Document:

EX-10.59

Exhibit 10.59

Award of Deferrable Restricted Stock Units

(1995 Plan)

Pursuant to Section 9 of the Albertson’s, Inc. Amended and Restated 1995 Stock-Based Incentive
Plan (the “Plan”),    (the “Participant”), an officer or other key employee of
Albertson’s, Inc. or one or more of its Subsidiaries (the “Company”) is hereby awarded units
representing    shares of common stock, $1.00 par value, of the Company (the “Deferrable
Restricted Stock Units”), on    , 200   (the “Date of Grant”), upon the terms and
conditions set forth in this Award Agreement (this “Agreement”) and in the Plan.

1. Grant of Deferrable Restricted Stock Units; Payment of Dividend Equivalents.

	 	(a)	 	Each Deferrable Restricted Stock Unit represents a hypothetical share of the
Company’s common stock, $1.00 par value (the “Stock”). The Deferrable Restricted Stock
Units will be credited to an account established for the Participant.

	 	(b)	 	On each date a cash dividend is distributed with respect to the Stock, an
amount equal to such dividend per share, multiplied by the number of Deferrable
Restricted Stock Units then credited to the Participant’s account, will be paid in cash
to the Participant.

2. Vesting.

	 	(a)	 	The Deferrable Restricted Stock Units will vest as follows: twenty percent
(20%) of the Deferrable Restricted Stock Units will vest on each of the first, second,
third, fourth and fifth anniversaries of the Date of Grant (each, a “Vesting Date”),
provided that the Participant has been continuously employed as an employee of the
Company from the Date of Grant through the applicable Vesting Date. For purposes of
this Agreement, “continuously employed” shall mean the absence of any interruption or
termination of employment with the Company or with a person or entity controlling,
controlled by or under common control with the Company (an “Affiliate”). Continuous
employment shall not be considered interrupted or terminated in the case of sick leave,
military leave or any other leave of absence approved by the Company or in the case of
transfers between locations of the Company or its Affiliates.

	 	(b)	 	Notwithstanding Section 2(a) above, all Deferrable Restricted Stock Units
subject to this Agreement will become immediately vested upon the occurrence of a
Change in Control of the Company.

	 	(c)	 	Upon a termination of employment for any reason whatsoever, any Deferrable
Restricted Stock Units that were not vested as of such date of termination of
employment will be forfeited and the Company will have no further obligation with
respect to thereto.

	 	3.	 	Non-Assignable/Non-Transferable. This Agreement and the Deferrable Restricted Stock Units
are not assignable or transferable by the Participant (voluntarily or by operation of law)
prior to issuance as set forth in Section 4 below; provided, however, that no
provision in this Agreement will prevent the transfer of the Deferrable Restricted Stock Units
or the shares of Stock underlying such Deferrable Restricted Stock Units by will or the laws
of descent and distribution in the event of the death of the Participant.

4. Issuance of the Stock.

	 	(a)	 	The Company will issue to the Participant the Stock underlying the vested
Deferrable Restricted Stock Units upon each Vesting Date or, if earlier, upon a Change
in Control; provided, however, that if such Change in Control does not
constitute a “change in ownership or effective control” of the Company, or a “change in
the ownership of a substantial portion of the assets” (as such terms are defined in
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)) and if
required by Section 409A of the Code, the Company will issue the Stock underlying the
Deferrable Restricted Stock Units to the Participant upon the earlier of:

	 	(i)	 	the applicable Vesting Date, notwithstanding any earlier
vesting under Section 2(b) hereof; and

	 	(ii)	 	the Participant’s “separation from service” (as such phrase is
defined in Section 409A of the Code); provided, however, that
if the Participant is a “specified employee” (as such phrase is defined in
Section 409A of the Code) of the Company or an Affiliate on the date of the
Participant’s “separation from service,” the Company will issue the Stock to
the Participant six months following the Participant’s “separation from
service” (or, if earlier, on the date of death).

	 	(b)	 	Notwithstanding Section 4(a) above, the Participant may elect, in the manner
and form prescribed by the Company (the “Deferral Election”), to delay the issuance of
the Stock pursuant to Section 4(a).

	 	(i)	 	If permitted by Section 409A of the Code, such Deferral
Election may apply to less than all of the shares of Stock underlying the
Participant’s Deferrable Restricted Stock Units.

	 	(ii)	 	If permitted by Section 409A of the Code, the Participant may
make an initial Deferral Election in connection with the grant of the
Deferrable Restricted Stock Units.

	 	(iii)	 	Unless otherwise permitted in accordance with Section 409A of
the Code, a Deferral Election that is not made pursuant to clause (ii) above
will not be effective unless (A) in the case of a distribution made by reason
of a specified time or a fixed schedule, the Deferral Election is made not less
than twelve months prior to the first date that issuance would have been made
absent such Deferral Election, (B) the issuance under such Deferral Election
will be made no less than five years from the date payment would have been made
absent such Deferral Election (excluding issuance on account of the death or
disability of the Participant), and (C) such Deferral Election will not take
effect until twelve months after the date on which the Deferral Election is
made.

	 	(c)	 	If the Participant makes a Deferral Election in accordance with Section 4(b)
above, the Company will issue to the Participant (or to the estate, guardian or
beneficiary of the Participant, as the case may be) the Stock underlying the vested
Deferrable Restricted Stock Units so deferred upon the earliest of: (i) the date
selected by the Participant in the Deferral Election, if any; (ii) the Participant’s
death; and (iii) the Participant’s becoming disabled (within the meaning of Section
409A of the Code).

	 	(d)	 	Except to the extent provided by Section 409A and permitted by the Company, no
Stock may be issued to the Participant at a time earlier than otherwise expressly
provided in this Agreement.

	 	(e)	 	The Company’s obligations to the Participant with respect to the Deferrable
Restricted Stock Units will be satisfied in full upon the issuance of shares of Stock
corresponding to such Deferrable Restricted Stock Units.

5. Detrimental Activity.

	 	(a)	 	If the Participant, either during employment by the Company or within one year
after termination of such employment, shall engage in any Detrimental Activity (as
defined below), and the Board of Directors of the Company shall so find, and (except
for any Detrimental Activity described in Section 5(c)(iv)(B)) the Participant shall
not have ceased all Detrimental Activity within 30 days after notice of such finding
given within one year after commencement of such Detrimental Activity, the Participant
shall:

	 	(i)	 	Forfeit any Deferrable Restricted Stock Units then held by the
Participant;

	 	(ii)	 	Return to the Company, all shares of Stock that the Participant
has not disposed of that were issued to the Participant pursuant to this
Agreement within a period of one year prior to the date of the commencement of
such Detrimental Activity; and

	 	(iii)	 	With respect to any shares of Stock that the Participant has
disposed of that were issued to the Participant pursuant to this Agreement
within a period of one year prior to the date of the commencement of such
Detrimental Activity, pay to the Company in cash the closing price of the
 shares of such Stock on the New York Stock Exchange on the date of issuance
pursuant to this Agreement (or on the last trading day prior to such issuance,
if there was no trading on the date of issuance).

	 	(b)	 	To the extent that such amounts are not paid to the Company, the Company may,
in addition to all other remedies at law or in equity, set off the amounts so payable
to it against any amounts that may be owing from time to time by the Company to the
Participant, whether as wages, deferred compensation or vacation pay or in the form of
any other benefit or for any other reason.

(c) For purposes of this Agreement, the term “Detrimental Activity” shall include:

	 	(i)	 	Without the prior written consent of the Company, engaging in
any activity, as an employee, director, principal, agent, or consultant for
another entity, and in a capacity, that directly competes with the Company in
any business activity (or in any business activity which was under active
development while the Participant was employed by the Company if such
development is being actively pursued by the Company during the one-year period
referred to in this Section 5) for which the Participant has had any direct
responsibility and direct involvement during the last two years of his or her
employment with the Company, in any territory in which the Company engages in
such business activity.

	 	(ii)	 	Soliciting any employee of the Company to terminate his or her
employment with the Company.

	 	(iii)	 	The disclosure to anyone outside the Company, or the use in
other than the Company’s business, without prior written authorization from the
Company, of any confidential, proprietary or trade secret information or
material relating to the business of the Company, acquired by the Participant
during his or her employment with the Company or while acting as a consultant
for the Company thereafter.

	 	(iv)	 	Activity that results in termination for “cause”. For the
purposes of this Section, termination for “cause” shall mean a termination:

	 	(A)	 	Due to the Participant’s willful and continuous
gross neglect of his or her duties for which he or she is employed; or

	 	(B)	 	Due to an act of dishonesty on the part of the
Participant constituting a felony resulting or intended to result,
directly or indirectly, in his or her gain for personal enrichment at
the expense of the Company.

6. Rights of Participant.

	 	(a)	 	The Participant will not have any rights as a stockholder with respect to any
 shares of Stock issuable pursuant to the Deferrable Restricted Stock Units until the
date on which a stock certificate (or certificates) representing such Stock is issued.

	 	(b)	 	The obligations of the Company under this Agreement will be merely that of an
unfunded and unsecured promise of the Company to deliver shares of Stock in the future
and to pay cash in respect of dividends from time to time, and the rights of the
Participant will be no greater than that of an unsecured general creditor. No assets
of the Company will be held or set aside as security for the obligations of the Company
under this Agreement.

	 	7.	 	Adjustments. The number of shares of Stock issuable pursuant to the Deferrable Restricted
Stock Units is subject to adjustment as provided in Section 14 of the Plan.

8. American Jobs Creation Act.

	 	(a)	 	It is intended that this Agreement and its administration comply with the
provisions of Section 409A of Code. Any provisions in this Agreement or in the Plan
that would cause the Agreement to fail to satisfy Section 409A of the Code shall have
no force and effect until amended to comply with Section 409A of the Code (which
amendment may be retroactive to the extent permitted by Section 409A of the Code and
may be made by the Company without the consent of the Participant).

	 	(b)	 	It is intended that, to the extent applicable, all Participant elections
hereunder will comply with Section 409A of the Code. The Company is authorized to
adopt rules or regulations deemed necessary or appropriate in connection therewith to
anticipate and/or comply with the requirements thereof.

	 	9.	 	Notices. Notices hereunder will be mailed or delivered to the Company, Compensation
Department, Albertson’s, Inc., P.O. Box 20, Boise, Idaho 83726 and will be mailed to or
delivered to the Participant at the Participant’s address set forth in the payroll records of
the Company, or in either case, at such other address as one party may subsequently furnish to
the other party in writing.

	 	10.	 	No Employment Rights. This award will not confer upon the Participant any right with respect
to continuance of employment by the Company, nor will it interfere in any way with any right
of the Company to terminate the Participant’s employment at any time.

	 	11.	 	Governing Law. The laws of the State of Delaware will govern this award and all matters
related hereto.

	 	12.	 	Severability. In the event that one or more of the provisions of this Agreement shall be
invalidated for any reason by a court of competent jurisdiction, any provision so invalidated
shall be deemed to be separable from the other provisions hereof, and the remaining provisions
hereof shall continue to be valid and fully enforceable.

	 	13.	 	Interpretation. Any reference in this Agreement to Section 409A of the Code will also
include any proposed, temporary or final regulations, or any other guidance, promulgated with
respect to such Section by the U.S. Department of the Treasury or the Internal Revenue
Service. Except as expressly provided in this Agreement, capitalized terms used herein will
have the meaning ascribed to such terms in the Plan.

	 	14.	 	Subject to Plan. This award is subject to the terms of the Plan, and the Participant is
being delivered a copy of the Plan with this award agreement. To the extent any provision of
this Agreement violates or is inconsistent with an express provision of the Plan, the Plan
provision will govern and any inconsistent provision in this Agreement will have no force or
effect.

	 	15.	 	Taxes. The Participant will pay to the Company, on demand, any taxes the Company reasonably
determines it is required to withhold under applicable tax laws with respect to the Deferrable
Restricted Stock Units or the issuance of Stock pursuant to this award. The tax withholding
obligation shall be satisfied by the Company withholding shares of Stock otherwise issuable
pursuant to this award in order to satisfy the minimum tax withholding amount permissible
under the method that results in the least amount withheld.

	 	16.	 	Counterparts. This Agreement may be executed in two or more counterparts, each of which will
be an original but all of which together will represent one and the same agreement.

	 	17.	 	Amendments/Entire Agreement. Any amendment to the Plan will be deemed to be an amendment to
this Agreement. Except as provided in this Agreement, no amendment will adversely affect the
number or value of the Participant’s Deferrable Restricted Stock Units without the
Participant’s written consent. This Agreement cannot be changed or terminated orally. The
Agreement and the Plan contain the entire agreement between the parties relating to the
subject matter hereof.

PARTICIPANT ALBERTSON’S, INC.

