Document:

exv10w1

Exhibit 10.1

 

Piper Jaffray Companies

$120,000,000

Variable Rate Senior Notes due December 31, 2010

 

Note Purchase Agreement

 

Dated December 31, 2009

 

 

 

Table of Contents

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page	 
	Section 1.	 	Authorization of Notes
	 	 	6	 
	 	 	 
	 	 	 	 
	     Section 1.1.	 	Description of Notes
	 	 	6	 
	     Section 1.2.	 	Interest Rate
	 	 	6	 
	 	 	 
	 	 	 	 
	Section 2.	 	Sale and Purchase of Notes
	 	 	6	 
	 	 	 
	 	 	 	 
	Section 3.	 	Closing
	 	 	6	 
	 	 	 
	 	 	 	 
	Section 4.	 	Conditions to Closing
	 	 	7	 
	 	 	 
	 	 	 	 
	     Section 4.1.	 	Representations and Warranties
	 	 	7	 
	     Section 4.2.	 	Performance; No Default
	 	 	7	 
	     Section 4.3.	 	Compliance Certificates
	 	 	7	 
	     Section 4.4.	 	Opinions of Counsel
	 	 	7	 
	     Section 4.5.	 	Purchase Permitted By Applicable Law, Etc
	 	 	7	 
	     Section 4.6.	 	Sale of Other Notes
	 	 	8	 
	     Section 4.7.	 	Payment of Special Counsel Fees
	 	 	8	 
	     Section 4.8.	 	Private Placement Number
	 	 	8	 
	     Section 4.9.	 	Changes in Corporate Structure
	 	 	8	 
	     Section 4.10.	 	Proceedings and Documents
	 	 	8	 
	 	 	 
	 	 	 	 
	Section 5.	 	Representations and Warranties of the Company
	 	 	8	 
	 	 	 
	 	 	 	 
	     Section 5.1.	 	Organization; Power and Authority
	 	 	8	 
	     Section 5.2.	 	Authorization, Etc
	 	 	8	 
	     Section 5.3.	 	Disclosure
	 	 	9	 
	     Section 5.4.	 	Organization and Ownership of Shares of Subsidiaries; Affiliates
	 	 	9	 
	     Section 5.5.	 	Financial Statements; Material Liabilities
	 	 	10	 
	     Section 5.6.	 	Compliance with Laws, Other Instruments, Etc
	 	 	10	 
	     Section 5.7.	 	Governmental Authorizations, Etc
	 	 	10	 
	     Section 5.8.	 	Litigation; Observance of Agreements, Statutes and Orders
	 	 	10	 
	     Section 5.9.	 	Taxes
	 	 	11	 
	     Section 5.10.	 	Title to Property; Leases
	 	 	11	 
	     Section 5.11.	 	Licenses, Permits, Etc
	 	 	11	 
	     Section 5.12.	 	Compliance with ERISA
	 	 	11	 
	     Section 5.13.	 	Private Offering by the Company
	 	 	12	 
	     Section 5.14.	 	Use of Proceeds; Margin Regulations
	 	 	12	 
	     Section 5.15.	 	Existing Indebtedness; Future Liens
	 	 	13	 
	     Section 5.16.	 	Foreign Assets Control Regulations, Etc
	 	 	13	 
	     Section 5.17.	 	Status under Certain Statutes
	 	 	14	 
	     Section 5.18.	 	Environmental Matters
	 	 	14	 
	     Section 5.19	 	Other Securities
	 	 	14	 
	     Section 5.20	 	Internal Controls
	 	 	14	 
	     Section 5.21	 	Investment Company Act
	 	 	15	 
	 	 	 
	 	 	 	 
	Section 6.	 	Representations of the Purchasers
	 	 	15	 
	 	 	 
	 	 	 	 
	     Section 6.1.	 	Purchase for Investment
	 	 	15	 
	     Section 6.2.	 	Source of Funds
	 	 	16	 
	 	 	 
	 	 	 	 
	Section 7.	 	Information as to Company
	 	 	16	 
	 	 	 
	 	 	 	 
	     Section 7.1.	 	Financial and Business Information
	 	 	16	 
	     Section 7.2.	 	Officer’s Certificate
	 	 	19	 
	 	 	 
	 	 	 	 

-2-

 

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page	 
	     Section 7.3.	 	Visitation
	 	 	20	 
	 	 	 
	 	 	 	 
	Section 8.	 	Payment and Prepayment of the Notes
	 	 	20	 
	 	 	 
	 	 	 	 
	     Section 8.1.	 	Maturity
	 	 	20	 
	     Section 8.2.	 	Allocation of Partial Prepayments
	 	 	20	 
	     Section 8.3.	 	Maturity; Surrender, Etc.
	 	 	20	 
	     Section 8.4.	 	Purchase of Notes
	 	 	21	 
	     Section 8.5.	 	Change in Control
	 	 	21	 
	 	 	 
	 	 	 	 
	Section 9.	 	Affirmative Covenants
	 	 	23	 
	 	 	 
	 	 	 	 
	     Section 9.1.	 	Compliance with Law
	 	 	23	 
	     Section 9.2.	 	Insurance
	 	 	23	 
	     Section 9.3.	 	Maintenance of Properties
	 	 	23	 
	     Section 9.4.	 	Payment of Taxes and Claims
	 	 	23	 
	     Section 9.5.	 	Corporate Existence, Etc
	 	 	24	 
	     Section 9.6.	 	Books and Records
	 	 	24	 
	     Section 9.7.	 	Minimum Consolidated Net Worth
	 	 	24	 
	     Section 9.8.	 	Minimum
Regulatory Net Capital
	 	 	24	 
	     Section 9.9.	 	Maximum Consolidated Funded Indebtedness to Total Capitalization
	 	 	24	 
	     Section 9.10.	 	Minimum Operating Cash Flow to Consolidated Fixed Charges
	 	 	24	 
	 	 	 
	 	 	 	 
	Section 10.	 	Negative Covenants
	 	 	24	 
	 	 	 
	 	 	 	 
	     Section 10.1.	 	Transactions with Affiliates
	 	 	24	 
	     Section 10.2.	 	Merger, Consolidation, Etc
	 	 	25	 
	     Section 10.3.	 	Line of Business
	 	 	25	 
	     Section 10.4.	 	Terrorism Sanctions Regulations
	 	 	25	 
	     Section 10.5	 	Restricted Payments
	 	 	26	 
	 	 	 
	 	 	 	 
	Section 11.	 	Events of Default
	 	 	26	 
	 	 	 
	 	 	 	 
	Section 12.	 	Remedies on Default, Etc
	 	 	28	 
	 	 	 
	 	 	 	 
	     Section 12.1.	 	Acceleration
	 	 	28	 
	     Section 12.2.	 	Other Remedies
	 	 	28	 
	     Section 12.3.	 	Rescission
	 	 	29	 
	     Section 12.4.	 	No Waivers or Election of Remedies, Expenses, Etc
	 	 	29	 
	 	 	 
	 	 	 	 
	Section 13.	 	Registration; Exchange; Substitution of Notes
	 	 	29	 
	 	 	 
	 	 	 	 
	     Section 13.1.	 	Registration of Notes
	 	 	29	 
	     Section 13.2.	 	Transfer and Exchange of Notes
	 	 	29	 
	     Section 13.3.	 	Replacement of Notes
	 	 	30	 
	     Section 13.4.	 	Book-Entry Provisions for Global Notes
	 	 	31	 

-3-

 

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page	 
	Section 14.	 	Payments on Notes
	 	 	32	 
	 	 	 
	 	 	 	 
	     Section 14.1.	 	Place of Payment
	 	 	32	 
	     Section 14.2.	 	Home Office Payment
	 	 	32	 
	 	 	 
	 	 	 	 
	Section 15.	 	Expenses, Etc
	 	 	33	 
	 	 	 
	 	 	 	 
	     Section 15.1.	 	Transaction Expenses
	 	 	33	 
	     Section 15.2.	 	Survival
	 	 	33	 
	 	 	 
	 	 	 	 
	Section 16.	 	Survival of Representations and Warranties; Entire Agreement
	 	 	33	 
	 	 	 
	 	 	 	 
	Section 17.	 	Amendment and Waiver
	 	 	33	 
	 	 	 
	 	 	 	 
	     Section 17.1.	 	Requirements
	 	 	33	 
	     Section 17.2.	 	Solicitation of Holders of Notes
	 	 	34	 
	     Section 17.3.	 	Binding Effect, etc
	 	 	34	 
	     Section 17.4.	 	Notes Held by Company, etc
	 	 	34	 
	 	 	 
	 	 	 	 
	Section 18.	 	Notices
	 	 	35	 
	 	 	 
	 	 	 	 
	Section 19.	 	Reproduction of Documents
	 	 	35	 
	 	 	 
	 	 	 	 
	Section 20.	 	Reserved
	 	 	36	 
	 	 	 
	 	 	 	 
	Section 21.	 	Substitution of Purchaser
	 	 	36	 
	 	 	 
	 	 	 	 
	Section 22.	 	Miscellaneous
	 	 	36	 
	 	 	 
	 	 	 	 
	     Section 22.1.	 	Successors and Assigns
	 	 	36	 
	     Section 22.2.	 	Payments Due on Non-Business Days
	 	 	36	 
	     Section 22.3.	 	Accounting Terms
	 	 	36	 
	     Section 22.4.	 	Severability
	 	 	37	 
	     Section 22.5.	 	Construction, etc
	 	 	37	 
	     Section 22.6.	 	Counterparts
	 	 	37	 
	     Section 22.7.	 	Governing Law
	 	 	37	 
	     Section 22.8.	 	Jurisdiction and Process; Waiver of Jury Trial
	 	 	37	 
	     Section 22.9.	 	Piper Jaffray & Co. Execution
	 	 	38	 

-4-

 

	 	 	 	 	 
	Schedule A
	 	—
	 	Information Relating to Purchasers

	 	 	 	 	 

	Schedule B
	 	—
	 	Defined Terms

	 	 	 	 	 

	Schedule 5.3
	 	—
	 	Disclosure Materials

	 	 	 	 	 

	Schedule 5.4
	 	—
	 	Subsidiaries of the Company and Ownership of Subsidiary Stock

	 	 	 	 	 

	Schedule 5.5
	 	—
	 	Financial Statements

	 	 	 	 	 

	Schedule 5.15
	 	—
	 	Existing Indebtedness

	 	 	 	 	 

	Exhibit A-1
	 	—
	 	Form of Variable Rate Senior Note due December 31, 2010

	 	 	 	 	 

	Exhibit A-2
	 	—
	 	Form of Global Notes

	 	 	 	 	 

	Exhibit 4.4(a)
	 	—
	 	Form of Opinion of Special Counsel for the Company

-5-

 

Piper Jaffray Companies

800 Nicollet Mall, Suite 800

Minneapolis, Minnesota 55402

Variable Rate Senior Notes due December 31, 2010

December 31, 2009

To each of the Purchasers Listed in

             Schedule A Hereto:

Ladies and Gentlemen:

     PIPER JAFFRAY COMPANIES, a Delaware corporation (the “Company”), agrees with each of the
purchasers whose name appears at the end hereof (each, a “Purchaser” and, collectively, the
“Purchasers”) as follows:

			
	Section 1.	 	Authorization of Notes.

     Section 1.1. Description of Notes. The Company will authorize the issue and sale of
$120,000,000 aggregate principal amount of its Variable Rate Senior Notes due December 31, 2010
(the “Notes”, such term to include any such notes issued in substitution therefor (including Global
Notes) pursuant to Section 13). The Notes
shall be substantially in the form set out in Exhibit A-1 or A-2, as applicable. Certain
capitalized and other terms used in this Agreement are defined in Schedule B; and references to a
“Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to
this Agreement.

     Section 1.2. Interest Rate. The Notes shall bear interest (computed on the basis of actual
days elapsed and a 360-day year) (a) on the unpaid balance thereof at the rate per annum equal to
the Interest Rate from the date thereof, payable on the last day of March, June, September and
December in each year (each, an “Interest Payment Date”) and at maturity, commencing on March 31,
2010 until the principal thereof shall have become due and payable, and (b) to the extent permitted
by law, on any overdue payment (including any overdue prepayment) of principal and on any overdue
payment of interest, at a rate per annum from time to time equal to 2% over the rate of interest
set forth in clause (a), payable quarterly on each Interest Payment Date, as aforesaid (or at the
option of the registered holder thereof, on demand). Interest payable on each Interest Payment
Date will be paid to the holders of the Notes as of the immediately preceding Record Date. “Record
Date” means, with respect to any Interest Payment Date, the tenth Business Day prior to such
Interest Payment Date.

			
	Section 2.	 	Sale and Purchase of Notes.

     Subject to the terms and conditions of this Agreement, the Company will issue and sell to
Piper Jaffray & Co. as “Initial Purchaser” Notes in the aggregate principal amount of $120,000,000
at the purchase price of 100% of the principal amount thereof, and Initial Purchaser will sell to
each Purchaser and each Purchaser will purchase from the Initial Purchaser, at the Closing provided
for in Section 3, Notes in the principal amount specified opposite such Purchaser’s name in
Schedule A at the purchase price of 100% of the principal amount thereof. The Purchasers’
obligations hereunder are several and not joint obligations and no Purchaser shall have any
liability to any Person for the performance or non-performance of any obligation by any other
Purchaser hereunder.

			
	Section 3.	 	Closing.

     The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the
offices of Faegre & Benson LLP, 90 South 7th Street, Suite 2200, Minneapolis, Minnesota
55402, at 10:00 a.m., Minneapolis time, at a closing (the “Closing”) on December 31, 2009. At the
Closing, the Initial Purchaser will deliver to each Purchaser through the DTC book-entry system
pursuant to Section 13.4 (in denominations of at least $500,000 as such Purchaser may request)
beneficial interests in the Notes, which shall be evidenced by a Global Note dated the date of the
Closing and registered in the name of Cede & Co., as nominee of DTC, against delivery by such
Purchaser to the Initial Purchaser or its order of immediately available funds in the amount of the
purchase price therefor by same day settlement process through DTC. If at the Closing the Initial
Purchaser shall fail to tender such Notes to any Purchaser as provided above in this Section 3, or
any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s
satisfaction, such Purchaser shall, at its election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights such Purchaser may have
by reason of such failure or such nonfulfillment.

-6-

 

			
	Section 4.	 	Conditions to Closing.

     Such Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at
the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the
Closing, of the following conditions:

     Section 4.1. Representations and Warranties. The representations and warranties of the
Company in this Agreement shall be correct when made and at the time of the Closing.

     Section 4.2. Performance; No Default. The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed or complied with by
it prior to or at the Closing and after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by Section 5.14) no Default or Event of Default
shall have occurred and be continuing. Neither the Company nor any Subsidiary shall have entered
into any transaction since December 18, 2009 that would have been prohibited by Sections 10.1
through 10.4 had such Sections applied since such date.

     Section 4.3. Compliance Certificates.

     (a) Officer’s Certificate. The Company shall have delivered to such Purchaser an Officer’s
Certificate, dated the date of the Closing, certifying that the conditions specified in Sections
4.1, 4.2 and 4.8 have been fulfilled.

     (b) Secretary’s Certificate. The Company shall have delivered to such Purchaser a certificate
of its Secretary or Assistant Secretary, dated the date of Closing, certifying as to the
resolutions attached thereto and other corporate proceedings relating to the authorization,
execution and delivery of the Notes and this Agreement.

     Section 4.4. Opinion of Counsel. Such Purchaser shall have received opinions in form and
substance satisfactory to such Purchaser, dated the date of the Closing from Faegre & Benson LLP,
counsel for the Company, covering the matters set forth in Exhibit 4.4(a) and covering such other
matters incident to the transactions contemplated hereby as such Purchaser or its counsel may
reasonably request (and the Company hereby instructs its counsel to deliver such opinion to the
Purchasers).

     Section 4.5. Purchase Permitted By Applicable Law, Etc. On the date of the Closing such
Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each
jurisdiction to which such Purchaser is subject, (b) not violate any applicable law or regulation
(including, without limitation, Regulation T, U or X of the Board of Governors of the Federal
Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or
pursuant to any applicable law or regulation. If requested by such Purchaser, such Purchaser shall
have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.

-7-

 

     Section 4.6. Sale of Other Notes. Contemporaneously with the Closing, the Initial Purchaser
shall sell to each other Purchaser and each other Purchaser shall purchase the Notes to be
purchased by it at the Closing as specified in Schedule A.

     Section 4.7. Payment of Special Counsel Fees. Without limiting the provisions of Section
15.1, the Company shall have paid on or before the Closing the fees, charges and disbursements of
the Purchasers’ special counsel, Latham & Watkins LLP, to the extent reflected in a statement of
such counsel rendered to the Company at least one Business Day prior to the Closing.

     Section 4.8. Private Placement Number. A Private Placement Number issued by Standard & Poor’s
CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for the Notes.

     Section 4.9. Changes in Corporate Structure. The Company shall not have changed its
jurisdiction of incorporation or organization, as applicable, or been a party to any merger or
consolidation or succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent financial statements referred to in Schedule 5.5.

     Section 4.10. Proceedings and Documents. All corporate and other proceedings in connection
with the transactions contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to such Purchaser and its special counsel, and such
Purchaser and its special counsel shall have received all such counterpart originals or certified
or other copies of such documents as such Purchaser or such special counsel may reasonably request.

			
	Section 5.	 	Representations and Warranties of the Company.

     The Company represents and warrants to each Purchaser that:

     Section 5.1. Organization; Power and Authority. The Company is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of incorporation, and is
duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. The Company has the corporate power and authority to own or
hold under lease the properties it purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to
perform the provisions hereof and thereof.

     Section 5.2. Authorization, Etc. This Agreement and the Notes have been duly authorized by
all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon
execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors’ rights

-8-

 

generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law).

     Section 5.3. Disclosure. This Agreement and the documents, certificates or other writings
delivered to the Purchaser by or on behalf of the Company in connection with the transactions
contemplated hereby and identified in Schedule 5.3, and the financial statements listed in Schedule
5.5 (this Agreement and such documents, certificates or other writings and such financial
statements delivered to each Purchaser prior to the date hereof being referred to, collectively, as
the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein not misleading in
light of the circumstances under which they were made. Except as disclosed in the Disclosure
Documents, since December 31, 2008, there has been no change in the financial condition,
operations, business, properties or prospects of the Company or any Subsidiary except changes that
individually or in the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Disclosure Documents.

     Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates. (a) Schedule
5.4 contains (except as noted therein) complete and correct lists (i) of the Company’s
Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii) of the Company’s
Affiliates, other than Subsidiaries, and (iii) of the Company’s directors and senior officers.

     (b) All of the outstanding shares of capital stock or similar equity interests of each
Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary
free and clear of any Lien (except as otherwise disclosed in Schedule 5.4).

     (c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal entity and is in good
standing in each jurisdiction in which such qualification is required by law, other than those
jurisdictions as to
which the failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the
corporate or other power and authority to own or hold under lease the properties it purports to own
or hold under lease and to transact the business it transacts and proposes to transact.

     (d) No Subsidiary is a party to, or otherwise subject to any legal, regulatory, contractual or
other restriction (other than this Agreement, the agreements listed on Schedule 5.4 and customary
limitations imposed by corporate law or similar statutes) restricting the ability of such
Subsidiary to pay dividends out of profits or make any other similar distributions of profits to
the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar
equity interests of such Subsidiary.

-9-

 

     Section 5.5. Financial Statements; Material Liabilities. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries listed on Schedule
5.5. All of said financial statements (including in each case the related schedules and notes)
fairly present in all material respects the consolidated financial position of the Company and its
Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except as set forth in
the notes thereto (subject, in the case of any interim financial statements, to normal year-end
adjustments). The Company and its Subsidiaries do not have any Material liabilities that are not
disclosed on such financial statements or otherwise disclosed in the Disclosure Documents.

     Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution, delivery and
performance by the Company of this Agreement and the Notes will not (i) contravene, result in any
breach of, or constitute a default under, or result in the creation of any Lien in respect of any
property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Subsidiary is bound or by which the Company or any
Subsidiary or any of their respective properties may be bound or affected, (ii) conflict with or
result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority applicable to the Company or any
Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.

     Section 5.7. Governmental Authorizations, Etc. No consent, approval or authorization of, or
registration, filing or declaration with, any Governmental Authority is required in connection with
the execution, delivery or performance by the Company of this Agreement or the Notes, except for
the filing with the SEC of a Current Report on Form 8-K and a Form D.

     Section 5.8. Litigation; Observance of Agreements, Statutes and Orders. (a) Except
as identified under “Legal Proceedings” in Part I, Item 3 of the Company’s Annual Report on Form
10-K for the year ended December 31, 2008, and updated in subsequent reports filed with the SEC,
there are no actions, suits, investigations or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any Subsidiary or any property of the
Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, if determined adversely to the Company or any Subsidiary, individually
or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

     (b) Neither the Company nor any Subsidiary is in default under any term of any agreement or
instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling
of any court, arbitrator or Governmental Authority or is in violation of any applicable law,
ordinance, rule or regulation (including without limitation Environmental Laws or the USA Patriot
Act) of any Governmental Authority, which default or violation, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.

-10-

 

     Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown to be due and
payable on such returns and all other taxes and assessments levied upon them or their properties,
assets, income or franchises, to the extent such taxes and assessments have become due and payable
and before they have become delinquent, except for any taxes and assessments (i) the amount of
which is not individually or in the aggregate Material or (ii) the amount, applicability or
validity of which is currently being contested in good faith by appropriate proceedings and with
respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves
in accordance with GAAP. The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on
the books of the Company and its Subsidiaries in respect of Federal, state or other taxes for all
fiscal periods are adequate. The Federal income tax liabilities of the Company and its
Subsidiaries have been finally determined (whether by reason of completed audits or the statute of
limitations having run) for all fiscal years up to and including the fiscal year ended December 31,
2005.

     Section 5.10. Title to Property; Leases. The Company and its Subsidiaries have good and
sufficient title to their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet referred to in
Section 5.5 or purported to have been acquired by the Company or any Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business), in each case free and
clear of Liens prohibited by this Agreement. All leases that individually or in the aggregate are
Material are valid and subsisting and are in full force and effect in all material respects.

     Section 5.11. Licenses, Permits, Etc. (a) The Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service
marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are
Material, without known conflict with the rights of others.

     (b) To the best knowledge of the Company, no product of the Company or any of its Subsidiaries
infringes in any material respect any license, permit, franchise, authorization, patent, copyright,
proprietary software, service mark, trademark, trade name or other right owned by any other Person.

     (c) To the best knowledge of the Company, there is no Material violation by any Person of any
right of the Company or any of its Subsidiaries with respect to any patent, copyright, proprietary
software, service mark, trademark, trade name or other right owned or used by the Company or any of
its Subsidiaries.

     Section 5.12. Compliance with ERISA. (a) The Company and each ERISA Affiliate have operated
and administered each Plan in compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to any Plan, and no event, transaction or condition has occurred or exists that could
reasonably be expected to result in the incurrence of any such liability by the Company or any

-11-

 

ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such
penalty or excise tax provisions or to section 401(a)(29) or 412 of the Code or section 4068 of
ERISA, other than such liabilities or Liens as would not be individually or in the aggregate
Material.

     (b) The present value of the aggregate benefit liabilities under each of the Plans (other than
Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the
basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent
actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term “benefit liabilities” has the meaning specified in
section 4001 of ERISA and the terms “current value” and “present value” have the meaning specified
in section 3 of ERISA.

     (c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not
subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.

     (d) The expected postretirement benefit obligation (determined as of the last day of the
Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board
Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by
section 4980B of the Code) of the Company and its Subsidiaries is not Material.

     (e) The execution and delivery of this Agreement and the issuance and sale of the Notes
hereunder will not involve any transaction that is subject to the prohibitions of section 406 of
ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of
the Code. The representation by the Company to each Purchaser in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to the accuracy of such Purchaser’s
representation in Section 6.2 as to the sources of the funds used to pay the purchase price of the
Notes to be purchased by such Purchaser.

     Section 5.13. Private Offering by the Company. Neither the Company nor anyone acting on its
behalf (including the Initial Purchaser) has offered the Notes or any similar securities for sale
to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in
respect thereof with, any person other than the Purchasers. Neither the Company nor anyone acting
on its behalf (including the Initial Purchaser) has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of Section 5 of the
Securities Act or to the registration requirements of any securities or blue sky laws of any
applicable jurisdiction.

     Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply the proceeds of the
sale of the Notes to the Initial Purchaser to fund, in part, the acquisition of the capital stock
of Advisory Research, Inc. If such acquisition is not consummated, the Company may use the
proceeds of the sale of the Notes for other corporate purposes of the Company. No
part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for
the purpose of buying or carrying any margin stock within the meaning of Regulation U of the

-12-

 

Board
of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying
or trading in any securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). As used in this Section, the terms “margin stock” and
“purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.

     Section 5.15. Existing Indebtedness; Future Liens . (a) Except as described
therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Consolidated
Funded Indebtedness of the Company and its Subsidiaries as of the date hereof (including a
description of the obligors and obligees, principal amount outstanding and collateral therefor, if
any, and Guaranty thereof, if any), since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of
the Company or its Subsidiaries. Neither the Company nor any Subsidiary is in default and no
waiver of default is currently in effect, in the payment of any principal or interest on any
Indebtedness of the Company or such Subsidiary and no event or condition exists with respect to any
Indebtedness of the Company or any Subsidiary that would permit (or that with notice or the lapse
of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and
payable before its stated maturity or before its regularly scheduled dates of payment.

     (b) Neither the Company nor any Subsidiary is a party to, or otherwise subject to any
provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary,
any agreement relating thereto or any other agreement (including, but not limited to, its charter
or other organizational document) which limits the amount of, or otherwise imposes restrictions on
the incurring of, Indebtedness of the Company, except as specifically indicated in Schedule 5.15.

     Section 5.16. Foreign Assets Control Regulations, Etc. (a) Neither the sale of the Notes by
the Company hereunder nor its use of the proceeds thereof will violate the Trading with the Enemy
Act, as amended, or any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.

     (b) Neither the Company nor any Subsidiary (i) is a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or
in Section 1 of the Anti-Terrorism Order or (ii) engages in any dealings or transactions with any
such Person. The Company and its Subsidiaries are in compliance, in all material respects, with
the USA Patriot Act.

     (c) No part of the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for any payments to any governmental official or employee, political party, official of
a political party, candidate for political office, or anyone else acting in an official capacity,
in order to obtain, retain or direct business or obtain any improper advantage, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases that such
Act applies to the Company.

-13-

 

     Section 5.17. Status under Certain Statutes. Neither the Company nor any Subsidiary is
subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility
Holding Company Act of 2005, as amended, the ICC Termination Act of 1995, as amended, or the
Federal Power Act, as amended.

     Section 5.18. Environmental Matters. (a) Neither the Company nor any Subsidiary has knowledge
of any claim or has received any notice of any claim, and no proceeding has been instituted raising
any claim against the Company or any of its Subsidiaries or any of their respective real properties
now or formerly owned, leased or operated by any of them or other assets, alleging any damage to
the environment or violation of any Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect.

     (b) Neither the Company nor any Subsidiary has knowledge of any facts which would give rise to
any claim, public or private, of violation of Environmental Laws or damage to the environment
emanating from, occurring on or in any way related to real properties now or formerly owned, leased
or operated by any of them or to other assets or their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect.

     (c) Neither the Company nor any Subsidiary has stored any Hazardous Materials on real
properties now or formerly owned, leased or operated by any of them and has not disposed of any
Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that
could reasonably be expected to result in a Material Adverse Effect; and

     (d) All buildings on all real properties now owned, leased or operated by the Company or any
Subsidiary are in compliance with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse Effect.

     Section 5.19 Other Securities. Within the preceding six months, neither the Company nor any
other person acting on behalf of the Company (including the Initial Purchaser) has offered or sold
to any person any Notes, or any securities of the same or a similar class as the Notes, other than
the Notes offered or sold to the Purchasers hereunder. The Company will take reasonable
precautions designed to insure that any offer or sale, direct or indirect, in the United States or
to any U.S. person (as defined in Rule 902 under the Securities Act) of any Notes or any
substantially similar security issued by the Company, within six months subsequent to the date
hereof is made under restrictions and other circumstances reasonably designed not to affect the
status of the offer and sale of the Notes contemplated by this Agreement as transactions exempt
from the registration provisions of the Securities Act.

     Section 5.20 Internal Controls.

     (a) The Company maintains a system of internal control over financial reporting that complies
with the requirements of the Exchange Act and has been designed by the Company’s principal
executive officer and principal financial officer, or under their supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting
principles.

-14-

 

     (b) To the knowledge of the Company, the Company’s internal control over financial reporting
is effective and the Company is not aware of any material weaknesses in its internal control over
financial reporting.

     (c) The Company maintains disclosure controls and procedures that comply with the requirements
of the Exchange Act; such disclosure controls and procedures have been designed to ensure that
material information relating to the Company and its Subsidiaries is made known to the Company’s
principal executive officer and principal financial officer by others within those entities; and,
to the knowledge of the Company, such disclosure controls and procedures are effective.

     Section 5.21 Investment Company Act. The Company is not, and after giving effect to the
offering and sale of the Notes to be issued and sold by the Company under this Agreement and the
application of the net proceeds from such sale as described in Section 5.14, will not be required
to register as an “investment company,” as such term is defined in the Investment Company Act.

Section 6. Representations of the Purchasers.

     Section 6.1. Purchase for Investment. Each Purchaser severally represents that it is
purchasing the Notes for its own account and not with a view to the distribution thereof in
violation of the Securities Act, it being recognized that the Initial Purchaser is selling the
Notes hereunder solely to Qualified Institutional Buyers pursuant to Rule 144A promulgated by the
SEC under the Securities Act, as amended from time to time (“Rule 144A”). Each Purchaser
understands that the Notes have not been registered under the Securities Act and may be resold only
if registered pursuant to the provisions of the Securities Act or if an exemption from registration
is available, except under circumstances where neither such registration nor such an exemption is
required by law, and that the Company is not required to register the Notes. Each Purchaser
represents that it is a Qualified Institutional Buyer acting for its own account (and not for the
account of others) or as a fiduciary or agent for others (which others are also Qualified
Institutional Buyers) and is aware that the sale of the Notes to such Purchaser will be made in
reliance on Rule 144A. Each Purchaser further represents that such Purchaser has had the
opportunity to ask questions of the Company and received answers concerning the terms and
conditions of the sale of the Notes.

Each Purchaser agrees that it will only offer, sell or otherwise transfer the Notes (a) to the
Company or the Initial Purchaser, or by, through or in a transaction approved by, the Initial
Purchaser, or (b) as long as the Notes are eligible for resale pursuant to Rule 144A, to a Person
it reasonably believes is a Qualified Institutional Buyer under Rule 144A that purchases for its
own account or for the account of a Qualified Institutional Buyer to whom notice is given that the
transfer is being made in reliance on Rule 144A. Each Purchaser acknowledges that the Company and
the Initial Purchaser will rely upon the truth and accuracy of the foregoing
acknowledgements, representations and agreements and agrees that, if any of the acknowledgements,
representations or agreements are no longer accurate, it shall promptly notify the Company and the
Initial Purchaser; and if any Purchaser is acquiring any Notes as a fiduciary or agent for one or
more Persons who qualifies as Qualified Institutional Buyers, such Purchaser

-15-

 

represents that it has
sole investment discretion with respect to each such Person and that it has full power to make the
foregoing acknowledgements, representations and agreements on behalf of each such Person. Each
Purchaser acknowledges that (i) the Initial Purchaser, Piper Jaffray & Co., is a subsidiary of the
Company, (ii) its registered representative at Piper Jaffray & Co. in connection with this purchase
is an employee of Piper Jaffray & Co., (iii) Piper Jaffray & Co. may compensate such Purchaser’s
registered representative by reference to the dollar amount of the Notes such Purchaser is
purchasing from the Initial Purchaser and (iv) it is aware that the relationships referred to above
pose a potential conflict of interest.

     Section 6.2. Source of Funds. No Purchaser is an “employee benefit plan” or an entity whose
underlying assets are deemed to include “plan assets” by reason of the investment by an “employee
benefit plan” in the entity within the meaning of 29 C.F.R. Section 2510.3—101.

As used in this Section 6.2, the term “employee benefit plan shall have the meaning assigned to
such term in section 3 of ERISA.

Section 7. Information as to Company.

     Section 7.1. Financial and Business Information. The Company shall deliver to each Purchaser,
and to each holder and Beneficial Holder of Notes that requests it:

     (a) Quarterly Statements — within 60 days (or such shorter period as is 15 days
greater than the period applicable to the filing of the Company’s Quarterly Report on Form
10-Q (the “Form 10-Q”) with the SEC regardless of whether the Company is subject to the
filing requirements thereof) after the end of each quarterly fiscal period in each fiscal
year of the Company (other than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,

     (i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such quarter, and

     (ii) consolidated statements of income, changes in shareholders’ equity and
cash flows of the Company and its Subsidiaries, for such quarter and (in the case of
the second and third quarters) for the portion of the fiscal year ending with such
quarter,

setting forth in each case in comparative form the figures for the corresponding periods in
the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows, subject to
changes resulting from year-end adjustments, provided that delivery within the time
period specified above of copies of the Company’s Form 10-Q prepared in compliance with the
requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of
this Section 7.1(a), provided, further, that the Company shall be deemed to have made such
delivery of such Form 10-Q if it shall have timely made such

-16-

 

Form 10-Q available on “EDGAR”
and on its home page on the worldwide web (at the date of this Agreement located at:
http//www.piperjaffray.com) and shall have given each Purchaser prior notice of such
availability on EDGAR and on its home page in connection with each delivery (such
availability and notice thereof being referred to as “Electronic Delivery”);

     (b) Annual Statements — within 105 days (or such shorter period as is 15 days greater
than the period applicable to the filing of the Company’s Annual Report on Form 10-K (the
“Form 10-K”) with the SEC regardless of whether the Company is subject to the filing
requirements thereof) after the end of each fiscal year of the Company, duplicate copies of

     (i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such year, and

     (ii) consolidated statements of income, changes in shareholders’ equity and
cash flows of the Company and its Subsidiaries for such year,

setting forth in each case in comparative form the figures for the previous fiscal year, all
in reasonable detail, prepared in accordance with GAAP, and accompanied by

     (A) an opinion thereon of independent public accountants of recognized national
standing, which opinion shall state that such financial statements present fairly,
in all material respects, the financial position of the companies being reported
upon and their results of operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of such accountants in connection
with such financial statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable basis for such opinion
in the circumstances, and

     (B) a certificate of such accountants stating that they have reviewed this
Agreement and stating further whether, in making their audit, they have become aware
of any condition or event that then constitutes a Default or an Event of Default,
and, if they are aware that any such condition or event then exists, specifying the
nature and period of the existence thereof (it being understood that such
accountants shall not be liable, directly or indirectly, for any failure to obtain
knowledge of any Default or Event of Default unless such accountants should have
obtained knowledge thereof in making an audit in accordance with generally accepted
auditing standards or did not make such an audit),

provided that the delivery within the time period specified above of the Company’s Form 10-K
for such fiscal year (together with the Company’s annual report to shareholders, if any,
prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the SEC, together with the accountant’s certificate
described in clause (B) above (the “Accountants’ Certificate”),

-17-

 

shall be deemed to satisfy
the requirements of this Section 7.1(b), provided, further, that the Company shall be deemed
to have made such delivery of such Form 10-K if it shall have timely made Electronic
Delivery thereof, in which event the Company shall separately deliver, concurrently with
such Electronic Delivery, the Accountants’ Certificate;

     (c) SEC and Other Reports — promptly upon their becoming available, one copy of (i)
each financial statement, report, notice or proxy statement sent by the Company or any
Subsidiary to its principal lending banks as a whole (excluding information sent to such
banks in the ordinary course of administration of a bank facility, such as information
relating to pricing and borrowing availability) or to its public securities holders
generally, and (ii) each regular or periodic report, each registration statement (without
exhibits except as expressly requested by such Purchaser, holder or Beneficial Holder of
Notes), and each prospectus and all amendments thereto filed by the Company or any
Subsidiary with the SEC and of all press releases and other statements made available
generally by the Company or any Subsidiary to the public concerning developments that are
Material; provided, that the Company shall be deemed to have made such delivery if it shall
timely have made Electronic Delivery thereof;

     (d) Notice of Default or Event of Default — promptly, and in any event within five
days after a Responsible Officer becoming aware of the existence of any Default or Event of
Default or that any Person has given any notice or taken any action with respect to a
claimed default hereunder or that any Person has given any notice or taken any action with
respect to a claimed default of the type referred to in Section 11(f), a written notice
specifying the nature and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;

     (e) ERISA Matters — promptly, and in any event within five days after a Responsible
Officer becoming aware of any of the following, a written notice setting forth the nature
thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with
respect thereto:

     (i) with respect to any Plan, any reportable event, as defined in section
4043(c) of ERISA and the regulations thereunder, for which notice thereof has not
been waived pursuant to such regulations as in effect on the date hereof; or

     (ii) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multi-employer Plan
that such action has been taken by the PBGC with respect to such Multi-employer
Plan; or

     (iii) any event, transaction or condition that could result in the incurrence
of any liability by the Company or any ERISA Affiliate pursuant to

-18-

 

Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating to the Plans, or
in the imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or
excise tax provisions, if such liability or Lien, taken together with any other such
liabilities or Liens then existing, could reasonably be expected to have a Material
Adverse Effect;

     (f) Notices from Governmental Authority — promptly, and in any event within 30 days of
receipt thereof, copies of any publicly available notice to the Company or any Subsidiary
from any Federal or state Governmental Authority relating to any order, ruling, statute or
other law or regulation that could reasonably be expected to have a Material Adverse Effect;
and

     (g) Requested Information — with reasonable promptness, such other publicly available
data and information relating to the business, operations, affairs, financial condition,
assets or properties of the Company or any of its Subsidiaries (including, but without
limitation, actual copies of the Company’s Form 10-Q and Form 10-K) or relating to the
ability of the Company to perform its obligations hereunder and under the Notes as from time
to time may be reasonably requested by such Purchaser, holder or Beneficial Holder of Notes
or such information regarding the Company required to satisfy the requirements of Rule 144A
in connection with any contemplated transfer of the Notes.

