Exhibit 10.57

 

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COMMON STOCK AND WARRANT PURCHASE AGREEMENT

by and among

Antares Pharma, Inc.

and

the parties named herein on Schedule 1, as Purchasers

February 27, 2006

 

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This COMMON STOCK AND WARRANT PURCHASE AGREEMENT (this “Agreement”) is dated as
of February 27, 2006, among Antares Pharma, Inc., a Delaware corporation (the
“Company”), and the purchasers identified on Schedule 1 hereto (each a
“Purchaser” and collectively the “Purchasers”).

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act (as defined below), and Rule 506
promulgated thereunder, the Company desires to issue and sell to the Purchasers,
and the Purchasers, severally and not jointly, desire to purchase from the
Company in the aggregate, 8,770,000 shares of Common Stock, and Warrants to
purchase 6,577,500 shares of Common Stock.

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

ARTICLE I

DEFINITIONS

1.1 Certain Definitions; Terms of Warrants.

In addition to the terms defined elsewhere in this Agreement, for all purposes
of this Agreement, the following terms have the meanings indicated in this
Section 1.1:

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

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

“Agreement” shall have the meaning ascribed to such term in the Preamble.

“Business Day” means any day except Saturday, Sunday and any day which is a
federal legal holiday or a day on which banking institutions in the Commonwealth
of Pennsylvania are authorized or required by law or other governmental action
to close.

“Closing” shall have the meaning ascribed to such term in Section 2.1(a).

“Closing Date” shall have the meaning ascribed to such term in Section 2.1(a).

“Closing Escrow Agreement” shall have the meaning ascribed to such term in
Section 2.1(b).

“Commission” means the Securities and Exchange Commission.

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“Common Stock” means the common stock of the Company, $0.01 par value per share,
and any securities into which such common stock may hereafter be reclassified.

“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

“Company” shall have the meaning ascribed to such term in the Preamble.

“Disclosure Schedules” means the Disclosure Schedules concurrently delivered
herewith.

“Effective Date” means the date that the Registration Statement is first
declared effective by the Commission.

“Environmental Laws” shall have the meaning ascribed to such term in
Section 3.1(y).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“FDC Act” shall have the meaning ascribed to such term in Section 3.1(m).

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

“Governmental Authorizations” shall have the meaning ascribed to such term in
Section 3.1(m).

“Hazardous Substances” shall have the meaning ascribed to such term in
Section 3.1(y).

“Indemnified Party” shall have the meaning ascribed to such term in Section 5.3.

“Indemnifying Party” shall have the meaning ascribed to such term in
Section 5.3.

“Intellectual Property” shall have the meaning ascribed to such term in
Section 3.1(o).

“Investor Rights Agreement” means the Investor Rights Agreement, dated as of the
date of this Agreement, among the Company and each of the Purchasers, in the
form of Exhibit A hereto.

“Lien” means a lien, charge, security interest, encumbrance, right of first
refusal or other restriction, except for a lien for current taxes not yet due
and payable and a minor imperfection of title, if any, not material in nature or
amount and not materially detracting from the value or impairing the use of the
property subject thereto or impairing the operations or proposed operations of
the Company.

“Material Adverse Effect” shall have the meaning ascribed to such term in
Section 3.1(b).

 

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“Per Share Purchase Price” equals $1.25, subject to adjustment for stock splits,
reverse stock splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of this Agreement and
prior to Closing.

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

“Placement Agent Warrants” means the common stock purchase warrants to be issued
at the Closing to SCO Securities LLC and/or their designees as partial
compensation for services rendered in connection with the transaction set forth
herein as provided on Schedule 1 attached hereto, which warrants shall be in the
form of Exhibit C hereto.

“Premises” shall have the meaning ascribed to such term in Section 3.1(y).

“Purchase Price” means the aggregate purchase price paid by each Purchaser for
the shares of Common Stock and Warrants purchased by such Purchaser hereunder.

“Purchaser” shall have the meaning ascribed to such term in the Preamble.

