in case any such action shall be brought against
an indemnified person, the indemnifying person shall be entitled to participate
therein, and, to the extent that it shall elect by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, shall be entitled to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified person.  After notice from the indemnifying person to
such indemnified person of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for any
legal expenses subsequently incurred by such indemnified person in connection
with the defense thereof, provided  further, however, that
if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the
same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees
and expenses of more than one separate counsel (together with appropriate local
counsel) for all indemnified parties.  In
no event shall any indemnifying person be liable in respect of any amounts paid
in settlement of any action unless the indemnifying person shall have approved
the terms of such settlement; provided that such consent shall not be
unreasonably withheld.  No indemnifying
person shall, 

 

A-19

 

without the prior written
consent of the indemnified person, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified person is or could
have been a party and indemnification could have been sought hereunder by such
indemnified person, unless such settlement includes an unconditional release of
such indemnified person from all liability on claims that are the subject
matter of such proceeding.

 

(d)                                 If
the indemnification provided for in this Section 7.3 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages, liabilities or expenses (or
actions or proceedings in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Investor
on the other in connection with the statements or omissions or other matters which
resulted in such losses, claims, damages, liabilities or expenses (or actions
in respect thereof), as well as any other relevant equitable
considerations.  The relative fault shall
be determined by reference to, among other things, in the case of an untrue
statement, whether the untrue statement relates to information supplied by the
Company on the one hand or an Investor on the other and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement.  The Company and
the Investors agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Investors were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to above in this subsection (d).  The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this
subsection (d), no Investor shall be required to contribute any amount in
excess of the net amount received by the Investor from the sale of the
Registered Shares.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. 
The Investors’ obligations in this subsection to contribute are several
in proportion to their sales of Registered Shares to which such loss relates
and not joint.

 

(e)                                  The
parties to this Agreement hereby acknowledge that they are sophisticated
business persons who were represented by counsel during the negotiations
regarding the provisions hereof including, without limitation, the provisions
of this Section 7.3, and are fully informed regarding said provisions.

 

7.4                                 Information
Available.  So long as the Registration
Statement is effective covering the resale of the Registered Shares owned by
the Investor, the Company will furnish (or, to the extent such information is
available electronically through the Company’s filings with the SEC, the
Company will make available) to the Investor:

 

(a)                                  as
soon as practicable after it is available, one copy of (i) its Annual Report to
Shareholders (which Annual Report shall contain financial statements audited 

 

A-20

 

in accordance with
generally accepted accounting principles by a national firm of certified public
accountants) and (ii) if not included in substance in the Annual Report to
Shareholders, its Annual Report on Form 10-K (the foregoing, in each case,
excluding exhibits);

 

(b)                                 upon
the reasonable request of the Investor, all exhibits excluded by the
parenthetical to subparagraph (a)(ii) of this Section 7.4 as filed with the SEC
and all other information that is made available to shareholders; and

 

(c)                                  upon
the reasonable request of the Investor, an adequate number of copies of the
Prospectuses to supply to any other party requiring such Prospectuses; and the
Company, upon the reasonable request of the Investor, will meet with the
Investor or a representative thereof at the Company’s headquarters during the
Company’s normal business hours to discuss all information relevant for disclosure
in the Registration Statement covering the Registered Shares and will otherwise
reasonably cooperate with the Investor conducting an investigation for the
purpose of reducing or eliminating the Investor’s exposure to liability under
the Securities Act, including the reasonable production of information at the
Company’s headquarters; provided, that the Company shall not be required to
disclose any confidential information to or meet at its headquarters with the
Investor until and unless the Investor shall have entered into a
confidentiality agreement in form and substance reasonably satisfactory to the
Company with the Company with respect thereto.

 

7.5                                 Termination
of Conditions and Obligations.  The
conditions precedent imposed by Section 5 or this Section 7 upon
Dispositions of the Registrable Shares by the Investor shall cease and
terminate as to any particular number of the Registrable Shares and the
restrictive legend shall be removed when such Registrable Shares shall have
been effectively registered under the Securities Act and sold or otherwise
disposed of in accordance with the intended method of disposition set forth in
the Registration Statement covering such Registrable Shares or at such time as
an opinion of counsel reasonably satisfactory to the Company shall have been
rendered to the effect that such conditions are not necessary in order to
comply with the Securities Act (provided that such opinion shall not be
required if the Company shall be furnished with written documentation reasonably
satisfactory to it that such Registrable Shares are being transferred in a
customary transaction exempt from registration under Rule 144 under the
Securities Act).

 

8.                                       Notices.  All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed (A) if
within domestic United States by first-class registered or certified airmail,
or nationally recognized overnight express courier, postage prepaid, or by
facsimile, or (B) if delivered from outside the United States, by International
Federal Express or facsimile, and shall be deemed given (i) if delivered
by first-class registered or certified mail domestic, three business days after
so mailed, (ii) if delivered by nationally recognized overnight carrier,
one business day after so mailed, (iii) if delivered by International
Federal Express, two business days after so mailed, and (iv) if delivered
by facsimile, upon electric confirmation of receipt and shall be delivered as
addressed as follows:

 

A-21

 

(a)                                  if
to the Company, to:

 

Genaissance
Pharmaceuticals, Inc.

Five Science Park

New Haven, Connecticut
06511

Attention:  Chief Financial Officer

 

with a copy to:

 

Wilmer Cutler Pickering
Hale and Dorr LLP

60 State Street

Boston, Massachusetts
02109

Attention:  Steven D. Singer, Esq.

 

(b)                                 if
to the Investor, at its address on the cover page hereto, or at such other
address or addresses as may have been furnished to the Company in writing, with
a copy to:

 

9.                                       Changes.  This Agreement may not be modified or amended
except pursuant to an instrument in writing signed by the Company and the
Investor.

 

10.                                 Headings.  The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.

 

11.                                 Severability.  In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

 

12.                                 Governing
Law.  This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State
of New York, without giving effect to the principles of conflicts of law.

 

13.                                 Entire
Agreement.  This Agreement
constitutes the entire agreement between the parties hereto pertaining to the
subject matter hereof, and any and all other written or oral agreements
relating to such subject matter are expressly cancelled.

 

14.                                 Finders
Fees.  Except for commissions payable
to Legg Mason Wood Walker, Incorporated by the Company, neither the Company nor
the Investor nor any affiliate thereof has

 

A-22

 

incurred any obligation
which will result in the obligation of the other party to pay any finder’s fee
or commission in connection with this transaction.

 

15.                                 Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.

