Document:

exv10w1

 

EXHIBIT 10.1

FORM OF PURCHASE AGREEMENT

     THIS AGREEMENT is made as of April 17, 2007, by and between CytRx Corporation (the
“Company”), a corporation organized under the laws of the State of Delaware, with its
principal offices at 11726 San Vicente Blvd, Suite 650, Los Angeles, California 90049, and the
purchaser whose name and address is set forth on the signature page hereof (the
“Purchaser”).

     IN CONSIDERATION of the mutual covenants contained in this Agreement, the Company and the
Purchaser agree as follows:

          SECTION 1. Authorization of Sale of the Shares. Subject to the terms and conditions
of this Agreement, the Company has authorized the issuance and sale
of up to ___ shares (the
“Shares”) of common stock, par value $0.001 per share (the “Common Stock”), of the
Company.

          SECTION 2. Agreement to Sell and Purchase the Shares. At the Closing (as defined in
Section 3), the Company will, subject to the terms and conditions of this Agreement, issue and sell
to the Purchaser and the Purchaser will buy from the Company, upon the terms and conditions
hereinafter set forth, the number of Shares at the purchase price per share and aggregate purchase
price set forth on the signature page hereto.

     The Company proposes to enter into this same form of purchase agreement with certain other
investors (the “Other Purchasers”) and expects to complete sales of the shares of Common
Stock to them. The Purchaser and the Other Purchasers are hereinafter sometimes collectively
referred to as the “Purchasers,” and this Agreement and the purchase agreements executed by
the Other Purchasers are hereinafter sometimes collectively referred to as the
“Agreements.” The term “Placement Agent” shall mean Lehman Brothers Inc.
Oppenheimer & Co. Inc., Griffin Securities, Inc., and Pulse Obsidian, a division of Pulse Trading,
Inc. are acting as the co-agents and are referred to herein, together with the Placement Agent as
the “Agents.”

          SECTION 3. Delivery of the Shares at the Closing. The completion of the purchase and
sale of the Shares (the “Closing”) shall occur at the offices of Morrison & Foerster LLP,
1290 Avenue of the Americas, New York, New York 10104 as soon as practicable and as agreed to by
the parties hereto, within three business days following the execution of the Agreements, or on
such later date or at such different location as the parties shall agree in writing, but not prior
to the date that the conditions for Closing set forth below have been satisfied or waived by the
appropriate party (the “Closing Date”).

     At the Closing, the Purchaser shall deliver, in immediately available funds, the full amount
of the purchase price for the Shares being purchased hereunder by wire transfer to an account
designated by the Company and the Company shall deliver to the Purchaser one or more stock
certificates registered in the name of the Purchaser, or in such nominee name(s) as designated by
the Purchaser in writing, representing the number of Shares set forth in Section 2 above and
bearing an appropriate legend referring to the fact that the Shares were sold in reliance upon the
exemption from registration under the Securities Act of 1933, as amended (the “Securities
Act”), provided by Section 4(2) thereof and Rule 506 thereunder. The name(s) in

 

which the stock certificates are to be registered are set forth in the Stock Certificate
Questionnaire attached hereto as part of Appendix I.

     The Company’s obligation to complete the purchase and sale of the Shares and deliver such
stock certificate(s) to the Purchaser at the Closing shall be subject to the following conditions,
any one or more of which may be waived by the Company: (a) receipt by the Company of same-day funds
in the full amount of the purchase price for the Shares being purchased hereunder; (b) completion
of the purchases and sales under the Agreements with the Other Purchasers; and (c) the accuracy of
the representations and warranties made by the Purchasers and the fulfillment of those undertakings
of the Purchasers to be fulfilled prior to the Closing. The Purchaser’s obligation to accept
delivery of such stock certificate(s) and to pay for the Shares evidenced thereby shall be subject
to the following conditions: (a) each of the representations and warranties of the Company made
herein shall be accurate as of the Closing Date; (b) the delivery to the Purchaser by counsel to
the Company of a legal opinion in a form reasonably satisfactory to counsel to the Agents; (c)
receipt by the Purchaser of a certificate executed by the chief executive officer and the chief
financial or accounting officer of the Company, dated as of the Closing Date, to the effect that
the representations and warranties of the Company set forth herein are true and correct as of the
date of this Agreement and as of such Closing Date and that the Company has complied with all the
agreements and satisfied all the conditions herein on its part to be performed or satisfied on or
prior to such Closing Date; and (e) the fulfillment in all material respects of those undertakings
of the Company to be fulfilled prior to the Closing. The Purchaser’s obligations hereunder are
expressly not conditioned on the purchase by any or all of the Other Purchasers of the Shares that
they have agreed to purchase from the Company.

          SECTION 4. Representations, Warranties and Covenants of the Company. The Company
hereby represents and warrants to, and covenants with, the Purchaser as follows:

          4.1 Organization and Qualification. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of incorporation and the
Company is qualified to do business as a foreign corporation in each jurisdiction in which
qualification is required, except where failure to so qualify would not have a Material Adverse
Effect (as defined herein). The Company’s subsidiaries (each a “Subsidiary” and
collectively the “Subsidiaries”) are listed on Exhibit A to this Agreement. Except
as set forth on Exhibit A, each Subsidiary is a direct or indirect wholly owned subsidiary
of the Company. Each Subsidiary is duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and is qualified to do business as a foreign corporation
in each jurisdiction in which qualification is required, except where failure to so qualify would
not have a Material Adverse Effect.

          4.2 Reporting Company; Form S-3. The Company is not an “ineligible issuer” (as
defined in Rule 405 promulgated under the Securities Act) and is eligible to register the Shares
for resale by the Purchaser on a registration statement on Form S-3 under the Securities Act. The
Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and has filed all reports required thereby. To the Company’s
knowledge, there exist no facts or circumstances (including without

2

 

limitation any required approvals or waivers or any circumstances that may delay or prevent
the obtaining of accountant’s consents) that reasonably could be expected to prohibit or delay the
preparation and filing of a registration statement on Form S-3 under the Securities Act registering
the Shares for public resale as contemplated in Section 7 (the “Registration Statement”) .

          4.3 Authorized Capital Stock. The Company had duly authorized and validly issued
outstanding capitalization as set forth under the heading “Capitalization” in the confidential
Private Placement Memorandum dated April 9, 2007 as supplemented by Supplement No. 1 thereto dated
April 17, 2007 prepared by the Company (including all exhibits, supplements and amendments thereto,
the “Private Placement Memorandum”) as of the date set forth therein; the issued and
outstanding shares of Common Stock have been duly authorized and validly issued, are fully paid and
nonassessable, have been issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to subscribe for or
purchase securities, and conform in all material respects to the description thereof contained in
the Private Placement Memorandum. Except as set forth in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2006 (the “Form 10-K”), which is attached as an exhibit to,
and made a part of the Private Placement Memorandum, the Company does not have outstanding any
options to purchase, or any preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible securities or obligations.
With respect to each of the Subsidiaries, (i) all the issued and outstanding shares of such
Subsidiary’s capital stock have been duly authorized and validly issued, are fully paid and
nonassessable, have been issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to subscribe for or
purchase securities, and (ii) except as provided in the Private Placement Memorandum, there are no
outstanding options to purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or commitments to issue
or sell, shares of such Subsidiary’s capital stock or any such options, rights, convertible
securities or obligations.

          4.4 Issuance, Sale and Delivery of the Shares. The Shares have been duly authorized
and, when issued, delivered and paid for in the manner set forth in this Agreement, will be validly
issued, fully paid and nonassessable, and will conform in all material respects to the description
thereof set forth in the Private Placement Memorandum. No preemptive rights or other rights to
subscribe for or purchase any shares of Common Stock of the Company exist with respect to the
issuance and sale of the Shares by the Company pursuant to this Agreement. No stockholder of the
Company has any right (which has not been waived or has not expired by reason of lapse of time
following notification of the Company’s intention to file the Registration Statement) to require
the Company to register the sale of any capital stock owned by such stockholder under the
Registration Statement except for certain rights to register up to 150,000 shares of Common Stock
held by the University of Massachusetts Medical School. No further approval or authority of the
stockholders or the Board of Directors of the Company will be required for the issuance and sale of
the Shares to be sold by the Company as contemplated herein.