“Registration Statement” means a registration statement meeting the requirements
set forth in the Investor Rights Agreement and covering the resale by the
Purchasers of the Shares and the Warrant Shares.

“Rights” shall have the meaning ascribed to such term in Section 3.1(o).

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

“Securities” means the Shares, the Warrants and the Warrant Shares.

“Securities Act” means the Securities Act of 1933, as amended.

“Shares” means the shares of Common Stock issued to each Purchaser pursuant to
this Agreement.

“Subscription Amount” means, as to each Purchaser, the amount set forth beside
such Purchaser’s name on Schedule 1 hereto, in United States dollars and in
immediately available funds.

“Subsidiary” means, with respect to any entity, any corporation or other
organization of which securities or other ownership interest having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions, are directly or indirectly owned by such entity or
of which such entity is a partner or is, directly or indirectly, the beneficial
owner of 50% or more of any class of equity securities or equivalent profit
participation interests.

 

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“Trading Day” means (i) a day on which the Common Stock is traded on a Trading
Market, or (ii) if the Common Stock is not listed on a Trading Market, a day on
which the Common Stock is traded on the over-the-counter market, as reported by
the OTC Bulletin Board, or (iii) if the Common Stock is not listed on a Trading
Market or quoted on the OTC Bulletin Board, a day on which the Common Stock is
quoted in the over-the-counter market as reported by Pink Sheets LLC (or any
similar organization or agency succeeding to its functions of reporting prices);
provided, that in the event that the Common Stock is not listed or quoted as set
forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

“Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the American
Stock Exchange, the New York Stock Exchange, the Nasdaq National Market, or the
Nasdaq Capital Market.

“Transaction Documents” means this Agreement, the Certificate of Designation,
the Investor Rights Agreement, the Warrants and any other documents or
agreements executed in connection with the transactions contemplated hereunder.

“Warrants” means the Common Stock Purchase Warrants, in the form of Exhibit B
hereto. The Placement Agent Warrants shall also constitute “Warrants” for all
purposes hereunder and SCO Securities LLC and/or its designees shall constitute
“Purchasers” for all purposes hereunder.

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.

1.2 Terms of the Warrants. The terms and provisions of the Warrants are as set
forth in the form of Common Stock Purchase Warrant, attached hereto as Exhibit B
(and Exhibit C in the case of the Placement Agent Warrants).

 

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ARTICLE II

PURCHASE AND SALE

2.1 Closing.

(a) The closing of the transactions contemplated under this Agreement (the
“Closing”) will take place as promptly as practicable, but no later than five
(5) Business Days following satisfaction or waiver of the conditions set forth
in Sections 2.2 and 2.3 (other than those conditions which by their terms are
not to be satisfied or waived until the Closing), at the offices of Wiggin and
Dana LLP, 400 Atlantic Street, Stamford, CT 06901 (or remotely via exchange of
documents and signatures) or at such other place or day as may be mutually
acceptable to the Purchasers and the Company. The date on which the Closing
occurs is the “Closing Date”.

(b) At the Closing, the Purchasers shall purchase, severally and not jointly,
and the Company shall issue and sell, in the aggregate, 8,770,000 shares of
Common Stock and Warrants to purchase 6,577,600 shares of Common Stock on the
Closing Date. Each Purchaser shall purchase from the Company, and the Company
shall issue and sell to each Purchaser, a number of Shares equal to such
Purchaser’s Subscription Amount divided by the Per Share Purchase Price and a
Warrant to purchase 75% of the number of Shares purchased by such Purchaser. The
Subscription Amount paid by each Purchaser shall be placed in escrow pending the
Closing pursuant to a Closing Escrow Agreement among the Company, SCO Securities
LLC and Wiggin and Dana LLP (the “Escrow Agent”), which agreement shall be in
the form attached hereto as Exhibit D (the “Closing Escrow Agreement”).