 

16.                                 Successors
and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the successors and permitted
assigns of the Company and the Investors, including without limitation and
without the need for an express assignment, affiliates of the Investors.  With respect to transfers that are not made
pursuant to the Registration Statement, the rights and obligations of an
Investor under this Agreement shall be automatically assigned by such Investor
to any transferee of all or any portion of such Investor’s Registrable Shares
who is a Permitted Transferee (as defined below); provided, however, that
within two business days prior to the transfer, (i) the Company is provided
notice of the transfer including the name and address of the transferee and the
number of Registrable Shares transferred; and (ii) that such transferee agrees
in writing to be bound by the terms of this Agreement.  (For purposes of this “Agreement, a “Permitted
Transferee” shall mean any Person who (a) is an “accredited investor,” as that
term is defined in Rule 501(a) of Regulation D under the Securities Act and (b)
is a transferee of at least 20,000 Registrable Shares as permitted under the
securities laws of the United States). 
Upon any transfer permitted by this Section 16, the Company shall be
obligated to such transferee to perform all of its covenants under this
Agreement applicable to a holder of Registrable Shares as if such transferee
were an Investor.

 

17.                                 Expenses.  Each of the Company and the Investors shall
bear its own expenses in connection with the preparation and negotiation of the
Agreement.

 

A-23

 

EXHIBIT A

 

The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or registered or
qualified under any state securities laws. 
The securities may not be sold, transferred, pledged or hypothecated
unless such sale, transfer, pledge or hypothecation is in accordance with such
Act and applicable state securities laws.

 

WARRANT
NO.      

 

to
Purchase Common Stock of

 

GENAISSANCE
PHARMACEUTICALS, INC.

 

THIS WARRANT IS TO
CERTIFY THAT                                 ,
a                       
corporation (the “Holder”), is entitled to purchase from Genaissance
Pharmaceuticals, Inc., a Delaware corporation (the “Company”),                   shares
of Common Stock of the Company (the “Common Stock”) for the Exercise
Price described herein upon the terms and conditions set forth herein.  This warrant is being issued by the Company
in connection with the closing of a sale to the Holder of                     
shares of Common Stock and is one of a series of common stock purchase warrants
(collectively, the “November 2004 Warrants”) issued in connection with
the sale by the Company of up to approximately $6.0 million worth of Common
Stock.

 

Section 1.  Certain Definitions.

 

(a)                                  Unless
otherwise stated in this Warrant, capitalized terms used but not defined herein
shall have the meanings set forth in that certain Securities Purchase
Agreement, dated as of the date hereof, between the Company and the Holder.

 

(b)                                 As
used in this Warrant, capitalized terms used herein shall have the following
meanings:

 

“Expiration Date”
shall mean November 19, 2009.

 

“Securities Act”
shall mean the Securities Act of 1933, as amended.

 

“Warrant” shall
mean this Warrant and any warrant(s) issued in substitution for this Warrant.

 

“Warrantholder”
shall mean the Holder, as the initial holder of this Warrant, and any Affiliate
of the Holder to whom this Warrant has been transferred in accordance with
Section 10 hereof.

 

Section 2.  Warrant Shares; Exercise Price.

 

(a)                                  This
Warrant may be exercised in accordance with Section 3 for up to               
shares of Common Stock (such shares, as may be adjusted from time to time
pursuant to Section 4, are referred to herein as the “Warrant
Shares”).

 

 

(b)                                 The
exercise price for each Warrant Share is $1.69 (such price, as may be adjusted
from time to time pursuant to Section 4, is referred to herein as the “Exercise
Price”).

 

Section 3.  Exercise of Warrant.

 

(a)(i)                       Subject to Sections
3(b) and clause 3(a)(ii) below, the Warrantholder may exercise this
Warrant, in whole or in part, at any time beginning on the date hereof until
and including the Expiration Date; provided,  however, that the
minimum number of Warrants Shares subject to any exercise notice shall be
25,000.  In the event this Warrant is
exercised in part, the Company, at its expense, will cause to be issued in the
name of, and delivered to, the Holder a new warrant or warrants (dated the date
hereof) of like tenor, calling in the aggregate on the face or faces thereof
for the number of Warrant Shares equal (without giving effect to any adjustment
therein) to the number of such shares called for on the face of this Warrant
minus the number of Warrant Shares for which this Warrant was so exercised.

 

(a)(ii)                    Notwithstanding
the foregoing, if at any time after one
year from the date of the issuance of this Warrant, and only after such time, a
registration statement on Form S-3 to enable the resale of all of the Warrant Shares
has not been declared effective by the Securities and Exchange Commission, the
Holder may, at its option, elect to exchange this Warrant, in whole but not in
part (a “Warrant Exchange”), into the number of Warrant Shares determined in
accordance with this Section 3(a)(ii) by presentation and surrender of
this Warrant to the Company at its principal office, accompanied by a notice (a
“Notice of Exchange”) stating that this Warrant is being exchanged and the
number of shares of Common Stock to be exchanged.  In connection with any Warrant Exchange, this
Warrant shall represent the right to acquire the number of shares of Common
Stock (rounded to the nearest whole number) equal to (i) the total number of
Warrant Shares (the “Total Number”), less (ii) the number of shares equal to
the quotient obtained by dividing (A) the product of the Total Number and the
then applicable Exercise Price by (B) the then fair market value (determined as
set forth below) per share of Common Stock. 
For purposes of this Section 3(a)(ii), the “fair market value” per
share of Common Stock as of any date shall be the closing sale prices of the
Common Stock, as reported on the securities exchange which is the principal
market for the Common Stock on the trading day immediately preceding the date
the Notice of Exchange is received by the Company.  If the Common Stock is not publicly traded,
the “fair market value” per share of Common Stock shall be an amount determined
by the Company’s Board of Directors upon request of the Holder.

 

(b)                                 Except
as provided in Section 3(a)(ii) above, the Warrantholder shall exercise this
Warrant by delivering to the Company at the address set forth on the signature
page hereto (i) the Exercise Notice set out at the end of this Warrant, (ii)
this Warrant and (iii) a cash payment equal to the aggregate Exercise Price
payable in respect of the number of Warrant Shares purchased upon such
exercise, by wire transfer to an account of the Company designated in writing
by the Company to the Warrantholder.

 

(c)                                  Upon
exercise of this Warrant and delivery of the Exercise Notice with proper
payment (or upon a valid Warrant Exchange pursuant to Section 3(a)(ii) above)
relating thereto, the Company shall issue and deliver as soon as practicable
(and in any case within four

 

2

 

(4) Business Days
thereafter) to the Warrantholder a stock certificate or certificates, duly
executed by the Company, representing the Warrant Shares.