   By:   

Title:EX-10.1

Exhibit 10.1

SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT (this “Agreement”), dated as of December 14, 2004, by and among
Diametrics Medical, Inc., a Minnesota corporation (the “Company”), and the subscribers identified
on the signature page hereto (each a “Subscriber” and collectively “Subscribers”).

WHEREAS, the Company and the Subscribers are executing and delivering this Agreement in
reliance upon an exemption from securities registration afforded by the provisions of Section 4(2),
Section 4(6) and/or Regulation D (“Regulation D”) as promulgated by the United States Securities
and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “1933
Act”).

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained
herein, the Company shall issue and sell to the Subscribers, as provided herein, and the
Subscribers, in the aggregate, shall purchase up to Three Million Dollars ($3,000,000) (the
"Purchase Price”) of principal amount of promissory notes of the Company (“Note” or “Notes”)
convertible into shares of the Company’s common stock, $0.01 par value (the “Common Stock”) at a
per share conversion price equal to $0.02, and common stock purchase warrants (the “Warrants”) in
the form attached hereto as Exhibit A, to purchase shares of Common Stock (the “Warrant Shares”).
One Million Eight Hundred Thousand Dollars ($1,800,000) of the Purchase Price shall be payable on
the Initial Closing Date as defined in Section 1 hereof (“Initial Closing Purchase Price”). One
Million Two Hundred Thousand Dollars ($1,200,000) of the Purchase Price (“Second Closing Purchase
Price”) will be payable on the Second Closing Date as defined in Section 2(a) of this Agreement.
The Notes, shares of Common Stock issuable upon conversion of the Notes (the “Shares”), the
Warrants and the Warrant Shares are collectively referred to herein as the “Securities”; and

WHEREAS, the aggregate proceeds of the sale of the Notes and the Warrants contemplated hereby
shall be held in escrow pursuant to the terms of a Funds Escrow Agreement to be executed by the
parties substantially in the form attached hereto as Exhibit B (the “Escrow Agreement”).

NOW, THEREFORE, in consideration of the mutual covenants and other agreements contained in
this Agreement the Company and the Subscribers hereby agree as follows:

1. Initial Closing. Subject to the satisfaction or waiver of the terms and
conditions of this Agreement, on the Initial Closing Date, each Subscriber shall purchase and the
Company shall sell to each Subscriber a Note in the principal amount designated on the signature
page hereto (“Initial Closing Notes”) and the amount of Warrants determined pursuant to Section 3
below (“Initial Closing Warrants”). The aggregate principal amount of the Notes to be purchased by
the Subscribers on the Initial Closing Date shall, in the aggregate, be equal to the Initial
Closing Purchase Price. The Initial Closing Date shall be the date that subscriber funds
representing the net amount due the Company from the Initial Closing Purchase Price of the Offering
is transmitted by wire transfer or otherwise to or for the benefit of the Company.

2. Second Closing.

(a) Second Closing. The closing date in relation to the Second Closing Purchase
Price shall be the fifth (5th) business day after the Actual Effective Date as defined
in Section 2(b) of this Agreement (the “Second Closing Date”). Subject to the satisfaction or
waiver of the terms and conditions of this Agreement on the Second Closing Date, each Subscriber
shall purchase and the Company shall sell to each Subscriber a Note in the principal amount
designated on the signature page hereto (“Second Closing Notes”) and the amount of Warrants
determined pursuant to Section 3 below (“Second Closing Warrants”). The aggregate Purchase Price
of the Second Closing Notes for all Subscribers shall be equal to the Second Closing Purchase
Price. The Second Closing Note shall be identical to the Note issuable on the Initial Closing Date
except that the maturity date of such Note shall be the third anniversary of the Second Closing
Date. The Conversion Price for the Second Closing Notes shall be the same Conversion Price in
effect for the Initial Closing Notes as of the Second Closing Date.

(b) Conditions to Second Closing. The occurrence of the Second Closing is expressly
contingent on (i) receipt of the Approval described in Section 7.8 of this Agreement, (ii) the
truth and accuracy in all material respects, on the date the Registration Statement described in
Section 11.1 (iv) is declared effective by the Commission (“Actual Effective Date”) and Second
Closing Date of the representations and warranties of the Company and Subscriber contained in this
Agreement, (iii) continued compliance in all material respects with the covenants of the Company
set forth in this Agreement, (iv) the non-occurrence of any Event of Default (as defined in the
Note) or other default by the Company of its obligations and undertakings contained in this
Agreement, (v) the delivery on the Second Closing Date of Second Closing Notes, and (vi) the
delivery of the Second Closing Warrants. The exercise price of the Warrants issuable on the Second
Closing Date shall be the same as the exercise price of the Initial Closing Warrants in effect on
the Initial Closing Date.

(c) Second Closing Deliveries. On the Second Closing Date, the Company will deliver
the Second Closing Notes and Second Closing Warrants to the Escrow Agent and each Subscriber will
deliver its portion of the Second Closing Purchase Price to the Escrow Agent. On the Second
Closing Date, the Company will deliver a certificate (“Second Closing Certificate”) signed by its
chief executive officer or chief financial officer (i) representing the truth and accuracy in all
material respects of all the representations and warranties made by the Company contained in this
Agreement, as of the Initial Closing Date, and Second Closing Date, as if such representations and
warranties were made and given on all such dates, (ii) adopting the covenants and conditions set
forth in Sections 9, 10, 11, and 12 of this Agreement in relation to the Second Closing Notes and
Second Closing Warrants, (iii) representing the timely compliance by the Company with the Company’s
registration requirements set forth in Section 11 of this Agreement, and (iv) certifying that an
Event of Default, as defined in the Note and this Agreement, has not occurred. A legal opinion
nearly identical to the legal opinion referred to in Section 6 of this Agreement shall be delivered
to each Subscriber at the Second Closing in relation to the Company, Second Closing Notes, and
Second Closing Warrants (“Second Closing Legal Opinion”).

3. Warrants. On each Closing Date (as defined in Section 13(b) hereof), the Company
will issue and deliver Warrants to the Subscribers. Fifty (50) Warrants will be issued for each
one hundred (100) Shares which would be issued on each Closing Date assuming the complete
conversion of the Notes issued on each such Closing Date at the Conversion Price in effect on each
such Closing Date. The per Warrant Share exercise price to acquire a Warrant Share upon exercise
of a Warrant shall be $0.025. The Warrants shall be exercisable until five (5) years after the
Issue Date of the Warrants.

4. Subscriber’s Representations and Warranties. Each Subscriber hereby represents and
warrants to and agrees with the Company only as to such Subscriber that:

(a) Information on Company. The Subscriber has been furnished with or has had access
at the EDGAR Website of the Commission to the Company’s Form 10-K- for the year ended December 31,
2003 as filed with the Commission, together with all subsequently filed Forms 10-Q, 8-K, and
filings made with the Commission available at the EDGAR website (hereinafter referred to
collectively as the “Reports”). In addition, the Subscriber has received in writing from the
Company such other information concerning its operations, financial condition and other matters as
the Subscriber has requested in writing (such other information is collectively, the “Other Written
Information”), and considered all factors the Subscriber deems material in deciding on the
advisability of investing in the Securities.

(b) Information on Subscriber. The Subscriber is, and will be at the time of the
conversion of the Notes and exercise of the Warrants, an “accredited investor”, as such term is
defined in Regulation D promulgated by the Commission under the 1933 Act, is experienced in
investments and business matters, has made investments of a speculative nature and has purchased
securities of United States publicly-owned companies in private placements in the past and, with
its representatives, has such knowledge and experience in financial, tax and other business matters
as to enable the Subscriber to utilize the information made available by the Company to evaluate
the merits and risks of and to make an informed investment decision with respect to the proposed
purchase, which represents a speculative investment. The Subscriber has the authority and is duly
and legally qualified to purchase and own the Securities. The Subscriber is able to bear the risk
of such investment for an indefinite period and to afford a complete loss thereof. The information
set forth on the signature page hereto regarding the Subscriber is accurate.

(c) Purchase of Common Stock and Warrants. On each Closing Date, the Subscriber will
purchase the Notes and Warrants as principal for its own account for investment only and not with a
view toward, or for resale in connection with, the public sale or any distribution thereof.

(d) Compliance with Securities Act. The Subscriber understands and agrees that the
Securities have not been registered under the 1933 Act or any applicable state securities laws, by
reason of their issuance in a transaction that does not require registration under the 1933 Act
(based in part on the accuracy of the representations and warranties of Subscriber contained
herein), and that such Securities must be held indefinitely unless a subsequent disposition is
registered under the 1933 Act or any applicable state securities laws or is exempt from such
registration. In any event, and subject to compliance with applicable securities laws, the
Subscriber may enter into lawful hedging transactions with third parties, which may in turn engage
in short sales of the Securities in the course of hedging the position they assume and the
Subscriber may also enter into short positions or other derivative transactions relating to the
Securities, or interests in the Securities, and deliver the Securities, or interests in the
Securities, to close out their short or other positions or otherwise settle short sales or other
transactions, or loan or pledge the Securities, or interests in the Securities, to third parties
that in turn may dispose of these Securities.

(e) Shares Legend. The Shares and the Warrant Shares shall bear the following or
similar legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO DIAMETRICS MEDICAL, INC. THAT SUCH REGISTRATION IS
NOT REQUIRED.”

(f) Warrants Legend. The Warrants shall bear the following

or similar legend:

“THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON
EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR ANY APPLICABLE STATE
SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
DIAMETRICS MEDICAL, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.”

(g) Note Legend. The Note shall bear the following legend:

“THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS
NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION
OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO DIAMETRICS MEDICAL, INC. THAT SUCH REGISTRATION IS
NOT REQUIRED.”

(h) Communication of Offer. The offer to sell the Securities was directly
communicated to the Subscriber by the Company. At no time was the Subscriber presented with or
solicited by any leaflet, newspaper or magazine article, radio or television advertisement, or any
other form of general advertising or solicited or invited to attend a promotional meeting otherwise
than in connection and concurrently with such communicated offer.

(i) Authority; Enforceability. This Agreement and other agreements delivered together
with this Agreement or in connection herewith have been duly authorized, executed and delivered by
the Subscriber and are valid and binding agreements enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors’ rights generally and to general
principles of equity; and Subscriber has full corporate power and authority necessary to enter into
this Agreement and such other agreements and to perform its obligations hereunder and under all
other agreements entered into by the Subscriber relating hereto.

(j) Restricted Securities. Subscriber understands that the Securities have not been
registered under the 1933 Act and such Subscriber will not sell, offer to sell, assign, pledge,
hypothecate or otherwise transfer any of the Securities unless (i) pursuant to an effective
registration statement under the 1933 Act, (ii) such Subscriber provides the Company with an
opinion of counsel, in a form reasonably acceptable to the Company, to the effect that a sale,
assignment or transfer of the Securities may be made without registration under the 1933 Act, or
(iii) Subscriber provides the Company with reasonable assurances (in the form of seller and broker
representation letters) that the Shares or the Warrant Shares, as the case may be, may be sold
pursuant to (A) Rule 144 promulgated under the 1933 Act, or (B) Rule 144(k) promulgated under the
1933 Act, in each case following the applicable holding period set forth therein. Notwithstanding
anything to the contrary contained in this Agreement, such Subscriber may transfer (without
restriction and without the need for an opinion of counsel) the Securities to its Affiliates (as
defined below) provided that each such Affiliate is an “accredited investor” under Regulation D and
such Affiliate agrees to be bound by the terms and conditions of this Agreement.

For the purposes of this Agreement, an “Affiliate” of any person or entity means any other
person or entity directly or indirectly controlling, controlled by or under direct or indirect
common control with such person or entity. Affiliate includes each Subsidiary of the Company. For
purposes of this definition, “control” means the power to direct the management and policies of
such person or firm, directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.

(k) No Governmental Review. Each Subscriber understands that no United States federal
or state agency or any other governmental or state agency has passed on or made recommendations or
endorsement of the Securities or the suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the Securities.

(l) Correctness of Representations. Each Subscriber represents as to such Subscriber
that the foregoing representations and warranties are true and correct as of the date hereof and,
unless a Subscriber otherwise notifies the Company prior to each Closing Date shall be true and
correct as of each Closing Date.

(m) Survival. The foregoing representations and warranties shall survive for a period
of three years after the later of the Initial Closing Date or the Second Closing Date.

5. Company Representations and Warranties. Except as set forth in the Disclosure
Schedule (attached hereto as Attachment 1) and the Reports the Company represents and warrants to
and agrees with each Subscriber that:

(a) Due Incorporation. The Company and each of its Subsidiaries identified in
Schedule 5(a) (individually a “Subsidiary” and collectively “Subsidiaries”) is a corporation duly
organized, validly existing and in good standing under the laws of the respective jurisdictions of
their incorporation and have the requisite corporate power to own their properties and to carry on
their business as now being conducted. The Company and each of its Subsidiaries is duly qualified
as a foreign corporation to do business and is in good standing in each jurisdiction where the
nature of the business conducted or property owned by them makes such qualification necessary,
other than those jurisdictions in which the failure to so qualify would not have a Material Adverse
Effect. For purpose of this Agreement, a “Material Adverse Effect” shall mean a material adverse
effect on the financial condition, results of operations, properties or business of the Company
taken as a whole.