2.2 Conditions to Obligations of Purchasers to Effect the Closing.

The obligations of each Purchaser to effect the Closing and the transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior
to the Closing of each of the following conditions, any of which may be waived,
in writing, by such Purchaser:

(a) At the Closing (unless otherwise specified below) the Company shall deliver
or cause to be delivered to each Purchaser the following:

(i) this Agreement, duly executed by the Company;

(ii) a certificate evidencing a number of Shares equal to such Purchaser’s
Subscription Amount divided by the Per Share Purchase Price as set forth on
Schedule 1 hereto, registered in the name of such Purchaser;

(iii) a Warrant, registered in the name of such Purchaser, pursuant to which
such Purchaser shall have the right to acquire up to the number of shares of
Common Stock equal to 75% of the Shares to be issued to such Purchaser at such
Closing, as set forth on Schedule 1 hereto;

(iv) the Investor Rights Agreement, duly executed by the Company;

 

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(v) a legal opinion of counsel to the Company, in the form of Exhibit E hereto;

(vi) a certificate of the Secretary of the Company (the “Secretary’s
Certificate”), attaching a true copy of the Certificate of Incorporation and
Bylaws of the Company, as amended to the Closing Date, and attaching true and
complete copies of the resolutions of the Board of Directors of the Company
authorizing the execution, delivery and performance of this Agreement and the
other Transaction Documents; and

(vii) confirmation from the American Stock Exchange or email confirmation from
Company counsel that the American Stock Exchange has approved the application
for the listing or qualification of the Shares and the Warrant Shares for
trading thereon, subject to official notice of issuance.

(b) The Company shall have entered into the Closing Escrow Agreement.

(c) All representations and warranties of the Company contained herein shall
remain true and correct as of the Closing Date as though such representations
and warranties were made on such date (except those representations and
warranties that address matters only as of a particular date will remain true
and correct as of such date).

(d) As of the Closing Date, there shall have been no Material Adverse Effect
with respect to the Company since the date hereof.

(e) From the date hereof to the Closing Date, trading in the Common Stock shall
not have been suspended by the Commission (except for any suspension of trading
of limited duration agreed to by the Company, which suspension shall be
terminated prior to the Closing), and, at any time prior to the Closing Date,
trading in securities generally as reported by Bloomberg Financial Markets shall
not have been suspended or limited, or minimum prices shall not have been
established on securities whose trades are reported by such service, or on any
Trading Market, nor shall a banking moratorium have been declared either by the
United States or New York State authorities.

2.3. Conditions to Obligations of the Company to Effect the Closing.

The obligations of the Company to effect the Closing and the transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior
to the Closing of each of the following conditions, any of which may be waived,
in writing, by the Company.

(a) At the Closing, each Purchaser shall deliver or cause to be delivered to the
Company the following:

(i) this Agreement, duly executed by such Purchaser;

(ii) such Purchaser’s Subscription Amount, by wire transfer of immediately
available funds as provided in the Closing Escrow Agreement; and

 

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(iii) the Investor Rights Agreement, duly executed by such Purchaser.

(b) All representations and warranties of each of the Purchasers contained
herein shall remain true and correct as of the Closing Date as though such
representations and warranties were made on such date.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company.

Except as set forth under the corresponding section of the Disclosure Schedules
delivered concurrently herewith, the Company hereby makes the following
representations and warranties as of the date hereof and as of the Closing Date
to each Purchaser:

(a) Subsidiaries. Except as listed in Schedule 3.1(a), the Company has no direct
or indirect Subsidiaries.

(b) Organization and Qualification. Each of the Company and the Subsidiaries is
an entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite corporate power and authority to own and use
its properties and assets and to carry on its business as currently conducted.
Neither the Company nor any of its Subsidiaries is in violation of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and the
Subsidiaries is duly qualified to conduct business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not have or result in (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the business or financial condition of the Company
and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on
the Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii) being
referred to herein as a “Material Adverse Effect”).