 

(d)                                 The
stock certificate or certificates for the Warrant Shares to be delivered in
accordance with this Section 3 shall be registered in the name of
the Warrantholder or such other Person as shall be designated in the Exercise
Notice.  Such certificate or certificates
shall be deemed to have been issued and the Warrantholder or any other Person
so designated to be named therein shall be deemed to have become the holder of
record of such shares, including to the extent permitted by law the right to
vote such shares or to consent or to receive notice as stockholders, as of the
time said notice is delivered to the Company as aforesaid.

 

(e)                                  The
Company shall pay all expenses payable in connection with the preparation,
issue and delivery of stock certificates under this Section 3,
including any transfer taxes resulting from the exercise of this Warrant by the
Holder and the issuance of the Warrant Shares to the Holder hereunder.

 

(f)                                    Upon
the exercise of this Warrant in accordance with the terms hereof, the Warrant
Shares shall be validly issued, fully paid and non-assessable, and free from
all liens, other than liens created by the Warrantholder.

 

Section 4.  Adjustment of Exercise Price and Warrant
Shares.

 

(a)                                  If,
at any time prior to the Expiration Date, the number of outstanding shares of
Common Stock is (i) increased by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up of shares of Common Stock or (ii)
decreased by a combination of shares of Common Stock, then, following the
record date fixed for the determination of holders of Common Stock entitled to
receive the benefits of such stock dividend, subdivision, split-up, or
combination, the Exercise Price shall be adjusted to a new amount equal to the
product of (I) the Exercise Price in effect on such record date and (II) the
quotient obtained by dividing (x) the number of shares of Common Stock
outstanding on such record date (without giving effect to the event referred to
in the foregoing clause (i) or (ii)), by (y) the number of shares of Common
Stock which would be outstanding immediately after the event referred to in the
foregoing clause (i) or (ii), if such event had occurred immediately following
such record date.

 

(b)                                 Upon
each adjustment of the Exercise Price as provided in Section 4(a),
the Warrantholder shall thereafter be entitled to purchase, at the Exercise
Price resulting from such adjustment, the number of shares of Common Stock
equal to the product of (i) the number of shares of Common Stock that the
Warrantholder was entitled to purchase prior to such adjustment and (ii) the
quotient obtained by dividing (x) the Exercise Price existing prior to such
adjustment by (y) the new Exercise Price resulting from such adjustment.

 

Section 5.  Reclassification, Etc.  In case of any reclassification or change of
the outstanding shares of Common Stock (other than as a result of a
subdivision, combination or stock dividend), or in case of any consolidation of
the Company with, or merger of the Company into, another corporation or other
business organization (other than a consolidation or merger in which the
Company is the continuing corporation and which does not result in any 

 

3

 

reclassification or
material change of the outstanding shares of Common Stock) at any time prior to
the Expiration Date, then, as a condition of such reclassification,
reorganization, change, consolidation or merger, lawful provision shall be
made, and duly executed documents evidencing the same from the Company or its
successor shall be delivered to the Warrantholder, so that the Warrantholder
shall have the right prior to the Expiration Date to purchase, at a price not
to exceed the aggregate Exercise Price, the kind and amount of shares of stock
and other securities and property receivable upon such reclassification,
reorganization, change, consolidation or merger by a holder of the number of
shares of Common Stock purchasable by the Warrantholder immediately prior to
such reclassification, reorganization, change, consolidation or merger, and in
any such case appropriate provisions shall be made with respect to the rights
and interests of the Warrantholder to the end that the provisions hereof shall
thereafter be applicable in relation to any shares of stock and other
securities and property thereafter deliverable upon exercise hereof.

 

Section 6.  Reservation and Authorization of Common
Stock.  The Company shall at all
times reserve and keep available for issuance such number of its authorized but
unissued shares of Common Stock as will be sufficient to permit the exercise of
this Warrant.

 

Section 7.  Stock Books.  The Company will not at any time, except upon
dissolution, liquidation or winding up or in accordance with Section 5,
close its stock books so as to result in preventing or delaying the exercise of
this Warrant during normal business hours.

 

Section 8.  Limitation of Liability.  No provisions hereof, in the absence of
affirmative action by the Warrantholder to purchase the Warrant Shares
hereunder, shall give rise to any liability of the Warrantholder to pay the
Exercise Price or as a stockholder of the Company (whether such liability is
asserted by the Company or creditors of the Company).

 

Section 9  Legend. Each stock certificate
representing Warrant Shares shall bear a legend substantially in the following
form:

 

“THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER APPLICABLE STATE SECURITIES LAWS,
AND MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION UNDER THE ACT OR IN A TRANSACTION WHICH QUALIFIES
AS AN EXEMPT TRANSACTION UNDER THE ACT, THE RULES AND REGULATIONS PROMULGATED
THEREUNDER AND THE SECURITIES LAW OF ANY APPLICABLE STATE.”

 

Section 10.  Transfer.  Subject to compliance with the Securities Act
and the applicable rules and regulations promulgated thereunder, the Holder may
transfer this Warrant, in whole but not in part, to any of its affiliates
without the consent of the Company.  Any such
transfer shall be made at the office or agency of the Company at which this
Warrant is exercisable, by the registered holder hereof in person or by its
duly authorized attorney, upon surrender of this Warrant together with the
assignment hereof properly endorsed, and promptly thereafter a new warrant
shall be issued and delivered by the Company, registered in the name of

 

4

 

the assignee.  Until registration of transfer hereof on the
books of the Company, the Company may treat the Holder as the owner hereof for
all purposes.

 

Section 11.  Loss, Destruction, Etc. of Warrant.  Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company will make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Warrant, a new warrant of like tenor
and representing the right to purchase the Warrant Shares.

 

Section 12.  Amendments.  The terms of this Warrant may be amended, and
the observance of any term herein may be waived (either generally or in a
particular instance and either retroactively or prospectively), upon written
consent of the Company and the holders of at least 50% of the shares of Common
Stock issued or issuable upon exercise of the November 2004 Warrants then
outstanding; provided, however, that any such amendment or waiver
will apply to all November 2004 Warrants then outstanding; and provided  further
that the number of Warrant Shares subject to this Warrant and the Exercise
Price of this Warrant may not be amended, and the right to exercise this
Warrant may not be waived, without the written consent of the holder of this
Warrant (it being agreed that an event occurring under any of the provisions of
Section 4 or Section 5 of this Warrant shall not be considered an amendment of
the number of Warrant Shares or the Exercise Price).

 

Section 13.  Notices.  All notices or other communications required
or permitted hereunder shall be in writing and shall be deemed given or
delivered (a) when delivered personally, (b) if transmitted by facsimile when
confirmation of transmission is received, (c) if sent by registered or
certified mail, postage prepaid, return receipt requested, three Business Days
after mailing or (d) if sent by reputable overnight courier service, one
Business Day after delivery to such service; and shall be addressed as follows:

 

	
  If to the Company, to:

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
  Genaissance
  Pharmaceuticals, Inc.