     Section 7.2. Officer’s Certificate. Each set of financial statements delivered to a
Purchaser, holder or Beneficial Holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) shall
be accompanied by a certificate of a Senior Financial Officer setting forth (which, in the case of
Electronic Delivery of any such financial statements, shall be by separate concurrent delivery of
such certificate to each holder of Notes):

     (a) Covenant Compliance — the information (including detailed calculations) required
in order to establish whether the Company was in compliance with the requirements of Section
9.7 through Section 9.10, inclusive, during the quarterly or annual period covered by the
statements then being furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the
case may be, permissible under the terms of such Sections, and the calculation of the
amount, ratio or percentage then in existence); and

     (b) Event of Default — a statement that such Senior Financial Officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her supervision, a
review of the transactions and conditions of the Company and its Subsidiaries from the
beginning of the quarterly or annual period covered by the statements then being furnished
to the date of the certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or an Event of
Default or, if any such condition or event existed or
exists (including, without limitation, any such event or condition resulting from the
failure of the Company or any Subsidiary to comply with any Environmental Law),

-19-

 

specifying
the nature and period of existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.

     Section 7.3. Visitation. The Company shall permit the representatives of each Purchaser,
holder and Beneficial Holder of Notes:

     (a) No Default — if no Default or Event of Default then exists, at the expense of such
Purchaser, holder or Beneficial Holder of Notes and upon reasonable prior notice to the
Company, to visit the principal executive office of the Company, to discuss the affairs,
finances and accounts of the Company and its Subsidiaries with the Company’s officers, and
(with the consent of the Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company, which consent will not
be unreasonably withheld) to visit the other offices and properties of the Company and each
Subsidiary, all at such reasonable times and as often as may be reasonably requested in
writing; and

     (b) Default — if a Default or Event of Default then exists, at the expense of the
Company to visit and inspect any of the offices or properties of the Company or any
Subsidiary, to examine all their respective books of account, records, reports and other
papers, to make copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent public accountants (and
by this provision the Company authorizes said accountants to discuss the affairs, finances
and accounts of the Company and its Subsidiaries), all at such times and as often as may be
requested.

In connection with the exercise by a Purchaser, holder or Beneficial Holder of Notes of any
rights under this Section 7.3, the Company may require such Purchaser, holder or Beneficial
Holder of Notes to execute a confidentiality agreement containing customary terms.

Section 8. Payment and Prepayment of the Notes.

     Section 8.1. Maturity. As provided therein, the entire unpaid principal balance of the Notes
shall be due and payable on the stated maturity date thereof. Except as provided in Section 8.5,
the Notes are not prepayable, in whole or in part.

     Section 8.2. Allocation of Partial Prepayments. In the case of each partial prepayment of the
Notes, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at
the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof not theretofore called for prepayment.

     Section 8.3. Maturity; Surrender, Etc. In the case of each prepayment of Notes pursuant to
this Section 8, the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment (which shall be a Business Day),
together with interest on such principal amount accrued to such date. From and after such date,
unless the Company shall fail to pay such principal amount when so due and payable, together

-20-

 

with
the interest as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid
or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.

     Section 8.4. Purchase of Notes. The Company will not and will not permit any Affiliate to
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes
except upon the payment or prepayment of the Notes in accordance with the terms of this Agreement
and the Notes. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment or prepayment of Notes pursuant to any provision of this Agreement and no Notes may
be issued in substitution or exchange for any such Notes.

     Section 8.5. Change in Control.

     (a) Notice of Change in Control or Control Event. The Company will, within 15 Business Days
after any Responsible Officer has knowledge of the occurrence of any Change in Control or Control
Event, give written notice of such Change in Control or Control Event to each holder of Notes
unless notice in respect of such Change in Control (or the Change in Control contemplated by such
Control Event) shall have been given pursuant to subparagraph (b) of this Section 8.5. If a Change
in Control has occurred, such notice shall contain and constitute an offer to prepay the Notes as
described in subparagraph (c) of this Section 8.5 and shall be accompanied by the certificate
described in subparagraph (h) of this Section 8.5.

     (b) Condition to Company Action. The Company will not take any action that consummates or
finalizes a Change in Control unless (i) at least 15 Business Days prior to such action it shall
have given to each holder of Notes written notice containing and constituting an offer to prepay
Notes as described in subparagraph (c) of this Section 8.5 or an election to prepay the Notes as
described in subparagraph (e) of this Section 8.5, accompanied by the certificate described in
subparagraph (h) of this Section 8.5, and (ii) contemporaneously with such action, it prepays all
Notes required to be prepaid in accordance with this Section 8.5.

     (c) Offer to Prepay Notes. The offer to prepay Notes contemplated by subparagraphs (a) and
(b) of this Section 8.5 shall be an offer to prepay, in accordance with and subject to this Section
8.5, all, but not less than all, the Notes held by each holder and Beneficial Holder of Notes on a
date specified in such offer (the “Proposed Prepayment Date”). If such Proposed Prepayment Date is
in connection with an offer contemplated by subparagraph (a) of this Section 8.5, such date shall
be not less than 20 days and not more than 30 days after the date of such offer (if the Proposed
Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date shall be the
20th day after the date of such offer).

     (d) Acceptance; Rejection. A holder or Beneficial Holder of Notes may accept or reject the
offer to prepay made pursuant to this Section 8.5 by causing a notice of such acceptance or
rejection to be delivered to the Company at least 5 Business Days prior to the Proposed Prepayment
Date. A failure by a holder or Beneficial Holder of Notes to respond to an offer to
prepay made pursuant to this Section 8.5 shall be deemed to constitute a rejection of such
offer by such holder or Beneficial Holder of Notes.

-21-

 

     (e) Voluntary Prepayment. The Company may, at its option, elect to prepay the Notes in whole,
but not in part, upon the occurrence of a Change of Control.

     (f) Prepayment. Prepayment of the Notes to be prepaid pursuant to this Section 8.5 shall be
at 101% of the principal amount of such Notes, together with interest on such Notes accrued to the
date of prepayment. The prepayment shall be made on the Proposed Prepayment Date except as
provided in subparagraph (g) of this Section 8.5.

     (g) Deferral Pending Change in Control. The obligation of the Company to prepay Notes
pursuant to the offers required by subparagraph (b) and accepted in accordance with subparagraph
(d) of this Section 8.5, or an election by the Company pursuant to subparagraph (e) of this Section
8.5, is subject to the occurrence of the Change in Control in respect of which such offers and
acceptances, or election, shall have been made. In the event that such Change in Control does not
occur on the Proposed Prepayment Date in respect thereof (or any date specified in the election by
the Company pursuant to subparagraph (e) of this Section 8.5), the prepayment shall be deferred
until and shall be made on the date on which such Change in Control occurs. The Company shall keep
each holder of Notes reasonably and timely informed of (i) any such deferral of the date of
prepayment, (ii) the date on which such Change in Control and the prepayment are expected to occur,
and (iii) any determination by the Company that efforts to effect such Change in Control have
ceased or been abandoned (in which case the offers and acceptances, or election by the Company to
prepay, made pursuant to this Section 8.5 in respect of such Change in Control shall be deemed
rescinded).

     (h) Officer’s Certificate. Each offer or election to prepay the Notes pursuant to this
Section 8.5 shall be accompanied by a certificate, executed by a Senior Financial Officer of the
Company and dated the date of such offer or election, specifying: (i) the Proposed Prepayment Date;
(ii) that such offer or election is made pursuant to this Section 8.5; (iii) the principal amount
of each Note offered or elected to be prepaid; (iv) the interest that would be due on each Note
offered or elected to be prepaid, accrued to the Proposed Prepayment Date; (v) that the conditions
of this Section 8.5 have been fulfilled; and (vi) in reasonable detail, the nature and date or
proposed date of the Change in Control.

     (i) “Change in Control” Defined. “Change in Control” is defined in Schedule B.

     (j) “Control Event” Defined. “Control Event” means:

     (i) the execution by the Company or any of its Subsidiaries or Affiliates of any
agreement or letter of intent with respect to any proposed transaction or event or series of
transactions or events which, individually or in the aggregate, may reasonably be expected
to result in a Change in Control, or

     (ii) the execution of any written agreement which, when fully performed by the parties
thereto, would result in a Change in Control.

-22-

 

Section 9. Affirmative Covenants.

     The Company covenants that so long as any of the Notes are outstanding:

     Section 9.1. Compliance with Law. Without limiting Section 10.4, the Company will, and will
cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation, ERISA, the USA Patriot
Act and Environmental Laws, and will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in each case to the extent
necessary to ensure that non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such licenses, certificates, permits,
franchises and other governmental authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

     Section 9.2. Insurance. The Company will, and will cause each of its Subsidiaries to,
maintain, with financially sound and reputable insurers, insurance with respect to their respective
properties and businesses against such casualties and contingencies, of such types, on such terms
and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves
are maintained with respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly situated.

     Section 9.3. Maintenance of Properties. The Company will, and will cause each of its
Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective properties
in good repair, working order and condition (other than ordinary wear and tear), so that the
business carried on in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Subsidiary from discontinuing the operation and
the maintenance of any of its properties if such discontinuance is desirable in the conduct of its
business and the Company has concluded that such discontinuance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

     Section 9.4. Payment of Taxes and Claims. The Company will, and will cause each of its
Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other taxes, assessments,
governmental charges, or levies imposed on them or any of their properties, assets, income or
franchises, to the extent the same have become due and payable and before they have become
delinquent and all claims for which sums have become due and payable that have or might become a
Lien on properties or assets of the Company or any Subsidiary, provided that neither the Company
nor any Subsidiary need pay any such tax, assessment, charge, levy or claim if (i) the amount,
applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis
in good faith and in appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary
or (ii) the nonpayment of all such taxes, assessments, charges, levies and claims in the aggregate
could not reasonably be expected to have a Material Adverse Effect.

-23-

 

     Section 9.5. Corporate Existence, Etc. Subject to Section 10.2, the Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to Section 10.2, the
Company will at all times preserve and keep in full force and effect the corporate existence of
each of its Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary) and all
rights and franchises of the Company and its Subsidiaries unless, in the good faith judgment of the
Company, the termination of or failure to preserve and keep in full force and effect such corporate
existence, right or franchise could not, individually or in the aggregate, have a Material Adverse
Effect.

     Section 9.6. Books and Records. The Company will, and will cause each of its Subsidiaries to,
maintain proper books of record and account in conformity with GAAP and all applicable requirements
of any Governmental Authority having legal or regulatory jurisdiction over the Company or such
Subsidiary, as the case may be.

     Section 9.7. Minimum Consolidated Net Worth. The Company will maintain, as of the end of each
fiscal quarter of the Company, commencing with the fiscal quarter ending March 31, 2010,
Consolidated Tangible Net Worth in an amount at least equal to the Minimum Consolidated Tangible
Net Worth.

     Section 9.8. Minimum Regulatory Net Capital. The Company will cause its Subsidiary, Piper
Jaffray & Co., to maintain Regulatory Net Capital of at least $150,000,000.

     Section 9.9. Maximum Consolidated Funded Indebtedness to Total Capitalization. The Company
will maintain, as of the end of each fiscal quarter, a ratio of Consolidated Funded Indebtedness to
Total Capitalization of not more than 0.20 to 1.00.

     Section 9.10. Minimum Operating Cash Flow to Consolidated Fixed Charges. The Company will
maintain, as of the end of each fiscal quarter, a ratio of Operating Cash Flow for the period
commencing on January 1, 2010 through the end of such fiscal quarter to Consolidated Fixed Charges
for the period commencing on January 1, 2010 through the end of such fiscal quarter, of at least
2.00 to 1.00.

Section 10. Negative Covenants.

          The Company covenants that so long as any of the Notes are outstanding:

     Section 10.1. Transactions with Affiliates. The Company will not and will not permit any
Subsidiary to enter into directly or indirectly any transaction or group of related transactions
(including without limitation the purchase, lease, sale or exchange of properties of any kind or
the rendering of any service) with any Affiliate (other than the Company or another Subsidiary),
except in the ordinary course and pursuant to the reasonable requirements of the Company’s or such
Subsidiary’s business and upon fair and reasonable terms no less favorable to the Company or such
Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an
Affiliate and the Company delivers to each holder of Notes within 10 days after any such
transaction or group of related transactions involving aggregate consideration in excess of
$10,000,000, (a) a resolution of the board of directors of the Company set forth in an

-24-

 

Officers’ Certificate certifying that such transaction or group of related transactions
complies with this Section 10.1 and that such transaction or group of related transactions has been
approved by a majority of the members of the board of directors of the Company and, (b) an opinion
as to the fairness to the Company or such Subsidiary of such transaction or group of related
transactions from a financial point of view issued by an accounting, appraisal or investment
banking firm of national standing.

     Section 10.2. Merger, Consolidation, Etc. The Company will not consolidate with or merge with
any other Person or convey, transfer or lease all or substantially all of its assets in a single
transaction or series of transactions to any Person unless:

     (a) the successor formed by such consolidation or the survivor of such merger or the
Person that acquires by conveyance, transfer or lease all or substantially all of the assets
of the Company as an entirety, as the case may be, shall be a solvent corporation or limited
liability company organized and existing under the laws of the United States or any State
thereof (including the District of Columbia), and, if the Company is not such corporation or
limited liability company, (i) such corporation or limited liability company shall have
executed and delivered to each holder of any Notes its assumption of the due and punctual
performance and observance of each covenant and condition of this Agreement and the Notes
and (ii) such corporation or limited liability company shall have caused to be delivered to
each holder of any Notes an opinion of nationally recognized independent counsel, or other
independent counsel reasonably satisfactory to the Required Holders, to the effect that all
agreements or instruments effecting such assumption are enforceable in accordance with their
terms and comply with the terms hereof; and

     (b) immediately before and immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing.

No such conveyance, transfer or lease of substantially all of the assets of the Company shall have
the effect of releasing the Company or any successor corporation or limited liability company that
shall theretofore have become such in the manner prescribed in this Section 10.2 from its liability
under this Agreement or the Notes.

     Section 10.3. Line of Business. The Company will not and will not permit any Subsidiary to
engage in any business if, as a result, the general nature of the business in which the Company and
its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the
general nature of the business in which the Company and its Subsidiaries, taken as a whole, are
engaged on the date of this Agreement.

     Section 10.4. Terrorism Sanctions Regulations. The Company will not and will not permit any
Subsidiary to (a) become a Person described or designated in the Specially Designated Nationals and
Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism
Order or (b) engage in any dealings or transactions with any such Person.

-25-

 

     Section 10.5 Restricted Payments. After the occurrence and during the continuation of an
Event of Default, the Company will not make any distribution, payment on account of, or set apart
assets for, a sinking or other analogous fund for the purchase, redemption, retirement or other
acquisition of any equity or ownership interest of the Company, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Company or any Subsidiary. The Company will
not make any payment on any Indebtedness of the Company that is subordinated in right of payment to
the Notes that is prohibited by the applicable subordination provisions.

Section 11. Events of Default.

          An “Event of Default” shall exist if any of the following conditions or events shall occur and
be continuing:

     (a) the Company defaults in the payment of any principal on any Note when the same
becomes due and payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or

     (b) the Company defaults in the payment of any interest on any Note for more than five
Business Days after the same becomes due and payable; or

     (c) the Company defaults in the performance of or compliance with any term contained in
Section 7.1(d), Section 8.5(a), Sections 9.7, 9.9 or 9.10, or Sections 10.1 through 10.4; or

     (d) the Company defaults in the performance of or compliance with any term contained
herein (other than those referred to in Sections 11(a), (b) and (c)) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual
knowledge of such default and (ii) the Company receiving written notice of such default from
any holder of a Note (any such written notice to be identified as a “notice of default” and
to refer specifically to this Section 11(d)); or

     (e) any representation or warranty made in writing by or on behalf of the Company or by
any officer of the Company in this Agreement or in any writing furnished in connection with
the transactions contemplated hereby proves to have been false or incorrect in any material
respect on the date as of which made; or

     (f) (i) the Company or any Subsidiary is in default (as principal or as guarantor or
other surety) in the payment of any principal of or premium or make-whole amount or interest
on any Indebtedness that is outstanding and has an aggregate principal amount of at least
$10,000,000 beyond any period of grace provided with respect thereto, or (ii) the Company or
any Subsidiary is in default in the performance of or compliance
with any term of any evidence of any Indebtedness that has an aggregate outstanding
principal amount of at least $10,000,000 or of any mortgage, indenture or other agreement
relating thereto or any other condition exists, and as a consequence of such default or
condition such Indebtedness has become, or has been declared (or one or more

-26-

 

Persons are
entitled to declare such Indebtedness to be), due and payable before its stated maturity or
before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence
or continuation of any event or condition (other than the passage of time or the right of
the holder of Indebtedness to convert such Indebtedness into equity interests), (x) the
Company or any Subsidiary has become obligated to purchase or repay Indebtedness in an
aggregate outstanding principal amount of at least $10,000,000 before its regular maturity
or before its regularly scheduled dates of payment, or (y) one or more Persons have the
right to require the Company or any Subsidiary so to purchase or repay such Indebtedness; or

     (g) the Company or any Subsidiary (i) is generally not paying, or admits in writing its
inability to pay, its debts as they become due, (ii) files, or consents by answer or
otherwise to the filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction,
(iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, (v) is adjudicated as insolvent or to
be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

     (h) a court or Governmental Authority of competent jurisdiction enters an order
appointing, without consent by the Company or any of its Subsidiaries, a custodian,
receiver, trustee or other officer with similar powers with respect to it or with respect to
any substantial part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of the Company or any of its Subsidiaries, or any
such petition shall be filed against the Company or any of its Subsidiaries and such
petition shall not be dismissed within 60 days; or

     (i) a final judgment or judgments for the payment of money aggregating in excess of
$10,000,000 are rendered against one or more of the Company and its Subsidiaries and which
judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending
appeal, or are not discharged within 60 days after the expiration of such stay; or

     (j) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the
Code for any plan year or part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected to be filed with the
PBGC or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have
notified the Company or any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate “amount of unfunded benefit liabilities” (within the
meaning of section 4001(a)(18) of ERISA) under all Plans, determined in accordance

-27-

 

with
Title IV of ERISA, shall exceed $10,000,000, (iv) the Company or any ERISA Affiliate shall
have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating to the Plans, (v) the
Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or
any Subsidiary establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the liability of the
Company or any Subsidiary thereunder; and any such event or events described in clauses (i)
through (vi) above, either individually or together with any other such event or events,
could reasonably be expected to have a Material Adverse Effect.