(b) Outstanding Stock. All issued and outstanding shares of capital stock of the
Company and each of its Subsidiaries have been duly authorized and validly issued and are fully
paid and nonassessable.

(c) Authority; Enforceability. This Agreement, the Note, the Warrants, the Escrow
Agreement, the Security Agreement to which the Company is a party, the documents referred to in
Section 1.1(w) of the Escrow Agreement relating to TGC Research Limited (a company incorporated in
the United Kingdom with registered number 5273708 referred to herein as “TGC”), a wholly-owned
Subsidiary of the Company, Collateral Agent Agreement, and the Guaranty described in Section 13
hereof and any other agreements delivered together with this Agreement or in connection herewith
(collectively “Transaction Documents”) have been duly authorized, executed and delivered by the
Company and Subsidiaries and are valid and binding agreements enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors’ rights generally and to
general principles of equity. The Company and each Subsidiary have full corporate power and
authority necessary to enter into and deliver the Transaction Documents and to perform their
obligations thereunder.

(d) Additional Issuances. There are no outstanding agreements or preemptive or
similar rights affecting the Company’s common stock or equity and no outstanding rights, warrants
or options to acquire, or instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of any shares of common stock or equity of the
Company or other equity interest in any of the Subsidiaries of the Company except as described on
Schedule 5(d).

(e) Consents. No consent, approval, authorization or order of any court, governmental
agency or body or arbitrator having jurisdiction over the Company, or any of its Affiliates, the
Bulletin Board nor the Company’s shareholders is required for the execution by the Company and
Subsidiaries of the Transaction Documents and, except for the Approval in connection with the
Second Closing, compliance and performance by the Company of its obligations under the Transaction
Documents, including, without limitation, the issuance and sale of the Securities.

(f) No Violation or Conflict. Assuming the representations and warranties of the
Subscribers in Section 4 are true and correct, neither the issuance and sale of the Securities nor
the performance of the Company’s obligations under this Agreement and all other agreements entered
into by the Company relating thereto by the Company will:

(i) violate, conflict with, result in a breach of, or constitute a default (or an event which
with the giving of notice or the lapse of time or both would be reasonably likely to constitute a
default) under (A) the articles or certificate of incorporation, charter or bylaws of the Company,
(B) to the Company’s knowledge, any decree, judgment, order, law, treaty, rule, regulation or
determination applicable to the Company of any court, governmental agency or body, or arbitrator
having jurisdiction over the Company or any of its Subsidiaries or over the properties or assets of
the Company or any of its Affiliates, (C) the terms of any bond, debenture, note or any other
evidence of indebtedness, or any agreement, stock option or other similar plan, indenture, lease,
mortgage, deed of trust or other instrument to which the Company or any of its Affiliates or
Subsidiaries is a party, by which the Company or any of its Affiliates or Subsidiaries is bound, or
to which any of the properties of the Company or any of its Affiliates or Subsidiaries is subject,
or (D) the terms of any “lock-up” or similar provision of any underwriting or similar agreement to
which the Company, or any of its Affiliates or Subsidiaries is a party except the violation,
conflict, breach, or default of which would not have a Material Adverse Effect on the Company; or

(ii) result in the creation or imposition of any lien, charge or encumbrance upon the
Securities or any of the assets of the Company, its Subsidiaries or any of its Affiliates; or

(iii) result in the activation of any anti-dilution rights or a reset or repricing of any debt
or security instrument of any other creditor or equity holder of the Company, nor result in the
acceleration of the due date of any obligation of the Company; or

(iv) result in the activation of any piggy-back registration rights of any person or entity
holding securities of the Company or having the right to receive securities of the Company.

(g) The Securities. The Securities upon issuance:

(i) are, or will be, free and clear of any security interests, liens, claims or other
encumbrances, subject to restrictions upon transfer under the 1933 Act and any applicable state
securities laws;

(ii) have been, or will be, duly and validly authorized and on the date of conversion of the
Notes and upon exercise of the Warrants (after receipt by the Company of payment therefor), the
Shares and Warrant Shares will be duly and validly issued, fully paid and nonassessable and, if
registered for resale pursuant to the 1933 Act, and resold pursuant to an effective registration
statement, will be free trading and unrestricted);

(iii) will not have been issued or sold in violation of any preemptive or other similar rights
of the holders of any securities of the Company; and

(iv) will not subject the holders thereof to personal liability by reason of being such
holders.

 (h) Litigation. There is no pending or, to the best knowledge of the
Company, threatened action, suit, proceeding or investigation before any court, governmental agency
or body, or arbitrator having jurisdiction over the Company, or any of its Affiliates that would
affect the execution by the Company or the performance by the Company of its obligations under the
Transaction Documents. Except as disclosed in the Reports, there is no pending or, to the best
knowledge of the Company, threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its
Affiliates which litigation if adversely determined would have a Material Adverse Effect on the
Company.

(i) Reporting Company. The Company is a publicly-held company subject to reporting
obligations pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “1934
Act”) and has a class of common shares registered pursuant to Section 12(g) of the 1934 Act.
Pursuant to the provisions of the 1934 Act, the Company has timely filed all reports and other
materials required to be filed thereunder with the Commission during the preceding twelve months.

(j) No Market Manipulation. The Company has not taken, and will not take, directly or
indirectly, any action designed to, or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of the Common Stock of the Company to facilitate the
sale or resale of the Securities or affect the price at which the Securities may be issued or
resold.

(k) Information Concerning Company. The Reports contain all material information
relating to the Company and its operations and financial condition as of their respective dates
which information is required to be disclosed therein. Since the date of the financial statements
included in the Reports, and except as modified in the Other Written Information or in the
Schedules hereto, there has been no material adverse change in the Company’s business, financial
condition or affairs not disclosed in the Reports. The Reports do not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances when made.

(l) Stop Transfer. The Securities, when issued, will be restricted securities. The
Company will not issue any stop transfer order or other order impeding the sale, resale or delivery
of any of the Securities, except as may be required by any applicable federal or state securities
laws and unless contemporaneous notice of such instruction is given to the Subscriber.

(m) Defaults. The Company and its Subsidiaries are not in violation of its articles
of incorporation or bylaws. The Company and its Subsidiaries are (i) not in default under or in
violation of any other material agreement or instrument to which it is a party or by which it or
any of its properties are bound or affected, which default or violation would have a Material
Adverse Effect on the Company, (ii) not in default with respect to any order of any court,
arbitrator or governmental body or subject to or party to any order of any court or governmental
authority arising out of any action, suit or proceeding under any statute or other law respecting
antitrust, monopoly, restraint of trade, unfair competition or similar matters, or (iii) to the
Company’s knowledge not in violation of any statute, rule or regulation of any governmental
authority which violation would have a Material Adverse Effect on the Company or its Subsidiaries.

(n) No Integrated Offering. Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf, has directly or indirectly made any offers or sales of any
security or solicited any offers to buy any security under circumstances that would cause the offer
of the Securities pursuant to this Agreement to be integrated with prior offerings by the Company
for purposes of the 1933 Act or any applicable stockholder approval provisions, including, without
limitation, under the rules and regulations of the Bulletin Board. Nor will the Company or any of
its Affiliates or Subsidiaries take any action or steps that would cause the offer or issuance of
the Securities to be integrated with other offerings. The Company will not conduct any offering
other than the transactions contemplated hereby that will be integrated with the offer or issuance
of the Securities.

(o) No General Solicitation. Neither the Company, nor any of its Affiliates, nor to
its knowledge, any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under the 1933 Act) in
connection with the offer or sale of the Securities.

(p) Listing. The Company’s common stock is quoted on the OTC Bulletin Board
(“Bulletin Board”). The Company has not received any oral or written notice that its common stock
is not eligible nor will become ineligible for quotation on the Bulletin Board nor that its common
stock does not meet all requirements for the continuation of such quotation and the Company
satisfies all the requirements for the continued quotation of its common stock on the Bulletin
Board.

(q) No Undisclosed Liabilities. The Company and its Subsidiaries have no liabilities
or obligations which are material, individually or in the aggregate, which are not disclosed in the
Reports and Other Written Information, other than those incurred in the ordinary course of the
Company’s businesses since December 31, 2003 and which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect, other than as set forth in Schedule 5(q).

(r) No Undisclosed Events or Circumstances. Since December 31, 2003, no event or
circumstance has occurred or exists with respect to the Company or its Subsidiaries, businesses,
properties, operations or financial condition, that, under applicable law, rule or regulation,
requires public disclosure or announcement prior to the date hereof by the Company but which has
not been so publicly announced or disclosed in the Reports.

(s) Capitalization. The authorized and outstanding capital stock of the Company and
TGC as of the date of this Agreement and the Closing Date are set forth on Schedule 5(s). Except
as set forth on Schedule 5(d), there are no options, warrants, or rights to subscribe to,
securities, rights or obligations convertible into or exchangeable for or giving any right to
subscribe for any shares of capital stock of the Company or any of its Subsidiaries. All of the
outstanding shares of Common Stock of the Company and TGC have been duly and validly authorized and
issued and are fully paid and nonassessable.

(t) Dilution. The Company’s executive officers and directors understand the nature
of the Securities being sold hereby and recognize that the issuance of the Securities will have a
potential dilutive effect on the equity holdings of other holders of the Company’s equity or rights
to receive equity of the Company. The board of directors of the Company has concluded, in its good
faith business judgment, that the issuance of the Securities is in the best interests of the
Company. The Company specifically acknowledges that its obligation to issue the Shares upon
conversion of the Notes, and the Warrant Shares upon exercise of the Warrants is binding upon the
Company and enforceable regardless of the dilution such issuance may have on the ownership
interests of other shareholders of the Company or parties entitled to receive equity of the
Company.

(u) No Disagreements with Accountants and Lawyers. There are no disagreements of any
kind presently existing, or reasonably anticipated by the Company to arise, between the Company and
the accountants and lawyers formerly or presently employed by the Company, including but not
limited to disputes or conflicts over payment owed to such accountants and lawyers.

(v) Correctness of Representations. The Company represents that the foregoing
representations and warranties are true and correct as of the date hereof in all material respects,
and, unless the Company otherwise notifies the Subscribers prior to each Closing Date, shall be
true and correct in all material respects as of each Closing Date.

(w) Investment Company. The Company is not an Affiliate of an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.

(x) Survival. The foregoing representations and warranties shall survive for a period
of three years after the later of the Initial Closing Date or the Second Closing Date.

6. Regulation D Offering. The offer and issuance of the Securities to the Subscribers
is being made pursuant to the exemption from the registration provisions of the 1933 Act afforded
by Section 4(2) or Section 4(6) of the 1933 Act and/or Rule 506 of Regulation D promulgated
thereunder. On the Closing Date, the Company will provide an opinion reasonably acceptable to
Subscriber from the Company’s legal counsel opining on the availability of an exemption from
registration under the 1933 Act as it relates to the offer and issuance of the Securities and other
matters reasonably requested by Subscribers. A form of the legal opinion is annexed hereto as
Exhibit C. The Company will provide, at the Company’s expense, such other legal opinions in the
future as are reasonably necessary for the issuance and resale of the Common Stock issuable upon
conversion of the Notes and exercise of the Warrants pursuant to an effective registration
statement.

7.1. Conversion of Note.

(a) Upon the conversion of a Note or part thereof, the Company shall, at its own cost and
expense, take all necessary action, including obtaining and delivering, an opinion of counsel to
assure that the Company’s transfer agent shall issue stock certificates in the name of Subscriber
(or its nominee) or such other persons as designated by Subscriber and in such denominations to be
specified at conversion representing the number of shares of common stock issuable upon such
conversion. The Company warrants that no instructions regarding the Notes and Warrants other than
these instructions have been or will be given to the transfer agent of the Company’s Common Stock
and that, unless waived by the Subscriber, the Shares will be free-trading, and freely
transferable, and will not contain a legend restricting the resale or transferability of the Shares
provided the Shares are concurrently being sold pursuant to an effective registration statement
covering the Shares. Otherwise, such Shares will bear the legend set forth in Section 4 (e) hereof.