  Five Science Park

  New Haven, Connecticut 06511

  Attention: Chief Financial Officer

  Facsimile: (203) 786-3567

  	
   

  	
  Wilmer Cutler Pickering
  Hale and Dorr LLP

  60 State Street

  Boston, Massachusetts 02109

  Attention: Steven D. Singer, Esq.

  Facsimile: (617) 526-5000

  
	
   

  	
   

  	
   

  
	
  If to the Holder, to:

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:
  

  	
   

  	
  Attention: 

  
	
  Facsimile:

  	
   

  	
  Facsimile:

  

 

5

 

Section 14.  Successors and Assigns.  This Warrant shall bind and inure to the
benefit of and be enforceable by the parties hereto and their respective
permitted successors and assigns.

 

Section 15.  Governing Law.  This Warrant and the obligations arising
hereunder shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York (other than its conflicts of law provisions).

 

Section 16.  No Stockholder Rights With Respect to
Warrant Shares.  Until the Warrant
Shares subject to this Warrant are issued to the Warrantholder upon exercise of
this Warrant, the Warrantholder shall have no right to vote the Warrant Shares
in connection with any matters to which holders of Common Stock are entitled to
vote and shall have no rights as a stockholder of the Company with respect to
the Warrant Shares.

 

 

[Signature
Page Follows]

 

6

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed by a duly authorized officer as
of November 19, 2004.

 

	
   

  	
  GENAISSANCE PHARMACEUTICALS,

  INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Five Science Park

  
	
   

  	
  New Haven, Connecticut
  06511

  
	
   

  	
  Attention: Chief
  Financial Officer

  
	
   

  	
  Fax: (203) 786-3567

  

 

[Holders’
agreement and acknowledgement follows]

 

 

Signature
Page to Warrant

 

 

AGREED AND ACKNOWLEDGED

AS OF NOVEMBER 19, 2004:

 

Number of Warrant Shares:

 

Exercise Price Per
Warrant Share:

 

HOLDER:

 

	
   

  	
   

  	
   

  
	
   

  	
  , a

  	
   

  	
   

  	
   

  
	
   

  	
  (jurisdiction)

  	
   

  	
  (type of entity)

  
	
   

  	
   

  	
   

  	
   

  

 

	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

Holder’s
Agreement and Acknowledgement

 

 

EXERCISE
NOTICE

 

(to be executed
only upon exercise of Warrant)

 

To:                              Genaissance
Pharmaceuticals, Inc.

Five Science Park

New Haven, Connecticut 06511

Attention:  Chief Financial Officer

 

The undersigned,
pursuant to the provisions set forth in the attached Warrant, hereby
irrevocably elects to purchase                        
of the Warrant Shares covered by such Warrant and herewith makes payment of the
aggregate Exercise Price payable in respect of the number of Warrant Shares
purchased upon such exercise, as provided for in such Warrant.

 

The Warrant Shares shall
be registered in the name of the following Person:

 

                                                        .

 

	
  Dated:
  

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
							

 

 

EXHIBIT B

 

GENAISSANCE
PHARMACEUTICALS, INC.

 

SECURITIES CERTIFICATE QUESTIONNAIRE

 

Pursuant
to Section 2 of the Agreement, please provide us with the following
information:

 

	
  1.

  	
  The
  exact name in which your Shares and Warrants are to be registered (this is
  the name that will appear on your stock certificate(s) and warrant(s)). You
  may use a nominee name if appropriate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  If
  a nominee name is listed in response to item 1 above, the relationship
  between the Investor and such nominee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  The
  mailing address of the registered holder listed in response to item 1 above:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  The
  Social Security Number or Tax Identification Number of the registered holder
  listed in the response to item 1 above:

  	
   

  	
   

  

 

 

EXHIBIT
C

 

GENAISSANCE
PHARMACEUTICALS, INC.

 

INVESTOR QUESTIONNAIRE

 

(All
information will be treated confidentially, except as otherwise noted)

 

To: Genaissance
Pharmaceuticals, Inc.,

 

The undersigned hereby
acknowledges the following:

 

This Investor
Questionnaire (“Questionnaire”)
must be completed by each potential investor in connection with the offer and
sale of (i) shares of the common stock, par value $.001 per share (the “Shares”), and (ii) related common stock
purchase warrants (the “Warrants” and,
together with the Shares, the “Securities”)
of Genaissance Pharmaceuticals, Inc. (the “Company”).  The Securities are being offered and sold by
the Company without registration under the Securities Act of 1933, as amended
(the “Securities Act”), and the
securities laws of certain states, in reliance on the exemptions contained in
Section 4 of the Securities Act and on Regulation D promulgated thereunder and
in reliance on similar exemptions under applicable state laws.  In order to comply with applicable law,
including the USA PATRIOT Act, the Company must determine that a potential
investor meets certain suitability requirements before offering or selling
Securities to such investor.  The purpose
of this Questionnaire is to assure the Company that each investor will meet the
applicable suitability requirements.  The
information supplied by the undersigned will be used in determining whether the
undersigned meets such criteria, and reliance upon the private offering
exemption from registration is based in part on the information herein
supplied.

 

This Questionnaire does
not constitute an offer to sell or a solicitation of an offer to buy any
security.  The undersigned’s answers will
be kept strictly confidential.  However,
by signing this Questionnaire the undersigned will be authorizing the Company
to provide a completed copy of this Questionnaire to such parties as the
Company deems appropriate in order to ensure that the offer and sale of the
Securities will not result in a violation of the Securities Act, the securities
laws of any state or the USA PATRIOT Act, and that the undersigned otherwise
satisfies the suitability standards applicable to purchasers of the
Securities.  All potential investors must
answer all applicable questions and complete, date and sign this Questionnaire.  The undersigned shall print or type its
responses and attach additional sheets of paper if necessary to complete its
answers to any item.

 

A.                                    BACKGROUND
INFORMATION

 

	
  Name:

  	
   

  
	
   

  
	
  Business Address:

  	
   

  
	
   

  	
  (Number and
  Street)

  
	
   

  
	
  (City)

  	
  (State)

  	
  (Zip Code)

  
	
   

  
	
  Telephone Number:
  (       )

  	
   

  
	
   

  
	
  Residence Address:

  	
   

  
	
   

  	
  (Number and
  Street)

  
	
   

  
	
  (City)

  	
  (State)

  	
  (Zip Code)

  
	
   

  
	
  Telephone Number:
  (       )

  	
   

  
	
   

  
	
  If an
  individual:

  
	
   

  
	
  Age:

  	
   

  	
   

  	
  Citizenship:

  	
   

  	
   

  	
  Where registered to
  vote:

  	
   

  
	
   

  
	
  If a
  corporation, partnership, limited liability company, trust or other entity:

  
	
   

  
	
  Type of entity:

  	
   

  
															

 

 

	
  State of formation:

  	
   

  	
   

  	
  Date of formation:

  	
   

  
	
   

  
	
  Social Security or
  Taxpayer Identification No.