3

 

          4.5 Due Execution, Delivery and Performance of the Agreements. The Company has full
legal right, corporate power and authority to enter into this Agreement and perform the
transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered
by the Company. This Agreement constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws and judicial
decisions of general application relating to or affecting the enforcement of creditors’ rights and
the application of equitable principles relating to the availability of remedies, and except as
rights to indemnity or contribution, including but not limited to, indemnification provisions set
forth in Section 7.3 of this Agreement may be limited by federal or state securities law or the
public policy underlying such laws. The execution and performance of this Agreement by the Company
and the consummation of the transactions herein contemplated will not violate any provision of the
certificate of incorporation or bylaws of the Company or the organizational documents of any
Subsidiary and will not result in the creation of any lien, charge, security interest or
encumbrance upon any assets of the Company or any Subsidiary pursuant to the terms or provisions
of, or will not conflict with, result in the breach or violation of, or constitute, either by
itself or upon notice or the passage of time or both, a default under any agreement, mortgage, deed
of trust, lease, franchise, license, indenture, permit or other instrument to which any of the
Company or any Subsidiary is a party or by which any of the Company or any Subsidiary or their
respective assets or properties may be bound or affected and in each case that would have a
Material Adverse Effect, any statute or any authorization, judgment, decree, order, rule or
regulation of any court or any regulatory body, administrative agency or other governmental agency
or body applicable to the Company or any Subsidiary or any of their respective assets or
properties. No consent, approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental agency or body is required for the execution and
delivery of this Agreement by the Company or the consummation by the Company of the transactions
contemplated by this Agreement, except for compliance with the Blue Sky laws applicable to the
offering of the Shares. For the purposes of this Agreement the term “Material Adverse
Effect” shall mean a material adverse effect on the condition (financial or otherwise),
properties, business, prospects or results of operations of the Company and its Subsidiaries, taken
as a whole.

          4.6 Accountants. BDO Seidman, LLP, who has expressed its opinion with respect to the
consolidated financial statements contained in the Company’s Form 10-K, are registered independent
public accountants as required by the Securities Act and the rules and regulations promulgated
thereunder (the “1933 Act Rules and Regulations”) and by the rules of the Public Company
Accounting Oversight Board.

          4.7 No Defaults or Consents. Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions contemplated hereby
(including, without limitation, the issuance and sale by the Company of the Shares) will give rise
to a right to terminate or accelerate the due date of any payment due under, or conflict with or
result in the breach of any term or provision of, or constitute a default (or an event which with
notice or lapse of time or both would constitute a default) under, except such defaults that
individually or in the aggregate would not cause a Material Adverse Effect, or require any consent
or waiver under, or result in the execution or imposition of any lien, charge or encumbrance upon
any properties or assets of the Company or its Subsidiaries pursuant to the

4

 

terms of, any indenture, mortgage, deed of trust or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which either the Company or its Subsidiaries or
any of its or their properties or businesses is bound, or any franchise, license, permit, judgment,
decree, order, statute, rule or regulation applicable to the Company or any of its Subsidiaries or
violate any provision of the charter or by-laws of the Company or any of its Subsidiaries, except
for such consents or waivers which have already been obtained and are in full force and effect.

          4.8 Contracts. The material contracts to which the Company is a party, as listed or
otherwise described in the Form 10-K, have been duly and validly authorized, executed and delivered
by the Company and constitute the legal, valid and binding agreements of the Company, enforceable
by and against it in accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws and judicial
decisions of general application relating to enforcement of creditors’ rights generally and the
application of equitable principles relating to the availability of remedies, and except as rights
to indemnity or contribution may be limited by federal or state securities laws and the public
policy underlying such laws.

          4.9 No Actions. There are no legal or governmental actions, suits or proceedings
pending or, to the Company’s knowledge, threatened against the Company or any Subsidiary before or
by any court, regulatory body or administrative agency or any other governmental agency or body,
domestic, or foreign, which actions, suits or proceedings, individually or in the aggregate, might
reasonably be expected to have a Material Adverse Effect; and no labor disturbance by the employees
of the Company exists or, to the Company’s knowledge, is imminent, that might reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary is a party to
or subject to the provisions of any injunction, judgment, decree or order of any court, regulatory
body, administrative agency or other governmental agency or body that might have a Material Adverse
Effect.

          4.10 Properties. The Company and each Subsidiary has good and marketable title to all
the properties and assets described as owned by it in the consolidated financial statements
included in the Private Placement Memorandum, free and clear of all liens, mortgages, pledges, or
encumbrances of any kind except (i) those, if any, reflected in such consolidated financial
statements, or (ii) those that are not material in amount and do not adversely affect the use made
and proposed to be made of such property by the Company or its Subsidiaries. The Company and each
Subsidiary holds its leased properties under valid and binding leases, with such exceptions as are
not materially significant in relation to its business. The Company and any Subsidiary owns or
leases all such properties as are necessary to its operations as now conducted.

          4.11 No Material Adverse Change. Except as set forth in the Form 10-K, since December
31, 2006 (i) the Company and its Subsidiaries have not incurred any material liabilities or
obligations, indirect, or contingent, or entered into any material agreement or other transaction
that is not in the ordinary course of business or that could reasonably be expected to result in a
material reduction in the future earnings of the Company; (ii) the Company and its Subsidiaries
have not sustained any material loss or interference with their businesses or properties from fire,
flood, windstorm, accident or other calamity not covered by

5

 

insurance; (iii) the Company and its Subsidiaries have not paid or declared any dividends or
other distributions with respect to their capital stock and none of the Company or any Subsidiary
is in default in the payment of principal or interest on any outstanding debt obligations; (iv)
there has not been any change in the capital stock of the Company or its Subsidiaries other than
the sale of the Shares hereunder and shares or options issued pursuant to employee equity incentive
plans or purchase plans approved by the Company’s Board of Directors, or indebtedness material to
the Company or its Subsidiaries (other than in the ordinary course of business and any required
scheduled payments); and (v) there has not occurred any event that has caused or could reasonably
be expected to cause a Material Adverse Effect.

          4.12 Intellectual Property. Except as disclosed in the Private Placement Memorandum,
(i) the Company and each Subsidiary owns or has obtained valid and enforceable licenses or options
for the inventions, patent applications, patents, trademarks (both registered and unregistered),
trade names, copyrights and trade secrets necessary for the conduct of their respective business as
currently conducted (collectively, the “Intellectual Property”); and (ii) to the Company’s
knowledge, (a) there are no third parties who have any ownership rights to the Intellectual
Property that is owned by the Company or each Subsidiary for the products or assets described in
the Private Placement Memorandum that would preclude the Company or any Subsidiary from conducting
its business as currently conducted and have a Material Adverse Effect; (b) there are no third
parties who have any ownership rights to the Intellectual Property that has been licensed to or
optioned by the Company or each Subsidiary for the products or assets described in the Private
Placement Memorandum that would preclude the Company or any Subsidiary from conducting its business
as currently conducted and have a Material Adverse Effect, except for the ownership rights of the
owners of the Intellectual Property licensed or optioned by the Company or any Subsidiary; (c)
there are currently no sales of any products that would constitute an infringement by third parties
of the Intellectual Property, which infringement would have a Material Adverse Effect; (d) there is
no pending or threatened action, suit, proceeding or claim by others challenging the rights of the
Company or any Subsidiary in or to the Intellectual Property owned, licensed or optioned by the
Company or any Subsidiary, other than claims which could not reasonably be expected to have a
Material Adverse Effect; (e) there is no pending or threatened action, suit, proceeding or claim by
others challenging the validity or scope of the Intellectual Property, other than non-material
actions, suits, proceedings and claims; and (f) there is no pending or threatened action, suit,
proceeding or claim by others that the Company or any of any Subsidiaries infringes or otherwise
violates any patent, trademark, copyright, trade secret or other proprietary right of others, other
than non-material actions, suits, proceedings and claims.

          4.13 Compliance. The Company and its Subsidiaries conduct their business in
compliance with all applicable laws, rules and regulations of the jurisdictions in which it is
conducting business, including, without limitation, all applicable local, state and federal
environmental laws and regulations, except where failure to be so in compliance would not have a
Material Adverse Effect.