(b) Subscriber will give notice of its decision to exercise its right to convert the Note or
part thereof by telecopying an executed and completed Notice of Conversion (a form of which is
annexed as Exhibit A to the Note) to the Company via confirmed telecopier transmission or otherwise
pursuant to Section 13(a) of this Agreement. The Subscriber will not be required to surrender the
Note until the Note has been fully converted or satisfied. Each date on which a Notice of
Conversion is telecopied to the Company in accordance with the provisions hereof shall be deemed a
Conversion Date. The Company will instruct the Company’s transfer agent to transmit the Company’s
Common Stock certificates representing the Shares issuable upon conversion of the Note to the
Subscriber via express courier for receipt by such Subscriber within three (3) business days after
receipt by the Company of the Notice of Conversion (such third day being the “Delivery Date”). In
the event the Shares are electronically transferable, then delivery of the Shares must be
made by electronic transfer provided request for such electronic transfer has been made by the
Subscriber. A Note representing the balance of the Note not so converted will be provided by the
Company to the Subscriber if requested by Subscriber, provided the Subscriber delivers an original
Note to the Company.

(c) The Company understands that a delay in the delivery of the Shares in the form required
pursuant to Section 7.1 hereof, or the Mandatory Redemption Amount described in Section 7.2 hereof,
later than two business days after the Delivery Date or later than the Mandatory Redemption Payment
Date (as hereinafter defined) could result in economic loss to the Subscriber. As compensation to
the Subscriber for such loss, the Company agrees to pay (as liquidated damages and not as a
penalty) to the Subscriber for late issuance of Shares in the form required pursuant to Section 7.1
hereof upon Conversion of the Note in the amount of $100 per business day after the Delivery Date
for each $10,000 of Note principal amount being converted of the corresponding Shares which are not
timely delivered. The Company shall pay any payments incurred under this Section in immediately
available funds upon demand. Furthermore, in addition to any other remedies which may be available
to the Subscriber, in the event that the Company fails for any reason to effect delivery of the
Shares by the Delivery Date or make payment by the Mandatory Redemption Payment Date, the
Subscriber will be entitled to revoke all or part of the relevant Notice of Conversion or rescind
all or part of the notice of Mandatory Redemption by delivery of a notice to such effect to the
Company whereupon the Company and the Subscriber shall each be restored to their respective
positions immediately prior to the delivery of such notice, except that the liquidated damages
described above shall be payable through the date notice of revocation or rescission is given to
the Company.

(d) Nothing contained herein or in any document referred to herein or delivered in connection
herewith shall be deemed to establish or require the payment of a rate of interest or other charges
in excess of the maximum permitted by applicable law. In the event that the rate of interest or
dividends required to be paid or other charges hereunder exceed the maximum permitted by such law,
any payments in excess of such maximum shall be credited against amounts owed by the Company to the
Subscriber and thus refunded to the Company.

7.2. Mandatory Redemption at Subscriber’s Election. In the event the Company is
prohibited from issuing Shares for any reason other than pursuant to the limitations set forth in
Section 7.3 hereof, or fails to timely deliver Shares within twenty (20) days after a Delivery
Date, or upon the occurrence of any other Event of Default (as defined in the Note or in this
Agreement), then at the Subscriber’s election, the Company must pay to the Subscriber ten (10)
business days after request by the Subscriber, at the Subscriber’s election, a sum of money
determined by (i) multiplying up to the outstanding principal amount of the Note designated by the
Subscriber by 120%, or (ii) multiplying the number of Shares otherwise deliverable upon conversion
of an amount of Note principal and/or interest designated by the Subscriber (with the date of
giving of such designation being a Deemed Conversion Date) at the then Conversion Price that would
be in effect on the Deemed Conversion Date by the highest closing price of the Common Stock on the
principal market for the period commencing on the Deemed Conversion Date until the day prior to the
receipt of the Mandatory Redemption Payment, whichever is greater, together with accrued but unpaid
interest thereon (“Mandatory Redemption Payment”). The Mandatory Redemption Payment must be
received by the Subscriber on the same date as the Company Shares otherwise deliverable or within
ten (10) business days after request, whichever is sooner (“Mandatory Redemption Payment Date”).
Upon receipt of the Mandatory Redemption Payment, the corresponding Note principal and interest
will be deemed paid and no longer outstanding. Liquidated damages calculated pursuant to Section
7.1(c) hereof, that have been paid or accrued for the twenty day period prior to the actual receipt
of the Mandatory Redemption Payment by the Subscriber shall be credited against the Mandatory
Redemption Payment.

7.3. Maximum Conversion. The Subscriber shall not be entitled to convert on a
Conversion Date that amount of the Note in connection with that number of shares of Common Stock
which would be in excess of the sum of (i) the number of shares of common stock beneficially owned
by the Subscriber and its Affiliates on a Conversion Date, and (ii) the number of shares of Common
Stock issuable upon the conversion of the Note with respect to which the determination of this
provision is being made on a Conversion Date, which would result in beneficial ownership by the
Subscriber and its Affiliates of more than 9.99% of the outstanding shares of common stock of the
Company on such Conversion Date. For the purposes of the provision to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder. Subject to the
foregoing, the Subscriber shall not be limited to aggregate conversions of only 9.99% and aggregate
conversions by the Subscriber may exceed 9.99%. The Subscriber may void the conversion limitation
described in this Section 7.3 upon and effective after 61 days prior written notice to the Company.
The Subscriber may allocate which of the equity of the Company deemed beneficially owned by the
Subscriber shall be included in the 9.99% amount described above and which shall be allocated to
the excess above 9.99%.

7.4. Injunction — Posting of Bond. In the event a Subscriber shall elect to convert a
Note or part thereof or exercise the Warrant in whole or in part, the Company may not refuse
conversion or exercise based on any claim that such Subscriber or any one associated or affiliated
with such Subscriber has been engaged in any violation of law, or for any other reason, unless, an
injunction from a court, on notice, restraining and or enjoining conversion of all or part of said
Note or exercise of all or part of said Warrant shall have been sought and obtained by the Company
and the Company has posted a surety bond for the benefit of such Subscriber in the amount of 130%
of the amount of the Note, or aggregate purchase price of the Warrant Shares which are subject to
the injunction, which bond shall remain in effect until the completion of arbitration/litigation of
the dispute and the proceeds of which shall be payable to such Subscriber to the extent Subscriber
obtains judgment.

7.5. Buy-In. In addition to any other rights available to the Subscriber, if the
Company fails to deliver to the Subscriber such shares issuable upon conversion of a Note by the
Delivery Date and if seven (7) business days after the Delivery Date the Subscriber purchases (in
an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by such Subscriber of the Common Stock which the Subscriber was entitled to receive upon such
conversion (a “Buy-In”), then the Company shall pay in cash to the Subscriber (in addition to any
remedies available to or elected by the Subscriber) the amount by which (A) the Subscriber’s total
purchase price (including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (B) the aggregate principal and/or interest amount of the Note for which such
conversion was not timely honored, together with interest thereon at a rate of 15% per annum,
accruing until such amount and any accrued interest thereon is paid in full (which amount shall be
paid as liquidated damages and not as a penalty). For example, if the Subscriber purchases shares
of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an
attempted conversion of $10,000 of note principal and/or interest, the Company shall be required to
pay the Subscriber $1,000, plus interest. The Subscriber shall provide the Company written notice
indicating the amounts payable to the Subscriber in respect of the Buy-In.

7.6 Adjustments. The Conversion Price, Warrant exercise price and amount of Shares
issuable upon conversion of the Notes and exercise of the Warrants shall be adjusted as described
in this Agreement, the Notes and Warrants.

7.7. Redemption. The Note and Warrants shall not be redeemable or callable except
as described in the Note and Warrants.

7.8. Shareholder Approval. The Company and Subscribers agree that until the Company
obtains shareholder approval of an increase in the authorized Common Stock of the Company to not
less than 1,000,000,000 Shares of Common Stock (the “Approval”), each Subscriber may not convert a
Note for more than such Subscriber’s pro rata portion of the Initial Reserve (as defined in Section
9.1(f) hereof). The Company further covenants to file a preliminary proxy statement for a meeting
of the Company shareholders relating to the Approval with the Commission on or before December 30,
2004(“Proxy Filing Date”). The Company further covenants to use its reasonable best efforts to
obtain the Approval not later than 90 days from the earlier of the Proxy Filing Date or date the
preliminary proxy is actually filed (“Approval Date”). The Company’s failure to (i) file the proxy
on or before the Proxy Filing Date; or (ii) the Company’s failure to obtain the Approval on or
before the Approval Date (any of the preceding being an “Approval Default”) shall be deemed an
Event of Default under the Note.

8. Broker/Legal Fees.

(a) Broker’s Fee. The Company on the one hand, and each Subscriber (for himself
only) on the other hand, agree to indemnify the other against and hold the other harmless from any
and all liabilities to any persons claiming brokerage commissions or finder’s fees on account of
services purported to have been rendered on behalf of the indemnifying party in connection with
this Agreement or the transactions contemplated hereby and arising out of such party’s actions.
The Company represents that there are no parties entitled to receive fees, commissions, or similar
payments in connection with the Offering.

(b) Due Diligence Fee. The Company will pay a due diligence fee equal to ten percent
(10%) of the Purchase Price to Ghillie Finanz, AG (“Due Diligence Fee”). The Due Diligence Fee
will be payable in two tranches proportionate to the aggregate principal amount of the Notes sold
at the Initial Closing and Second Closing out of funds held pursuant to the Escrow Agreement.
Ghillie Finanz, AG will also be paid by the Company a due diligence fee of 10% of the proceeds
received by the Company from exercise of the Warrants (“Warrant Exercise Compensation”). The
Warrant Exercise Compensation will be payable by the Company to Ghillie Finanz, AG within ten days
after each receipt by the Company of Warrant Exercise proceeds.

(c) Legal Fees. The Company shall pay to (i) Grushko & Mittman, P.C., a fee of
$30,000 as reimbursement for services rendered to the Subscribers in connection with this Agreement
and the purchase and sale of the Notes and Warrants (the “Offering”) and acting as Escrow Agent for
the Offering and (ii) Moorhead James (Solicitors) a fee of $25,000 as reimbursement for services
rendered to the Subscribers in connection with this Agreement and the Offering (together, the
“Legal Fees”). The Legal Fees will be payable out of funds held pursuant to the Escrow Agreement.

9.1. Covenants of the Company. The Company covenants and agrees with the Subscribers
as follows:

(a) Stop Orders. The Company will advise the Subscribers, promptly after it receives
notice of issuance by the Commission, any state securities commission or any other regulatory
authority of any stop order or of any order preventing or suspending any offering of any securities
of the Company, or of the suspension of the qualification of the Common Stock of the Company for
offering or sale in any jurisdiction, or the initiation of any proceeding for any such purpose.

(b) Listing. The Company shall promptly secure the listing of the shares of Common
Stock and the Warrant Shares upon each national securities exchange, or automated quotation system
upon which they are or become eligible for listing (subject to official notice of issuance) and
shall maintain such listing so long as any Warrants are outstanding. The Company will maintain the
listing of its Common Stock on the American Stock Exchange, Nasdaq SmallCap Market, Nasdaq National
Market System, Bulletin Board, or New York Stock Exchange (whichever of the foregoing is at the
time the principal trading exchange or market for the Common Stock (the “Principal Market”)), and
will comply in all respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of the Principal Market, as applicable. The Company will provide the Subscribers
copies of all notices it receives notifying the Company of the threatened and actual delisting of
the Common Stock from any Principal Market. As of the date of this Agreement and the Closing Date,
the Bulletin Board is and will be the Principal Market.

(c) Market Regulations. The Company shall notify the Commission, the Principal Market
and applicable state authorities, in accordance with their requirements, of the transactions
contemplated by this Agreement, and shall take all other necessary action and proceedings as may be
required and permitted by applicable law, rule and regulation, for the legal and valid issuance of
the Securities to the Subscribers and promptly provide copies thereof to Subscriber.

(d) Reporting Requirements. From the date of this Agreement and until the sooner of
(i) two (2) years after the Second Closing Date, or (ii) until all the Shares and Warrant Shares
have been resold or transferred by all the Subscribers pursuant to the Registration Statement or
pursuant to Rule 144, without regard to volume limitation, the Company will (v) cause its Common
Stock to continue to be registered under Section 12(b) or 12(g) of the 1934 Act, (x) comply in all
material respects with its reporting and filing obligations under the 1934 Act, (y) comply with all
reporting requirements that are applicable to an issuer with a class of shares registered pursuant
to Section 12(b) or 12(g) of the 1934 Act, as applicable, and (z) comply with all requirements
related to any registration statement filed pursuant to this Agreement. The Company will use its
best efforts not to take any action or file any document (whether or not permitted by the 1933 Act
or the 1934 Act or the rules thereunder) to terminate or suspend such registration or to terminate
or suspend its reporting and filing obligations under said acts until three (3) years after the
Second Closing Date. Until the earlier of the resale of the Common Stock and the Warrant Shares by
each Subscriber or two (2) years after the Warrants have been exercised, the Company will use its
best efforts to continue the listing or quotation of the Common Stock on the Principal Market or
other market with the reasonable consent of Subscribers holding a majority of the Shares and
Warrant Shares, and will comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Principal Market. The Company agrees to timely file a
Form D with respect to the Securities if required under Regulation D and to provide a copy thereof
to each Subscriber promptly after such filing.