(c) Authorization; Enforceability. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
each of the Transaction Documents and otherwise to carry out its obligations
thereunder. The execution and delivery of each of the Transaction Documents by
the Company and the consummation by it of the transactions contemplated thereby
(including, but not limited to, the sale and delivery of the Shares and
Warrants) have been duly authorized by all necessary corporate action on the
part of the Company and no further corporate action is required by the Company
in connection therewith. The issuance and delivery of Warrant Shares upon
exercise of the Warrants has been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company in
connection therewith. Each Transaction Document has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with
the terms hereof, will constitute the valid and binding obligation of the
Company

 

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enforceable against the Company in accordance with its terms, except (i) as
limited by laws of general application relating to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally, (ii) as limited by rules of law governing specific performance,
injunctive relief, or other equitable remedies and (iii) to the extent the
indemnification provisions contained in the Transaction Documents may be limited
by applicable federal or state securities laws.

(d) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated thereby do not and will not (i) conflict with or violate any
provision of the Company’s or any of its Subsidiaries’ certificate or articles
of incorporation, bylaws or other organizational or charter documents, or
(ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or its Subsidiary’s debt or otherwise of the
Company or any of its Subsidiaries) or other understanding to which the Company
or any of its Subsidiaries is a party or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company or
a of its Subsidiaries is subject (including federal and state securities laws
and regulations), or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected, except, in the case of clause (ii), where
such conflict, default or violation would not have or result in a Material
Adverse Effect.

(e) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
(i) the filing with the Commission of the Registration Statement, the
application(s) to each Trading Market for the listing of the Shares and Warrant
Shares for trading thereon in the time and manner required thereby, Form D and
applicable Blue Sky filings, and (ii) such as have already been obtained or such
exemptive filings as are required to be made under applicable securities laws.

(f) Issuance of the Securities. The Securities are duly authorized and, when
issued and paid for in accordance with the Transaction Documents, will be duly
and validly issued, fully paid and nonassessable, free and clear of all Liens,
other than any Liens created by or imposed on the holders thereof through no
action of the Company. The Company has reserved from its duly authorized capital
stock (i) the maximum number of shares of Common Stock issuable pursuant to this
Agreement and (ii) the maximum number of shares of Common Stock issuable upon
exercise of the Warrants.

(g) Capitalization.

(i) The entire authorized capital stock of the Company consists of
(A) 100,000,000 shares of Common Stock, 44,591,640 of which are issued and
outstanding, and (B) 3,000,000 shares of preferred stock, none of which are
issued and outstanding. All shares of the

 

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Company’s issued and outstanding capital stock have been duly authorized, are
validly issued and outstanding, and are fully paid and nonassessable. No
securities issued by the Company from the date of its incorporation to the date
hereof were issued in violation of any statutory or common law preemptive
rights. There are no dividends which have accrued or been declared but are
unpaid on the capital stock of the Company. All taxes required to be paid by the
Company in connection with the issuance and any transfers of the Company’s
capital stock have been paid. All securities of the Company have been issued in
all material respects in accordance with the provisions of all applicable
securities and other laws.

(ii) No Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as a result of the purchase
and sale of the Securities and except for employee and director stock options
under the Company’s equity compensation plans and for 15,141,381 shares of
Common Stock issuable pursuant to outstanding warrants, there are no outstanding
options, warrants, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of Common Stock, or securities or rights
convertible or exchangeable into shares of Common Stock. The issue and sale of
the Securities will not obligate the Company to issue shares of Common Stock or
other securities to any Person (other than the Purchasers) and will not result
in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities.

(h) SEC Reports; Financial Statements; Liabilities.

(i) The Company has filed all reports required to be filed by it under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) of the Exchange Act, for the 12 months preceding the date hereof (or such
shorter period as the Company was required by law to file such material) (the
foregoing materials, including the exhibits thereto, being collectively referred
to herein as the “SEC Reports”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. As of their respective filing dates, the SEC
Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as the case may be, and the rules and
regulations of the Commission promulgated thereunder, as applicable, and none of
the SEC Reports, as of their respective filing dates, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.

(ii) The financial statements of the Company included in the SEC Reports comply
in all material respects with applicable accounting requirements and the rules
and regulations of the Commission with respect thereto as in effect at the time
of filing. Such financial statements have been prepared in accordance with
generally accepted accounting principles in the United States, applied on a
consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by
GAAP, subject to normal year-end

 

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audit adjustments. Such financial statements fairly present in all material
respects the financial position of the Company and its consolidated
subsidiaries, if any, as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal year-end audit adjustments.

