Committed Equity Financing Facility - Note 10

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements

Committed Equity Financing Facility - Note 10

10. COMMITTED EQUITY FINANCING FACILITY

In August 2010, we entered into a committed equity financing facility (CEFF) with Azimuth, under which we could sell to Azimuth up to the lesser of $60.0 million or 17,771,901 of our shares of common stock over a 24-month term, which began on September 9, 2010. During 2011, we completed two draws from this facility and raised a total of $5.6 million in gross proceeds from the sale of approximately 4.5 million shares of our common stock. In July 2011, we cancelled this facility.

In May 2011, we entered into a CEFF with Azimuth, under which we may sell to Azimuth up to the lesser of $40.0 million or 21,018,431 of our shares of common stock over a 24-month term, which began on July 8, 2011. We paid Azimuth 225,000 shares of our common stock in consideration for entering into the CEFF with us. In August 2011, we raised $1.5 million in gross proceeds from the sale of approximately 1.6 million shares of our common stock under this facility.

From time to time over the agreement term, and at our sole discretion, we may present Azimuth with draw-down notices requiring Azimuth to purchase shares of our common stock over 10 consecutive trading days (the "Draw-Down Period") at a pre-determined purchase price. The per share purchase price is the daily volume-weighted average price (VWAP) of our common stock on each trading day of the Draw-Down Period, less a discount ranging from 3.50% to 10.0%. The discount is determined by a minimum threshold price that we specify which cannot be less than $0.75. If the daily VWAP of our common stock falls below the threshold price on any trading day during a Draw-Down Period, Azimuth will not purchase the pro rata portion of shares for that day. We will determine, in our sole discretion, the timing, the dollar amount and the price per share of each draw under this facility, subject to certain conditions.

We can require Azimuth to purchase the greater of the daily allocation amount specified in the draw-down notice or a percentage of the daily trading volume of our common stock for each trading day during the Draw-Down Period, subject to certain limitations. The total dollar amount of each draw is subject to certain agreed-upon limitations based on the market price of our common stock at the time of the draw. We are allowed to present Azimuth with up to 24 draw-down notices during the agreement term. Only one draw-down notice is allowed per Draw-Down Period with a minimum of five trading days required between each Draw-Down Period.

In September 2011, we entered into another CEFF with Azimuth, under which we may sell to Azimuth up to the lesser of $35.0 million or 22,030,737 of our shares of common stock over a 24-month term, which began on September 13, 2011. This facility provides additional flexibility in the types and timing of draw downs, compared to the May 2011 CEFF. In September 2011, we raised $5.0 million in gross proceeds from the sale of approximately 7.6 million shares of our common stock under this CEFF.

As in our May 2011 CEFF, from time to time over the term of our September 2011 CEFF, we may present Azimuth with draw-down notices requiring Azimuth to purchase shares of our common stock over the Draw-Down Period at a pre-determined purchase price. Once presented with a draw-down notice, Azimuth must purchase a pro rata portion of the shares on each trading day during the Draw-Down Period on which the daily VWAP for our common stock exceeds the threshold price specified in the draw-down notice. We can require Azimuth to purchase the greater of the daily allocation amount specified in the draw-down notice or a percentage of the daily trading volume of our common stock for each trading day during the Draw-Down Period, subject to certain limitations.

The per share purchase price for these shares is the daily VWAP of our common stock on each day of the Draw-Down Period, less a discount ranging from 3.5% to 6.5%. The discount is determined by the threshold price that we specify in the draw-down notice. If the daily VWAP of our common stock falls below the threshold price on any trading day during a Draw-Down Period, Azimuth will not be required to purchase the pro rata portion of shares for that day. However, Azimuth may elect to buy the pro-rata portion of shares allocated to that day at the threshold price less the discount described above.

The agreement also provides that from time to time, and at our sole discretion, we may grant Azimuth the option to purchase additional shares of our common stock during each Draw-Down Period up to an aggregate amount we specify. If Azimuth exercises this option, we would sell to Azimuth the shares of our common stock at the greater of the daily VWAP of our common stock on the day Azimuth exercises its option or the threshold price for the option we determined, less the same discount applied to the fixed amount in the draw-down notices. We are allowed to present Azimuth with up to 24 draw-down notices during the 24-month term, with only one draw-down notice allowed per Draw-Down Period and a minimum of five trading days required between each Draw-Down Period, unless we and Azimuth otherwise agree.

Reedland Capital Partners is acting as placement agent and receives a fee for its services equal to 1% of the aggregate dollar amount of common stock purchased by Azimuth upon settlement of any draws under these facilities.