  	
   

  
	
   

  
	
  Send all correspondence
  to (check one):          Residence
  Address

  	
   

  	
   

  	
  Business Address

  
							

 

B.                                    STATUS
AS ACCREDITED INVESTOR

 

The undersigned is an “accredited
investor” as such term is defined in Regulation D under the Securities Act,
because at the time of the sale of the Securities the undersigned falls within
one or more of the following categories (Please initial one or more, as applicable):

 

(1)                                  a
bank as defined in Section 3(a)(2) of the Securities Act, or a savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the
Securities Act whether acting in its individual or fiduciary capacity; a broker
or dealer registered pursuant to Section 15 of the Securities Exchange Act of
1934; an insurance company as defined in Section 2(13) of the Securities Act;
an investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that act; a
Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958; a plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; an employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974 if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of such act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with the investment decisions made
solely by persons that are accredited investors;(1)

 

(2)                                  a
private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940;

 

(3)                                  an
organization described in Section 501(c)(3) of the Internal Revenue Code of
1986, corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the Shares offered, with total
assets in excess of $5,000,000;

 

(4)                                  a
natural person whose individual net worth, or joint net worth with that person’s
spouse, at the time of such person’s purchase of the Securities exceeds
$1,000,000;

 

(5)                                  a
natural person who had an individual income in excess of $200,000 in each of
the two most recent years or joint income with that person’s spouse in excess
of $300,000 in each of those years and has a reasonable expectation of reaching
the same income level in the current year;

 

(6)                                  a
trust, with total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the Securities offered, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D; and

 

(7)                                  an
entity in which all of the equity owners are accredited investors (as defined
above).

 

(1)          As used in this
Questionnaire, the term “net worth” means the excess of total assets over total
liabilities.  In computing net worth for
the purpose of subsection (4), the principal residence of the investor must be
valued at cost, including cost of improvements, or at recently appraised value
by a professional appraiser.  In
determining income, the investor should add to the investor’s adjusted gross
income any amounts attributable to tax exempt income received, losses claimed
as a limited partner in any limited partnership, deductions claimed for
depreciation, contributions to an IRA or KEOGH retirement plan, alimony
payments, and any amount by which income from long-term capital gains has been
reduced in arriving at adjusted gross income.

 

2

 

C.                                    REPRESENTATIONS

 

The undersigned hereby
represents and warrants to the Company as follows:

 

1.                                      Any purchase of the Securities would be solely for the account of the
undersigned and not for the account of any other person or with a view to any
resale, fractionalization, division, or distribution thereof.

 

2.                                      The
information contained herein is complete and accurate and may be relied upon by
the Company, and the undersigned will notify the Company immediately of any
material change in any of such information occurring prior to the closing, if
any, with respect to the purchase of Securities by the undersigned or any
co-purchaser.

 

3.                                      There
are no suits, pending litigation, or claims against the undersigned that could
materially affect the net worth of the undersigned as reported in this
Questionnaire.

 

4.                                      The
undersigned acknowledges that there may occasionally be times when the Company,
based on the advice of its counsel, determines that it must suspend the use of
the Prospectus forming a part of the Registration Statement (as such terms are
defined in the Securities Purchase Agreement to which this Questionnaire is
attached) until such time as an amendment to the Registration Statement has
been filed by the Company and declared effective by the Securities and Exchange
Commission or until the Company has amended or supplemented such
Prospectus.  The undersigned is aware
that, in such event, the Securities will not be subject to ready liquidation,
and that any Securities purchased by the undersigned would have to be held
during such suspension.  The overall
commitment of the undersigned to investments which are not readily marketable
is not excessive in view of the undersigned’s net worth and financial
circumstances, and any purchase of the Securities will not cause such
commitment to become excessive.  The
undersigned is able to bear the economic risk of an investment in the
Securities.

 

5.                                      The
undersigned has carefully considered the potential risks relating to the
Company and a purchase of the Securities and fully understands that the
Securities are speculative investments which involve a high degree of risk of
loss of the undersigned’s entire investment. 
Among others, the undersigned has carefully considered each of the risks
described in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2003.

 

6.                                      The
following is a list of all states and other jurisdictions in which blue sky or
similar clearance will be required in connection with the undersigned’s
purchase of the Securities:

 

The undersigned agrees to
notify the Company in writing of any additional states or other jurisdictions
in which blue sky or similar clearance will be required in connection with the
undersigned’s purchase of the Securities.

 

7.                                      For purposes of the following
representations, the term “Restricted Person”
shall mean (a) any national of or entity operating in or organized under the
laws of Cuba, Iran, Syria, Sudan, or other countries that may, from time to
time, become subject to comprehensive U.S. foreign assets control regulations
that prohibit or require prior U.S. government licensing for investments in
U.S. entities; (b) any Specially Designated National or Blocked Person as may
be published from time to time by the U.S. Department of the Treasury Office of
Foreign Assets Control; and (c) any person or entity designated by the U.S.
Department of the Treasury as a financial institution of primary money laundering
concern.

 

(a)                                  The undersigned represents and warrants that
(1) neither it nor any of its officers, partners, shareholders, owners,
members, employees, or agents are Restricted Persons, or controlled by, owned
by, or otherwise acting on behalf of, any Restricted Person, or otherwise
prohibited from engaging in financial transactions with U.S. persons; (2) the
funds to be used by the undersigned in purchasing the Shares are lawfully
derived, held, and invested in accordance with applicable laws and regulations,
including without limitation the Bank Secrecy Act, Money Laundering Control Act
of 1986, and the International Money Laundering and Anti-Terrorist Financing
Act of 2001.

 

(b)                                 The undersigned represents, warrants, and
covenants that it (1) has and shall implement and/or maintain all required
anti-money laundering safeguards, including without limitation an
anti-money laundering

 

3

 

compliance program
consistent with applicable regulations as may promulgated from time to time by
the U.S. Department of the Treasury; (2) is and shall remain in compliance with
all applicable foreign assets control regulations as may be promulgated from
time to time by the U.S. Department of the Treasury; (3) has disclosed or will
promptly disclose to Company any transaction, acquisition of any interest, or
exchange of any property involving the undersigned and any Restricted Person;
and (4) is and shall remain in compliance with applicable money laundering laws
and regulation, including without limitation those listed in paragraph (a)(2)
above.