(iii) Except as set forth in the SEC Reports, and except for liabilities and
obligations incurred since December 31, 2004 in the ordinary course of business,
consistent with past practice, as of the date hereof: (i) the Company and its
Subsidiaries do not have any material liabilities or obligations (absolute,
accrued, contingent or otherwise) and (ii) to the knowledge of the Company,
there has not been any aspect of the prior or current conduct of the business of
the Company or its Subsidiaries which would reasonably be expected to form the
basis for any material claim by any third party which if asserted would result
in a Material Adverse Effect.

(i) Material Changes. Since December 31, 2004 and except as expressly disclosed
in the SEC Reports or as set forth on Schedule 3.1(i), the Company has conducted
its business only in the ordinary course, consistent with past practice, and
there has not occurred:

(i) any event that would have or would reasonably be expected to have a Material
Adverse Effect on the Company or any of its Subsidiaries;

(ii) any amendments or changes in the charter documents of the Company and its
Subsidiaries;

(iii) any damage, destruction or loss, whether or not covered by insurance, that
would, individually or in the aggregate, have or would be reasonably likely to
have, a Material Adverse Effect on the Company and its Subsidiaries;

(iv) any:

(A) incurrence, assumption or guarantee by the Company or its Subsidiaries of
any debt for borrowed money other than (i) equipment leases made in the ordinary
course of business, consistent with past practice and (ii) any such incurrence,
assumption or guarantee with respect to an amount of $25,000 or less;

(B) issuance or sale of any securities convertible into or exchangeable for
securities of the Company other than to directors, employees and consultants
pursuant to existing equity compensation or stock purchase plans of the Company;

(C) issuance or sale of options or other rights to acquire from the Company or
its Subsidiaries, directly or indirectly, securities of the Company or any
securities convertible into or exchangeable for any such securities, other than
options issued to directors, employees and consultants in the ordinary course of
business, consistent with past practice;

(D) issuance or sale of any stock, bond or other corporate security other than
to directors, employees and consultants pursuant to existing equity compensation
or stock purchase plans of the Company;

 

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(E) discharge or satisfaction of any material Lien on any asset of the Company
or any of its Subsidiaries;

(F) declaration or making any payment or distribution to stockholders or
purchase or redemption of any share of its capital stock or other security other
than to directors, officers and employees of the Company or any of its
Subsidiaries as compensation for services rendered to the Company or its
Subsidiary (as applicable) or for reimbursement of expenses incurred on behalf
of the Company or any of its Subsidiary (as applicable);

(G) sale, assignment or transfer of any of the intangible assets of the Company
or any of its Subsidiaries except in the ordinary course of business, consistent
with past practice, or cancellation of any debt or claim except in the ordinary
course of business, consistent with past practice;

(H) waiver of any right of substantial value of the Company or any of its
Subsidiaries whether or not in the ordinary course of business;

(I) material change in officer compensation of the Company or any of its
Subsidiaries, except in the ordinary course of business and consistent with past
practice; or

(J) other commitment (contingent or otherwise) of the Company or any of its
Subsidiaries to do any of the foregoing.

(v) any creation, sufferance or assumption by the Company or any of its
Subsidiaries of any Lien on any asset or any making of any loan, advance or
capital contribution to or investment in any Person, in an aggregate amount
which exceeds $25,000 outstanding at any time;

(vi) any entry into, amendment of, relinquishment, termination or non-renewal by
the Company or any of its Subsidiaries of any material contract, license, lease,
transaction, commitment or other right or obligation, other than in the ordinary
course of business, consistent with past practice; or

(vii) any transfer or grant of a right with respect to the patents, trademarks,
trade names, service marks, trade secrets, copyrights or other intellectual
property rights owned or licensed by the Company or any of its Subsidiaries,
except as between or among the Company and any its Subsidiaries.