          4.14 Taxes. The Company and each Subsidiary has filed on a timely basis (giving
effect to extensions) all required federal, state and foreign income and franchise tax returns and
has paid or accrued all taxes shown as due thereon, and none of the Company or any subsidiary has
knowledge of a tax deficiency that has been or might be asserted or threatened

6

 

against it that could have a Material Adverse Effect. All tax liabilities accrued through the
date hereof have been adequately provided for on the books of the Company.

          4.15 Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other
than income taxes) that are required to be paid in connection with the sale and transfer of the
Shares to be sold to the Purchaser hereunder will have been, fully paid or provided for by the
Company and all laws imposing such taxes will have been fully complied with.

          4.16 Investment Company. The Company is not an “investment company” or an “affiliated
person” of, or “promoter” or “principal underwriter” for an investment company, within the meaning
of the Investment Company Act of 1940, as amended, and the rules and regulations of the Securities
and Exchange Commission (the “Commission”) promulgated thereunder.

          4.17 Offering Materials. None of the Company, its directors and officers has
distributed or will distribute prior to the Closing Date any offering material, including any “free
writing prospectus” (as defined in Rule 405 promulgated under the Securities Act), in connection
with the offering and sale of the Shares other than the Private Placement Memorandum or any
amendment or supplement thereto. The Company has not in the past nor will it hereafter take any
action independent of the Agents to sell, offer for sale or solicit offers to buy any securities of
the Company that could result in the initial sale of the Shares not being exempt from the
registration requirements of Section 5 of the Securities Act.

          4.18 Insurance. The Company maintains insurance underwritten by insurers of
recognized financial responsibility, of the types and in the amounts that the Company reasonably
believes is adequate for its business, including, but not limited to, insurance covering all real
and personal property owned or leased by the Company against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, with such deductibles as are customary
for companies in the same or similar business, all of which insurance is in full force and effect.

          4.19 Additional Information. The information contained in the following documents,
which the Agents have furnished to the Purchaser, or will furnish a reasonable period of time prior
to the Closing, as of the dates thereof, did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made not misleading:

          (a) the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006;

          (b) the Private Placement Memorandum, including all addenda and exhibits thereto, other than
this Agreement and appendices and exhibits hereto; and

          (c) all other documents, if any, filed by the Company with the Commission since April 2, 2007
pursuant to the reporting requirements of the Exchange Act.

7

 

     The documents incorporated by reference in the Private Placement Memorandum or attached as
exhibits thereto, at the time they became effective or were filed with the Commission, as the case
may be, complied in all material respects with the requirements of the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder (the “1934 Act Rules and
Regulations” and, together with the 1933 Act Rule and Regulations, the “Rules and
Regulations”). In the past 12 calendar months, the Company has filed all documents required to
be filed by it prior to the date hereof with the Commission pursuant to the reporting requirements
of the Exchange Act.

          4.20 Price of Common Stock. The Company has not taken, and will not take, directly or
indirectly, any action designed to cause or result in, or that has constituted or that might
reasonably be expected to constitute, the stabilization or manipulation of the price of the shares
of the Common Stock to facilitate the sale or resale of the Shares.

          4.21 Use of Proceeds. The Company shall use the proceeds from the sale of the Shares
as described under “Use of Proceeds” in the Private Placement Memorandum.

          4.22 Non-Public Information. The Company has not disclosed to the Purchaser, whether
in the Private Placement Memorandum or otherwise, information that will constitute material
non-public information as of the Closing Date other than the existence of the transactions
contemplated hereby, including the expected use of the proceeds from the sale of the Shares, which
will be disclosed in the press release issued as provided in Section 20.

          4.23 Use of Purchaser Name. Except as otherwise required by applicable law or
regulation, the Company shall not use the Purchaser’s name or the name of any of its affiliates in
any advertisement, announcement, press release or other similar public communication unless it has
received the prior written consent of the Purchaser for the specific use contemplated which consent
shall not be unreasonably withheld.

          4.24 Related Party Transactions. No transaction has occurred between or among the
Company, on the one hand, and its affiliates, officers or directors on the other hand, that is
required to have been described under applicable securities laws in its Exchange Act filings and is
not so described in such filings.

          4.25 Off-Balance Sheet Arrangements. There is no transaction, arrangement or other
relationship between the Company and an unconsolidated or other off-balance sheet entity that is
required to be disclosed by the Company in its Exchange Act filings and is not so disclosed or that
otherwise would be reasonably likely to have a Material Adverse Effect. There are no such
transactions, arrangements or other relationships with the Company that may create contingencies or
liabilities that are not otherwise disclosed by the Company in its Exchange Act filings.

          4.26 Governmental Permits, Etc. The Company and each Subsidiary has all franchises,
licenses, certificates and other authorizations from such federal, state or local government or
governmental agency, department or body that are currently necessary for the operation of the
business of the Company as currently conducted, except where the failure to posses currently such
franchises, licenses, certificates and other authorizations is not reasonably

8

 

expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary has
received any notice of proceedings relating to the revocation or modification of any such permit
that, if the subject of an unfavorable decision, ruling or finding, could reasonably be expected to
have a Material Adverse Effect.

          4.27 Financial Statements. The consolidated financial statements of the Company and
the related notes and schedules thereto included in the Form 10-K fairly present the financial
position, results of operations, stockholders’ equity and cash flows of the Company and its
consolidated Subsidiaries at the dates and for the periods specified therein. Such financial
statements and the related notes and schedules thereto have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the periods involved
(except as otherwise noted therein) and all adjustments necessary for a fair presentation of
results for such periods have been made.

          4.28 Listing Compliance. The Company is in compliance with the requirements of the
Nasdaq Capital Market for continued listing of the Common Stock thereon. The Company has taken no
action designed to, or likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act or the listing of the Common Stock on the Nasdaq Capital Market, nor
has the Company received any notification that the Commission or the Nasdaq Capital Market is
contemplating terminating such registration or listing. The transactions contemplated by this
Agreement will not contravene the rules and regulations of the Nasdaq Capital Market. Except as
set forth in Schedule 4.28 of this Agreement, the Company will comply with all requirements of the
Nasdaq Capital Market with respect to the issuance of the Shares and shall cause the Shares to be
listed on the Nasdaq Capital Market and listed on any other exchange on which the Company’s Common
Stock is listed on or before the Closing Date.

          4.29 Internal Accounting Controls. Except as set forth in the Form 10-K, (a) the
Company maintains a system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences; (b) the Company has disclosure controls and procedures (as defined in Rules 13a-14 and
15d-14 under the Exchange Act) that are designed to ensure that material information relating to
the Company is made known to the Company’s principal executive officer and the Company’s principal
financial officer or persons performing similar functions; and (c) the Company is otherwise in
compliance in all material respects with all applicable provisions of the Sarbanes-Oxley Act of
2002 and the rules and regulations promulgated thereunder. The Company’s independent auditors and
the Audit Committee of the Board of Directors of the Company have been advised of: (A) all material
weaknesses in internal controls and all significant deficiencies in the design or operation of
internal controls that could adversely affect the Company’s ability to record, process, summarize
and report financial data; and (B) all fraud, if any, whether or not material, that involves
management or other employees who have a role in the Company’s internal controls; and, except as
set forth in the Form 10-K, since the date of the

9

 

most recent evaluation of such disclosure controls and procedures and internal controls, there
have been no significant changes in internal controls or in other factors that could significantly
affect internal controls, including any corrective actions with regard to significant deficiencies
and material weaknesses.

          4.30 Foreign Corrupt Practices. Neither the Company, nor any Subsidiary, nor, to the
knowledge of the Company, any director, officer, agent, employee or other Person acting on behalf
of the Company or any Subsidiary has, in the course of its actions for, or on behalf of, the
Company (i) used any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment
to any foreign or domestic government official or employee from corporate funds; (iii) violated or
is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or
(iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment
to any foreign or domestic government official or employee.

          4.31 Employee Relations. Neither the Company nor any Subsidiary is a party to any
collective bargaining agreement or employs any member of a union. The Company and each Subsidiary
believe that their relations with their employees are satisfactory. No executive officer of the
Company (as defined in Rule 501(f) promulgated under the Securities Act) has notified the Company
that such officer intends to leave the Company or otherwise terminate such officer’s employment
with the Company. To the Company’s knowledge, (i) no executive officer of the Company is, or is
now expected to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or any other agreement
or any restrictive covenant, and (ii) the continued employment of each such executive officer does
not subject the Company or any Subsidiary to any liability with respect to any of the foregoing
matters.