 

(c)                                  The undersigned covenants that it shall
report to the Company within twenty-four hours if the undersigned, or any of
its officers, partners, shareholders, owners, members, employees, or agents are
designated as Restricted Persons or otherwise become prohibited from acquiring
and/or holding a financial interest in a U.S. person or entity.

 

(d)                                 The undersigned shall provide additional
information and/or assurances as Company may reasonably request for purposes of
compliance with applicable laws concerning anti-money laundering laws and
similar activities.  Any breach of these
representations, warranties, or covenants shall constitute a default under the Securities purchase agreement between the undersigned
and the Company, entitling the Company to block the purchase of the Securities by the undersigned and/or redeem the Securities previously sold to the undersigned or
exercise such other remedies as may be prescribed such agreement.

 

(e)                                  The Company may, subject to applicable
securities laws, disclose information about the undersigned or any of its
officers, partners, shareholders, owners, members, employees, or agents to
appropriate governmental or self-regulatory bodies if the Company reasonably
determines, in its sole discretion, that such disclosure is required by law or
would otherwise serve the best interests of the Company.

 

(f)                                    The undersigned shall indemnify and hold
harmless the Company, it officers, directors, shareholders, successors, and
assigns from any liability arising from relating to the undersigned’s breach of
any representation, warranty, or covenant set forth in this paragraph 7.

 

IN WITNESS WHEREOF, the
undersigned has executed this Questionnaire this 18th day of November, 2004,
and declares under oath that it is truthful and correct.

 

	
   

  	
  Print Name:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  (required for
  any purchaser that is a corporation, partnership, trust or other entity)

  
					

 

4

 

 

	
  EXHIBIT D

  	
  60 STATE STREET

  
	
   

  	
  BOSTON, MA 02109

  
	
   

  	
  +1 617 526 6000

  
	
   

  	
  +1 617 526 5000 fax

  
	
   

  	
  wilmerhale.com

  

 

 

November 19, 2004

 

Legg Mason Wood Walker,
Incorporated

Investors Named on Schedule
A attached hereto

 

Re:                               Genaissance
Pharmaceuticals, Inc.

 

Ladies and Gentlemen:

 

This opinion is being
furnished pursuant to Section 3 of Annex I to the Securities Purchase
Agreements, dated as of November 18, 2004 (collectively, the “Agreements”
and individually, an “Agreement”), by and between Genaissance Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), and the person identified in each
Agreement as the “Investor,” each of whom is named on Schedule A
attached hereto (collectively, the “Investors” and individually, an “Investor”).  Capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to them in the
Agreement.

 

We have acted as counsel
to the Company in connection with the preparation, execution and delivery of
the Agreements.  As such counsel, we have
examined and are familiar with and have relied upon the following documents:

 

1.                                       the
Certificate of Incorporation and By-laws, each as amended to date, of the
Company;

 

2.                                       a
Certificate of the Secretary of State of the State of Delaware, dated November    ,
2004, attesting to the continued legal existence and corporate good standing of
the Company in Delaware (the “Domestic Certificate”);

 

3.                                       a
Certificate of the Secretary of State of the State of Connecticut, dated
November    , 2004, attesting to the authority of the Company to
transact business in Connecticut (the “Connecticut Certificate”);

 

4.                                       a
Certificate of the Secretary of State of the State of Florida, dated November    ,
2004, attesting to the authority of the Company to transact business in Florida
(the “Florida Certificate”);

 

BALTIMORE                       BERLIN     BOSTON                                    BRUSSELS                                    LONDON                                            MUNICH

NEWYORK                                 NORTHERN
VIRGINIA                   OXFORD                                             PRINCETON                           WALTHAM                           WASHINGTON

 

 

Legg Mason Wood Walker,
Incorporated

Investors Named on Schedule
A attached hereto

November 19, 2004

Page 2

 

5.                                       a
Certificate of the Secretary of State of the State of North Carolina, dated
November    , 2004, attesting to the authority of the Company to
transact business in North Carolina (the “North Carolina Certificate” and,
collectively with the Connecticut Certificate and the Florida Certificate, the “Foreign
Qualification Certificates”);

 

6.                                       the
Agreements and the Warrants;

 

7.                                       an
officers’ certificate from the Company, dated as of the date hereof (the “Officers’
Certificate”), attesting to the business of the Company, the accuracy of the
statements set forth in the Chief Executive Officer’s Certificate delivered
pursuant to Section 3 of Annex I of the Agreements and the full payment for the
Securities, and as to certain other matters;

 

8.                                       a
Secretary’s Certificate from the Company, dated as of the date hereof (the “Secretary’s
Certificate”), attesting to the Company’s charter and by-laws, resolutions
adopted by the Board of Directors (and the pricing committee thereof) of the
Company and the incumbency of certain officers of the Company; and

 

9.                                       such
other records of meetings, documents, instruments and certificates (including
but not limited to certificates of public officials and officers of the
Company) as we have considered necessary for purposes of this opinion.

 

In our examination of
the documents described above, we have assumed the genuineness of all
signatures, the legal capacity of all individual signatories, the completeness
of all corporate and stock records provided to us, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as copies, and the authenticity of the originals
of such latter documents.

 

In rendering this
opinion, we have relied, as to all questions of fact material to this opinion,
upon certificates of public officials and officers of the Company and upon the
representations and warranties made by the Investors and the Company in the
Agreements.  We have not attempted to verify
independently such facts.  We have not
conducted a search of any electronic databases or the dockets of any court,
administrative or regulatory body, agency or other filing office in any
jurisdiction.

 

For purposes of this
opinion, we have assumed that each Agreement has been duly authorized, executed
and delivered by each Investor, and that each Investor has all requisite power
and authority to effect the transactions contemplated by the respective
Agreements.  We have also assumed that
each Agreement is the valid and binding obligation of each Investor and is
enforceable against such Investor in accordance with its terms.  We do not render any opinion as to the
application of any federal or state law or regulation to the power, authority
or competence of any party to the Agreement other than the Company.

 

For purposes of this
opinion we have assumed that the Board of Directors of the Company has complied
with its fiduciary duties in connection with the transactions contemplated

 

2

 

Legg Mason Wood Walker,
Incorporated

Investors Named on Schedule
A attached hereto

November 19, 2004

Page 3

 

by the Agreement.  We have also assumed for purposes of Section
144 of the Delaware General Corporation Law, that the Agreement and Warrant are
fair as to the Company as of the time they were authorized, approved or
ratified by the Board of Directors of the Company, a committee thereof or the
shareholders of the Company.