(j) Litigation. There is no action, suit, inquiry, notice of violation,
proceeding or investigation pending or, to the knowledge of the Company or any
of its Subsidiaries, threatened against the Company, any of its Subsidiaries or
any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “Action”) which (i) adversely
affects or challenges the legality, validity or enforceability of any of the
Transaction Documents or the Securities or (ii) would, if there were an
unfavorable decision, have or result in a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries, nor, to the knowledge of the Company or any
of its Subsidiaries, any director or officer thereof, is or has been the subject
of

 

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any Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. To the knowledge of the
Company or any of its Subsidiaries, there has not been and there is not pending
or contemplated, any investigation by the Commission involving the Company or
any of its Subsidiaries or any current or former director or officer of the
Company or any of its Subsidiaries. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed
by the Company or any of its Subsidiaries under the Exchange Act or the
Securities Act.

(k) Labor Relations. No material labor dispute exists or, to the knowledge of
the Company or any of its Subsidiaries, is imminent with respect to any of the
employees of the Company or any of its Subsidiaries which would have or result
in a Material Adverse Effect.

(l) Compliance. Neither the Company nor any of its Subsidiaries (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any of its Subsidiaries under), nor has the Company or any of its
Subsidiaries received notice of a claim that it is in default under or that it
is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived),
(ii) is in violation of any order of any court, arbitrator or governmental body,
or (iii) is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws applicable to its business, except in the case of clauses (i) and
(iii) as would not have or reasonably be expected to result in a Material
Adverse Effect.

(m) Licenses; Compliance With FDA and Other Regulatory Requirements.

(i) The Company and its Subsidiaries hold all material authorizations, consents,
approvals, franchises, licenses and permits required under applicable law or
regulation for the operation of the business of the Company and its Subsidiaries
as presently operated (the “Governmental Authorizations”). All the Governmental
Authorizations have been duly issued or obtained and are in full force and
effect, and the Company and its Subsidiaries are in material compliance with the
terms of all the Governmental Authorizations. The Company and its Subsidiaries
have not engaged in any activity that, to their knowledge, would cause
revocation or suspension of any such Governmental Authorizations. The Company
has no knowledge of any facts which would reasonably be expected to cause the
Company to believe that the Governmental Authorizations will not be renewed by
the appropriate governmental authorities in the ordinary course. Neither the
execution, delivery nor performance of this Agreement shall adversely affect the
status of any of the Governmental Authorizations.

(ii) Without limiting the generality of the representations and warranties made
in sub-paragraph (i) above, the Company represents and warrants that (i) the
Company and each of its Subsidiaries is in material compliance with all
applicable provisions of the United States Federal Food, Drug, and Cosmetic Act
and the rules and regulations promulgated thereunder (the “FDC Act”) and
equivalent laws, rules and regulations in jurisdictions outside the United
States in which the Company or its Subsidiaries do business, (ii) its products
and those of each of its Subsidiaries that are in the Company’s control are not
adulterated or misbranded and are in lawful distribution, (iii) all of the
products marketed by and within the control of the Company

 

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comply in all material respects with any conditions of approval and the terms of
the application by the Company to the appropriate Regulatory Authorities,
(iv) no Regulatory Authority has initiated legal action with respect to the
manufacturing of the Company’s products, such as seizures or required recalls,
and the Company is in compliance with applicable good manufacturing practice
regulations, (v) its products are labeled and promoted by the Company and its
representatives in substantial compliance with the applicable terms of the
marketing applications submitted by the Company to the Regulatory Authorities
and the provisions of the FDC Act and foreign equivalents, (vi) all adverse
events that were known to and required to be reported by Company to the
Regulatory Authorities have been reported to the Regulatory Authorities in a
timely manner, (vii) neither the Company nor any of its Subsidiaries is, to
their knowledge, employing or utilizing the services of any individual who has
been debarred under the FDC Act or foreign equivalents, (viii) all stability
studies required to be performed for products distributed by the Company or any
of its Subsidiaries have been completed or are ongoing in material compliance
with the applicable Regulatory Authority requirements, (ix) any products
exported by the Company or any of its Subsidiaries have been exported in
compliance with the FDC Act and (x) the Company and its Subsidiaries are in
compliance in all material respects with all applicable provisions of the
Controlled Substances Act. For purposes of this Section 3.1(m), “Regulatory
Authority” means any governmental authority in a country or region that
regulates the manufacture or sale of Company’s products, including, but not
limited to, the United States Food and Drug Administration.