          4.32 ERISA. The Company is in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder (herein called “ERISA”); no
“reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as
defined in ERISA) for which the Company would have any liability; the Company has not incurred and
does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any “pension plan”; or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations thereunder (the
“Code”); and each “Pension Plan” for which the Company would have liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all material respects
and nothing has occurred, whether by action or by failure to act, which would cause the loss of
such qualification.

          4.33 Environmental Matters. There has been no storage, disposal, generation,
manufacture, transportation, handling or treatment of toxic wastes, hazardous wastes or hazardous
substances by the Company or to its knowledge, any Subsidiary (or, to the knowledge of the Company,
any of their predecessors in interest) at, upon or from any of the property now or previously owned
or leased by the Company or any Subsidiary in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or that would

10

 

require remedial action under any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit; there has been no material spill, discharge, leak, emission, injection,
escape, dumping or release of any kind into such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or any Subsidiary or with respect to which the Company
has knowledge; the terms “hazardous wastes”, “toxic wastes”, “hazardous substances”, and “medical
wastes” shall have the meanings specified in any applicable local, state, federal and foreign laws
or regulations with respect to environmental protection.

          4.34 Integration; Other Issuances of Shares. Neither the Company nor the Subsidiaries
or any affiliates, nor any Person acting on its or their behalf, has issued any shares of Common
Stock or shares of any series of preferred stock or other securities or instruments convertible
into, exchangeable for or otherwise entitling the holder thereof to acquire shares of Common Stock
which would be integrated with the sale of the Shares to such Purchaser for purposes of the
Securities Act or of any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of any exchange or automated quotation system on which any of the
securities of the Company are listed or designated, nor will the Company or the Subsidiaries or
affiliates take any action or steps that would require registration of any of the Shares under the
Securities Act or cause the offering of the Shares to be integrated with other offerings. Assuming
the accuracy of the representations and warranties of Purchasers set forth in this Agreement, the
offer and sale of the Shares by the Company to the Purchasers pursuant to the Agreements will be
exempt from the registration requirements of the Securities Act.

          SECTION 5. Representations, Warranties and Covenants of the Purchaser. The Purchaser
represents and warrants to, and covenants with, the Company that:

          5.1 Experience. (i) The Purchaser is knowledgeable, sophisticated and experienced in
financial and business matters, in making, and is qualified to make, decisions with respect to
investments in shares representing an investment decision like that involved in the purchase of the
Shares, including investments in securities issued by the Company and comparable entities, has the
ability to bear the economic risks of an investment in the Shares and has reviewed carefully the
Private Placement Memorandum and has requested, received, reviewed and considered all information
it deems relevant in making an informed decision to purchase the Shares; (ii) the Purchaser is
acquiring the number of Shares set forth in Section 2 above in the ordinary course of its business
and for its own account and with no present intention of distributing any of such Shares or any
arrangement or understanding with any other persons regarding the distribution of such Shares (this
representation and warranty not limiting the Purchaser’s right to sell pursuant to the Registration
Statement or in compliance with the Securities Act and the Rules and Regulations, or, other than
with respect to any claims arising out of a breach of this representation and warranty, the
Purchaser’s right to indemnification under Section 7.3); (iii) the Purchaser will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection with
sales of the Shares pursuant to the Registration Statement or with the applicable requirements of
any exemption from the Securities Act; (iv) the Purchaser has completed or caused to be completed
the Registration Statement Questionnaire attached hereto as part of Appendix I or another
form reasonably acceptable to the Company, for use in preparation of the Registration Statement,
and the answers thereto are true

11

 

and correct as of the date hereof and will be true and correct as of the effective date of the
Registration Statement and the Purchaser will notify the Company immediately of any material change
in any such information provided in the Registration Statement Questionnaire until such time as the
Purchaser has sold all of its Shares or until the Company is no longer required to keep the
Registration Statement effective; (v) the Purchaser has, in connection with its decision to
purchase the number of Shares set forth in Section 2 above, relied solely upon the Private
Placement Memorandum and the representations and warranties of the Company contained herein; (vi)
the Purchaser has had an opportunity to discuss this investment with representatives of the Company
and ask questions of and receive answers from the representatives; and (vii) the Purchaser is an
“accredited investor” within the meaning of Rule 501(a) of Regulation D promulgated under the
Securities Act.

          5.2 Reliance on Exemptions. The Purchaser understands that the Shares are being
offered and sold to it in reliance upon specific exemptions from the registration requirements of
the Securities Act, the Rules and Regulations and state securities laws and that the Company is
relying upon the truth and accuracy of, and the Purchaser’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in
order to determine the availability of such exemptions and the eligibility of the Purchaser to
acquire the Shares.

          5.3 Confidentiality. The Purchaser understands that the information contained in the
Private Placement Memorandum is strictly confidential and proprietary to the Company and has been
prepared from the Company’s publicly available documents and other information and is being
submitted to the Purchaser solely for such Purchaser’s confidential use. The Purchaser agrees to
use the information contained in the Private Placement Memorandum for the sole purpose of
evaluating a possible investment in the Shares and the Purchaser acknowledges that it is prohibited
from reproducing or distributing the Private Placement Memorandum, this Agreement, or any other
offering materials or other information provided by the Company in connection with the Purchaser’s
consideration of its investment in the Company, in whole or in part, or divulging or discussing any
of their contents, except to its financial, investment or legal advisors in connection with its
proposed investment in the Shares. Further, the Purchaser understands that the existence and
nature of all conversations and presentations, if any, regarding the Company and this offering must
be kept strictly confidential. The Purchaser understands that the federal securities laws impose
restrictions on trading based on information regarding this offering. In addition, the Purchaser
hereby acknowledges that unauthorized disclosure of information regarding this offering may result
in a violation of Regulation FD. The Purchaser’s confidentiality obligation hereunder will
terminate upon the issuance by the Company of a press release or press releases announcing the
offering contemplated hereby as provided in Section 20. The foregoing agreements shall not apply
to any information that is or becomes publicly available through no fault of the Purchaser, or that
the Purchaser is legally required to disclose; provided, however, that if the
Purchaser is requested or ordered to disclose any such information pursuant to any court or other
government order or any other applicable legal or regulatory procedure, it shall provide the
Company with prompt notice of any such request or order in time sufficient to enable the Company to
seek an appropriate protective order.

          5.4 Investment Decision. The Purchaser understands that nothing in the Agreement or
any other materials presented to the Purchaser in connection with the purchase

12

 

and sale of the Shares constitutes legal, tax or investment advice. The Purchaser has
consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Shares.

          5.5 Risk of Loss. The Purchaser understands that its investment in the Shares
involves a significant degree of risk, including a risk of total loss of the Purchaser’s
investment, and the Purchaser has full cognizance of and understands all of the risk factors
related to the Purchaser’s purchase of the Shares. The Purchaser understands that the market price
of the Common Stock has been volatile and that no representation is being made as to the future
value of the Common Stock.

          5.6 Legend; Legend Removal; Damages. The Purchaser understands that, until such time
as the Registration Statement has been declared effective or the Shares may be sold pursuant to
Rule 144 under the Securities Act without any restriction as to the number of securities as of a
particular date that can then be immediately sold, the Shares will bear a restrictive legend in
substantially the following form:

“THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. THE SHARES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE
SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A
TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT
SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES
ACT AND SUCH OTHER APPLICABLE LAWS.”

     The Company agrees that at such time as the legend is no longer required under this Section
5.6, it will, no later than four Trading Days following the delivery by the Purchaser to the
Company or the Company’s transfer agent of a certificate representing Shares issued with a
restrictive legend (such fourth Trading Day, the “Legend Removal Date”), deliver or cause
to be delivered to such Purchaser a certificate representing such Shares that is free from all
restrictive and other legends. The Company shall cause its counsel to issue a legal opinion to the
Company’s transfer agent promptly if required by the Company’s transfer agent to effect the removal
of the legend hereunder. In addition to any other available remedies, the Company shall pay to the
Purchaser, in cash, as partial liquidated damages and not as a penalty, for each $1,000 of Shares
(based on the closing price of the Common Stock on the date the certificate(s) for such Shares are
submitted to the Company’s transfer agent) delivered for removal of the restrictive

13

 

legend $10 per Trading Day (increasing to $20 per Trading Day commencing five Trading Days
after such damages have begun to accrue) for each Trading Day commencing on the Legend Removal Date
until such certificate is delivered to the Purchaser without a legend. Nothing herein shall limit
such Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates
representing any Shares. For purposes of the Agreement, “Trading Day” means a day on which
the Common Stock is traded on the Nasdaq Capital Market or such other markets or exchanges on which
the Common Stock is then listed or quoted for trading on the date in question.