 

Our opinions set forth
below are qualified to the extent that they may be subject to or affected by
(i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws relating to or affecting the rights of creditors
generally, (ii) statutory or decisional law concerning recourse by creditors to
security in the absence of notice or hearing, (iii) duties and standards
imposed on creditors and parties to contracts, including, without limitation,
requirements of good faith, reasonableness and fair dealing, and (iv) general
equitable principles.  We express no opinion
as to the availability of any equitable or specific remedy upon any breach of
any of the agreements as to which we are opining herein, or any of the
agreements, documents or obligations referred to therein, or to the successful
assertion of any equitable defenses, inasmuch as the availability of such
remedies or the success of any equitable defense may be subject to the
discretion of a court.  We are expressing
no opinion herein as to the enforceability of Section 7.3 of the Agreements.

 

We also express no
opinion herein as to any provision of any agreement (a) which may be deemed to
or construed to waive any right of the Company, (b) to the effect that rights
and remedies are not exclusive, that every right or remedy is cumulative and
may be exercised in addition to or with any other right or remedy and does not
preclude recourse to one or more other rights or remedies, (c) relating to the
effect of invalidity or unenforceability of any provision of the Agreements on
the validity or enforceability of any other provision thereof, (d) requiring
the payment of penalties, consequential damages or liquidated damages, (e)
which is in violation of public policy, including, without limitation, any
provision relating to indemnification and contribution with respect to
securities law matters, (f) purporting to indemnify any person against his, her
or its own negligence or intentional misconduct, (g) which provides that the
terms of the Agreements may not be waived or modified except in writing or (h)
relating to choice of law or consent to jurisdiction.

 

Our opinions expressed
in paragraph 1 below, insofar as they relate to the due organization,
valid existence, due qualification, authority to transact business and/or good
standing of the Company, are based solely on the Domestic Certificate and the
Foreign Qualification Certificates and are limited accordingly, and, as to such
matters, our opinions are rendered as of the respective dates of such
certificates.  We express no opinion as
to the tax good standing of the Company in any jurisdiction.

 

For purposes of our
opinions in paragraphs 4, 5 and 6 below, we have relied upon representations
made by the Investors in Section 5 of the Agreements (including the investor
questionnaires attached as Exhibit C to Annex I thereto) and have
assumed (without any independent investigation) the accuracy of such
representations and responses.  For
purposes of our opinions in paragraphs 4, 5 and 6 below, we have also assumed
that in connection with the offer and sale of securities to the Investors,
neither the Company nor any person acting on its

 

3

 

Legg Mason Wood Walker,
Incorporated

Investors Named on Schedule
A attached hereto

November 19, 2004

Page 4

 

behalf has engaged in any
form of “general solicitation or general advertising” within the meaning
contemplated by Rule 502 (c) of Regulation D.

 

Our opinion in paragraph
7 below is based in part on the Officers’ Certificate and is rendered as of the
date of such certificate.

 

We are opining herein
solely as to the state laws of the State of New York, the Delaware General
Corporation Law statute and the federal laws of the United States of
America.  To the extent that any other
laws govern any of the matters as to which we express an opinion herein, we
have assumed for purposes of this opinion, with your permission and without
independent investigation, that such laws are identical to the state laws of
the State of New York, and we express no opinion as to whether such assumption
is reasonable or correct.  We also
express no opinion herein with respect to the securities or Blue Sky laws of
any state or other jurisdiction of the United States or of any foreign
jurisdiction.  In addition, we express no
opinion and make no statement herein with respect to the antifraud laws of any
jurisdiction.

 

For purposes of our
opinions rendered below, we have assumed that the facts and law governing the
future performance by the Company of its obligations under each Agreement will
be identical to the facts and law governing its performance on the date of this
opinion.

 

Based upon and subject
to the foregoing, we are of the opinion that:

 

1.                                       The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to conduct its business as it is, based upon the Officers’
Certificate, currently conducted, to enter into and perform its obligations
under each Agreement and each Warrant, and to carry out the transactions
contemplated by each Agreement and each Warrant.  The Company is duly authorized to do business
in the States of Connecticut, Florida and North Carolina.

 

2.                                 The
Securities and the Warrant Shares have been duly authorized by all necessary corporate
action on the part of the Company; and the Shares, when issued, sold and
delivered against payment therefor in accordance with the provisions of the
Agreements, and the Warrant Shares, when issued and paid for in accordance with
the terms of the Warrants, will be duly and validly issued, fully paid and
non-assessable; the issuance of the Shares and the Warrant Shares will not be
subject to any preemptive rights under the Delaware General Corporation Law
statute or the Certificate of Incorporation, or, to our knowledge, similar
contractual rights pursuant to any agreement to which the Company is a party
and which has been filed by the Company with the SEC as an exhibit to the SEC
Documents (except for such preemptive or contractual rights as have been
waived).

 

3.                                       The
execution and delivery by the Company of the Agreements and the

 

4

 

Legg Mason Wood Walker,
Incorporated

Investors Named on Schedule
A attached hereto

November 19, 2004

Page 5

 

Warrants,
and the consummation by the Company of the transactions contemplated thereby,
have been duly authorized by all necessary corporate action on the part of the
Company, and the Agreements and the Warrants have been duly executed and
delivered by the Company.  Each of the
Agreements and each of the Warrants constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance with
their respective terms.

 

4.                                       The
execution and delivery by the Company of the Agreements and the Warrants, and
the consummation by the Company of the transactions contemplated thereby, do
not (a) violate the provisions of any U.S. federal or New York state law, rule
or regulation applicable to the Company or the Delaware General Corporation Law
Statute; (b) violate the provisions of the Company’s Certificate of
Incorporation or By-laws, each as amended to date; (c) violate any judgment,
decree, order or award of any court, governmental body or arbitrator
specifically naming the Company of which we are aware; or (d) with or without
notice and/or the passage of time, conflict with or result in the breach or
termination of any term or provision of, or constitute a default under, or
cause any acceleration under, or cause the creation of any lien, charge or encumbrance
upon the properties or assets of the Company pursuant to, any agreement to
which the Company is a party and which has been filed by the Company with the
SEC as an exhibit to the SEC Documents (except for the registration rights
provisions of those agreements set forth in Schedule B-1 attached hereto and
the preemptive rights provisions of that agreement set forth in Schedule B-2
attached hereto).

 

5.                                       Except
for the filing of one or more Forms D with the Securities and Exchange
Commission under Regulation D under the Securities Act of 1933, as amended, no
filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any United States federal or New York state
governmental authority or agency is necessary for the issuance, sale and
delivery of the Securities by the Company to the Investors pursuant to the
Agreements.