(e) Use of Proceeds. The proceeds of the Offering will be employed by the Company for
the purposes set forth on Schedule 9.1(e) hereto. A deviation of more than 20% of any single
stated use of proceeds or a deviation in the aggregate of more than 35% will be an Event of Default
under the Note. Except as set forth on Schedule 9.1(e), the Purchase Price may not and will not be
used for accrued and unpaid officer and director salaries, payment of financing related debt,
redemption of outstanding notes or equity instruments of the Company nor non-trade obligations
outstanding on a Closing Date. A portion of the proceeds will be paid by the Escrow Agent directly
from escrow on the Closing Date to the parties and for the purposes set forth on Schedule 9.1(e).

(f) Reservation. Prior to the Initial Closing Date, the Company undertakes to and
through the Approval Date, the Company shall reserve, on behalf of each holder of Notes in
proportion to the principal amount of Notes purchased pursuant to this Agreement, from its
authorized but unissued common stock, an aggregate of 80,000,000 Shares (“Initial Reserve”) of
Common Stock for issuance upon conversion of the Initial Closing Notes at the conversion price set
forth in the Notes. From and after the Approval Date, the Company undertakes to reserve,
pro rata, on behalf of each holder of a Note or Warrant on a pro rata basis
(including the Second Closing Notes and Second Closing Warrants), from its authorized but unissued
common stock, a number of common shares equal to 150% of the amount of Common Stock necessary to
allow each holder of such Notes to be able to convert all such outstanding Notes and interest and
reserve the amount of Warrant Shares issuable upon exercise of the Warrants. Failure to have
sufficient shares reserved pursuant to this Section 9(f) for three (3) consecutive business days or
ten (10) days in the aggregate shall be a material default of the Company’s obligations under this
Agreement.

(g) Taxes. From the date of this Agreement and until the sooner of (i) three (3)
years after the Second Closing Date, or (ii) until all the Shares and Warrant Shares have been
resold or transferred by all the Subscribers pursuant to the Registration Statement or pursuant to
Rule 144, without regard to volume limitations, the Company will promptly pay and discharge, or
cause to be paid and discharged, when due and payable, all lawful taxes, assessments and
governmental charges or levies imposed upon the income, profits, property or business of the
Company; provided, however, that any such tax, assessment, charge or levy need not be paid if the
validity thereof shall currently be contested in good faith by appropriate proceedings and if the
Company shall have set aside on its books adequate reserves with respect thereto, and provided,
further, that the Company will pay all such taxes, assessments, charges or levies forthwith upon
the commencement of proceedings to foreclose any lien which may have attached as security
therefore.

(h) Insurance. From the date of this Agreement and until the sooner of (i) three (3)
years after the Second Closing Date, or (ii) until all the Shares and Warrant Shares have been
resold or transferred by all the Subscribers pursuant to the Registration Statement or pursuant to
Rule 144, without regard to volume limitations, the Company will keep its assets which are of an
insurable character insured by financially sound and reputable insurers against loss or damage by
fire, explosion and other risks customarily insured against by companies in the Company’s line of
business, in amounts sufficient to prevent the Company from becoming a co-insurer and not in any
event less than one hundred percent (100%) of the insurable value of the property insured; and the
Company will maintain, with financially sound and reputable insurers, insurance against other
hazards and risks and liability to persons and property to the extent and in the manner customary
for companies in similar businesses similarly situated and to the extent available on commercially
reasonable terms.

(i) Books and Records. From the date of this Agreement and until the sooner of (i)
three (3) years after the Second Closing Date, or (ii) until all the Shares and Warrant Shares have
been resold or transferred by all the Subscribers pursuant to the Registration Statement or
pursuant to Rule 144, without regard to volume limitations, the Company will keep true records and
books of account in which full, true and correct entries will be made of all dealings or
transactions in relation to its business and affairs in accordance with generally accepted
accounting principles applied on a consistent basis.

(j) Governmental Authorities. From the date of this Agreement and until the sooner
of (i) three (3) years after the Second Closing Date, or (ii) until all the Shares and Warrant
Shares have been resold or transferred by all the Subscribers pursuant to the Registration
Statement or pursuant to Rule 144, without regard to volume limitations, the Company shall duly
observe and conform in all material respects to all valid requirements of governmental authorities
relating to the conduct of its business or to its properties or assets.

(k) Intellectual Property. From the date of this Agreement and until the sooner of
(i) three (3) years after the Second Closing Date, or (ii) until all the Shares and Warrant Shares
have been resold or transferred by all the Subscribers pursuant to the Registration Statement or
pursuant to Rule 144, without regard to volume limitations, the Company shall maintain in full
force and effect its corporate existence, rights and franchises and all licenses and other rights
to use intellectual property owned or possessed by it and reasonably deemed to be necessary to the
conduct of its business.

(l) Properties. From the date of this Agreement and until the sooner of (i) three (3)
years after the Second Closing Date, or (ii) until all the Shares and Warrant Shares have been
resold or transferred by all the Subscribers pursuant to the Registration Statement (as defined in
Section 11.1(iv) hereof) or pursuant to Rule 144, without regard to volume limitations, the Company
will keep its properties in good repair, working order and condition, reasonable wear and tear
excepted, and from time to time make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto; and the Company will at all times comply with each provision of
all leases to which it is a party or under which it occupies property if the breach of such
provision could reasonably be expected to have a Material Adverse Effect.

(m) Confidentiality/Public Announcement. From the date of this Agreement and until
the sooner of (i) three (3) years after the Second Closing Date, or (ii) until all the Shares and
Warrant Shares have been resold or transferred by all the Subscribers pursuant to the Registration
Statement or pursuant to Rule 144, without regard to volume limitations, the Company agrees that
except in connection with a Form 8-K or the Registration Statement, it will not disclose publicly
or privately the identity of the Subscribers unless expressly agreed to in writing by a Subscriber
or only to the extent required by law and then only upon five days prior notice to Subscriber. In
any event and subject to the foregoing, the Company undertakes to file a Form 8-K or make a public
announcement describing the Offering not later than the first business day after each Closing Date.
In the Form 8-K or public announcement, the Company will specifically disclose the amount of
common stock outstanding immediately after each Closing. A form of the proposed Form 8-K or public
announcement to be employed in connection with each Closing Date is annexed hereto as Exhibit D.

(n) Further Registration Statements. Except for a registration statement filed on
behalf of the Subscribers pursuant to Section 11 of this Agreement or in connection with the
securities identified on Schedule 11.1 hereto, the Company will not file any registration
statements or amend any already filed registration statement (except for any amendments deemed
necessary by the Company to keep such already filed registration statements current and effective),
including but not limited to Form S-8, with the Commission or with state regulatory authorities
without the consent of the Subscriber (which consent shall not be unreasonably withheld) until the
sooner of (i) the Registration Statement shall have been current and available for use in
connection with the public resale of the Shares and Warrant Shares for 365 days, (ii) until all the
Shares have been resold or transferred by the Subscribers pursuant to the Registration Statement or
Rule 144, without regard to volume limitations, or (iii) the date the Notes have been fully paid
(“Exclusion Period”).

(o) Blackout. The Company undertakes and covenants that until the first to occur of
(i) the end of the Exclusion Period, or (ii) until all the Shares and Warrant Shares have been
resold pursuant to a registration statement or Rule 144 except as described on Schedule 11.1
hereto, the Company will not enter into any acquisition, merger, exchange or sale or other
transaction that could have the effect of delaying the effectiveness of any pending registration
statement or causing an already effective registration statement to no longer be effective or
current for a period of fifteen (15) or more days.

(p) Non-Public Information. The Company covenants and agrees that neither it nor any
other Person acting on its behalf will provide any Subscriber or its agents or counsel with any
information that the Company believes constitutes material non-public information, unless prior
thereto such Subscriber shall have agreed in writing to receive such information. The Company
understands and confirms that each Subscriber shall be relying on the foregoing representations in
effecting transactions in securities of the Company.

(q) Limited Standstill. The Company will deliver to the Subscribers on or before the
Closing Date and enforce the provisions of irrevocable lockup agreements (“Limited Standstill
Agreements”) in the forms annexed hereto as Exhibit E, with the parties identified on Schedule
9.1(q) hereto.

(r) Schedule 9.1(r) is also a schedule of all outstanding debt of the Company or equity
instruments of the Company and TGC which accrue dividends or interest. The Company will obtain the
agreement of the holders of all such debt or equity instruments to waive conversion or exercise and
payment of all such principal, redemption amounts, interest, dividends and any other payments due
thereon or in connection therewith until the date the Notes have been fully paid. A copy of the
Subordination Agreement to be delivered to Subscribers is annexed hereto as Exhibit F hereto.

9.2. Covenants of the Subsidiaries. The Company makes the same covenants contained
in Section 9.1(g) through 9.1(l) on behalf of TGC as if such covenants were made by TGC.

10. Covenants of the Company and Subscriber Regarding Indemnification.

(a) The Company agrees to indemnify, hold harmless, reimburse and defend the Subscribers, the
Subscribers’ officers, directors, agents, Affiliates, control persons, and principal shareholders,
against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal
fees) of any nature, incurred by or imposed upon the Subscriber or any such person which results,
arises out of or is based upon (i) any material misrepresentation by Company or breach of any
warranty by Company in this Agreement or in any Exhibits or Schedules attached hereto, or other
agreement delivered pursuant hereto; or (ii) after any applicable notice and/or cure periods, any
breach or default in performance by the Company of any covenant or undertaking to be performed by
the Company hereunder, or any other agreement entered into by the Company and Subscriber relating
hereto.

(b) Each Subscriber agrees to indemnify, hold harmless, reimburse and defend the Company and
each of the Company’s officers, directors, agents, Affiliates, control persons against any claim,
cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any
nature, incurred by or imposed upon the Company or any such person which results, arises out of or
is based upon (i) any material misrepresentation by such Subscriber in this Agreement or in any
Exhibits or Schedules attached hereto, or other agreement delivered pursuant hereto; or (ii) after
any applicable notice and/or cure periods, any breach or default in performance by such Subscriber
of any covenant or undertaking to be performed by such Subscriber hereunder, or any other agreement
entered into by the Company and Subscribers, relating hereto.

(c) In no event shall the liability of any Subscriber or permitted successor hereunder or
under any Transaction Document or other agreement delivered in connection herewith be greater in
amount than the dollar amount of the net proceeds actually received by such Subscriber upon the
sale of Registrable Securities (as defined herein).

(d) The procedures set forth in Section 11.6 shall apply to the indemnification set forth in
Sections 10(a) and 10(b) above.

11.1. Registration Rights. The Company hereby grants the following registration
rights to holders of the Securities.

(i) On one occasion, for a period commencing sixty-one (61) days after the Initial Closing
Date, but not later than two (2) years after the Second Closing Date (“Request Date”), upon a
written request therefor from any record holder or holders of more than 50% of the Shares issued
and issuable upon conversion of the Notes and Warrant Shares actually issued upon exercise of the
Warrants, the Company shall prepare and file with the Commission a registration statement under the
1933 Act registering the Shares and Warrant Shares which are the subject of such request for
unrestricted public resale by the holder thereof. For purposes of Section 11 hereof, Registrable
Securities shall include all Shares issuable upon conversion of the Notes and all Warrant Shares.
For purposes of Sections 11.1(i) and 11.1(ii), Registrable Securities shall not include (A)
Securities which are registered for resale in an effective registration statement, (B) included for
registration in a pending registration statement, or (C) which have been issued without further
transfer restrictions after a sale or transfer pursuant to Rule 144 under the 1933 Act. Upon the
receipt of such request, the Company shall promptly give written notice to all other record holders
of the Registrable Securities that such registration statement is to be filed and shall include in
such registration statement Registrable Securities for which it has received written requests
within ten (10) days after the Company gives such written notice. Such other requesting record
holders shall be deemed to have exercised their demand registration right under this Section
11.1(i).