     The Company acknowledges and agrees that the Purchaser may from time to time pledge pursuant
to a bona fide margin agreement with a registered broker-dealer or grant a security interest in
some or all of the Shares to a financial institution that is an “accredited investor” as defined in
Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement
and, if required under the terms of such arrangement, the Purchaser may transfer pledged or secured
Shares to the pledgees or secured parties. Such a pledge or transfer would not be subject to
approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or
pledgor shall be required in connection therewith. Further, no notice shall be required of such
pledge. At the Purchaser’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of the Shares may reasonably request in connection with
a pledge or transfer of the Shares, including, if appropriate, the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of selling stockholders thereunder.

          5.7 Residency. The Purchaser’s principal executive offices are in the jurisdiction
set forth immediately below the Purchaser’s name on the signature pages hereto.

          5.8 Public Sale or Distribution. The Purchaser hereby covenants with the Company not
to make any sale of the Shares under the Registration Statement without complying with the
provisions of this Agreement and without effectively causing the prospectus delivery requirement
under the Securities Act to be satisfied (whether physically or through compliance with Rule 172
under the Securities Act or any similar rule). The Purchaser acknowledges that there may
occasionally be times when the Company must suspend the use of the prospectus (the
“Prospectus”) forming a part of the Registration Statement (a “Suspension”) until
such time as an amendment to the Registration Statement has been filed by the Company and declared
effective by the Commission, or until such time as the Company has filed an appropriate report with
the Commission pursuant to the Exchange Act. Without the Company’s prior written consent, which
consent shall not unreasonably be withheld or delayed, the Purchaser shall not use any written
materials to offer the Shares for resale other than the Prospectus, including any “free writing
prospectus” as defined in Rule 405 under the Securities Act. The Purchaser covenants that it will
not sell any Shares pursuant to said Prospectus during the period commencing at the time when
Company gives the Purchaser written notice of the Suspension of the use of the Prospectus and
ending at the time when the Company gives the Purchaser written notice that the Purchaser may
thereafter effect sales pursuant to the Prospectus. Notwithstanding the foregoing, the Company
agrees that no Suspension shall be for a period of longer than 30 consecutive days, and no
Suspension shall be for a period longer than 60 days in

14

 

the aggregate in any 365-day period. The Purchaser further covenants to notify the Company
promptly of the sale of all of its Shares.

          5.9 Authorization; Validity; Enforcement. The Purchaser has full right, power,
authority and capacity to enter into this Agreement and to consummate the transactions contemplated
hereby and has taken all necessary action to authorize the execution, delivery and performance of
this Agreement, (ii) the making and performance of this Agreement by the Purchaser and the
consummation of the transactions herein contemplated will not violate any provision of the
organizational documents of the Purchaser or conflict with, result in the breach or violation of,
or constitute, either by itself or upon notice or the passage of time or both, a default under any
material agreement, mortgage, deed of trust, lease, franchise, license, indenture, permit or other
instrument to which the Purchaser is a party or, any statute or any authorization, judgment,
decree, order, rule or regulation of any court or any regulatory body, administrative agency or
other governmental agency or body applicable to the Purchaser, (iii) no consent, approval,
authorization or other order of any court, regulatory body, administrative agency or other
governmental agency or body is required on the part of the Purchaser for the execution and delivery
of this Agreement or the consummation of the transactions contemplated by this Agreement, (iv) upon
the execution and delivery of this Agreement, this Agreement shall constitute a legal, valid and
binding obligation of the Purchaser, enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application relating to or the enforcement of creditor’s rights and the
application of equitable principles relating to the availability of remedies, and except as rights
to indemnity or contribution, including, but not limited to, the indemnification provisions set
forth in Section 7.3 of this Agreement, may be limited by federal or state securities laws or the
public policy underlying such laws and (v) there is not in effect any order enjoining or
restraining the Purchaser from entering into or engaging in any of the transactions contemplated by
this Agreement.

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

          SECTION 6. Survival. Notwithstanding any investigation made by any party to this
Agreement or by the Agents, all covenants and agreements made by the Company and the Purchaser
herein and in the certificates for the Shares delivered pursuant hereto shall survive the execution
of this Agreement, the delivery to the Purchaser of the Shares being purchased and the payment
therefor. All representations and warranties made by the Company and the Purchaser herein and in
the certificates delivered pursuant hereto shall survive the execution of this Agreement, the
delivery to the Purchaser of the Shares being purchased and the payment therefor.

15

 

          SECTION 7. Registration of the Shares; Compliance with the Securities Act. 

          7.1 Registration Procedures and Expenses. The Company shall:

          (a) as soon as reasonably practicable, but in no event later than 15 days following the
Closing Date (the “Filing Deadline”), prepare and file with the Commission the Registration
Statement on Form S-3 relating to the resale of the Shares by the Purchaser and the Other
Purchasers (and the registration of up to 150,000 shares of Common Stock held by the University of
Massachusetts Medical School referred to in Section 4.4) from time to time on the Nasdaq Capital
Market, or the facilities of any national securities exchange on which the Common Stock is then
traded or in privately-negotiated transactions;

          (b) use its best efforts, subject to receipt of necessary information from the Purchasers, to
cause the Commission to declare the Registration Statement effective by 4:30 p.m. Eastern time on a
day (the “Effectiveness Date”) that is (i) within the earlier of five days after the
Commission has advised the Company that the Registration Statement will not be reviewed or 60 days
after the Closing Date or, (ii) if the Registration Statement is selected for review by the
Commission, no later than 90 days after the Closing Date (the “Effective Deadline”); and to
file a prospectus with the Commission by no later than 9:00 Eastern time on the business day
immediately following the Effectiveness Date; until 30 days after the Effective Date, the Company
shall not file any registration statement with the Commission for the offering of securities of the
Company (other than registration statements on Form S-8 or Form S-4 or similar filings);

          (c) promptly prepare and file with the Commission such amendments and supplements to the
Registration Statement and the prospectus used in connection therewith as may be necessary to keep
the Registration Statement effective until the earliest of (i) two years after the effective date
of the Registration Statement, (ii) such time as all of the Shares have been sold pursuant to the
Registration Statement, or (iii) such time as the Shares become eligible for resale by
non-affiliates pursuant to Rule 144(k) under the Securities Act or any other rule of similar
effect;

          (d) furnish to the Purchaser with respect to the Shares registered under the Registration
Statement (and to each underwriter, if any, of such Shares) such number of copies of prospectuses
and such other documents as the Purchaser may reasonably request, in order to facilitate the public
sale or other disposition of all or any of the Shares by the Purchaser;

          (e) file documents required of the Company for normal Blue Sky clearance in states specified
in writing by the Purchaser; provided, however, that the Company shall not be
required to qualify to do business or consent to service of process in any jurisdiction in which it
is not now so qualified or has not so consented;

          (f) bear all expenses in connection with the procedures in paragraphs (a) through (e) of this
Section 7.1 and the registration of the Shares pursuant to the Registration Statement, other than
fees and expenses, if any, of counsel or other advisers to the Purchaser or the Other Purchasers or
underwriting discounts, brokerage fees and commissions incurred by the

16

 

Purchaser or the Other Purchasers, if any in connection with the offering and sale of the
Shares pursuant to the Registration Statement;

          (g) file a Form D with respect to the Shares as required under Regulation D and to provide a
copy thereof to the Purchaser promptly after filing;

          (h) in order to enable the Purchasers to sell the Shares under Rule 144 to the Securities Act,
for a period of two years from Closing, use its commercially reasonable efforts to comply with the
requirements of Rule 144, including without limitation, use its commercially reasonable efforts to
comply with the requirements of Rule 144(c) with respect to public information about the Company
and to timely file all reports required to be filed by the Company under the Exchange Act; and

          The Company understands that the Purchaser disclaims being an underwriter, but the Purchaser
being deemed an underwriter shall not relieve the Company of any obligations it has hereunder. A
questionnaire related to the Registration Statement to be completed by the Purchaser is attached
hereto as Appendix I.