As used in Section 11(j), the terms “employee benefit plan” and “employee welfare benefit plan”
shall have the respective meanings assigned to such terms in section 3 of ERISA.

Section 12. Remedies on Default, Etc.

     Section 12.1. Acceleration. (a) If an Event of Default with respect to the Company described
in Section 11(g) or (h) (other than an Event of Default described in clause (i) of Section 11(g) or
described in clause (vi) of Section 11(g) by virtue of the fact that such clause encompasses clause
(i) of Section 11(g)) has occurred, all the Notes then outstanding shall automatically become
immediately due and payable.

          (b) If any other Event of Default has occurred and is continuing, any holder or holders of
more than 50% in principal amount of the Notes at the time outstanding may at any time at its or
their option, by notice or notices to the Company, declare all the Notes then outstanding to be
immediately due and payable.

          (c) If any Event of Default described in Section 11(a) or (b) has occurred and is continuing,
any holder or holders of Notes at the time outstanding affected by such Event of Default may at any
time, at its or their option, by notice or notices to the Company, declare all the Notes held by it
or them to be immediately due and payable.

          Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by
declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes,
plus all accrued and unpaid interest thereon, shall all be immediately due and payable, in each and
every case without presentment, demand, protest or further notice, all of which are hereby waived.

     Section 12.2. Other Remedies. If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been declared immediately due
and payable under Section 12.1, the
holder or Beneficial Holder of any Note at the time outstanding may proceed to protect and enforce
the rights of such holder or Beneficial Holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement contained herein or
in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in
aid of the exercise of any power granted hereby or thereby or by law or otherwise.

-28-

 

     Section 12.3. Rescission. At any time after any Notes have been declared due and payable
pursuant to Section 12.1(b) or (c), the holders of not less than 51% in principal amount of the
Notes then outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all
principal of any Notes that are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and (to the extent permitted by applicable
law) any overdue interest in respect of the Notes, (b) neither the Company nor any other Person
shall have paid any amounts which have become due solely by reason of such declaration, (c) all
Events of Default and Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no
judgment or decree has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent
Event of Default or Default or impair any right consequent thereon.

     Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no
delay on the part of any holder or Beneficial Holder of any Note in exercising any right, power or
remedy shall operate as a waiver thereof or otherwise prejudice such holder’s or Beneficial
Holder’s rights, powers or remedies. No right, power or remedy conferred by this Agreement or by
any Note upon any holder or Beneficial Holder thereof shall be exclusive of any other right, power
or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute
or otherwise. Without limiting the obligations of the Company under Section 15, the Company will
pay to the holder or Beneficial Holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder or Beneficial Holder incurred in any
enforcement or collection under this Section 12, including, without limitation, reasonable
attorneys’ fees, expenses and disbursements.

Section 13. Registration; Exchange; Substitution of Notes.

     Section 13.1. Registration of Notes. The Notes will be registered in the name of Cede & Co.,
as nominee for DTC. If Notes are taken out of the DTC book-entry system and issued in definitive
form, the Company shall keep at its principal executive office a register for the registration and
registration of transfers of Notes. The name and address of each holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more Notes shall be
registered in such register. Prior to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof
for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.

     Section 13.2. Transfer and Exchange of Notes. If Notes are taken out of the DTC book-entry
system and issued in definitive form, upon surrender of any Note to the Company at the address and
to the attention of the designated officer (all as specified in Section 18(iii)), for registration
of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by
a written instrument of transfer duly executed by the registered holder of such Note or such
holder’s attorney duly authorized in writing and accompanied by the relevant name,

-29-

 

address and
other information for notices of each transferee of such Note or part thereof), within ten Business
Days thereafter, the Company shall execute and deliver, at the Company’s expense (except as
provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor,
in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note.
Each such new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit A-1. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes. Notes shall not be transferred in denominations of less than $500,000, provided
that if necessary to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $500,000. Any transferee, by its acceptance
of a Note registered in its name (or the name of its nominee), shall be deemed to have made the
representations set forth in Sections 6.1 and 6.2.

          (b) The Company shall deliver a single permanent global Note in registered form,
substantially in the form set forth in Exhibit A-2 (the “Global Notes”), registered in the name of
Cede & Co., the nominee of DTC, duly executed by the Company. The Company will require that all
resales be made in compliance with the provisions of Rule 144A to Qualified Institutional Buyers
who have advised the Company in writing that they are purchasing the Note for their own account or
accounts with respect to which such Qualified Institutional Buyer exercises sole investment
discretion and that such Qualified Institutional Buyer is aware that the sale to it is being made
in reliance on Rule 144A and acknowledges that it has received such information regarding the
Company as it has requested pursuant to Rule 144A or has determined not to request such information
and that it is aware that Piper Jaffray & Co. is relying upon its foregoing representations in
order to claim the exemption from registration provided by Rule 144A. Any such transferee shall be
deemed to have also made the representations set forth in Sections 6.1 and 6.2.

          (c) If a beneficial interest in the Global Notes is proposed to be transferred, the
transfer of such beneficial interest may be effected only through the book-entry system maintained
by DTC.

          (d) The Notes have not been registered under the Securities Act or under the securities laws
of any state and may not be transferred or resold unless registered under the Securities Act and
applicable state securities laws or unless an exemption from such requirement
is available. Upon the registration of transfer, exchange or replacement of Notes, the Company
shall deliver only Notes that bear a legend to such effect.

     Section 13.3. Replacement of Notes. If Notes are taken out of the book-entry system of DTC
and issued in definitive form, upon receipt by the Company at the address and to the attention of
the designated officer (all as specified in Section 18(iii)) of evidence reasonably satisfactory to
it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence
shall be notice from such holder of such ownership and such loss, theft, destruction or
mutilation), and

-30-

 

     (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to
it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser
or another holder of a Note with a minimum net worth of at least $100,000,000 or a Qualified
Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to
be satisfactory), or

     (b) in the case of mutilation, upon surrender and cancellation thereof,

within ten Business Days thereafter, the Company at its own expense shall execute and deliver, in
lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have
been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen,
destroyed or mutilated Note if no interest shall have been paid thereon.

     Section 13.4. Book-Entry Provisions for Global Notes. (a) The Notes issued to the Purchasers
hereunder shall be in the form of a Global Note which initially shall be registered in the name of
Cede & Co., the nominee of DTC. The ownership interests of each beneficial holder (a “Beneficial
Holder”) of a Global Note will be recorded on DTC’s records and are expected to receive written
confirmations from DTC of their transaction from the direct or indirect participants in DTC (“Agent
Members”). Agent Members shall have no rights under this Agreement with respect to any Global
Notes held on their behalf by DTC, or under any Global Note, and DTC may be treated by the Company
and any agent of the Company as the absolute owner of each Global Note for all purposes whatsoever;
provided, that each Beneficial Holder shall have the rights expressly granted to Beneficial Holders
hereunder, subject to written notice to the Company from such Beneficial Holder confirming its
status as a Beneficial Holder and disclosing the principal amount of its beneficial interest in the
Global Note. Notwithstanding the foregoing, nothing herein shall prevent the Company or any agent
of the Company from giving effect to any written certification, proxy or other authorization
furnished by DTC or impair, as between DTC and its Agent Members, the operation of customary
practices governing the exercise of the rights of a Beneficial Holder of any Note.

          (b) Transfers of Global Notes shall be limited to transfers in whole, but not in part, to DTC,
its successors or nominees. Interests of Beneficial Holders in any Global Note may be transferred
or exchanged for physical Notes in accordance with the rules and procedures of DTC and the
provisions of Section 13.2.

          (c) In connection with any transfer or exchange of a portion of the beneficial interest in
any Global Notes to Beneficial Holders pursuant to clause (b) above, DTC shall reflect on its books
and record the date and a decrease in the principal amount of the beneficial interest in such
Global Note to be transferred, and the Company shall execute, one or more Notes of like tenor and
amount.

          (d) In connection with the transfer of interests of Beneficial Holders in Global Notes for
physical Notes pursuant to clause (b) above, the Global Notes shall be deemed to be surrendered to
the Company for cancellation, and the Company shall execute, to each such Beneficial Holder
identified by DTC in exchange for its beneficial interest in such Global Notes, an equal aggregate
principal amount of physical Notes of authorized denominations.

-31-

 

          (e) All transfers and exchanges of Global Notes or beneficial interests therein shall be
effected through DTC, in accordance with this Agreement (including applicable restrictions on
transfer set forth herein) and the procedures of DTC. A transferor of a beneficial interest in a
Global Note shall deliver a written order given in accordance with DTC’s procedures containing
information regarding the participant account of DTC to be credited with a beneficial interest in
such Global Note and such account shall be credited in accordance with such order with a beneficial
interest in the Global Note and the account of the person making the transfer shall be debited by
an amount equal to the beneficial interest in the Global Note being transferred. Any transferee of
a beneficial interest in a Global Note shall be deemed to have made the representations set forth
in Sections 6.1 and 6.2.

          (f) The holder of a Global Note may grant proxies and otherwise authorize any person,
including Agent Members and persons that may hold interests through Agent Members, to take any
action which a holder of a Note is entitled to take under this Agreement.

Section 14. Payments on Notes.

     Section 14.1. Place of Payment. Subject to Section 14.2, payments of principal and interest
becoming due and payable on the Notes shall be made in Chicago, Illinois at the corporate trust
office of The Bank of New York Mellon Trust Company, N.A., as paying agent for further payment to
DTC and DTC shall make payments to its direct participants for credit to the beneficial owners
through DTC’s typical payment procedures.

     Section 14.2. Home Office Payment. If Notes are taken out of the book-entry system of DTC and
issued in definitive form, then so long as any Purchaser or its nominee shall be the holder of the
Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the
Company will pay all sums becoming due on such Note for principal and interest by the method and at
the address specified for such purpose below such Purchaser’s name in Schedule A, or by such other
method or at such other address as such Purchaser shall have from time to time specified to the
Company in writing for such purpose, without the presentation or surrender of such Note or the
making of any notation thereon, except that upon written request of the Company made concurrently
with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall
surrender such Note for cancellation, reasonably promptly after any such request, to the Company at
its principal executive office or at the place of payment most recently designated by the Company
pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by a Purchaser
or its nominee, such Purchaser will, at its election, either endorse thereon the amount of
principal paid thereon and the last date to which interest has been paid thereon or surrender such
Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2. The Company will
afford the benefits of this Section 14.2 to any Person that is the direct or indirect transferee of
any Note purchased by a Purchaser under this Agreement and that has made the same agreement
relating to such Note as the Purchasers have made in this Section 14.2.

-32-

 

Section 15. Expenses, Etc.

     Section 15.1. Transaction Expenses. Whether or not the transactions contemplated hereby are
consummated, the Company will pay all costs and expenses (including reasonable attorneys’ fees of a
special counsel and, if reasonably required by the Required Holders, local or other counsel)
incurred by the Purchasers and each other holder or Beneficial Holder of a Note in connection with
such transactions and in connection with any amendments, waivers or consents under or in respect of
this Agreement or the Notes (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this Agreement or the Notes or in
responding to any subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or the Notes, or by reason of being a holder or Beneficial Holder of
any Note, and (b) the costs and expenses, including financial advisors’ fees, incurred in
connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with
any work-out or restructuring of the transactions contemplated hereby and by the Notes. The
Company will pay, and will save each Purchaser and each other holder and Beneficial Holder of a
Note harmless from, all claims in respect of any fees, costs or expenses, if any, of brokers and
finders (other than those, if any, retained by a Purchaser or other holder or Beneficial Holder in
connection with its purchase of the Notes).

     Section 15.2. Survival. The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this
Agreement or the Notes, and the termination of this Agreement.

Section 16. Survival of Representations and Warranties; Entire Agreement.

     All representations and warranties contained herein shall survive the execution and delivery
of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion
thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent
holder or Beneficial Holder of a Note, regardless of any investigation made at any time by or on
behalf of such Purchaser or any other holder or Beneficial Holder of a Note. All statements
contained in any certificate or other instrument delivered by or on behalf of the
Company pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between each Purchaser and the Company and supersede
all prior agreements and understandings relating to the subject matter hereof.

Section 17. Amendment and Waiver. 

     Section 17.1. Requirements. This Agreement and the Notes may be amended, and the observance
of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and
only with) the written consent of the Company and the Required Holders, except that no such
amendment or waiver may, without the written consent of the holder of each Note at the time
outstanding affected thereby, (i) subject to the provisions of Section 12 relating to acceleration
or rescission, change the amount or time of any prepayment or

-33-

 

payment of principal of, or reduce
the rate or change the time of payment or method of computation of interest on the Notes, (ii)
change the percentage of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or
20.

     Section 17.2. Solicitation of Holders of Notes.

          (a) Solicitation. The Company will provide each holder of the Notes (irrespective of the
amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the
date a decision is required, to enable such holder to make an informed and considered decision with
respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or
of the Notes. The Company will deliver executed or true and correct copies of each amendment,
waiver or consent effected pursuant to the provisions of this Section 17 to each holder of
outstanding Notes promptly following the date on which it is executed and delivered by, or receives
the consent or approval of, the requisite holders of Notes.

          (b) Payment. The Company will not directly or indirectly pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any
security or provide other credit support, to any holder or Beneficial Holder of Notes as
consideration for or as an inducement to the entering into by any holder or Beneficial Holder of
Notes of any waiver or amendment of any of the terms and provisions hereof unless such remuneration
is concurrently paid, or security is concurrently granted or other credit support concurrently
provided, on the same terms, ratably to each holder or Beneficial Holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.

     Section 17.3. Binding Effect, etc. Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding upon them and upon each future
holder of any Note and upon the Company without regard to whether such Note has been marked to
indicate such amendment or waiver. No such amendment or waiver will extend to or affect any
obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or
impair any right
consequent thereon. No course of dealing between the Company and the holder or Beneficial Holder
of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a
waiver of any rights of any holder or Beneficial Holder of such Note. As used herein, the term
“this Agreement” and references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.

     Section 17.4. Notes Held by Company, etc. Solely for the purpose of determining whether the
holders of the requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this Agreement or the
Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon
the direction of the holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall
be deemed not to be outstanding.

-34-

 

Section 18. Notices.

          All notices and communications provided for hereunder shall be in writing and sent (a) by
telecopy if the sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or certified mail with return
receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:

     (i) if to any Purchaser or its nominee, to such Purchaser or nominee at the address
specified for such communications in Schedule A, or at such other address as such Purchaser or
nominee shall have specified to the Company in writing,

     (ii) if to any other holder of any Note, to such holder at such address as such other
holder shall have specified to the Company in writing,

     (iii) if to the Company, to the Company at its address set forth at the beginning
hereof to the attention of Timothy L. Carter, or at such other address as the Company shall
have specified to the holder of each Note in writing, or

     (iv) if to the Initial Purchaser, at 800 Nicollet Mall, Suite 800, Minneapolis,
Minnesota 55402, attention Timothy L. Carter.

Notices under this Section 18 will be deemed given only when actually received.

Section 19. Reproduction of Documents.

     This Agreement and all documents relating thereto, including, without limitation, (a)
consents, waivers and modifications that may hereafter be executed, (b) documents received by any
Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates
and other information previously or hereafter furnished to any Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other
similar process and such Purchaser may destroy any original document so reproduced. The Company
agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall
be admissible in evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such reproduction was made by such
Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence. This Section 19 shall not prohibit
the Company or any other holder or Beneficial Holder of Notes from contesting any such reproduction
to the same extent that it could contest the original, or from introducing evidence to demonstrate
the inaccuracy of any such reproduction.

-35-

 

Section 20. Reserved.

Section 21. Substitution of Purchaser.

          Each Purchaser shall have the right to substitute any one of its Affiliates as the purchaser
of the Notes that it has agreed to purchase hereunder, by written notice to the Company, which
notice shall be signed by both such Purchaser and such Affiliate, shall contain such Affiliate’s
agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the
accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such
notice, any reference to such Purchaser in this Agreement (other than in this Section 21), shall be
deemed to refer to such Affiliate in lieu of such original Purchaser. In the event that such
Affiliate is so substituted as a Purchaser hereunder and such Affiliate thereafter transfers to
such original Purchaser all of the Notes then held by such Affiliate, upon receipt by the Company
of notice of such transfer, any reference to such Affiliate as a “Purchaser” in this Agreement
(other than in this Section 21), shall no longer be deemed to refer to such Affiliate, but shall
refer to the original Purchaser, and such original Purchaser shall again have all the rights of an
original holder of the Notes under this Agreement.

Section 22. Miscellaneous.

     Section 22.1. Successors and Assigns. All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent holder of a Note
and, in the case of rights expressly granted to Beneficial Holders hereunder, to any Beneficial
Holder to the extent set forth herein) whether so expressed or not. Except as set forth in Section
10.2, the Company may not assign any of its rights or obligations under this Agreement or the Notes
without the prior written consent of each holder of the Notes.

     Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to
the contrary notwithstanding (but without limiting the requirement in Section 8.3 that the notice
of any optional prepayment specify a Business Day as the date fixed for such prepayment), any
payment of principal of or interest on any Note that is due on a date other than a Business Day
shall be made on the next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day; provided that if the
maturity date of any Note is a date other than a Business Day, the payment otherwise due on such
maturity date shall be made on the next succeeding Business Day and shall include the additional
days elapsed in the computation of interest payable on such next succeeding Business Day.

     Section 22.3. Accounting Terms. All accounting terms used herein which are not expressly
defined in this Agreement have the meanings respectively given to them in accordance with GAAP.
Except as otherwise specifically provided herein, (i) all computations made pursuant to this
Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be
prepared in accordance with GAAP.

-36-

 

     Section 22.4. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by
law) not invalidate or render unenforceable such provision in any other jurisdiction.

     Section 22.5. Construction, etc. Each covenant contained herein shall be construed (absent
express provision to the contrary) as being independent of each other covenant contained herein, so
that compliance with any one covenant shall not (absent such an express contrary provision) be
deemed to excuse compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.

          For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be
deemed to be a part hereof.

     Section 22.6. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each signed by less than all, but together
signed by all, of the parties hereto.

     Section 22.7. Governing Law. This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would permit the application of
the laws of a jurisdiction other than such State.

     Section 22.8. Jurisdiction and Process; Waiver of Jury Trial. (a) The Company irrevocably
submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the
Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or
relating to this Agreement or the Notes. To the fullest extent permitted by applicable law, the
Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise,
any claim that it is not subject to the jurisdiction of any such court, any objection that it may
now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in
any such court and any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.

          (b) The Company consents to process being served by or on behalf of any holder or Beneficial
Holder of Notes in any suit, action or proceeding of the nature referred to in Section 22.8(a) by
mailing a copy thereof by registered or certified mail (or any substantially similar form of mail),
postage prepaid, return receipt requested, to it at its address specified in Section 18 or at such
other address of which such holder shall then have been notified pursuant to said Section. The
Company agrees that such service upon receipt (i) shall be deemed in every respect effective
service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest
extent permitted by applicable law, be taken and held to be valid personal service upon and
personal delivery to it. Notices hereunder shall be conclusively presumed received as

-37-

 

evidenced by
a delivery receipt furnished by the United States Postal Service or any reputable commercial
delivery service.

          (c) Nothing in this Section 22.8 shall affect the right of any holder or Beneficial Holder
of a Note to serve process in any manner permitted by law, or limit any right that the holders of
any of the Notes may have to bring proceedings against the Company in the courts of any appropriate
jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any
other jurisdiction.

          (d) The parties hereto hereby waive trial by jury in any action brought on or with respect
to this Agreement, the Notes or any other document executed in connection herewith or
therewith.

     Section 22.9. Piper Jaffray & Co. Execution. Piper Jaffray & Co. is a party to this
Agreement solely for purpose of purchasing the Notes from the Company as Initial Purchaser and
selling the Notes to the Purchasers hereunder. Piper Jaffray & Co. assumes no responsibility for
any obligations, representations, warranties or covenants of the Company.

[Signature Pages Follow]

*   *   *   *   *

-38-

 

          If you are in agreement with the foregoing, please sign the form of agreement on a counterpart
of this Agreement and return it to the Company, whereupon this Agreement shall become a binding
agreement between you and the Company.

	 	 	 	 	 
	 	Very truly yours,

Piper Jaffray Companies

 	 
	 	By  	/s/ Timothy L. Carter
 	 
	 	 	Timothy L. Carter, Treasurer 	 
	 	 	 	 
	 

[Signature Page to Note Purchase Agreement]

 

 

This Agreement is hereby

accepted and agreed to as

of the date thereof.

INITIAL PURCHASER

PIPER JAFFRAY & Co., Solely in Its Capacity As Initial Purchaser

	 	 	 	 	 
	By

	 	/s/ Mary B. Swanson
 

Name: Mary B. Swanson
	 	 
	 

	 	Its: Assistant Treasurer	 	 

[Signature Page to Note Purchase Agreement]

 

 

PURCHASERS

By: Pacific Investment Management Company LLC, as investment advisor to each Purchaser

	 	 	 	 	 
	By

	 	/s/ Chris Dialynas
 

Name: Chris Dialynas
	 	 
	 

	 	Its: Managing Director	 	 

[Signature Page to Note Purchase Agreement]

 

 

Defined Terms

     As used herein, the following terms have the respective meanings set forth below or set forth
in the Section hereof following such term:

     “Agent Members” is defined in Section 13.4(a).

     “Affiliate” means, at any time, and with respect to any Person, any other Person that at such
time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is
under common Control with, such first Person, and, with respect to the Company, shall include any
Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting
or equity interests of the Company or any Subsidiary or any corporation of which the Company and
its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of
any class of voting or equity interests. As used in this definition, “Control” means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by contract or
otherwise. Unless the context otherwise clearly requires, any reference to an “Affiliate” is a
reference to an Affiliate of the Company.

     “Anti-Terrorism Order” means Executive Order No. 13,224 of September 24, 2001, Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.

     “Beneficial Owner” has the meaning as defined by Rule 13d-3 and Rule 13d-5 under the Exchange
Act, except that in calculating the beneficial ownership of any particular “person” (as that term
is used in Sections 13(d) and 14(d) of the Exchange Act), notwithstanding the provisions of Rule
13(d)(1)(i)(A) and (B), such “person” will not be deemed to have beneficial ownership of any
securities that such “person” has the right to acquire by conversion of other securities or the
exercise of any option, warrant or right, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially Owns” and
“Beneficially Owned” have the correlative meaning.

     “Beneficial Holder” is defined in Section 13.4(a).

     “Business Day” means any day other than a Saturday, a Sunday or a day on which commercial
banks in New York, New York or Minneapolis, Minnesota are required or authorized to be closed.

     “Capital Lease” means, at any time, a lease with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of a liability in
accordance with GAAP.

     “Capital Lease Obligation” means, with respect to any Person and a Capital Lease, the amount
of the obligation of such Person as the lessee under such Capital Lease which would, in accordance
with GAAP, appear as a liability on a balance sheet of such Person.

Schedule B

(to Note Purchase Agreement)

 

 

     “Capital Stock” means any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent ownership interests
in a Person (other than a corporation) and any and all warrants, rights or options to purchase any
of the foregoing.

     “Change in Control” means an event or series of events by which any “person” or “group” (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee
benefit plan of such person or its Subsidiaries, and any Person acting in its capacity as trustee,
agent or other fiduciary or administrator of any such plan) becomes the Beneficial Owner, directly
or indirectly, of 50% or more of the Capital Stock of the Company entitled to vote for members of
the board of directors or equivalent governing body of the Company

     “Closing” is defined in Section 3.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules
and regulations promulgated thereunder from time to time.

     “Company” means Piper Jaffray Companies, a Delaware corporation or any successor that becomes
such in the manner prescribed in Section 10.2.

     “Confidential Information” is defined in Section 20.

     “Consolidated EBITDA” shall mean, for any period, (a) the Consolidated Net Income for such
period, plus (b) to the extent deducted in determining such Consolidated Net Income for such
period, the sum of the following for such period: (i) Consolidated Interest Expense for such
period, (ii) income tax expense for such period (iii) depreciation and amortization for such
period, and (iv) the aggregate amount of extraordinary, non-operating or non-cash charges for such
period, and, minus, without duplication, (c) the aggregate amount of extraordinary, non-operating
or non-cash income during such period.

     “Consolidated Fixed Charges” means, with respect to any period, the sum of (i) Consolidated
Interest Expense for such period plus (ii) Lease Rentals for such period.

     “Consolidated Funded Indebtedness” means as of any date of determination the total amount of
all Indebtedness of the Company and its Subsidiaries payable one year or more from the date of its
creation, including the current portion thereof.

     “Consolidated Interest Expense” shall mean, for any period, the gross interest expense of the
Company and its Subsidiaries on Consolidated Funded Indebtedness deducted in the calculation of
Consolidated Net Income for such period, determined on a consolidated basis in accordance with
GAAP.

-2-

 

     “Consolidated Net Income” shall mean, for any period, the consolidated net income (or loss) of
the Company and its Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP.

     “Consolidated Tangible Net Worth” shall mean the consolidated stockholder’s equity of the
Company and its Subsidiaries, as defined according to GAAP; less the purchase price of acquired
businesses in excess of the fair market value of tangible net assets, other items of goodwill,
patents, trademarks, trade names, copyrights, organization expense, unamortized debt discount and
expense, any write-up of the value of any assets, and other like intangibles, all determined on a
consolidated basis in accordance with GAAP.

     “Default” means an event or condition the occurrence or existence of which would, with the
lapse of time or the giving of notice or both, become an Event of Default.

     “DTC” means The Depository Trust Company, New York, New York, or a successor thereto
registered under the Securities Exchange Act of 1934, as amended, of other applicable statute or
regulation.

     “Electronic Delivery” is defined in Section 7.1(a).

     “Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including but
not limited to those related to Hazardous Materials.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time in effect.

     “ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated
as a single employer together with the Company under section 414 of the Code.

     “Event of Default” is defined in Section 11.

     “Form 10-K” is defined in Section 7.1(b).

     “Form 10-Q” is defined in Section 7.1(a).

     “GAAP” means generally accepted accounting principles as in effect from time to time in the
United States of America.

     “Global Notes” is defined in Section 13.2(b).

     “Governmental Authority” means

-3-

 

     (a) the government of

     (i) the United States of America or any State or other political subdivision
thereof, or

     (ii) any other jurisdiction in which the Company or any Subsidiary conducts all
or any part of its business, or which asserts jurisdiction over any properties of
the Company or any Subsidiary, or

     (b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

     “Guaranty” means, with respect to any Person, any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection) of such Person
guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other
Person in any manner, whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:

     (a) to purchase such indebtedness or obligation or any property constituting security
therefor;

     (b) to advance or supply funds (i) for the purchase or payment of such indebtedness or
obligation, or (ii) to maintain any working capital or other balance sheet condition or any
income statement condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;

     (c) to lease properties or to purchase properties or services primarily for the purpose
of assuring the owner of such indebtedness or obligation of the ability of any other Person
to make payment of the indebtedness or obligation; or

     (d) otherwise to assure the owner of such indebtedness or obligation against loss in
respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the
indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be
direct obligations of such obligor.

     “Hazardous Material” means any and all pollutants, toxic or hazardous wastes or other
substances that might pose a hazard to health and safety, the removal of which may be required or
the generation, manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law including, but not
limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum,
petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized
substances.

-4-

 

     “holder” means, with respect to any Note the Person in whose name such Note is
registered in the register maintained by the Company pursuant to Section 13.1.

     “Indebtedness” with respect to any Person means, at any time, without duplication,

     (a) its liabilities for borrowed money and its redemption obligations in respect of
mandatorily redeemable Preferred Stock;

     (b) its liabilities for the deferred purchase price of property acquired by such Person
(excluding accounts payable arising in the ordinary course of business but including all
liabilities created or arising under any conditional sale or other title retention agreement
with respect to any such property);

     (c) (i) all liabilities appearing on its balance sheet in accordance with GAAP in
respect of Capital Leases and (ii) all liabilities which would appear on its balance sheet
in accordance with GAAP in respect of Synthetic Leases assuming such Synthetic Leases were
accounted for as Capital Leases;

     (d) all liabilities for borrowed money secured by any Lien with respect to any property
owned by such Person (whether or not it has assumed or otherwise become liable for such
liabilities);

     (e) all its liabilities in respect of letters of credit or instruments serving a
similar function issued or accepted for its account by banks and other financial
institutions (whether or not representing obligations for borrowed money);

     (f) the aggregate Swap Termination Value of all Swap Contracts of such Person; and

     (g) any Guaranty of such Person with respect to liabilities of a type described in any
of clauses (a) through (f) hereof.

Indebtedness of any Person shall include all obligations of such Person of the character described
in clauses (a) through (g) to the extent such Person or its property remains legally liable in
respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP.

     “Initial Purchaser” is defined in Section 2.

     “Interest Payment Date” is defined in Section 1.2.

     “Interest Rate” means a annual interest rate equal to the LIBOR Rate, plus 4.10%, adjusted
quarterly on the last day of December, March, June and September.

     “Lease Rentals” shall mean, for any period, the aggregate amount of rental or operating lease
expense payable by the Company and its Subsidiaries with respect to leases of real and

-5-

 

personal
property (excluding Capital Lease Obligations) determined on a consolidated basis in accordance
with GAAP.

     “LIBOR Rate” means, the rate per annum determined by reference to the British Bankers’
Association Interest Settlement Rates for deposits in dollars offered on the London interbank
dollar market for a three month period in an amount comparable to the aggregate amount of the Notes
(as displayed in the Bloomberg Financial Market System or any successor thereto or any other
service selected by the Company that has been nominated by the British Bankers’ Association as an
authorized information vendor for the purpose of displaying such rates), or (b) if such rate cannot
be determined, the rate per annum equal to the rate determined by the Company to be a rate at which
U.S. dollar deposits are offered to major banks in the London interbank eurodollar market for
funds, in each case rounded upwards, if necessary, to the nearest .01 of 1%.

     “Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security
interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other title retention agreement or
Capital Lease, upon or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar arrangements).

     “Material” means material in relation to the business, operations, affairs, financial
condition, assets, properties, or prospects of the Company and its Subsidiaries taken as a whole.

     “Material Adverse Effect” means a material adverse effect on (a) the business, operations,
affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a
whole, or (b) the ability of the Company to perform its obligations under this Agreement and the
Notes, or (c) the validity or enforceability of this Agreement or the Notes.

     “Minimum Consolidated Tangible Net Worth” means an amount equal to (i) 80% of the Consolidated
Tangible Net Worth of the Company as of December 31, 2009, less (ii) all goodwill and other
intangible assets recorded in connection with the Company’s acquisition of Advisory Research, Inc.

     “Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in
section 4001(a)(3) of ERISA).

     “NAIC” means the National Association of Insurance Commissioners or any successor thereto.

     “Notes” is defined in Section 1.

     “Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other
officer of the Company whose responsibilities extend to the subject matter of such certificate.

-6-

 

     “Operating Cash Flow” means, for any period, (a) Consolidated EBITDA for such period,
plus (b) Lease Rentals for such period, minus (c) capital expenditures to replace
existing equipment, income tax expense and dividends paid for such period.

     “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any
successor thereto.

     “Person” means an individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization, business entity or Governmental Authority.

     “Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject to Title
I of ERISA that is or, within the preceding five years, has been established or maintained, or to
which contributions are or, within the preceding five years, have been made or required to be made,
by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability.

     “Preferred Stock” means any class of capital stock of a Person that is preferred over any
other class of capital stock (or similar equity interests) of such Person as to the payment of
dividends or the payment of any amount upon liquidation or dissolution of such Person.

     “property” or “properties” means, unless otherwise specifically limited, real or personal
property of any kind, tangible or intangible, choate or inchoate.

     “PTE” is defined in Section 6.2(a).

     “Purchasers” is defined in the first paragraph of this Agreement.

     “Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer”
within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.

     “Record Date” is defined in Section 1.2.

     “Regulatory Net Capital” means the Regulatory Net Capital of Piper Jaffray & Co. as shown on
its monthly FOCUS report.

     “Required Holders” means, at any time, the holders of at least 51% in principal amount of the
Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its
Affiliates).

     “Responsible Officer” means any Senior Financial Officer and any other officer of the Company
with responsibility for the administration of the relevant portion of this Agreement.

     “Rule 144A” is defined in Section 6.1.

     “SEC” shall mean the Securities and Exchange Commission of the United States, or any successor
thereto.

-7-

 

     “Securities” or “Security” shall have the meaning specified in Section 2(1) of the Securities
Act.

     “Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules
and regulations promulgated thereunder from time to time in effect.

     “Senior Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or comptroller of the Company.

     “Subsidiary” means, as to any Person, any other Person in which such first Person or one or
more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient
equity or voting interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing similar functions) of
such second Person, and any partnership or joint venture if more than a 50% interest in the profits
or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first
Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does
ordinarily take major business actions without the prior approval of such Person or one or more of
its Subsidiaries). Unless the context otherwise clearly requires, any reference to a “Subsidiary”
is a reference to a Subsidiary of the Company.

     “SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.

     “Swap Contract” means (a) any and all interest rate swap transactions, basis swap
transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index swaps or options,
bond or bond price or bond index swaps or options or forward foreign exchange transactions, cap
transactions, floor transactions, currency options, spot contracts or any other similar
transactions or any of the foregoing (including, but without limitation, any options to enter into
any of the foregoing), and (b) any and all transactions of any kind, and the related confirmations,
which are subject to the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement.

     “Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking
into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amounts(s) determined as the mark-to-market
values(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts41A.

     “Synthetic Lease” means, at any time, any lease (including leases that may be terminated by
the lessee at any time) of any property (a) that is accounted for as an operating lease under GAAP
and (b) in respect of which the lessee retains or obtains ownership of the

-8-

 

property so leased for U.S. federal income tax purposes, other than any such lease under which
such Person is the lessor.

     “Total Capitalization” means, as of any date, the sum of (a) Consolidated Funded Indebtedness,
plus (b) Consolidated Tangible Net Worth.

     “USA Patriot Act” means United States Public Law 107-56, Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of
2001, as amended from time to time, and the rules and regulations promulgated thereunder from time
to time in effect.

     “Wholly-Owned Subsidiary” means, at any time, any Subsidiary one hundred percent of all of the
equity interests (except directors’ qualifying shares) and voting interests of which are owned by
any one or more of the Company and the Company’s other Wholly-Owned Subsidiaries at such time.

-9-Exhibit 10.1

Exhibit 10.1

Execution Copy

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (the “Agreement”) is dated as of December 29, 2009, by and
among Osteologix, Inc., a Delaware corporation (the “Company”), and the purchasers named on the
signature page hereto (each a “Purchaser” and collectively, the “Purchasers”).