(ii) If the Company at any time proposes to register any of its securities under the 1933 Act
for sale to the public, whether for its own account or for the account of other security holders or
both, except with respect to registration statements on Forms S-4, S-8 or another form not
available for registering the Registrable Securities for sale to the public, provided the
Registrable Securities are not otherwise registered for resale by the Subscribers or Holder
pursuant to an effective registration statement, each such time it will give at least fifteen (15)
days’ prior written notice to the record holder of the Registrable Securities of its intention so
to do. Upon the written request of the holder, received by the Company within ten (10) days after
the giving of any such notice by the Company, to register any of the Registrable Securities not
previously registered, the Company will cause such Registrable Securities as to which registration
shall have been so requested to be included with the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent required to permit the sale or
other disposition of the Registrable Securities so registered by the holder of such Registrable
Securities (the “Seller” or “Sellers”). In the event that any registration pursuant to this Section
11.1(ii) shall be, in whole or in part, an underwritten public offering of common stock of the
Company, the number of shares of Registrable Securities to be included in such an underwriting may
be reduced by the managing underwriter if and to the extent that the Company and the underwriter
shall reasonably be of the opinion that such inclusion would adversely affect the marketing of the
securities to be sold by the Company therein; provided, however, that the Company shall notify the
Seller in writing of any such reduction. Notwithstanding the foregoing provisions, or Section 11.4
hereof, the Company may withdraw or delay or suffer a delay of any registration statement referred
to in this Section 11.1(ii) without thereby incurring any liability to the Seller.

(iii) If, at the time any written request for registration is received by the Company pursuant
to Section 11.1(i), the Company has determined to proceed with the actual preparation and filing of
a registration statement under the 1933 Act in connection with the proposed offer and sale for cash
of any of its securities for the Company’s own account and the Company actually does file such
other registration statement, such written request shall be deemed to have been given pursuant to
Section 11.1(ii) rather than Section 11.1(i), and the rights of the holders of Registrable
Securities covered by such written request shall be governed by Section 11.1(ii).

(iv) The Company shall file with the Commission a Form S-1 registration statement (the
“Registration Statement”) (or such other form that it is eligible to use) in order to register the
Registrable Securities for resale and distribution under the 1933 Act not later than thirty (30)
days after the Initial Closing Date (the “Filing Date”), and use its best efforts to cause to be
declared effective within the sooner of (A) sixty (60) days after the Filing Date, or (B) within
sixty (60) days after the actual date of filing of the Registration Statement (unless such
effectiveness is delayed solely by the Commission’s review process such that audited financial
statements for the year ended December 31, 2004 will be required prior to the Commission declaring
the Registration Statement effective, then not later than April 30, 2005) (the “Effective Date”).
For purposes of this Section 11.1(iv), Registrable Securities shall mean the Reserve Amount. The
Company will register not less than a number of shares of common stock in the aforedescribed
registration statement that is equal to the Initial Reserve. The Registrable Securities shall be
reserved and set aside exclusively for the benefit of each Subscriber and Warrant holder,
pro rata, and not issued, employed or reserved for anyone other than each such
Subscriber. The Registration Statement will immediately be amended or additional registration
statements will be immediately filed by the Company as necessary to register additional shares of
Common Stock to allow the public resale of all Common Stock included in and issuable by virtue of
the Registrable Securities. It shall be deemed a Non-Registration Event if at any time after the
Actual Effective Date the Company has registered for unrestricted resale on behalf of the
Subscriber fewer than 100% of the Registrable Securities.

(v) In connection with the Shares issuable upon conversion of the Initial Notes and Warrants
which have not been included in the Registration Statement and the Shares issuable upon conversion
of the Second Closing Notes and Warrants, if any (collectively “Additional Registrable
Securities”), the Subscriber is granted the identical registration rights described in the
Transaction Documents except that with respect to the Additional Registrable Securities, the Filing
Date and Effective Date shall be calculated respectively, thirty (30) days and sixty (60) days from
the earlier of the Approval Date or Second Closing Date. Without the written consent of the
Subscriber, no securities of the Company other than the Registrable Securities will be included in
the Registration Statement except as disclosed on Schedule 11.1.

11.2. Registration Procedures. If and whenever the Company is required by the
provisions of Section 11.1 to effect the registration of any Registrable Securities under the 1933
Act, the Company will, as expeditiously as possible:

(a) subject to the timelines provided in this Agreement, prepare and file with the Commission
a registration statement required by Section 11, with respect to such securities and use its best
efforts to cause such registration statement to become and remain effective for the period of the
distribution contemplated thereby (determined as herein provided), and promptly provide to the
holders of the Registrable Securities copies of all filings and Commission letters of comment and
notify Subscribers and Grushko & Mittman, P.C. (by telecopier and by email to
Counslers@aol.com) within one (1) business day after (i) notice that the Commission has no
comments or no further comments on the Registration Statement, and (ii) the declaration of
effectiveness of the registration statement, (failure to timely provide notice as required by this
Section 11.2(a) shall be a material breach of the Company’s obligation and an Event of Default as
defined in the Notes and a Non-Registration Event as defined in Section 11.4 of this Agreement);

(b) prepare and file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective until such registration statement has been effective for a period
of two (2) years, and comply with the provisions of the 1933 Act with respect to the disposition of
all of the Registrable Securities covered by such registration statement in accordance with the
Sellers’ intended method of disposition set forth in such registration statement for such period;

(c) furnish to the Sellers, at the Company’s expense, such number of copies of the
registration statement and the prospectus included therein (including each preliminary prospectus)
as such persons reasonably may request in order to facilitate the public sale or their disposition
of the securities covered by such registration statement;

(d) use its best efforts to register or qualify the Registrable Securities covered by such
registration statement under the securities or “blue sky” laws of such jurisdictions as the Sellers
shall request in writing, provided, however, that the Company shall not for any such purpose be
required to qualify generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any such jurisdiction;

(e) if applicable, list the Registrable Securities covered by such registration statement with
any securities exchange on which the Common Stock of the Company is then listed;

(f) immediately notify the Sellers when a prospectus relating thereto is required to be
delivered under the 1933 Act, of the happening of any event of which the Company has knowledge as a
result of which the prospectus contained in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in light of the
circumstances then existing; and

(g) provided same would not be in violation of the provision of Regulation FD under the 1934
Act, make available for inspection by the Sellers, and any attorney, accountant or other agent
retained by the Seller or underwriter, all publicly available, non-confidential financial and other
records, pertinent corporate documents and properties of the Company, and cause the Company’s
officers, directors and employees to supply all publicly available, non-confidential information
reasonably requested by the seller, attorney, accountant or agent in connection with such
registration statement.

11.3. Provision of Documents. In connection with each registration described in this
Section 11, each Seller will furnish to the Company in writing such information and representation
letters with respect to itself and the proposed distribution by it as reasonably shall be necessary
in order to assure compliance with federal and applicable state securities laws.

11.4. Non-Registration Events. The Company and the Subscribers agree that the Sellers
will suffer damages if the Registration Statement is not filed by the Filing Date and not declared
effective by the Commission by the Effective Date, and any registration statement required under
Section 11.1(i) or 11.1(ii) is not filed within 60 days after written request and declared
effective by the Commission within 120 days after such request, and maintained in the manner and
within the time periods contemplated by Section 11 hereof, and it would not be feasible to
ascertain the extent of such damages with precision. Accordingly, if (i) the Registration
Statement is not filed on or before the Filing Date, (ii) is not declared effective on or before
the Effective Date, (iii) the Registration Statement is not declared effective within three (3)
business days after receipt by the Company or its attorneys of a written or oral communication from
the Commission that the Registration Statement will not be reviewed or that the Commission has no
further comments, (iv) if the registration statement described in Sections 11.1(i) or 11.1(ii) is
not filed within 60 days after such written request, or is not declared effective within 120 days
after such written request, or (v) any registration statement described in Sections 11.1(i),
11.1(ii) or 11.1(iv) is filed and declared effective but shall thereafter cease to be effective
(without being succeeded within fifteen (15) business days by an effective replacement or amended
registration statement) for a period of time which shall exceed 30 days in the aggregate per year
(defined as a period of 365 days commencing on the date the Registration Statement is declared
effective) or more than 20 consecutive days (each such event referred to in clauses (i), (ii),
(iii), (iv) and (v) of this Section 11.4 is referred to herein as a “Non-Registration Event”), then
the Company shall deliver to the holder of Registrable Securities, as Liquidated Damages, an amount
equal to two percent (2%) for each thirty (30) days or part thereof, thereafter of the Purchase
Price of the Notes remaining unconverted and purchase price of Shares issued upon conversion of the
Notes owned of record by such holder which are subject to such Non-Registration Event. The Company
must pay the Liquidated Damages, at the Company’s option, in cash or an amount equal to two hundred
percent of such cash Liquidated Damages if paid in additional shares of registered unlegended
free-trading shares of Common Stock. Such Common Stock shall be valued at a per share value equal
to 75% of the average of the five (5) lowest closing bid prices of the Common Stock as reported by
Bloomberg L.P. for the twenty (20) trading days preceding the first day of each thirty (30) day or
shorter period for which Liquidated Damages are payable. The Liquidated Damages must be paid
within ten (10) days after the end of each thirty (30) day period or shorter part thereof for which
Liquidated Damages are payable. In the event a Registration Statement is filed by the Filing Date
but is withdrawn prior to being declared effective by the Commission, then such Registration
Statement will be deemed to have not been filed. All oral or written and accounting comments
received from the Commission relating to the Registration Statement must be responded to within ten
(10) business days. Failure to timely respond is a Non-Registration Event for which Liquidated
Damages shall accrue and be payable by the Company to the holders of Registrable Securities at the
same rate set forth above. Notwithstanding the foregoing, the Company shall not be liable to the
Subscriber under this Section 11.4 for any events or delays occurring as a consequence of the acts
or omissions of the Subscribers contrary to the obligations undertaken by Subscribers in this
Agreement. Liquidated Damages will not accrue or be payable pursuant to this Section 11.4 nor will
a Non-Registration Event be deemed to have occurred for times during which Registrable Securities
are transferable by the holder of Registrable Securities pursuant to Rule 144(k) under the 1933
Act.

11.5. Expenses. All expenses incurred by the Company in complying with Section 11,
including, without limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel and independent public accountants for the Company, fees and expenses
(including reasonable counsel fees) incurred in connection with complying with state securities or
“blue sky” laws, fees of the National Association of Securities Dealers, Inc., transfer taxes, fees
of transfer agents and registrars, costs of insurance and fee of one counsel for all Sellers are
called “Registration Expenses.” All underwriting discounts and selling commissions applicable to
the sale of Registrable Securities, including any fees and disbursements of any additional counsel
to the Seller, are called “Selling Expenses.” The Company will pay all Registration Expenses in
connection with the registration statement under Section 11. Selling Expenses in connection with
each registration statement under Section 11 shall be borne by the Seller and may be apportioned
among the Sellers in proportion to the number of shares sold by the Seller relative to the number
of shares sold under such registration statement or as all Sellers thereunder may agree.

11.6. Indemnification and Contribution.

(a) In the event of a registration of any Registrable Securities under the 1933 Act pursuant
to Section 11, the Company will, to the extent permitted by law, indemnify and hold harmless the
Seller, each officer of the Seller, each director of the Seller, each underwriter of such
Registrable Securities thereunder and each other person, if any, who controls such Seller or
underwriter within the meaning of the 1933 Act, against any losses, claims, damages or liabilities,
joint or several, to which the Seller, or such underwriter or controlling person may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such Registrable
Securities was registered under the 1933 Act pursuant to Section 11, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are
based upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of the circumstances
when made, and will subject to the provisions of Section 11.6(c) reimburse the Seller, each such
underwriter and each such controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company shall not be liable to the Seller to the extent that
any such damages arise out of or are based upon an untrue statement or omission made in any
preliminary prospectus if (i) the Seller failed to send or deliver a copy of the final prospectus
delivered by the Company to the Seller with or prior to the delivery of written confirmation of the
sale by the Seller to the person asserting the claim from which such damages arise, (ii) the final
prospectus would have corrected such untrue statement or alleged untrue statement or such omission
or alleged omission, or (iii) to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by any such Seller, or any such
controlling person in writing specifically for use in such registration statement or prospectus.

(b) In the event of a registration of any of the Registrable Securities under the 1933 Act
pursuant to Section 11, each Seller severally but not jointly will, to the extent permitted by law,
indemnify and hold harmless the Company, and each person, if any, who controls the Company within
the meaning of the 1933 Act, each officer of the Company who signs the registration statement, each
director of the Company, each underwriter and each person who controls any underwriter within the
meaning of the 1933 Act, against all losses, claims, damages or liabilities, joint or several, to
which the Company or such officer, director, underwriter or controlling person may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the registration statement under which such Registrable
Securities were registered under the 1933 Act pursuant to Section 11, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are
based upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will reimburse the Company
and each such officer, director, underwriter and controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any such loss, claim,
damage, liability or action, provided, however, that the Seller will be liable hereunder in any
such case if and only to the extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or omission or alleged omission made
in reliance upon and in conformity with information pertaining to such Seller, as such, furnished
in writing to the Company by such Seller specifically for use in such registration statement or
prospectus, and provided, further, however, that the liability of the Seller hereunder shall be
limited to the net proceeds actually received by the Seller from the sale of Registrable Securities
covered by such registration statement.