          7.2 Transfer of Shares After Registration. From and after the effectiveness of the
Registration Statement, the Purchaser agrees that it will not effect any disposition of the Shares
except as contemplated in the Registration Statement referred to in Section 7.1 or as otherwise
permitted by law, and that it will promptly notify the Company of any changes in the information
set forth in the Registration Statement regarding the Purchaser or its plan of distribution.

          7.3 Indemnification. For the purpose of this Section 7.3:

(i) the term “Purchaser/Affiliate” shall mean any
affiliate of the Purchaser, including a transferee who is an
affiliate of the Purchaser, each officer, director and member
of the Purchaser and any person who controls the Purchaser or
any affiliate of the Purchaser within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act; and

(ii) the term “Registration Statement” shall include
any preliminary prospectus, final prospectus, free writing
prospectus, exhibit, supplement or amendment included in or
relating to, and any document incorporated by reference in, the
Registration Statement referred to in Section 7.1.

          (a) The Company agrees to indemnify and hold harmless the Purchaser and each
Purchaser/Affiliate, against any losses, claims, damages, liabilities or expenses, joint or
several, to which the Purchaser or Purchaser/Affiliates may become subject, under the Securities
Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such settlement is effected with the
written consent of the Company), insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof as contemplated below) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained

17

 

in the Registration Statement, including the Prospectus, financial statements and schedules,
and all other documents filed as a part thereof, as amended at the time of effectiveness of the
Registration Statement, including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rules 430B, 430C or 434, of
the Rules and Regulations, or the Prospectus, in the form first filed with the Commission pursuant
to Rule 424(b) of the Regulations, or filed as part of the Registration Statement at the time of
effectiveness if no Rule 424(b) filing is required or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state in any of them a material fact
required to be stated therein or necessary to make the statements in the Registration Statement or
any amendment or supplement thereto not misleading or in the Prospectus or any amendment or
supplement thereto not misleading in light of the circumstances under which they were made, and
will promptly reimburse each Purchaser and each Purchaser/Affiliate for reasonable legal and other
expenses as such expenses are reasonably incurred by such Purchaser or such Purchaser/Affiliate in
connection with investigating, defending or preparing to defend, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided, however, that
the Company will not be liable for amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the Company, which
consent shall not be unreasonably withheld, and the Company will not be liable in any such case to
the extent that any such loss, claim, damage, liability or expense arises out of or is based upon
(i) an untrue statement or alleged untrue statement or omission or alleged omission made in the
Registration Statement, the Prospectus or any amendment or supplement thereto in reliance upon and
in conformity with written information furnished to the Company by or on behalf of the Purchaser
expressly for use therein, or (ii) the failure of such Purchaser to comply with the covenants and
agreements contained in Sections 5.11 or 7.2 hereof respecting the sale of the Shares, or (iii) the
inaccuracy of any representation or warranty made by such Purchaser herein or (iv) any statement or
omission in any Prospectus that is corrected in any subsequent Prospectus that was delivered to the
Purchaser prior to the pertinent sale or sales by the Purchaser.

          (b) The Purchaser will severally, but not jointly with any of the other Purchasers, indemnify
and hold harmless the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages, liabilities or expenses to which the Company, each of its directors, each of its officers
who signed the Registration Statement or controlling person may become subject, under the
Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, but only if such settlement is
effected with the written consent of such Purchaser) insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below) arise out of or are
based upon any untrue or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement thereto, 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 in the Registration Statement or any amendment
or supplement thereto not misleading or in the Prospectus or any amendment or supplement thereto
not misleading in the light of the circumstances under which they were made, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in

18

 

the Registration Statement, the Prospectus, or any amendment or supplement thereto, in
reliance upon and in conformity with written information, including the Registration Statement
Questionnaire, furnished to the Company by or on behalf of any Purchaser expressly for use therein;
and will reimburse the Company, each of its directors, each of its officers who signed the
Registration Statement or controlling person for reasonable legal and other expense reasonably
incurred by the Company, each of its directors, each of its officers who signed the Registration
Statement or controlling person in connection with investigating, defending, settling, compromising
or paying any such loss, claim, damage, liability, expense or action; provided,
however, that the Purchaser’s aggregate liability under this Section 7.3(b) shall not
exceed the amount of the net proceeds received by the Purchaser on the sale of the Shares pursuant
to the Registration Statement.

          (c) Promptly after receipt by an indemnified party under this Section 7.3 of notice of the
threat or commencement of any action, such indemnified party will, if a claim in respect thereof is
to be made against an indemnifying party under this Section 7.3 promptly notify the indemnifying
party in writing thereof, but the omission to notify the indemnifying party will not relieve it
from any liability that it may have to any indemnified party for contribution or otherwise under
the indemnity agreement contained in this Section 7.3 to the extent it is not prejudiced as a
result of such failure. In case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying
party will be entitled to participate in, and, to the extent that it may wish, jointly with all
other indemnifying parties similarly notified, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party, and the indemnifying party and
the indemnified party shall have reasonably concluded, based on an opinion of counsel reasonably
satisfactory to the indemnifying party, that there may be a conflict of interest between the
positions of the indemnifying party and the indemnified party in conducting the defense of any such
action or that there may be legal defenses available to it and/or other indemnified parties that
are different from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume such legal defenses and
to otherwise participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified party of its
election to assume the defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this Section 7.3 for
reasonable legal or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel, reasonably satisfactory to such indemnifying party,
representing all of the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after notice of commencement of action,
in each of which cases the reasonable fees and expenses of counsel shall be at the expense of the
indemnifying party. In no event shall any indemnifying party be liable in respect of any amounts
paid in settlement of any action unless the indemnifying party shall have approved in writing the
terms of such settlement; provided that such consent shall not be unreasonably withheld.
No indemnifying party shall,

19

 

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

          (d) If the indemnification provided for in this Section 7.3 is required by its terms but is
for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified
party under paragraphs (a), (b) or (c) of this Section 7.3 in respect to any losses, claims,
damages, liabilities or expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result of any losses,
claims, damages, liabilities or expenses referred to herein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the Purchaser from the
private placement of Common Stock hereunder or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but the relative fault of the Company and the
Purchaser in connection with the statements or omissions or inaccuracies in the representations and
warranties in this Agreement and/or the Registration Statement that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Purchaser on the other shall
be deemed to be in the same proportion as the amount paid by the Purchaser to the Company pursuant
to this Agreement for the Shares purchased by the Purchaser that were sold pursuant to the
Registration Statement bears to the difference (the “Difference”) between the amount the
Purchaser paid for the Shares that were sold pursuant to the Registration Statement and the net
amount received by such Purchaser from such sale. The relative fault of the Company on the one
hand and each Purchaser on the other shall be determined by reference to, among other things,
whether the untrue or alleged statement of a material fact or the omission or alleged omission to
state a material fact or the inaccurate or the alleged inaccurate representation and/or warranty
relates to information supplied by the Company or by such Purchaser and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject to the limitations
set forth in paragraph (c) of this Section 7.3, any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action or claim. The
provisions set forth in paragraph (c) of this Section 7.3 with respect to the notice of the threat
or commencement of any threat or action shall apply if a claim for contribution is to be made under
this paragraph (d); provided, however, that no additional notice shall be required
with respect to any threat or action for which notice has been given under paragraph (c) for
purposes of indemnification. The Company and the Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 7.3 were determined solely by pro rata
allocation (even if the Purchaser were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations referred to in
this paragraph. Notwithstanding the provisions of this Section 7.3, the Purchaser shall not be
required to contribute any amount in excess of the amount by which the Difference exceeds the
amount of any damages that the Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of

20

 

such fraudulent misrepresentation. The Purchasers’ obligations to contribute pursuant to this
Section 7.3(d) are several and not joint.

          7.4 Termination of Conditions and Obligations. The restrictions imposed by Section
5.11 or Section 7.2 upon the transferability of the Shares shall cease and terminate as to any
particular number of the Shares upon the earlier of (i) the passage of two years from the effective
date of the Registration Statement covering such Shares and (ii) at such time as an opinion of
counsel satisfactory in form and substance to the Company shall have been rendered to the effect
that such conditions are not necessary in order to comply with the Securities Act.