 

6.                                       The
offer, issuance and sale of the Securities pursuant to the Agreements are
exempt from registration under the Securities Act of 1933, as amended.

 

7.                                       To
our knowledge, there is no action, proceeding or litigation pending or
threatened against the Company before any court, governmental or administrative
agency or body.

 

This opinion is provided
to the Investors as a legal opinion only and not as a 

 

5

 

Legg Mason Wood Walker,
Incorporated

Investors Named on Schedule
A attached hereto

November 19, 2004

Page 6

 

guaranty or warranty of
the matters discussed herein.  This
opinion is based upon currently existing statutes, rules, regulations and
judicial decisions and is rendered as of the date hereof, and we disclaim any
obligation to advise you of any change in any of the foregoing sources of law
or subsequent developments in law or changes in facts or circumstances which
might affect any matters or opinions set forth herein.

 

This opinion is rendered
only to the Investors and is solely for the benefit of the Investors in
connection with the transactions contemplated by the Agreements.  This opinion may not be relied upon by the
Investors for any other purpose, nor may this opinion be provided to, quoted to
or relied upon by any other person or entity for any purpose without our prior
written consent.

 

	
  Very truly yours,

  	
   

  
	
   

  	
   

  
	
  WILMER CUTLER PICKERING

  	
   

  
	
  HALE AND DORR LLP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Steven
  D. Singer, a Partner

  	
   

  
				

 

6

 

Schedule
A

 

Bristol Investment Fund, Ltd.

 

Orion Biomedical Fund, L.P.

 

Orion Biomedical Offshore Fund, L.P.

 

Portside Growth and Opportunity Fund

 

Capital Ventures International

 

Prescott Group Aggressive Small Cap Master Fund

 

TCMP(3) Partners

 

Catalytix, LDC

 

Catalytix, LDC Life Science Hedge

 

Merifin Capital N.V.

 

Sunrise Equity Partners, L.P.

 

MPB Limited Partnership

 

Victor Marshall

 

Richard L.E. Morgan

 

Amphion Capital Partners LLC 401K dated 11/1/03 FBO: Jonathan Gold TTEE

 

Emerald Investment Partners, L.P.

 

Robert Mosberg 

 

Iroquois Capital L.P.

 

 

Schedule
B-1

 

Warrant
Agreement, dated as of March 8, 2000, by and between the Company and Legg Mason
Wood Walker, Incorporated.

 

Warrant
Agreement, dated as of April 30, 1999, by and between the Company and TBCC
Funding Trust II.

 

Warrant
Agreement, dated as of May 15, 2003, by and between the Company and Legg
Mason, Inc.

 

Warrant
Agreement, dated as of May 15, 2003, by and between the Company and Joseph
Klein III.

 

Second
Amended and Restated Registration Rights Agreement, dated as of March 10, 2000,
by and among the Company and the investors party thereto.

 

Amended
and Restated Registration Rights Agreement, dated as of March 10, 2000, by and
among the Company and the investors party thereto.

 

Registration
Rights Agreement, dated as of March 10, 2000, by and among the Company and the
investors party thereto.

 

License,
Development and Cooperation Agreement by and between the Company and Merck KgaA
dated September 22, 2004.

 

Connecticut
Innovations, Incorporated has registration rights with respect to specified
capital stock of the Company pursuant to a Purchase Agreement dated as of March
10, 1994, Financing Agreements dated as of November 16, 1994 and September 10,
1996 and a letter agreement dated February 17, 2000.

 

 

Schedule
B-2

 

Series
A Preferred Stock Purchase Agreement by and between the Company and RAM
Trading, Ltd. dated October 29, 2003.

 

 

EXHIBIT
E

 

Warrant
Agreement, dated as of March 8, 2000, by and between the Company and Legg Mason
Wood Walker, Incorporated.

 

Warrant
Agreement, dated as of April 30, 1999, by and between the Company and TBCC
Funding Trust II.

 

Warrant
Agreement, dated as of May 15, 2003, by and between the Company and Legg
Mason, Inc.

 

Warrant
Agreement, dated as of May 15, 2003, by and between the Company and Joseph
Klein III.

 

Second
Amended and Restated Registration Rights Agreement, dated as of March 10, 2000,
by and among the Company and the investors party thereto.

 

Amended
and Restated Registration Rights Agreement, dated as of March 10, 2000, by and
among the Company and the investors party thereto.

 

Registration
Rights Agreement, dated as of March 10, 2000, by and among the Company and the
investors party thereto.

 

Series
A Preferred Stock Purchase Agreement by and between the Company and RAM
Trading, Ltd. dated October 29, 2003.

 

License,
Development and Cooperation Agreement by and between the Company and Merck KgaA
dated September 22, 2004.

 

Connecticut
Innovations, Incorporated has registration rights with respect to specified
capital stock of the Company pursuant to a Purchase Agreement dated as of March
10, 1994, Financing Agreements dated as of November 16, 1994 and September 10,
1996 and a letter agreement dated February 17, 2000.

 

 

EXHIBIT
F

 

GENAISSANCE
PHARMACEUTICALS, INC.

 

CERTIFICATE OF SUBSEQUENT SALE

 

American
Stock Transfer and Trust Company

59
Maiden Lane

New
York, NY  10038

 

Re:                               Sale of Shares of Common
Stock of Genaissance Pharmaceuticals, Inc. (the “Company”) pursuant to the
Company’s Registration Statement on Form S-3 dated                    
(the “Registration Statement”)

 

Ladies and Gentlemen:

 

The undersigned hereby
certifies, in connection with the sale of shares of Common Stock of the Company
included in the table of Selling Stockholders in the Registration Statement,
that the undersigned has sold the shares pursuant to the Registration Statement
and in a manner described under the caption “Plan of Distribution” in the
Registration Statement and that such sale complies with all applicable
securities laws, including, without limitation, the Registration Statement
delivery requirements of the Securities Act of 1933, as amended.

 

	
  Selling
  Stockholder (the beneficial owner):

  	
   

  
	
   

  
	
  Record
  Holder (e.g.,
  if held in name of nominee):

  	
   

  
	
   

  
	
  Restricted
  Stock Certificate No.(s):

  	
   

  
	
   

  
	
  Number
  of Shares Sold:

  	
   

  
	
   

  
	
  Date
  of Sale:

  	
   

  
						

 

In the event that you
receive a stock certificate(s) representing more shares of Common Stock than
have been sold by the undersigned, then you should return to the undersigned a
newly issued certificate for such excess shares in the name of the Record
Holder and BEARING A RESTRICTIVE LEGEND.  Further, you should place a stop transfer on
your records with regard to such certificate.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  Investor:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
									

 

cc:                                 Ben
D. Kaplan

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}]]