(c) Promptly after receipt by an indemnified party hereunder of notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so
to notify the indemnifying party shall not relieve it from any liability which it may have to such
indemnified party other than under this Section 11.6(c) and shall only relieve it from any
liability which it may have to such indemnified party under this Section 11.6(c), except and only
if and to the extent the indemnifying party is prejudiced by such omission. In case any such action
shall be brought against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent
it shall wish, to assume and undertake the defense thereof with counsel satisfactory to such
indemnified party, and, after notice from the indemnifying party to such indemnified party of its
election so to assume and undertake the defense thereof, the indemnifying party shall not be liable
to such indemnified party under this Section 11.6(c) for any legal expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than reasonable costs of
investigation and of liaison with counsel so selected, provided, however, that, if the defendants
in any such action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable defenses available
to it which are different from or additional to those available to the indemnifying party or if the
interests of the indemnified party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified parties, as a group, shall have the right to select one
separate counsel and to assume such legal defenses and otherwise to participate in the defense of
such action, with the reasonable expenses and fees of such separate counsel and other expenses
related to such participation to be reimbursed by the indemnifying party as incurred.

(d) In order to provide for just and equitable contribution in the event of joint liability
under the 1933 Act in any case in which either (i) a Seller, or any controlling person of a Seller,
makes a claim for indemnification pursuant to this Section 11.6 but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 11.6 provides for indemnification
in such case, or (ii) contribution under the 1933 Act may be required on the part of the Seller or
controlling person of the Seller in circumstances for which indemnification is not provided under
this Section 11.6; then, and in each such case, the Company and the Seller will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject (after contribution
from others) in such proportion so that the Seller is responsible only for the portion represented
by the percentage that the public offering price of its securities offered by the registration
statement bears to the public offering price of all securities offered by such registration
statement, provided, however, that, in any such case, (y) the Seller will not be required to
contribute any amount in excess of the public offering price of all such securities sold by it
pursuant to such registration statement; and (z) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

11.7. Delivery of Unlegended Shares.

(a) Within three (3) business days (such third (3rd) business day being the
“Unlegended Shares Delivery Date”) after the business day on which the Company has received (i) a
notice that Registrable Securities have been sold either pursuant to the Registration Statement or
Rule 144 under the 1933 Act, (ii) a representation that the prospectus delivery requirements, or
the requirements of Rule 144, as applicable and if required, have been satisfied, and (iii) the
original share certificates representing the shares of Common Stock that have been sold, and (iv)
in the case of sales under Rule 144, customary representation letters of the Subscriber and/or
Subscriber’s broker regarding compliance with the requirements of Rule 144, the Company at its
expense, (y) shall deliver, and shall cause legal counsel selected by the Company to deliver, to
its transfer agent (with copies to Subscriber) an appropriate instruction and opinion of such
counsel, directing the delivery of shares of Common Stock without any legends including the legend
set forth in Section 4(e) above, issuable pursuant to any effective and current Registration
Statement described in Section 11 of this Agreement or pursuant to Rule 144 under the 1933 Act (the
“Unlegended Shares”); and (z) cause the transmission of the certificates representing the
Unlegended Shares together with a legended certificate representing the balance of the submitted
Shares certificate, if any, to the Subscriber at the address specified in the notice of sale, via
express courier, by electronic transfer or otherwise on or before the Unlegended Shares Delivery
Date. Transfer fees shall be the responsibility of the Seller.

(b) In lieu of delivering physical certificates representing the Unlegended Shares, if the
Company’s transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer program, upon request of a Subscriber, so long as the certificates therefor do
not bear a legend and the Subscriber is not obligated to return such certificate for the placement
of a legend thereon, the Company shall cause its transfer agent to electronically transmit the
Unlegended Shares by crediting the account of Subscriber’s prime Broker with DTC through its
Deposit Withdrawal Agent Commission system. Such delivery must be made on or before the Unlegended
Shares Delivery Date.

(c) The Company understands that a delay in the delivery of the Unlegended Shares pursuant to
Section 11 hereof later than two business days after the Unlegended Shares Delivery Date could
result in economic loss to a Subscriber. As compensation to a Subscriber for such loss, the
Company agrees to pay late payment fees (as liquidated damages and not as a penalty) to the
Subscriber for late delivery of Unlegended Shares in the amount of $100 per business day after the
Delivery Date for each $10,000 of purchase price of the Unlegended Shares subject to the delivery
default. If during any 360 day period, the Company fails to deliver Unlegended Shares as required
by this Section 11.7 for an aggregate of thirty (30) days, then each Subscriber or assignee holding
Securities subject to such default may, at its option, require the Company to redeem all or any
portion of the Shares and Warrant Shares subject to such default at a price per share equal to 120%
of the Purchase Price of such Common Stock and Warrant Shares (“Unlegended Redemption Amount”).
The amount of the aforedescribed liquidated damages that have accrued or paid for the twenty day
period prior to the receipt by the Subscriber of the Unlegended Redemption Amount shall be credited
against the Unlegended Redemption Amount. The Company shall pay any payments incurred under this
Section in immediately available funds upon demand.

(d) In addition to any other rights available to a Subscriber, if the Company fails to deliver
to a Subscriber Unlegended Shares as required pursuant to this Agreement, within seven (7) business
days after the Unlegended Shares Delivery Date and the Subscriber purchases (in an open market
transaction or otherwise) shares of common stock to deliver in satisfaction of a sale by such
Subscriber of the shares of Common Stock which the Subscriber was entitled to receive from the
Company (a “Buy-In”), then the Company shall pay in cash to the Subscriber (in addition to any
remedies available to or elected by the Subscriber) the amount by which (A) the Subscriber’s total
purchase price (including brokerage commissions, if any) for the shares of common stock so
purchased exceeds (B) the aggregate purchase price of the shares of Common Stock delivered to the
Company for reissuance as Unlegended Shares, together with interest thereon at a rate of 15% per
annum, accruing until such amount and any accrued interest thereon is paid in full (which amount
shall be paid as liquidated damages and not as a penalty). For example, if a Subscriber purchases
shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to
$10,000 of purchase price of shares of Common Stock delivered to the Company for reissuance as
Unlegended Shares, the Company shall be required to pay the Subscriber $1,000, plus interest. The
Subscriber shall provide the Company written notice indicating the amounts payable to the
Subscriber in respect of the Buy-In.

(e) In the event a Subscriber shall request delivery of Unlegended Shares as described in
Section 11.7(a) and the Company is required to deliver such Unlegended Shares pursuant to Section
11.7(a), the Company may not refuse to deliver Unlegended Shares based on any claim that such
Subscriber or any one associated or affiliated with such Subscriber has been engaged in any
violation of law, or for any other reason, unless, an injunction or temporary restraining order
from a court, on notice, restraining and or enjoining delivery of such Unlegended Shares or
exercise of all or part of said Warrant shall have been sought and obtained and the Company has
posted a surety bond for the benefit of such Subscriber in the amount of 120% of the amount of the
aggregate purchase price of the Common Stock and Warrant Shares which are subject to the injunction
or temporary restraining order, which bond shall remain in effect until the completion of
arbitration/litigation of the dispute and the proceeds of which shall be payable to such Subscriber
to the extent Subscriber obtains judgment in Subscriber’s favor.

12. (a) Right of First Refusal. Until one year after the Actual Effective Date, the
Subscribers shall be given not less than seven (7) business days prior written notice of any
proposed sale by the Company of its common stock or other securities or debt obligations, except in
connection with (i) full or partial consideration in connection with a strategic merger,
consolidation or purchase of substantially all of the securities or assets of corporation or other
entity, and (ii) as has been described in the Reports or Other Written Information filed with the
Commission or delivered to the Subscribers prior to the Closing Date (collectively the foregoing
are “Excepted Issuances”). The Subscribers who exercise their rights pursuant to this Section
12(a) shall have the right during the seven (7) business days following receipt of the notice to
purchase such offered common stock, debt or other securities in accordance with the terms and
conditions set forth in the notice of sale in the same proportion to each other as their purchase
of Notes in the Offering. In the event such terms and conditions are modified during the notice
period, the Subscribers shall be given prompt notice of such modification and shall have the right
during the seven (7) business days following the notice of modification, whichever is longer, to
exercise such right.

(b) Offering Restrictions. Until the end of the Exclusion Period, the Company will
not issue any equity, convertible debt or other securities convertible into common stock or equity
of the Company without the prior written consent of the Subscriber, which consent may be withheld
for any reason.

(c) Favored Nations Provision. Other than the Excepted Issuances, if at any time
Notes are outstanding the Company shall offer, issue or agree to issue any common stock or
securities convertible into or exercisable for shares of common stock (or modify any of the
foregoing which may be outstanding) to any person or entity at a price per share or conversion or
exercise price per share which shall be less than the Conversion Price in respect of the Shares, or
if less than the Warrant exercise price in respect of the Warrant Shares, without the consent of
each Subscriber holding Notes and/or Shares, then the Company shall issue, for each such occasion,
additional shares of Common Stock to each Subscriber so that the average per share purchase price
of the shares of Common Stock issued to the Subscriber (of only the Common Stock or Warrant Shares
still owned by the Subscriber) is equal to such other lower price per share and the Conversion
Price and Warrant Exercise Price shall automatically be reduced to such other lower price per
share. The average Purchase Price of the Shares and average exercise price in relation to the
Warrant Shares shall be calculated separately for the Shares and Warrant Shares. The foregoing
calculation and issuance shall be made separately for Shares received upon conversion and
separately for Warrant Shares. The delivery to the Subscriber of the additional shares of Common
Stock shall be not later than the closing date of the transaction giving rise to the requirement to
issue additional shares of Common Stock. The Subscriber is granted the registration rights
described in Section 11 hereof in relation to such additional shares of Common Stock except that
the Filing Date and Effective Date vis-à-vis such additional common shares shall be, respectively,
the sixtieth (60th) and one hundred and twentieth (120th) date after the
closing date giving rise to the requirement to issue the additional shares of Common Stock. For
purposes of the issuance and adjustment described in this paragraph, the issuance of any security
of the Company carrying the right to convert such security into shares of Common Stock or of any
warrant, right or option to purchase Common Stock shall result in the issuance of the additional
shares of Common Stock upon the issuance of such convertible security, warrant, right or option and
again at any time upon any subsequent issuances of shares of Common Stock upon exercise of such
conversion or purchase rights if such issuance is at a price lower than the Conversion Price in
effect upon such issuance. The rights of the Subscriber set forth in this Section 12 are in
addition to any other rights the Subscriber has pursuant to this Agreement, the Note, any
Transaction Document, and any other agreement referred to or entered into in connection herewith.

(d) Option Plan Restrictions. The only officer, director, employee and consultant
stock option or stock incentive plan currently in effect or contemplated by the Company has been
submitted to the Subscribers or is described on Schedule 12(d). No other plan will be adopted nor
may any options or equity not included in such plan be issued for so long as any sum is outstanding
under the Note.

(e) Maximum Exercise of Rights. In the event the exercise of the rights described in
Sections 12(a) and 12(c) would result in the issuance of an amount of common stock of the Company
that would exceed the maximum amount that may be issued to a Subscriber calculated in the manner
described in Section 7.3 of this Agreement, then the issuance of such additional shares of common
stock of the Company to such Subscriber will be deferred in whole or in part until such time as
such Subscriber is able to beneficially own such common stock without exceeding the maximum amount
set forth calculated in the manner described in Section 7.3 of this Agreement. The determination
of when such common stock may be issued shall be made by each Subscriber as to only such
Subscriber.

13. Security Interest. The Subscribers will be granted a security interest in all
the assets of the Company to be memorialized in a Security Agreement, a form of which is annexed
hereto as Exhibit G. The Subscribers will be granted a security interest in all the assets of TGC
to be memorialized in a Security Agreement, a form of which is annexed hereto as Exhibit H. The
Company will execute such other agreements, documents and financing statements to be filed at the
Company’s expense with such jurisdictions, states and counties designated by the Subscribers. The
Company will also execute all such documents reasonably necessary in the opinion of Subscriber to
memorialize and further protect the security interest described herein. The Subscribers will
appoint a Collateral Agent to represent them collectively in connection with the security interest
to be granted in the assets of the Company and TGC. The appointment will be pursuant to a
Collateral Agent Agreement, a form of which is annexed hereto as Exhibit I.

14. Miscellaneous.

(a) Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless otherwise specified
herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below
or to such other address as such party shall have specified most recently by written notice. Any
notice or other communication required or permitted to be given hereunder shall be deemed effective
(a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second business day following the
date of mailing by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for such communications
shall be: (i) if to the Company, to: Diametrics Medical, Inc., 3050 Centre Pointe Drive, Suite 150,
St. Paul, MN 55113, Attn: David B. Kaysen, President & CEO, telecopier number: (651) 639-8549, with
a copy by telecopier only to: Kenneth L. Cutler, Esq., Dorsey & Whitney LLP, 50 South Sixth Street,
Suite 1500, Minneapolis, MN 55402, telecopier number: (612) 340-7800, and (ii) if to the
Subscribers, to: the one or more addresses and telecopier numbers indicated on the signature pages
hereto, with an additional copy by telecopier only to: Grushko & Mittman, P.C., 551 Fifth Avenue,
Suite 1601, New York, New York 10176, telecopier number: (212) 697-3575.