In consideration of the mutual covenants contained in this Agreement, and for other good and
valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and
each of the Purchasers agree as follows:

1. Purchase and Sale. On the Closing Date, in accordance with and subject to the terms
and conditions described in this Agreement relating to the offering (the “Offering”) by the Company
of shares (the “Shares”) of Company common stock, $0.0001 par value per share (the “Common Stock”),
for an aggregate purchase price equal to $1,000,000 (the “Aggregate Subscription Amount”), the
Company agrees to sell to each of the Purchasers, and each of the Purchasers agrees to purchase
from the Company, the number of Shares equal to (a) the Individual Subscription Amount set forth
next to such Purchaser’s name on Exhibit A hereto divided by (b) the Per-Share Purchase
Price (the number of Shares to be sold to each Purchaser shall be rounded down to the nearest whole
number).

Capitalized terms used but not otherwise defined herein shall have the respective meanings set
forth in Section 7 hereof or elsewhere herein.

2. Closing, Deliverables and Escrow.

(a) Closing. On the Closing Date, each Purchaser shall purchase from the Company, and
the Company shall issue and sell to each Purchaser, the number of Shares set forth next to such
Purchaser’s name on Exhibit A hereto, and such Purchaser shall pay to the Company in
consideration for the such Shares, the aggregate purchase price (equal to $0.5019 per Share) set
forth next to such Purchaser’s name on Exhibit A hereto (such amount shall be referred to
herein as such Purchaser’s “Subscription Amount”). On the Closing Date, the Closing shall occur at
the offices of Morrison & Foerster LLP, 755 Page Mill Road, Palo Alto, California 94304, or such
other time and location as the parties shall mutually agree.

(b) Deliveries.

(1) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to
each of the Purchasers the following:

(i) this Agreement and the Registration Rights Agreement duly executed by the Company;

(ii) a certificate evidencing the Shares registered in the name of each of the Purchasers; and

 

 

 

(iii) the Opinion of Company counsel substantially in the form of Exhibit B, attached
hereto.

(2) On or prior to the Closing Date, each of the Purchasers shall deliver or cause to be
delivered to the Company the following:

(i) this Agreement and, the Registration Rights Agreement duly executed by such Purchaser;

(ii) such Purchaser’s Subscription Amount by wire transfer of immediately available funds to
an account designated in writing by the Company;

(iii) the Investor Certification in the form of Appendix I attached hereto, completed
by the Purchaser; and

(iv) the Stock Certificate Questionnaire and Registration Statement Questionnaire in the form
of Appendix II attached hereto, completed by the Purchaser.

(c) Closing Conditions.

(1) The obligations of the Company hereunder in connection with the Closing are subject to the
following conditions being met:

(i) the accuracy in all material respects on the Closing Date of the representations and
warranties of each of the Purchasers contained herein;

(ii) all obligations, covenants and agreements of each of the Purchasers required to be
performed at or prior to the Closing Date shall have been performed;

(iii) the delivery by the each of the Purchasers of the items set forth in Section 2(b)(2) of
this Agreement; and

(iv) the delivery by each of the Purchasers of a certificate, executed by an authorized
officer of such Purchaser dated as of the Closing Date, certifying on behalf of such Purchaser that
such Purchaser has satisfied the conditions specified in Sections 2(c)(1)(i) and 2(c)(1)(ii).

(2) The obligations of each of the Purchasers in connection with the Closing are subject to
the following conditions being met:

(i) the accuracy in all material respects on the Closing Date of the representations and
warranties of the Company contained herein;

(ii) all obligations, covenants and agreements of the Company required to be performed at or
prior to the Closing Date shall have been performed;

(iii) the delivery by the Company of the items set forth in Section 2(b)(1) of this Agreement;

 

2

 

(iv) there shall have been no Material Adverse Effect with respect to the Company since the
date hereof; and

(v) the delivery by the Company of a certificate, executed by the President of the Company
dated as of the Closing Date, certifying on behalf of the Company that the Company has satisfied
the conditions specified in Sections 2(c)(2)(i), (ii) and (iv).

3. Acceptance of Subscription. The Company shall have no obligation hereunder until
the Company shall execute and deliver to each of the Purchasers an executed copy of this Agreement.
If this subscription is rejected or the Offering is terminated, in each case, prior to execution
and delivery of this Agreement by the Company, this Agreement and all other documents executed by
each of the Purchasers shall thereafter be of no further force or effect.

4. Purchaser Representations and Warranties. Each of the Purchasers hereby severally,
and not jointly with any other Purchaser, represents, warrants, acknowledges and agrees as of the
date hereof and as of the Closing Date to the Company as follows:

(a) The Shares are not registered under the Securities Act of 1933, as amended (the
“Securities Act”), or any state securities laws and, except as set forth in the Registration Rights
Agreement, the Company has no present or future obligation to register the Shares under the
Securities Act or any state securities laws. Such Purchaser understands that the offering and sale
of the Shares is intended to be exempt from registration under the Securities Act, by virtue of
Section 4(2) thereof and the provisions of Regulation D promulgated thereunder, or not subject to
such requirement, by virtue of Regulation S promulgated under the Securities Act, based, in part,
upon the representations, warranties and agreements of such Purchaser contained in this Agreement.

(b) Such Purchaser has had access to the SEC Reports and has received all other documents
requested by such Purchaser. Such Purchaser has carefully reviewed the SEC Reports and all such
other documents and understands the information contained therein.

(c) All documents, records and books pertaining to the investment in the Shares have been made
available for inspection by such Purchaser and its representatives. Such Purchaser hereby
acknowledges that all such information is confidential and such Purchaser shall not disclose any
such confidential information to any third party other than as may be required by law.

(d) Such Purchaser has had a reasonable opportunity to ask questions of and receive answers
from a person or persons acting on behalf of the Company concerning the offering of the Shares and
the business, financial condition, results of operations and prospects of the Company, and all such
questions have been answered to the full satisfaction of such Purchaser. Neither such inquiries
nor any other investigation conducted by or on behalf of such Purchaser or its representatives or
counsel shall modify, amend or affect such Purchaser’s right to rely on the truth, accuracy and
completeness of the Company’s representations and warranties contained in this Agreement.

 

3

 

(e) In evaluating the suitability of an investment in the Company, such Purchaser has not
relied upon any representation or other information (oral or written) other than as stated in this
Agreement.

(f) Such Purchaser is unaware of, is in no way relying on, and did not become aware of the
Offering through or as a result of, any form of general solicitation or general advertising as
those terms are used in Regulation D under the Securities Act, including, without limitation, any
article, notice, advertisement or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio, in connection with the Offering and is not
subscribing for Shares and did not become aware of the Offering through or as a result of any
seminar or meeting to which such Purchaser was invited by, or any solicitation of a subscription
by, a person not previously known to such Purchaser.

(g) Such Purchaser has taken no action which would give rise to any claim by any person for
brokerage commissions, finders’ fees or the like relating to this Agreement or the transactions
contemplated hereby.

(h) Such Purchaser has such knowledge and experience in financial, tax and business matters,
and, in particular, investments in securities similar to the Shares so as to enable such Purchaser
to utilize the information made available to it in connection with the Offering to evaluate the
merits and risks of an investment in the Shares and the Company and to make an informed investment
decision with respect thereto.

(i) Such Purchaser is not relying on the Company or any of its employees, officers or agents
with respect to the legal, tax, economic and related considerations as to an investment in the
Shares and such Purchaser has relied on the advice of, or has consulted with, only his own
advisors.

(j) Such Purchaser is acquiring the Shares solely for such Purchaser’s own account for
investment and not with a view to resale, assignment or distribution thereof, in whole or in part
in violation of the Securities Act or any applicable state securities laws. Such Purchaser has no
agreement or arrangement, formal or informal, with any person to sell or transfer all or any part
of the Shares in violation of the Securities Act or any state securities laws and such Purchaser
has no plans to enter into any such agreement or arrangement. Such Purchaser will not engage in
hedging transactions with respect to the Shares unless in compliance with the registration
requirements of the Securities Act.

(k) Such Purchaser must bear the substantial economic risks of the investment in the Shares
indefinitely because none of the Shares may be sold, hypothecated or otherwise disposed of unless
subsequently registered under the Securities Act and applicable state securities laws or an
exemption from such registration is available. Subject to the terms hereunder, legends shall be
placed on the Shares to the effect that they have not been registered under the Securities Act or
applicable state securities laws and appropriate notations thereof will be made in the Company’s
stock books.

 

4

 

(l) Such Purchaser has adequate means of providing for its current financial needs and
foreseeable contingencies and has no need for liquidity of the investment in the Shares for an
indefinite period of time.

(m) Such Purchaser (i) meets the requirements of the suitability standards for an “accredited
investor” because such Purchaser is a corporation, partnership, limited liability company, limited
liability partnership, other entity or similar business trust, not formed for the specific purpose
of acquiring the Shares, with total assets excess of $5,000,000 or (ii) is a “non-US Person” that
is a “qualified investor” as defined in the European Union Prospective Directive. Such Purchaser
further represents and warrants that it will notify and supply corrective information to the
Company immediately upon the occurrence of any change occurring prior to the Company’s issuance of
the Shares that renders the representation made in the immediately preceding sentence. Such
Purchaser represents to the Company that any information which the undersigned has heretofore
furnished under this Section 4(m) or furnishes to the Company pursuant to this Section 4(m) is
complete and accurate and may be relied upon by the Company in determining the availability of an
exemption from registration under Federal and state securities laws in connection with the
Offering.

(n) Such Purchaser represents that it is a corporation, partnership, limited liability company
or partnership, association, joint stock company, trust, unincorporated organization or other
entity, and that (A) such Purchaser was not formed for the specific purpose of acquiring the
Shares, (B) such Purchaser is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, (C) the consummation of the transactions contemplated
hereby is authorized by, and will not result in a violation of law or the charter or other
organizational documents of such Purchaser, (D) such Purchaser has full power and authority to
execute and deliver this Agreement and all other related agreements or certificates and to carry
out the provisions hereof and thereof and to purchase and hold the Shares, (E) the execution and
delivery of this Agreement has been duly authorized by all necessary action of such Purchaser, (F)
this Agreement has been duly executed and delivered on behalf of such Purchaser and constitutes a
legal, valid and binding obligation of such Purchaser, enforceable against such Purchaser in
accordance with its terms subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and
general principles of equity and (G) the execution and delivery of this Agreement by such Purchaser
will not violate or be in conflict with any order, judgment, injunction, agreement or controlling
document to which such Purchaser is a party or by which such Purchaser is bound.

(o) Such Purchaser is able to bear the economic risk of an investment in the Shares and, at
the present time, has a sufficient net worth to sustain a complete loss of such investment in the
Company in the event such a loss should occur. Such Purchaser’s overall commitment to investments
which are not readily marketable is not excessive in view of its net worth and financial
circumstances and the purchase of the Shares will not cause such commitment to become excessive.

 

5

 

(p) THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING OFFERED AND SOLD IN
RELIANCE ON EXEMPTIONS FROM, OR IN TRANSACTIONS NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF SAID ACT AND SUCH LAWS. THE SECURITIES OFFERED HEREBY MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE SECURITIES ACT OF 1933 AS AMENDED AND SUCH LAWS PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE
FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL.

(q) Such Purchaser should check the Office of Foreign Assets Control (“OFAC”) website at
http://www.treas.gov/ofac before making the following representations. Such Purchaser represents
that the amounts invested by it in the Company in the Offering were not and are not directly or
indirectly derived from activities that contravene federal, state or international laws and
regulations, including anti-money laundering laws and regulations. Federal regulations and
Executive Orders administered by OFAC prohibit, among other things, the engagement in transactions
with, and the provision of services to, certain foreign countries, territories, entities and
individuals. The lists of OFAC prohibited countries, territories, persons and entities can be
found on the OFAC website at http://www.treas.gov/ofac. In addition, the programs administered by
OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or entities in certain
countries regardless of whether such individuals or entities appear on the OFAC lists.

(r) To such Purchaser’s knowledge, none of: (1) such Purchaser, (2) any person controlling or
controlled by such Purchaser, (3) if such Purchaser is a privately-held entity, any person having a
beneficial interest in such Purchaser or (4) any person for whom such Purchaser is acting as agent
or nominee in connection with this investment is a country, territory, individual or entity named
on an OFAC list, or a person or entity prohibited under the OFAC Programs. Please be advised that
the Company may not accept any amounts from a prospective investor if such prospective investor
cannot make the representation set forth in the preceding paragraph. Such Purchaser agrees to
promptly notify the Company should such Purchaser become aware of any change in the information set
forth in Sections 4(r) — (t) of these representations. Such Purchaser understands and
acknowledges that, by law, the Company may be obligated to “freeze the account” of such Purchaser,
either by prohibiting additional subscriptions from such Purchaser, declining any redemption
requests and/or segregating the assets in the account in compliance with governmental regulations.
Such Purchaser further acknowledges that the Company may, by written notice to such Purchaser,
suspend the redemption rights, if any, of such Purchaser if the Company reasonably deems it
necessary to do so to comply with anti-money laundering regulations applicable to the Company or
any of the Company’s other service providers. These individuals include specially designated
nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions
and embargo programs.

 

	 	 	 
	1	 	These individuals include specially designated
nationals, specially designated narcotics traffickers and other parties subject
to OFAC sanctions and embargo programs.

 

6

 

(s) To such Purchaser’s knowledge, none of: (1) such Purchaser, (2) any person controlling or
controlled by such Purchaser, (3) if such Purchaser is a privately-held entity, any person having a
beneficial interest in such Purchaser or (4) any person for whom such Purchaser is acting as agent
or nominee in connection with this investment is a senior foreign political figure2, or
any immediate family3 member or close associate4 of a senior foreign
political figure, as such terms are defined in the footnotes below.

(t) If such Purchaser is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or
if such Purchaser receives deposits from, makes payments on behalf of, or handles other financial
transactions related to a Foreign Bank, such Purchaser represents and warrants to the Company that:
(1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in
which the Foreign Bank is authorized to conduct banking activities, (2) the Foreign Bank maintains
operating records related to its banking activities, (3) the Foreign Bank is subject to inspection
by the banking authority that licensed the Foreign Bank to conduct banking activities, and (4) the
Foreign Bank does not provide banking services to any other Foreign Bank that does not have a
physical presence in any country and that is not a regulated affiliate.

(u) Prior to the date hereof, the Purchaser has not taken, and prior to the public
announcement of the transaction after the Closing the Purchaser shall not take, any action that has
caused or will cause the Purchaser to have, directly or indirectly, sold or agreed to sell any
shares of Common Stock, effected any short sale, whether or not against the box, established any
“put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act with respect to the
Common Stock, granted any other right (including, without limitation, any put or call option) with
respect to the Common Stock or with respect to any security that includes, relates to or derived
any significant part of its value from the Common Stock.

5. Company Representations and Warranties. The Company hereby represents, warrants,
acknowledges and agrees as of the date hereof and as of the Closing Date to such Purchaser as
follows:

(a) Subsidiaries. Except as disclosed in the SEC Reports, the Company has no direct
or indirect subsidiaries.

(b) Organization and Qualification. The Company is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the State of Delaware,
with the requisite power and authority to own and use its properties and assets
and to carry on its business as currently conducted. The Company is not in violation of any
of the provisions of its Certificate of Incorporation or By-Laws.

 

	 	 	 
	2	 	A “senior foreign political figure” is defined as a
senior official in the executive, legislative, administrative, military or
judicial branches of a foreign government (whether elected or not), a senior
official of a major foreign political party, or a senior executive of a foreign
government-owned corporation. In addition, a “senior foreign political figure”
includes any corporation, business or other entity that has been formed by, or
for the benefit of, a senior foreign political figure.
	 
	3	 	“Immediate family” of a senior foreign political figure
typically includes the figure’s parents, siblings, spouse, children and
in-laws.
	 
	4	 	A “close associate” of a senior foreign political
figure is a person who is widely and publicly known to maintain an unusually
close relationship with the senior foreign political figure, and includes a
person who is in a position to conduct substantial domestic and international
financial transactions on behalf of the senior foreign political figure.

 

7

 

(c) Authorization; Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the Offering. The execution and delivery of this
Agreement and the Registration Rights Agreement by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all necessary action on
the part of the Company and no further consent or action is required by the Company, other than the
Required Approvals. The Charter Amendment has been duly authorized by all necessary action on the
part of the Company and no further consent or action is required by the Company other than
compliance with the requirements of Section 14 of the Exchange Act. This Agreement and the
Registration Rights Agreement, when executed and delivered in accordance with the terms hereof,
will each constitute the valid and binding obligation of the Company enforceable against the
Company in accordance with their respective terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally and general principles of equity.

(d) No Conflicts. The execution, delivery and performance of this Agreement and the
Registration Rights Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any
provision of the Company’s Certificate of Incorporation or By-Laws, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or cancellation (with
or without notice or lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is
a party or by which any material property or asset of the Company is bound or affected, or (iii)
subject to obtaining the Required Approvals, result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or governmental authority as
currently in effect to which the Company is subject (including federal and state securities laws
and regulations), or by which any material property or asset of the Company is bound or affected;
except in the case of each of clauses (ii) and (iii), such as could not, individually or in the
aggregate (a) adversely affect the legality, validity or enforceability of the Offering, (b) have
or result in a material adverse effect on the results of operations, assets, prospects, business or
condition (financial or otherwise) of the Company, taken as a whole, or (c) adversely impair the
Company’s ability to perform fully on a timely basis its obligations under this Agreement (any of
(a), (b) or (c), a “Material Adverse Effect”); provided, however, that,
notwithstanding the foregoing, the parties agree that no change in the market price of the
Company’s Common Stock shall be deemed to be a Material Adverse Effect for purposes of this
Agreement.

(e) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any filing or registration
with, any court or other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of this Agreement and the
Registration Rights Agreement other than (i) the filing with the SEC of the registration statement
required to be filed by the Company pursuant to the Registration Rights
Agreement, (ii) the filing with the SEC of a Form D pursuant to Regulation D under the
Securities Act and (iii) applicable Blue Sky filings (collectively, the “Required Approvals”).

 

8

 

(f) Issuance of the Shares. The Shares are duly authorized and, when issued and paid
for in accordance with this Agreement, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 4, no registration under the Securities Act is
required for the offer and sale of the Shares by the Company to each of the Purchasers as
contemplated hereby. No shareholder approval is required for the Company to fulfill its
obligations pursuant to this Agreement and the Registration Rights Agreement. As of the Closing,
the Company will have reserved from its duly authorized capital stock the maximum number of shares
of Common Stock issuable pursuant to this Agreement.