          7.5 Information Available. The Company, upon the reasonable request of the Purchaser,
shall make available for inspection by each Purchaser, any underwriter participating in any
disposition pursuant to the Registration Statement and any attorney, accountant or other agent
retained by the Purchaser or any such underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company’s officers, employees and
independent accountants to supply all information reasonably requested by the Purchaser or any such
underwriter, attorney, accountant or agent in connection with the Registration Statement.

          7.6 Delay in Filing or Effectiveness of Registration Statement. If the Registration
Statement is not filed by the Company with the Commission on or prior to the Filing Deadline, then
for each day following the Filing Deadline, until but excluding the date the Registration Statement
is filed, or if the Registration Statement is not declared effective by the Commission by the
Effective Deadline, then for each day following the Effective Deadline, until but excluding the
date the Commission declares the Registration Statement effective, the Company shall, for each such
day, pay the Purchaser with respect to any such failure, as liquidated damages and not as a
penalty, an amount per 30-day period equal to 1.0% of the purchase price paid pursuant to this
Agreement by the Purchaser for the Shares owned by the Purchaser at such time; and for any such
30-day period, such payment shall be made no later than three business days following such 30-day
period. If the Purchaser shall be prohibited from selling Shares under the Registration Statement
as a result of a Suspension of more than 30 consecutive days or Suspensions on more than two
occasions of not more than 30 days each in any 12-month period, then for each day on which a
Suspension is in effect that exceeds the maximum allowed period for a Suspension or Suspensions,
but not including any day on which a Suspension is lifted, the Company shall pay the Purchaser, as
liquidated damages and not as a penalty, an amount per 30-day period equal to 1.0% of the purchase
price paid pursuant to this Agreement by such Purchaser for the Shares owned by the Purchaser at
such time for each such day, and such payment shall be made no later than the first business day of
the calendar month next succeeding the month in which such day occurs. For purposes of this
Section 7.6, a Suspension shall be deemed lifted on the date that notice that the Suspension has
been lifted is delivered to the Purchaser pursuant to Section 5.9 of this Agreement. Any payments
made pursuant to this Section 7.6 shall not constitute the Purchaser’s exclusive remedy for such
events. Notwithstanding the foregoing provisions, the liquidated damages payable to the Purchaser
shall not exceed 16% of the aggregate purchase price paid by the Purchaser for the Shares and in no
event shall the Company be obligated to pay any liquidated damages pursuant to this Section 7.6 to
more than one Purchaser in respect of the same Shares for the same period of time. Such

21

 

payments shall be made to the Purchasers in cash. If the Company fails to pay any liquidated
damages pursuant to this Section in full within seven days after the date of demand therefor, the
Company will pay interest thereon at a rate of 10% per annum (or such lesser maximum amount that is
permitted to be paid by applicable law) to the Purchaser, accruing daily from the date such
liquidated damages are due until such amounts, plus all interest thereon, are paid in full.

          SECTION 8. Broker’s Fee. The Purchaser acknowledges that the Company intends to pay
to the Agents a fee in respect of the sale of the Shares to the Purchaser. The Purchaser and the
Company agree that the Purchaser shall not be responsible for such fee and that the Company will
indemnify and hold harmless the Purchaser and each Purchaser/Affiliate against any losses, claims,
damages, liabilities or expenses, joint or several, to which such Purchaser or Purchaser/Affiliate
may become subject with respect to such fee. Each of the parties hereto represents that, on the
basis of any actions and agreements by it, there are no other brokers or finders entitled to
compensation in connection with the sale of the Shares to the Purchaser.

          SECTION 9. Independent Nature of Purchasers’ Obligations and Rights. The obligations
of the Purchaser under this Agreement are several and not joint with the obligations of any Other
Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations
of any Other Purchaser under the Agreements. The decision of each Purchaser to purchase the Shares
pursuant to the Agreements has been made by such Purchaser independently of any other Purchaser.
Nothing contained in the Agreements, and no action taken by any Purchaser pursuant thereto, shall
be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Purchasers are in any way acting in concert
or as a group with respect to such obligations or the transactions contemplated by the Agreements.
Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in
connection with making its investment hereunder and that no Purchaser will be acting as agent of
such Purchaser in connection with monitoring its investment in the Shares or enforcing its rights
under this Agreement. Each Purchaser shall be entitled to independently protect and enforce its
rights, including without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any proceeding for such
purpose.

          SECTION 10. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed by first-class registered or certified airmail,
e-mail, confirmed facsimile or nationally recognized overnight express courier postage prepaid, and
shall be deemed given when so mailed and shall be delivered as addressed as follows:

     if to the Company, to:

CytRx Corporation
11726 San Vicente Blvd

Suite 650

Los Angeles, California 90049

Attention: Steven A. Kriegsman

22

 

Facsimile: (310) 826-6139

E-mail: stevenk@cytrx.com

          with a copy to:

Troy & Gould Professional Corporation

1801 Century Park East, Suite 1600,

Los Angeles, California 90067

Attention: Sanford J. Hillsberg, Esq.

Facsimile: (310) 201-4716

E-mail: shillsberg@troygould.com

or to such other person at such other place as the Company shall designate to the Purchaser
in writing; and

     if to the Purchaser, at its address as set forth at the end of this Agreement, or at
such other address or addresses as may have been furnished to the Company in writing.

               SECTION 11. Changes. This Agreement may not be modified or amended except pursuant to
an instrument in writing signed by the Company and the Purchaser. Any amendment or waiver effected
in accordance with this Section 11 shall be binding upon each holder of any securities purchased
under this Agreement at the time outstanding, each future holder of all such securities, and the
Company.

               SECTION 12. Headings. The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be part of this
Agreement.

               SECTION 13. Severability. In case any provision contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or impaired thereby.

               SECTION 14. Governing Law; Venue. This Agreement is to be construed in accordance
with and governed by the federal law of the United States of America and the internal laws of the
State of New York without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of New York to the rights
and duties of the parties. Each of the Company and the Purchaser submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of New York and of any
New York State court sitting in New York City for purposes of all legal proceedings arising out of
or relating to this Agreement and the transactions contemplated hereby. Each of the Company and
the Purchaser irrevocably waives, to the fullest extent permitted by law, any objection that it may
now or hereafter have to the laying of the venue of any such proceeding brought in such a court and
any claim that any such proceeding brought in such a court has been brought in an inconvenient
forum. Each party hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under

23

 

this agreement and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. The Company and the Purchaser hereby waive all
rights to a trial by jury.

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

               SECTION 16. Entire Agreement. This Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the Company nor the
Purchaser makes any representation, warranty, covenant or undertaking with respect to such matters.
Each party expressly represents and warrants that it is not relying on any oral or written
representations, warranties, covenants or agreements outside of this Agreement.

               SECTION 17. Fees and Expenses. Except as otherwise set forth herein, each of the
Company and the Purchaser shall pay its respective fees and expenses related to the transactions
contemplated by this Agreement.

               SECTION 18. Parties. This Agreement is made solely for the benefit of and, subject to
Section 11, is binding upon the Purchaser and the Company and to the extent provided in Section
7.3, any person controlling the Company or the Purchaser, the officers and directors of the
Company, and their respective executors, administrators, successors and assigns and subject to the
provisions of Section 7.3, no other person shall acquire or have any right under or by virtue of
this Agreement. The term “successor and assigns” shall not include any subsequent purchaser, as
such purchaser, of the Shares sold to the Purchaser pursuant to this Agreement.

               SECTION 19. Further Assurances. Each party agrees to cooperate fully with the other
parties and to execute such further instruments, documents and agreements and to give such further
written assurance as may be reasonably requested by any other party to evidence and reflect the
transactions described herein and contemplated hereby and to carry into effect the intents and
purposes of this Agreement.

               SECTION 20. Securities Laws Disclosure; Publicity. The Company shall, by 9:00 a.m.
New York City time on the Trading Day immediately following the date hereof, issue a press release
disclosing all material terms of the transactions contemplated hereby, and by 3:00 p.m. New York
City time on the second Trading Day following the date hereof, the Company shall file a Current
Report on Form 8-K, disclosing the material terms of the transactions contemplated hereby and
filing the form of Purchase Agreement as an exhibit in accordance with the applicable Commission
rules and regulations. In addition, except as noted in Schedule 4.28, the Company will make such
other filings and notices in the manner and time required by the Commission and Nasdaq or any other
trading market on which the Common Stock is listed or quoted. Notwithstanding the foregoing, the
Company shall not publicly

24

 

disclose the name of the Purchaser, or include the name of the Purchaser in any filing with
the Commission (other than the Registration Statement and any exhibits to filings made in respect
of this transaction in accordance with periodic filing requirements under the Exchange Act) or any
regulatory agency or Nasdaq or other trading market, without the prior written consent of the
Purchaser, except to the extent such disclosure is required by law or Nasdaq or other trading
Market regulations, in which case the Company shall provide the Purchasers with prior notice of
such disclosure.