(b) Closing. The consummation of the transactions contemplated herein shall take
place at the offices of Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York
10176, upon the satisfaction of all conditions to Closing set forth in this Agreement. Each of the
Initial Closing Date and Second Closing Date is referred to as a “Closing Date”.

(c) Entire Agreement; Assignment. This Agreement and other documents delivered in
connection herewith represent the entire agreement between the parties hereto with respect to the
subject matter hereof and may be amended only by a writing executed by both parties. Neither the
Company nor the Subscribers have relied on any representations not contained or referred to in this
Agreement and the documents delivered herewith. No right or obligation of the Company shall be
assigned without prior notice to and the written consent of the Subscribers.

(d)  Counterparts/Execution. This Agreement may be executed in any number of
counterparts and by the different signatories hereto on separate counterparts, each of which, when
so executed, shall be deemed an original, but all such counterparts shall constitute but one and
the same instrument. This Agreement may be executed by facsimile signature and delivered by
facsimile transmission.

(e) Law Governing this Agreement. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to principles of conflicts of
laws. Any action brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of New York or in the
federal courts located in the state of New York. The parties and the individuals executing this
Agreement and other agreements referred to herein or delivered in connection herewith on behalf of
the Company agree to submit to the jurisdiction of such courts and waive trial by jury. The
prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees
and costs. In the event that any provision of this Agreement or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict therewith and shall
be deemed modified to conform with such statute or rule of law. Any such provision which may prove
invalid or unenforceable under any law shall not affect the validity or enforceability of any other
provision of any agreement.

(f) Specific Enforcement, Consent to Jurisdiction. The Company and Subscriber
acknowledge and agree that irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to one or more preliminary
and final injunctions to prevent or cure breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof, this being in addition to any other remedy to
which any of them may be entitled by law or equity. Subject to Section 14(e) hereof, each of the
Company, Subscriber and any signator hereto in his personal capacity hereby waives, and agrees not
to assert in any such suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction in New York of such court, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is improper. Nothing in
this Section shall affect or limit any right to serve process in any other manner permitted by law.

(g) Independent Nature of Subscribers. The Company acknowledges that the obligations
of each Subscriber under the Transaction Documents are several and not joint with the obligations
of any other Subscriber, and no Subscriber shall be responsible in any way for the performance of
the obligations of any other Subscriber under the Transaction Documents. The Company acknowledges
that the decision of each Subscriber to purchase Securities has been made by such Subscriber
independently of any other Subscriber and independently of any information, materials, statements
or opinions as to the business, affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company which may have been made
or given by any other Subscriber or by any agent or employee of any other Subscriber, and no
Subscriber or any of its agents or employees shall have any liability to any Subscriber (or any
other person) relating to or arising from any such information, materials, statements or opinions.
The Company acknowledges that nothing contained in any Transaction Document, and no action taken by
any Subscriber pursuant hereto or thereto (including, but not limited to, the (i) inclusion of a
Subscriber in the Registration Statement and (ii) review by, and consent to, such Registration
Statement by a Subscriber) shall be deemed to constitute the Subscribers as a partnership, an
association, a joint venture or any other kind of entity, or create a presumption that the
Subscribers are in any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. The Company acknowledges that each
Subscriber shall be entitled to independently protect and enforce its rights, including without
limitation, the rights arising out of the Transaction Documents, and it shall not be necessary for
any other Subscriber to be joined as an additional party in any proceeding for such purpose. The
Company acknowledges that it has elected to provide all Subscribers with the same terms and
Transaction Documents for the convenience of the Company and not because Company was required or
requested to do so by the Subscribers. The Company acknowledges that such procedure with respect
to the Transaction Documents in no way creates a presumption that the Subscribers are in any way
acting in concert or as a group with respect to the Transaction Documents or the transactions
contemplated thereby.

[THIS SPACE INTENTIONALLY LEFT BLANK]

1

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (A)

Please acknowledge your acceptance of the foregoing Subscription Agreement by signing and
returning a copy to the undersigned whereupon it shall become a binding agreement between us.

DIAMETRICS MEDICAL, INC.

a Minnesota corporation

By:   /s/ David B. Kaysen   

	 	 	 	Name: David B. Kaysen

Title: President and CEO

Dated: December 14, 2004

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	INITIAL CLOSING	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	NOTE (INITIAL                   	 	 	 	 	 	SECOND CLOSING NOTE	 	 	 	 
	 
	 	CLOSING PURCHASE                	 	INITIAL CLOSING                 	 	(SECOND CLOSING                 	 	SECOND CLOSING
	SUBSCRIBER
	 	PRICE)                          	 	WARRANTS                        	 	PURCHASE PRICE)                 	 	WARRANTS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	LONGVIEW EQUITY FUND,

LP

600 Montgomery Street,

44th Floor

San Francisco, CA 94111

Fax: (415) 981-5302

/s/ Wayne H. Coleson

(Signature)

By: Wayne H. Coleson,

Investment Advisor
	 	$	200,000.00	 	 	 	5,000,000	 	 	$	133,333.00	 	 	 	3,333,325	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

2

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (B)

Please acknowledge your acceptance of the foregoing Subscription Agreement by signing and
returning a copy to the undersigned whereupon it shall become a binding agreement between us.

DIAMETRICS MEDICAL, INC.

a Minnesota corporation

By:   /s/ David B. Kaysen   

	 	 	 	Name: David B. Kaysen

Title: President and CEO

Dated: December 14, 2004

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	INITIAL CLOSING	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	NOTE (INITIAL                   	 	 	 	 	 	SECOND CLOSING NOTE	 	 	 	 
	 
	 	CLOSING PURCHASE                	 	INITIAL CLOSING                 	 	(SECOND CLOSING                 	 	SECOND CLOSING
	SUBSCRIBER
	 	PRICE)                          	 	WARRANTS                        	 	PURCHASE PRICE)                 	 	WARRANTS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	LONGVIEW FUND, LP

600 Montgomery Street,

44th Floor

San Francisco, CA 94111

Fax: (415) 981-5302

/s/ S. Michael Rudolph

(Signature)

By: S. Michael

Rudolph, Investment

Advisor
	 	$	350,000.00	 	 	 	8,750,000	 	 	$	233,333.00	 	 	 	5,833,325	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

3

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (C)

Please acknowledge your acceptance of the foregoing Subscription Agreement by signing and
returning a copy to the undersigned whereupon it shall become a binding agreement between us.

DIAMETRICS MEDICAL, INC.

a Minnesota corporation

By:   /s/ David B. Kaysen   

	 	 	 	Name: David B. Kaysen

Title: President and CEO

Dated: December 14, 2004

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	INITIAL CLOSING	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	NOTE (INITIAL                   	 	 	 	 	 	SECOND CLOSING NOTE	 	 	 	 
	 
	 	CLOSING PURCHASE                	 	INITIAL CLOSING                 	 	(SECOND CLOSING                 	 	SECOND CLOSING
	SUBSCRIBER
	 	PRICE)                          	 	WARRANTS                        	 	PURCHASE PRICE)                 	 	WARRANTS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	LONGVIEW INTERNATIONAL

EQUITY FUND, LP

600 Montgomery Street,

44th Floor

San Francisco, CA 94111

Fax: (415) 981-5302

/s/ Wayne H. Coleson

(Signature)

By: Wayne H. Coleson,

Investment Advisor
	 	$	100,000.00	 	 	 	2,500,000	 	 	$	66,667.00	 	 	 	1,666,675	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

4

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (D)

Please acknowledge your acceptance of the foregoing Subscription Agreement by signing and
returning a copy to the undersigned whereupon it shall become a binding agreement between us.

DIAMETRICS MEDICAL, INC.

a Minnesota corporation

By:   /s/ David B. Kaysen   

	 	 	 	Name: David B. Kaysen

Title: President and CEO

Dated: December 14, 2004

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	INITIAL CLOSING	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	NOTE (INITIAL                   	 	 	 	 	 	SECOND CLOSING NOTE	 	 	 	 
	 
	 	CLOSING PURCHASE                	 	INITIAL CLOSING                 	 	(SECOND CLOSING                 	 	SECOND CLOSING
	SUBSCRIBER
	 	PRICE)                          	 	WARRANTS                        	 	PURCHASE PRICE)                 	 	WARRANTS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	MERCATOR MOMENTUM

FUND III L.P.

555 South Flower

Street, Suite 4200

Los Angeles, CA 90071

Fax: (213) 533-8285

Additional Copy:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	David C. Ulich, Esq.

Fax: (213) 620-1398

/s/ David Firestone

(Signature)

By: David

Firestone, Managing

Member, Mercator

Advisory Group LLC
	 	$	160,000.00	 	 	 	4,000,000	 	 	$	106,667.00	 	 	 	2,666,675	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

5

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (E)

Please acknowledge your acceptance of the foregoing Subscription Agreement by signing and
returning a copy to the undersigned whereupon it shall become a binding agreement between us.

DIAMETRICS MEDICAL, INC.

a Minnesota corporation

By:   /s/ David B. Kaysen   

	 	 	 	Name: David B. Kaysen

Title: President and CEO

Dated: December 14, 2004

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	INITIAL CLOSING	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	NOTE (INITIAL                   	 	 	 	 	 	SECOND CLOSING NOTE	 	 	 	 
	 
	 	CLOSING PURCHASE                	 	INITIAL CLOSING                 	 	(SECOND CLOSING                 	 	SECOND CLOSING
	SUBSCRIBER
	 	PRICE)                          	 	WARRANTS                        	 	PURCHASE PRICE)                 	 	WARRANTS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	MERCATOR MOMENTUM

FUND L.P.

555 South Flower

Street, Suite 4200

Los Angeles, CA 90071

Fax: (213) 533-8285

Additional Copy:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	David C. Ulich, Esq.

Fax: (213) 620-1398

/s/ David Firestone

(Signature)

By: David Firestone,

Managing Member,

Mercator Advisory

Group LLC
	 	$	230,000.00	 	 	 	5,750,000	 	 	$	153,333.00	 	 	 	3,833,325	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

6

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (F)

Please acknowledge your acceptance of the foregoing Subscription Agreement by signing and
returning a copy to the undersigned whereupon it shall become a binding agreement between us.

DIAMETRICS MEDICAL, INC.

a Minnesota corporation

By:   /s/ David B. Kaysen   

	 	 	 	Name: David B. Kaysen

Title: President and CEO

Dated: December 14, 2004

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	INITIAL CLOSING	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	NOTE (INITIAL                   	 	 	 	 	 	SECOND CLOSING NOTE	 	 	 	 
	 
	 	CLOSING PURCHASE                	 	INITIAL CLOSING                 	 	(SECOND CLOSING                 	 	SECOND CLOSING
	SUBSCRIBER
	 	PRICE)                          	 	WARRANTS                        	 	PURCHASE PRICE)                 	 	WARRANTS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	MONARCH POINTE FUND,

LTD.

555 South Flower

Street, Suite 4200

Los Angeles, CA 90071

Fax: (213) 533-8285

Additional Copy:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	David C. Ulich, Esq.

Fax: (213) 620-1398

/s/ David Firestone

(Signature)

By: David Firestone,

Managing Member,

Mercator Advisory

Group LLC
	 	$	510,000.00	 	 	 	12,750,000	 	 	$	340,000.00	 	 	 	8,500,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

7

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (G)

Please acknowledge your acceptance of the foregoing Subscription Agreement by signing and
returning a copy to the undersigned whereupon it shall become a binding agreement between us.

DIAMETRICS MEDICAL, INC.

a Minnesota corporation

By:   /s/ David B. Kaysen   

	 	 	 	Name: David B. Kaysen

Title: President and CEO

Dated: December 14, 2004

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	INITIAL CLOSING	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	NOTE (INITIAL                   	 	 	 	 	 	SECOND CLOSING NOTE	 	 	 	 
	 
	 	CLOSING PURCHASE                	 	INITIAL CLOSING                 	 	(SECOND CLOSING                 	 	SECOND CLOSING
	SUBSCRIBER
	 	PRICE)                          	 	WARRANTS                        	 	PURCHASE PRICE)                 	 	WARRANTS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CAMDEN INTERNATIONAL

Charlotte House,

Charlotte Street

P.O. Box N9204

Nassau, Bahamas

Fax: (415) 835-8320

/s/ Deirdre M. McCoy

(Signature)

By: Deirdre M.

McCoy, Director
	 	$	250,000.00	 	 	 	6,250,000	 	 	$	166,667.00	 	 	 	4,166,675	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}]]