(g) Capitalization. The number of shares of Common Stock and type of all authorized,
issued and outstanding capital stock of the Company is as set forth in the SEC Reports. No Person
has any right of first refusal, preemptive right, right of participation, or any similar right to
participate in the Offering. Except as a result of the purchase and sale of the Shares which may
be issued in connection with this Offering and, except as described in the SEC Reports, there are
no outstanding options, warrants, script rights to subscribe to, calls or commitments of any
character whatsoever relating to shares of Common Stock, or, rights or obligations convertible into
or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of
Common Stock, or contracts, commitments, understandings or arrangements by which the Company is or
may become bound to issue additional shares of Common Stock or rights convertible or exchangeable
into shares of Common Stock. The issuance and sale of the Shares will not obligate the Company to
issue shares of Common Stock to any Person (other than the Purchasers) and will not result in a
right of any holder of Company equity to adjust the exercise, conversion, exchange or reset price
under any outstanding securities. All of the outstanding shares of capital stock of the Company
issued on and after May 24, 2006 are validly issued, fully paid and non-assessable, have been
issued in compliance with federal and state securities laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe for or purchase
securities.

(h) SEC Reports; Financial Statements. The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by it under the Securities Act and the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section
13(a) or 15(d) thereof, since January 1, 2007 (the foregoing materials, including the exhibits
thereto and documents incorporated by reference therein, being collectively referred to herein as
the “SEC Reports”) on a timely basis. As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the Exchange Act and the
rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The financial statements of the Company
included in the SEC Reports have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as
may be otherwise specified in such financial statements or the notes thereto, and fairly present in
all material respects the
financial position of the Company as of and for the dates thereof and the results of
operations and cash flows for the periods then ended.

 

9

 

(i) Material Changes. Except for the proposed Offering or as otherwise described in
the SEC Reports, since the date of the latest financial statements included in the SEC Reports:
(i) there has been no event, occurrence or development that has had or could reasonably be expected
to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice, and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in
filings made with the SEC, (iii) the Company has not altered its method of accounting or the
identity of its auditors, (iv) the Company has not declared or made any dividend or distribution of
cash or other property to its stockholders except in the ordinary course of business consistent
with prior practice, or purchased, redeemed or made any agreements to purchase or redeem any shares
of its capital stock except consistent with prior practice or pursuant to existing Company stock
option or similar plans, and (v) the Company has not issued any equity shares to any officer,
director or affiliate, except pursuant to existing Company stock option, director compensation or
similar plans.

(j) Litigation. Except as disclosed in the SEC Reports, there is no action, suit,
inquiry, notice of violation, Proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company or its properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority (federal, state, county,
local or foreign) (collectively, an “Action”) which: (i) adversely affects or challenges the
legality, validity or enforceability of this Agreement and the Registration Rights Agreement or the
Offering or (ii) could, if there were an unfavorable decision, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect. The Company is not nor has
it ever been the subject of any Action involving a claim of violation of or liability under federal
or state securities laws. There has not been, and to the knowledge of the Company, there is not
pending or contemplated, any investigation by the SEC involving the Company. The SEC has not
issued any stop order or other order suspending the effectiveness of any registration statement
filed by the Company under the Exchange Act or the Securities Act.

(k) Compliance. Except as disclosed in the SEC Reports, the Company: (i) is not in
default under or in violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company under), nor has the
Company received notice of a claim that it is in default under or that it is in violation of, any
material indenture, loan or credit agreement or any other material agreement or instrument to which
it is a party or by which it or any of its properties is bound (whether or not such default or
violation has been waived), which default or violation would have, or would reasonably be expected
to result in, a Material Adverse Effect, (ii) is not in violation of any order of any court,
arbitrator or governmental body, and (iii) is not and has not been in violation of any statute,
rule or regulation of any governmental authority, except in each case as, individually or in the
aggregate, would not have and would not reasonably be expected to result in, a Material Adverse
Effect.

 

10

 

(l) Regulatory Permits. Except as otherwise described in the SEC Reports, the Company
possesses or has applied for all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct its business as
described in the SEC Reports, except where the failure to possess such permits would not,
individually or in the aggregate, have a Material Adverse Effect (“Material Permits”), and the
Company has not received any notice of Proceedings relating to the revocation or modification of
any Material Permit.

(m) Title to Assets. The Company and its subsidiaries have title in fee simple to all
real property owned by them that is material to the business of the Company and its subsidiaries
and title in all personal property owned by them that is material to the business of the Company
and its subsidiaries, in each case free and clear of all Liens, except for Liens as do not
materially affect the value of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries and Liens for the payment
of federal, state or other taxes, and other statutory liens, the payment of which is neither
delinquent nor subject to penalties. Any real property and facilities held under lease by the
Company or its subsidiaries is held by them under valid leases of which the Company and its
subsidiaries are in compliance, except as would not have a Material Adverse Effect.

(n) Patents and Trademarks. The Company and its subsidiaries either own, or have
rights to use, all patents, patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, licenses and other similar rights that are necessary or material for use
in connection with their respective businesses as described in the SEC Reports and which the
failure to so own or have could reasonably be expected to result in a Material Adverse Effect
(collectively, the “Intellectual Property Rights”). The Company and its subsidiaries have not (i)
received a written notice that the Intellectual Property Rights owned or used by the Company or its
subsidiaries violates or infringes upon the rights of any Person, or (ii) received a written
invitation to license any intellectual property rights of any Person in order to avoid such a
violation or infringement. To the knowledge of the Company, there is no existing infringement of
any of the Intellectual Property Rights by any Person.

(o) Insurance. The Company and its subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks, including, without limitation, products
liability, and in such amounts as are prudent and customary in the businesses in which the Company
and its subsidiaries are engaged. Neither the Company nor any of its subsidiaries has any reason
to believe that it will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business on terms consistent with market for the Company’s and each of its
subsidiary’s respective lines of business.

(p) Lack of Publicity. None of the Company, its subsidiaries or any person acting on
its or their behalf have engaged or will engage in any form of general solicitation or general
advertising as those terms are used in Regulation D under the Securities Act in the United States
with respect to the Shares, including, without limitation, any article, notice, advertisement or
other communication published in any newspaper, magazine or similar media or broadcast over
television or radio, regarding the Offering, nor did any such person sponsor any seminar or meeting
to which potential investors were invited by, or any solicitation of a
subscription by, a person not previously known to such investor in connection with investments
in the Shares generally. None of the Company, its subsidiaries or any person acting on its or
their behalf have engaged or will engage in any form of directed selling efforts (as that term is
used in Regulation S under the Securities Act) with respect to the Shares.

 

11

 

(q) Certain Fees. No brokerage commissions, finder’s fees or the like are or will be
payable by the Company to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions contemplated by this
Agreement.

(r) Registration Rights. Other than pursuant to (i) the Registration Rights
Agreement, (ii) the Registration Rights Agreement dated March 27, 2008 by and among the Company and
the holders signatory thereto, (iii) the Registration Rights Agreement dated as of June 4, 2007 by
and among the Company and the holders signatory thereto and (iv) the Registration Rights Agreement
dated as of May 24, 2006 by and among the Company and the purchasers signatory thereto, and other
than the Purchasers, no Person has any right to cause the Company to effect the registration under
the Securities Act of any securities of the Company.

(s) Tax Status. Except for matters that would not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect, the Company and each of its
subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns
or have timely filed for valid extensions to the filing deadlines applicable to them with respect
to such taxes and has paid or accrued all taxes shown as due thereon, and the Company has no
knowledge of a tax deficiency which has been asserted or threatened against the Company or any of
its subsidiaries.

(t) Solvency. Based on the financial condition of the Company as of the Closing Date
after giving effect to the receipt by the Company of the proceeds from the sale of the Shares
hereunder, (i) the Company’s fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of the Company’s existing debts and other existing liabilities
(including known contingent liabilities) as they mature; (ii) the Company’s assets do not
constitute unreasonably small capital to carry on its business through March 31, 2010 as now
conducted and as proposed to be conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof; and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all of its assets, after
taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or
in respect of its existing debt when such amounts are required to be paid. The Company does not
intend to incur debts beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its debt). The Company has no
knowledge of any facts or circumstances which lead it to believe that it will file for
reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction
before March 31, 2010. The SEC Reports set forth as of the dates thereof all outstanding secured
and unsecured Indebtedness of the Company or any of its subsidiaries, or for which the Company or
any of its subsidiaries has commitments. For the purposes of this Agreement, “Indebtedness” shall
mean (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade
accounts payable incurred in the ordinary course of business), (b) all guaranties,

 

12

 

endorsements and other contingent obligations in respect of Indebtedness of others, whether or
not the same are or should be reflected in the Company’s balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business and (c) the present value of any lease payments in
excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither the
Company nor any of its subsidiaries is in default with respect to any Indebtedness.

(u) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly,
used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by
any person acting on its behalf of which the Company is aware) which is in violation of law, or
(iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

(v) Shareholders Rights Plan; Investment Company Act. No claim will be made or
enforced by the Company that any of the Purchasers is an “Acquiring Person” under any shareholders
rights plan or similar plan or arrangement in effect or hereafter adopted by the Company, or that
any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue
of receiving any Shares. The Company is not, and is not an Affiliate of, and immediately after
receipt of payment for the Shares, will not be or be an Affiliate of, an “investment company”
within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company
Act”).

(w) Disclosure. The disclosure provided to each of the Purchasers regarding the
Company, its business and the transactions contemplated hereby, furnished by or on behalf of the
Company, including the SEC Reports, does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading.

6. Covenants of the Purchasers and the Company.

(a) Transfer Restrictions.

(1) The Shares may only be disposed of in compliance with state and federal securities laws.
In connection with any transfer of such securities (or hedging activities involving such
securities) other than pursuant to an effective registration statement or Rule 144, to the Company
or to an affiliate of any Purchaser or in connection with a pledge as contemplated below, the
Company may require the transferor thereof to provide to the Company an opinion of counsel selected
by the transferor and reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred securities under the Securities Act. As a condition of transfer,
any such transferee shall agree in writing to be bound by the terms of this Agreement and shall
have the rights of a Purchaser under this Agreement.

 

13

 

(2) Each of the Purchasers agrees to the imprinting, so long as is required by this Section
6(a), of a legend on any of the Shares in the following form:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. ADDITIONALLY, HEDGING TRANSACTIONS IN RESPECT OF THESE SECURITIES
MUST BE EFFECTED IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, IF APPLICABLE. THESE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER
OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR”
AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY
SUCH SECURITIES.

(3) Certificates evidencing Shares shall not contain any legend (including the legend set
forth in Section 6(a)(2)): (i) following the resale of the Shares pursuant to an effective
registration statement under the Securities Act covering the resale of such Shares, or (ii)
following any resale of such Shares pursuant to Rule 144, or (iii) if such Shares are eligible for
resale under Rule 144 without volume limitations, or (iv) if such legend is not required under
applicable requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the Staff of the SEC). The Company agrees that following the time when a
legend is no longer required under this Section 6(a)(3), it will, no later than five (5) trading
days following the delivery by a Purchaser to the Company or the Company’s transfer agent of a
certificate representing Shares issued with a restrictive legend (such date, the “Legend Removal
Date”), deliver or cause to be delivered to such Purchaser or such Purchaser’s transferee, as
applicable, a certificate representing such Shares that is free from all restrictive and other
legends. The Company may not make any notation on its records or give instructions to any transfer
agent of the Company that enlarge the restrictions on transfer set forth in this Section.
Notwithstanding anything to the contrary contained herein, the Company shall not be required to
effect a removal of a restrictive legend to the extent such legend is required under applicable
requirements of the Securities Act, including any rule of the SEC promulgated thereunder, and
judicial interpretations thereof.

 

14

 

(4) Each of the Purchasers agrees that the removal of the restrictive legend from certificates
representing Shares as set forth in this Section 6(a)(3)(i) or (ii) is predicated upon the
Company’s reliance that such Purchaser will sell any Shares pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery requirements, or
an exemption therefrom.

(b) Furnishing of Information. As long as any Purchaser owns any Shares, the Company
covenants to timely file all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. If the Company is not required to file reports pursuant to the
Exchange Act, it will prepare and furnish to such Purchaser and make publicly available in
accordance with Rule 144(c) such information as is required for such Purchaser to sell the Shares
under Rule 144. The Company further covenants that it will take such further action as the
Purchasers may reasonably request, all to the extent required from time to time to enable the
Purchasers to sell such Shares without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144.

(c) Integration. The Company shall not sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act)
that would be integrated with the offer or sale of the Shares in a manner that would require the
registration under the Securities Act of the sale of the Shares to the Purchasers. The Company
shall conduct its business in a manner so that it will not become subject to registration under the
Investment Company Act.

(d) Disclosure; Publicity. No Purchaser shall issue any press release or otherwise
make any such public statement with respect to the transactions contemplated hereby without the
prior consent of the Company, except if such disclosure is required by law, in which case such
Purchaser shall promptly provide the Company with prior written notice of such public statement or
communication. The Company shall not publicly disclose the name of any Purchaser, or include the
name of such Purchaser in any filing with the SEC or any regulatory agency or Trading Market,
without the prior written consent of such Purchaser, except (i) as required by federal securities
law in connection with the registration statement contemplated by the Registration Rights Agreement
and (ii) to the extent such disclosure is required by law or Trading Market regulations, in which
case the Company shall provide such Purchaser with prior notice of such disclosure permitted under
sub clause (i) or (ii).

(e) Indemnification of Purchasers. Subject to the provisions of this Section 6(e),
the Company will indemnify and hold each Purchaser and its respective directors, officers,
shareholders, partners, members, employees and agents (each, a “Purchaser Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees
and costs of investigation that any such Purchaser Party may suffer or incur as a result of or
relating to (i) any breach of any of the representations, warranties, covenants or agreements made
by the Company in this Agreement or (ii) any action instituted against any Purchasers, Purchaser
Party or their respective Affiliates, by any stockholder of the Company or other person who is not
an Affiliate of any such Purchaser, with respect to any of the transactions contemplated by this
Agreement (unless such action is based upon a breach of such Purchaser’s representation, warranties
or covenants under this Agreement or any agreements or

 

15

 

understandings such Purchaser may have with any such stockholder or any violations by such
Purchaser of state or federal securities laws). If any action shall be brought against any
Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right
to assume the defense thereof with counsel of its own choosing. Any Purchaser Party shall have the
right to employ separate counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the
extent that (A) the employment thereof has been specifically authorized by the Company in writing;
(B) the Company has failed after a reasonable period of time to assume such defense and to employ
counsel reasonably acceptable to such Purchaser Party or (C) in such action there is, in the
reasonable opinion of such separate counsel, a material conflict on any material issue between the
position of the Company and the position of such Purchaser Party. The Company will not be liable
to any Purchaser Party under this Agreement (I) for any settlement by a Purchaser Party effected
without the Company’s prior written consent, which shall not be unreasonably withheld, conditioned
or delayed; or (II) to the extent, but only to the extent that a loss, claim, damage or liability
is attributable to any Purchaser Party’s breach of any of the representations, warranties,
covenants or agreements made by such Purchaser in this Agreement.

(f) Indemnification of Company. Subject to the provisions of this Section 6(f), each
Purchaser, will indemnify and hold the Company and its directors, officers, shareholders, partners,
members, employees and agents (each, a “Company Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Company Party may suffer or incur as a result of or relating to (i) any
breach of any of the representations, warranties, covenants or agreements made by such Purchaser in
this Agreement or (ii) any action instituted against the Company, or any Company Party or their
respective Affiliates, by any stockholder of the Company or other person, with respect to any of
the transactions contemplated by this Agreement if such action is based upon a breach of the
representation, warranties or covenants of such Purchaser under this Agreement or any violation by
such Purchaser of state or federal securities laws. If any action shall be brought against any
Company Party in respect of which indemnity may be sought pursuant to this Agreement, such Company
Party shall promptly notify the applicable Purchaser in writing, and such Purchaser shall have the
right to assume the defense thereof with counsel of its own choosing. Any Company Party shall have
the right to employ separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Company Party except to the
extent that (A) the employment thereof has been specifically authorized by such Purchaser in
writing; (B) such Purchaser has failed after a reasonable period of time to assume such defense and
to employ counsel reasonably acceptable to such Company Party or (C) in such action there is, in
the reasonable opinion of such separate counsel, a material conflict on any material issue between
the position of such Purchaser and the position of such Company Party. No Purchaser will be liable
to any Company Party under this Agreement (I) for any settlement by a Company Party effected
without such Purchaser’s prior written consent, which shall not be unreasonably withheld,
conditioned or delayed; or (II) to the extent, but only to the extent that a loss, claim, damage or
liability is attributable to any Company Party’s breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement.

 

16

 

(g) Amendment to Charter. The Company shall use commercially reasonable efforts to
cause its Certificate of Incorporation, as amended, to be further amended within ninety (90) days
following the Closing, to (a) reduce the number of authorized shares of Preferred Stock to zero,
(b) reduce the number of authorized shares of Common Stock to an amount equal to 110% of the sum of
(i) the number of shares of Common Stock issued and outstanding immediately following the
consummation of the Offering and (ii) the number of shares of Common Stock reserved for issuance
under the Company’s 2006 Stock Option Plan and for issuance upon exercise of all other stock
options or warrants outstanding immediately following the consummation of the Offering (the
“Charter Amendment”). In connection with such Charter Amendment, Nordic Biotech Opportunity Fund
K/S (“Nordic”) shall execute a written stockholder consent (“Nordic Consent”) to such Charter
Amendment, in form and substance reasonably satisfactory to the Company, within fifteen (15) days
following the Closing. Provided that the Company has received the Nordic Consent, the Company
shall use commercially reasonable efforts to file or cause to be filed an Information Statement
with respect to the Charter Amendment and the Nordic Consent on Schedule 14C with the SEC no later
than the later of (i) thirty (30) days following the Closing or (ii) fifteen (15) days following
the Company’s receipt of the Nordic Consent. Until the Charter Amendment becomes effective, the
Company shall not take any action and the Board of Directors shall not approve any action that
would violate or be inconsistent with the Charter Amendment.

(h) Board of Directors. The Company and Nordic agree that for so long as the Nordic
and its Affiliates are the beneficial owners (as determined pursuant to Rule 13d-3 under the
Exchange Act) of at least twenty percent (20%) of the outstanding shares of Common Stock the Board
of Directors of the Company shall consist of no more than seven (7) persons and Nordic shall have
the right to cause the appointment up to three (3) members of the Board of Directors of the Company
designated by Nordic in writing to the Company (each a “Nordic Designee”). As promptly as
practicable following receipt of written notice from Nordic designating one or more Nordic
Designees, and in any event within three (3) business days after receipt of any such notice, the
Company shall take all action necessary (including, without limitation, the calling of a special
meeting of the Board of Directors) to (i) increase, as needed, the size of the Board of Directors
to up to seven (7) persons, and (ii) approve the appointment of such Nordic Designee(s) to the
Board of Directors.