               SECTION 21. Non-Public Information. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the Company covenants and
agrees that neither it nor any other Person acting on its behalf will provide the Purchaser or its
agents or counsel with any information that the Company believes constitutes material non-public
information, unless prior thereto the Purchaser shall have executed a written agreement regarding
the confidentiality and use of such information. The Company understands and confirms that the
Purchaser shall be relying on the foregoing representations in effecting transactions in securities
of the Company.

               SECTION 22. Reimbursement. If the Purchaser becomes involved in any capacity in any
Proceeding by or against any Person who is a stockholder of the Company (except as a result of
sales, pledges, margin sales and similar transactions by the Purchaser to or with any other
stockholder), solely as a result of the Purchaser’s acquisition of the Shares under this Agreement,
the Company will reimburse the Purchaser for its reasonable legal and other expenses (including the
cost of any investigation preparation and travel in connection therewith) incurred in connection
therewith, as such expenses are incurred. The reimbursement obligations of the Company under this
paragraph shall be in addition to any liability that the Company may otherwise have, shall extend
upon the same terms and conditions to any affiliates of the Purchaser who are actually named in
such action, proceeding or investigation, and partners, directors, agents, employees and
controlling persons (if any), as the case may be, of the Purchaser and any such affiliate, and
shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, the Purchaser and any such affiliate and any such Person. The
Company also agrees that neither the Purchaser nor any such affiliates, partners, directors,
agents, employees or controlling persons shall have any liability to the Company or any Person
asserting claims on behalf of or in right of the Company solely as a result of acquiring the Shares
under this Agreement, except if such claim arises primarily from a breach of the Purchaser’s
representations, warranties or covenants hereunder or any agreement or understanding the Purchaser
may have with any such stockholder or any violations by the Purchaser of state or federal
securities laws or any conduct by the Purchaser which constitutes fraud, gross negligence, willful
misconduct or malfeasance.

[Remainder of Page Left Intentionally Blank]

25

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly
authorized representatives as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	CytRx Corporation 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 
	 

	 	 	Name: Steven A. Kriegsman	 	 
	 

	 	 	Title: President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	Print or Type:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Name of Purchaser

(Individual or Institution)	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Jurisdiction of Purchaser’s Executive Offices	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Name and Title of Individual representing

Purchaser (if an Institution)	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Signature of Individual Purchaser or Individual representing Purchaser (if an
Institution)	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Telephone:	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Facsimile:	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	E-mail:	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 

	 	Number of Shares:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Purchase Price per Share: $	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Aggregate Purchase Price: $exv10w1

 

Exhibit 10.1

April 17, 2007

MBI Financial, Inc.

1845 Woodall Rodgers, No. 1225

Dallas, Texas 75201

The undersigned investor (the “Purchaser”) hereby acknowledges receipt of 1,000 shares of MBI
Financial, Inc., a Nevada corporation (the “Corporation”) Series C Convertible Preferred Stock,
bearing a 15% dividend rate, $0.10 par value per share, and warrants to purchase 2,000,000 shares
of Common Stock, $0.0167 par value per share, of the Corporation from the Corporation
(collectively, the “Securities”). For a period of one year from the date of issuance, the
Corporation guarantees that it will not in any way require conversion of the preferred stock to
common stock, thereby guaranteeing the payment of the 15% dividend for one year. In order to
induce the Corporation to sell the Securities to the Purchaser, the Purchaser made certain
representations and warranties to the Corporation and certain agreements with the Corporation
immediately prior to, and again at the time of, the sale of the Securities by the Corporation to
the Purchaser, which representations, warranties, and agreements are reduced to writing as follows:

Prior to the sale of the Securities by the Corporation to the Purchaser, the Corporation disclosed
to the Purchaser that, because the Securities have not been registered under the Securities Act of
1933, as amended (the “Act”), or with the blue sky authority of any state, the Purchaser must bear
the economic risk of the Securities indefinitely and cannot resell the Securities unless the
Securities are registered under the Act and the appropriate state blue sky laws or unless an
exemption from such registration is available. Any sale of the Securities or any part thereof made
in reliance upon Rule 144 promulgated by the Securities and Exchange Commission (the “SEC”) may be
made only in limited amounts in accordance with the terms and conditions of that Rule or, in case
that Rule is not applicable, may be made only in compliance with Regulation A or some other
exemption. The Corporation is under no obligation to register the Securities or to comply with any
such exemption.

The Purchaser is purchasing the Securities for the account of the Purchaser and not for the account
of others and for investment and not with a view to dividing the Securities with others or with a
view to or in connection with an offering or any distribution. The Purchaser has no present
intention of selling or otherwise disposing of the Securities. It is the present intention of the
Purchaser to receive and hold the Securities for the private personal investment of the Purchaser
for the account of the Purchaser. Any sale or exchange offer of any of the Securities will not be
made in any manner that may violate the Act or any applicable blue sky law. The Purchaser has no
contract, understanding, agreement, or arrangement with any person to sell or transfer to such
person or to any other person(s) or to have such person or any other person(s) sell any Securities
and the Purchaser is not engaged, and does not plan to engage, within the foreseeable future, in
any discussion with any person(s) relating to the sale or other transfer of the Securities.

As of the time of the sale of the Securities by the Corporation to the Purchaser and as of the date
hereof, the Purchaser was/is not aware of any occurrence, event, or circumstance upon the happening
of which the Purchaser intended/s to sell or otherwise transfer the Securities, or any part
thereof, and the Purchaser did not and does not have any intention to sell or otherwise transfer
the Securities, or any part thereof, after the lapse of any particular period of time.

The Corporation furnished to the Purchaser, at a reasonable time prior to the sale of the
Securities by the Corporation to the Purchaser, all information material to an understanding of the
Corporation, the business of the Corporation, and the Securities and all other information that the
Purchaser requested and/or considered necessary or appropriate in connection with the sale of the
Securities. Neither the Corporation nor any person

 

 

acting on behalf of the Corporation offered or sold the Securities to the Purchaser by any form of general
solicitation or general advertising.

The Purchaser had the opportunity to ask questions and receive answers concerning the terms and
conditions of the offering of the Securities and to obtain any additional information which the
Corporation possessed or could acquire without unreasonable effort or expense that was necessary to
verify the accuracy of information furnished to the Purchaser.

The Purchaser is able to bear the economic risk of the Securities and has such knowledge and
experience in financial and business matters that the Purchaser is capable of evaluating the
permits and risks of the Securities. The Purchaser was an “accredited investor” (as such term is
defined in Rule 501(a) of Regulation D promulgated under the Act) at the time of the sale of the
Securities by the Corporation to the Purchaser and is an “accredited investor” as of the date
hereof.

In the event the Purchaser should in fact resell the Securities, or any part thereof, within the
foreseeable future, the Purchaser may be deemed to be an underwriter, as that term is defined in
the Act. The Securities cannot be transferred, sold, offered for sale, pledged, or hypothecated in
the absence of a registration statement in effect with respect to the Securities under the Act and
in compliance with any applicable state securities law or an opinion of counsel satisfactory to the
Corporation that such registration is not required or unless sold pursuant to Rule 144 of the Act.
Restrictive legends may be placed on the certificate(s) or other document(s) that represent(s)
and/or evidence(s) the Securities, including, without limitation, a legend in substantially the
form as follows:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAW. THEY MAY NOT BE TRANSFERRED, SOLD, OFFERED
FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT AND IN COMPLIANCE WITH ANY
APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH
ACT.

Remainder of Page Intentionally Left Blank.

Signature Page(s) to Follow.

2

 

     IN WITNESS WHEREOF, the undersigned investor has caused this letter to be executed and
effective as of the date first written above.

     If Purchaser is an individual (insert exact legal name of Purchaser):

	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 

     If Purchaser is not an individual (insert exact legal name of Purchaser):

	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}]]