7. Definitions. In addition to the terms defined elsewhere in this Agreement, the
following terms have the meanings indicated in this Section 7:

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

(b) “Business Day” means any day except Saturday, Sunday and any day which shall be a Federal
holiday or a day on which banking institutions in the State of New York are authorized or required
by law or other governmental action to close.

 

17

 

(c) “Closing Date” means January 7, 2009, or such later Trading Day when this Agreement and
the Registration Rights Agreement have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Purchasers’ respective obligations to pay their
respective Subscription Amounts have been satisfied or waived and (ii) the Company’s obligations to
deliver the Shares have been satisfied or waived.

(d) “Individual Subscription Amount” means, with respect to a particular Purchaser, the
aggregate purchase price of Shares to be purchased by such Purchaser pursuant to this Agreement.

(e) “Liens” means a lien, charge, security interest, encumbrance, right of first refusal,
preemptive right or other restriction.

(f) “Per-Share Purchase Price” means the Ten Day VWAP as of the Closing Date.

(g) “Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind.

(h) “Proceeding” means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition).

(i) “Registration Rights Agreement” shall mean that certain Registration Rights Agreement
dated as of December 29, 2009, by and among the Company and certain of the Purchasers who are
parties thereto.

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

(k) “Subscription Amount” shall mean, with respect to each Purchaser, the amount set forth
next to such Purchaser’s name on Exhibit A hereto.

(l) “Ten Day VWAP” means, as of a particular date, the volume weighted average closing price
of the Company’s Common Stock on the Trading Market for the ten trading days immediately prior to,
but excluding, such date.

(m) “Trading Market” means the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the American Stock Exchange, the New York
Stock Exchange, the NASDAQ Global Market, the NASDAQ Global Select Market, the NASDAQ Capital
Market or the OTC Bulletin Board.

8. Successors and Assigns. Each of the Purchasers hereby acknowledges and agrees that
this Agreement shall be binding upon and inure to the benefit of the parties and their heirs,
executors, administrators, successors, legal representatives and permitted assigns.

9. Modification. This Agreement shall not be modified or waived except by an
instrument in writing signed by the party against whom any such modification or waiver is sought.

 

18

 

10. Notices. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, sent
by nationwide overnight courier or delivered against receipt to the party to whom it is to be given
(a) if to Company, at the address set forth above, or (b) if to any of the Purchasers, at the
respective addresses set forth on the signature page hereof (or, in either case, to such other
address as the party shall have furnished in writing in accordance with the provisions of this
Section). Any notice or other communication given by certified mail shall be deemed given at the
time that it is signed for by the recipient except for a notice changing a party’s address which
shall be deemed given at the time of receipt thereof. Any notice or other communication given by
nationwide overnight courier shall be deemed given the next business day following being deposited
with such courier.

11. Assignability. Except as otherwise provided in this Agreement, this Agreement and
the rights, interests and obligations hereunder are not transferable or assignable by any
Purchaser. This Agreement and the rights, interests and obligations hereunder are not transferable
or assignable by the Company.

12. Applicable Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the principles of conflicts of
law thereof, except to the extent that the application of the General Corporation Law of the State
of Delaware is mandatorily applicable. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan
for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of this
Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action or
Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that
such suit, action or Proceeding is improper or inconvenient venue for such Proceeding. Each party
hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. The parties hereby waive to the
fullest extent permitted by applicable law, all rights to a trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby. If either
party shall commence an action or Proceeding to enforce any provisions of this Agreement, then the
prevailing party in such action or Proceeding shall be reimbursed by the other party for its
attorneys’ fees and other costs and expenses incurred with the investigation, preparation and
prosecution of such action or Proceeding.

13. Use of Pronouns. All pronouns and any variations thereof used herein shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the
person or persons referred to may require.

 

19

 

14. Miscellaneous.

(a) This Agreement shall terminate if the Closing has not been consummated on or before
January 22, 2010.

(b) This Agreement and its exhibits and schedules constitutes the entire agreement between the
Purchasers and the Company with respect to the subject matter hereof and supersedes all prior oral
or written agreements and understandings, if any, relating to the subject matter hereof. The terms
and provisions of this Agreement may be waived, or consent for the departure therefrom granted,
only by a written document executed by the party entitled to the benefits of such terms or
provisions.

(c) The respective covenants, agreements, representations and warranties made in this
Agreement by each of the Purchasers and the Company shall survive the execution and delivery hereof
and delivery of the Shares.

(d) At the Closing and any time after the Closing promptly after Nordic’s request therefore,
the Company shall reimburse Nordic up to $25,000 for its actual, out-of-pocket legal fees and
expenses related to the transactions contemplated by this Agreement. Except as expressly set forth
in this Agreement to the contrary, each of the parties hereto shall pay its own fees and expenses
(including the fees of any attorneys, accountants, appraisers or others engaged by such party) in
connection with this Agreement and the transactions contemplated hereby whether or not the
transactions contemplated hereby are consummated. The Company shall pay all transfer agent fees,
stamp taxes and other taxes and duties levied in connection with the delivery of the Shares.

(e) This Agreement may be executed in one or more counterparts, each of which shall be deemed
an original, but all of which shall together constitute one and the same instrument.

(f) Each provision of this Agreement shall be considered separable and, if for any reason any
provision or provisions hereof are determined to be invalid or contrary to applicable law, such
invalidity or illegality shall not impair the operation of or affect the remaining portions of this
Agreement.

(g) Section titles are for descriptive purposes only and shall not control or alter the
meaning of this Agreement as set forth in the text.

 

20

 

(h) The Company acknowledges that the obligations of each Purchaser under this Agreement are
several and not joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other Purchaser under this
Agreement. The decision of each Purchaser to enter into this Agreement has been made by such
Purchaser independently of any other Purchaser. The Company further acknowledges that nothing
contained in this Agreement, and no action taken by any Purchaser pursuant hereto, shall be deemed
to constitute the Purchasers as a partnership, an association, a joint venture of any other kind of
entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated hereby. Each Purchaser shall be
entitled to independently protect and enforce its rights, including without limitation, the rights
arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined
as an additional party in any proceeding for such purpose. Each Purchaser has been represented by
its own separate legal counsel in their review and negotiation of this Agreement and with respect
to the transactions contemplated hereby. The Company has elected to provide all Purchasers with
the same terms and Agreement for the convenience of the Company and not because it was required or
requested to do so by the Purchasers. The Company acknowledges that such procedure with respect to
this Agreement in no way creates a presumption that the Purchasers are in any way acting in concert
or as a group with respect to this Agreement or the transactions contemplated hereby or thereby.

[Remainder of page left intentionally blank.]

 

21

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be
duly executed by their respective authorized signatories as of the date first indicated above.

	 	 	 	 	 
	OSTEOLOGIX, INC.

 	 	 
	By:  	/s/ Phillip J. Young
 	 	 
	 	Name:  	Phillip J. Young 	 	 
	 	Title:  	CEO 	 	 
	 

[Signature page to Securities Purchase Agreement]

 

 

 

	 	 	 
	PURCHASERS:

	 	ADDRESS FOR NOTICE:
	 
	 	 
	NORDIC BIOTECH OPPORTUNITY 

FUND K/S

	 	c/o Nordic Biotech Advisors

Ostergade 5, 3rd Floor

DK-1100 Copenhagen K

Denmark

	 	 	 	 	 
	By:  	/s/ Christian Hansen
 	 	 
	 	Name:  	C. Hansen 	 	 
	 	Title:  	Partner 	 	 
	 	 	 
	By:  	/s/ Christian Hansen
 	 	 
	 	Name:  	for F. Schönharting by POA 	 	 
	 	Title:  	Partner 	 	 
	 

[Signature page to Securities Purchase Agreement]

 

 

 

EXHIBIT A

PURCHASERS

	 	 	 	 	 
	 	 	Individual	 
	Name	 	Subscription Amount	 
	Nordic Biotech Opportunity Fund K/S
	 	$	1,000,000.00	 

 

 

 

EXHIBIT B

FORM OF OPINION OF COMPANY COUNSEL

	(a)	 	The Company is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware, and has the corporate power and authority to conduct its
business as presently conducted. The Company is duly qualified to do business as a foreign
corporation in the State of California.
	 
	(b)	 	The Company has the corporate power and authority to execute and deliver, and to perform and
observe the provisions of, the Documents, and to issue, sell and deliver the Shares.
	 
	(c)	 	The Documents have each been duly authorized, executed and delivered by the Company. The
Documents constitute valid and binding obligations of the Company enforceable against the
Company in accordance with their respective terms.
	 
	(d)	 	The Shares have been duly authorized. Upon payment and delivery in accordance with the
Purchase Agreement, the Shares will be validly issued, fully paid and nonassessable.
	 
	(e)	 	Except as disclosed by the Company in the Purchase Agreement, no person is entitled to any
pre-emptive right or right of first refusal with respect to the issuance of the Shares
pursuant to (i) the terms of the Company’s Certificate of Incorporation or By-laws, as in
effect on the date of this opinion, (ii) the provisions of the Delaware General Corporation
Law (the “DGCL”) or any New York law known to us or (iii) any agreement, contract or other
arrangement identified as a material agreement of the Company filed as an exhibit (or
incorporated by reference therein) in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2008 (each a “Material Agreement”) filed by the Company with the Securities
and Exchange Commission (the “SEC”).
	 
	(f)	 	The execution, delivery and performance of the Documents by the Company will not violate or
result in a material breach of any of the terms of or constitute a material default under or
(except as contemplated in the Documents) result in the creation of any lien, charge or
encumbrance on any property or assets of the Company, pursuant to the terms of any Material
Agreement. As to agreements which by their terms are or may be governed by the laws of a
jurisdiction other than New York, we assume that such agreements are governed by the laws of
New York for purposes of the opinion expressed in this paragraph. In addition, we exclude
from the scope of such opinion any potential violation of financial covenants contained in
such agreements.
	 
	(g)	 	The execution, delivery and performance of the Documents by the Company (i) are not in
violation of its certificate of incorporation or by-laws, (ii) does not violate any federal or
New York law applicable to the Company, or the DGCL, and (iii) does not violate any judgment,
injunction, order or decree disclosed in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2008 filed by the Company with the SEC.

 

 

 

	(h)	 	No authorization, approval or consent of any court or governmental authority or agency is
required in connection with the transactions contemplated by the Purchase Agreement, except
such as may be required under federal and state securities or blue sky laws in connection with
the offer and sale of the Shares to the Purchasers.
	 
	(i)	 	Assuming that the representations and warranties of the Purchasers and the Company set forth
in the Documents (including the questionnaires attached to the Purchase Agreement and
completed by each of the Purchasers) are true and correct and subject to the timely filing by
the Company of a Form D pursuant to Regulation D promulgated by the SEC under the Securities
Act of 1933, as amended (the “Act”), the offer, sale and delivery to the Purchasers of the
Shares, in the manner contemplated by the Documents, are exempt from the registration
requirements of the Act, it being understood that no opinion is expressed as to the subsequent
resale of the Shares.
	 
	(j)	 	The Company is not an “investment company” within the meaning of the Investment Company Act
of 1940, as amended.

 

 

 

Appendix I

Investor Certification

NAME OF INVESTOR:                                         

Initial or Check the appropriate item(s)

US INVESTORS — The undersigned further represents and warrants as indicated below by the
undersigned’s initials:

	A.	 	Individual investors: (Please initial one or more of the following statements)
	 
	1.
 _____ 
 	 	
I certify that I am an accredited investor because I have had individual
income (exclusive of any income earned by my spouse) of more than $200,000 in
each of the most recent two years and I reasonably expect to have an
individual income in excess of $200,000 for the current year.
	 
	2.
 _____ 
 	 	
I certify that I am an accredited investor because I have had joint income
with my spouse in excess of $300,000 in each of the most recent two years and
reasonably expect to have joint income with my spouse in excess of $300,000
for the current year.
	 
	3.
 _____ 
 	 	
I certify that I am an accredited investor because I have an individual net
worth, or my spouse and I have a joint net worth, in excess of $1,000,000.
	 
	4.
 _____ 
 	 	
I am a director or executive officer of Osteologix, Inc.
	 
	B.
 _____ 
 	 	
Partnerships, corporations, trusts or other entities: (Please initial one of
the following seven statements). The undersigned hereby certifies that it is
an accredited investor because it is:
	 
	1.
 _____ 
 	 	
an employee benefit plan whose total assets exceed $5,000,000;
	 
	2.
 _____ 
 	 	
an employee benefit plan whose investments decisions are made by a plan
fiduciary which is either a bank, savings and loan association or an insurance
company (as defined in Section 3(a) of the Securities Act) or an investment
adviser registered as such under the Investment Advisers Act of 1940;
	 
	3.
 _____ 
 	 	
a self-directed employee benefit plan, including an Individual Retirement
Account, with investment decisions made solely by persons that are accredited
investors;
	 
	4.
 _____ 
 	 	
an organization described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, not formed for the specific purpose of acquiring the Shares,
with total assets in excess of $5,000,000;

 

 

 

	5.
 _____ 
 	 	
a corporation, partnership, limited liability company, limited liability
partnership, other entity or similar business trust, not formed for the
specific purpose of acquiring the Shares, with total assets excess of
$5,000,000;
	 
	6.
 _____ 
 	 	
a trust, not formed for the specific purpose of acquiring the Shares, with
total assets exceed $5,000,000, whose purchase is directed by a person who has
such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of an investment in the Shares; or
	 
	7.
 _____ 
 	 	
an entity (including a revocable grantor trust but other than a conventional
trust) in which each of the equity owners qualifies as an accredited investor.

NON-US INVESTORS — The undersigned further represents and warrants as indicated below by the
undersigned’s initials:

	A.	 	Please initial the following statement:
	 
	1.
 _____ 
 	 	
I certify that I am not a “U.S. person” (as defined in Regulation
S) or purchasing for the account or benefit of a “U.S. person” and
am purchasing Shares in an “offshore transaction” in accordance
with Regulation S and am a “qualified investor” as defined in the
European Union Prospectus Directive.

 

 

 

Appendix II

(Page 1 of 3)

OSTEOLOGIX, INC.

STOCK CERTIFICATE QUESTIONNAIRE

NAME OF INVESTOR:                                         

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

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

	 	
                                                  

	 	 	 	 	 
	 	 
	 	2.	 	 	The relationship between the
Purchaser of the Shares and the
Registered Holder listed in
response to item 1 above:

	 	
                                                  

	 	 	 	 	 
	 	 
	 	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
response to item 1 above:

	 	
                                                  

 

 

 

Appendix II

(Page 2 of 3)

OSTEOLOGIX, INC.

REGISTRATION STATEMENT QUESTIONNAIRE

In connection with the preparation of the Registration Statement, please provide us with the
following information:

SECTION 1. PURSUANT TO THE “SELLING STOCKHOLDER” SECTION OF THE REGISTRATION STATEMENT, PLEASE
STATE YOUR OR YOUR ORGANIZATION’S NAME EXACTLY AS IT SHOULD APPEAR IN THE REGISTRATION STATEMENT:

 

 

SECTION 2. PLEASE PROVIDE THE NUMBER OF SHARES THAT YOU OR YOUR ORGANIZATION WILL OWN
IMMEDIATELY AFTER CLOSING, INCLUDING THOSE SHARES PURCHASED BY YOU OR YOUR ORGANIZATION PURSUANT TO
THIS PURCHASE AGREEMENT AND THOSE SHARES PURCHASED BY YOU OR YOUR ORGANIZATION THROUGH OTHER
TRANSACTIONS AND PROVIDE THE NUMBER OF SHARES THAT YOU HAVE OR YOUR ORGANIZATION HAS THE RIGHT TO
ACQUIRE WITHIN 60 DAYS OF CLOSING:

 

 

SECTION 3. HAVE YOU OR YOUR ORGANIZATION HAD ANY POSITION, OFFICE OR OTHER MATERIAL
RELATIONSHIP WITHIN THE PAST THREE YEARS WITH THE COMPANY OR ITS AFFILIATES?

o Yes o No

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

 

 

 

 

 

 

 

SECTION 4. ARE YOU (I) A FINRA MEMBER (SEE DEFINITION), (II) A CONTROLLING (SEE DEFINITION)
SHAREHOLDER OF A FINRA MEMBER, (III) A PERSON ASSOCIATED WITH A MEMBER OF THE FINRA (SEE
DEFINITION), OR (IV) AN UNDERWRITER OR A RELATED PERSON (SEE DEFINITION) WITH RESPECT TO THE
PROPOSED OFFERING; OR (B) DO YOU OWN ANY SHARES OR OTHER SECURITIES OF ANY FINRA MEMBER NOT
PURCHASED IN THE OPEN MARKET; OR (C) HAVE YOU MADE ANY OUTSTANDING SUBORDINATED LOANS TO ANY FINRA
MEMBER?

Answer: o Yes o No If “yes,” please describe below

 

 

 

 

 

 

 

Appendix II

(Page 3 of 3)

FINRA Member. The term “FINRA member” means either any broker or dealer admitted to
membership in the Financial Industry Regulatory Authority (“FINRA”). (NASD Manual, By-laws of NASD
Regulation, Inc. Article I, Definitions)

Control. The term “control” (including the terms “controlling,” “controlled by” and
“under common control with”) means the possession, direct or indirect, of the power, either
individually or with others, to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by contract, or otherwise. (Rule 405
under the Securities Act of 1933, as amended)

Person Associated with a member of the FINRA. The term “person associated with a
member of the FINRA” means every sole proprietor, partner, officer, director, branch manager or
executive representative of any FINRA Member, or any natural person occupying a similar status or
performing similar functions, or any natural person engaged in the investment banking or securities
business who is directly or indirectly controlling or controlled by a FINRA Member, whether or not
such person is registered or exempt from registration with the FINRA pursuant to its bylaws. (NASD
Manual, By-laws of NASD Regulation, Inc. Article I, Definitions)

Underwriter or a Related Person. The term “underwriter or a related person” means,
with respect to a proposed offering, underwriters, underwriters’ counsel, financial consultants and
advisors, finders, members of the selling or distribution group, and any and all other persons
associated with or related to any of such persons. (FINRA Interpretation)

1883458.4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}]]