(n) Title to Assets. The Company and the Subsidiaries do not own any real
property, and have good and marketable title to all personal property owned by
them that is material to the business of the Company and the Subsidiaries, taken
as a whole, in each case free and clear of all Liens, except those, if any,
reflected in the Company’s financial statements. Any real property and
facilities held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases (subject to laws of general
application relating to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors’ rights generally and rules of law
governing specific performance, injunctive relief, or other equitable remedies)
with which the Company and the Subsidiaries are in material compliance.

(o) Intellectual Property.

(i) The Company or a Subsidiary thereof has the right to use or is the sole and
exclusive owner of all right, title and interest in and to all foreign and
domestic patents, patent rights, trademarks, service marks, trade names, brands
and copyrights (whether or not registered and, if applicable, including pending
applications for registration) owned, used or controlled by the Company and its
Subsidiaries (collectively, the “Rights”) and in and to each material invention,
software, trade secret, technology, product, composition, formula and method of
process used by the Company or its Subsidiaries (the Rights and such other
items, the “Intellectual Property”), and, to the Company’s and its Subsidiaries’
knowledge, has the right to use the same, free and clear of any claim or
conflict with the rights of others;

(ii) other than as set forth in the SEC Reports, no material royalties or fees
(license or otherwise) are payable by the Company or its Subsidiaries to any
Person by reason of the ownership or use of any of the Intellectual Property;

 

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(iii) there have been no claims made against the Company or its Subsidiaries
asserting the invalidity, abuse, misuse, or unenforceability of any of the
Intellectual Property, and, to the best of the Company’s knowledge, there are no
reasonable grounds for any such claims;

(iv) neither the Company nor its Subsidiaries have made any claim of any
violation or infringement by others of its rights in the Intellectual Property,
and to the best of the Company’s knowledge, no reasonable grounds for such
claims exist; and

(v) neither the Company nor its Subsidiaries have received notice that it is in
conflict with or infringing upon the asserted rights of others in connection
with the Intellectual Property.

(p) Insurance. The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and
the Subsidiaries are engaged. All of the insurance policies of the Company and
its Subsidiaries are in full force and effect and are valid and enforceable in
accordance with their terms, and the Company and its Subsidiaries have complied
with all material terms and conditions thereof. Neither the Company nor any of
its Subsidiaries has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business without a significant increase in cost.

(q) Transactions With Affiliates and Employees. None of the officers or
directors of the Company or its Subsidiaries and, to the knowledge of the
Company and its Subsidiaries, none of the employees of the Company or its
Subsidiaries is presently a party to any transaction with the Company or any of
its Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company and its
Subsidiaries, any entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee or partner, other
than (i) for payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii) for
other employee benefits, including stock option agreements and other stock
awards under any equity compensation plan of the Company.

(r) Internal Accounting Controls. The Company and each of the Subsidiaries
maintains a system of internal accounting controls sufficient in the judgment of
the Company’s management to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability,
(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 the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the Company and designed such disclosure controls and procedures to ensure that
material information relating to the Company, including its

 

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Subsidiaries, is made known to the certifying officers by others within those
entities, particularly during the period in which the Company’s Form 10-K or
10-Q, as the case may be, is being prepared. The Company’s certifying officers
have evaluated the effectiveness of the Company’s controls and procedures as of
September 30, 2005 (such date, the “Evaluation Date”). The Company presented in
its Form 10-Q for the quarter ended September 30, 2005, the conclusions of the
certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have not been any changes in the Company’s internal
control over financial reporting that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over
financial reporting.

(s) Certain Fees. Except for fees payable to SCO Securities LLC, no brokerage or
finder’s fees or commissions are or will be payable by the Company or its
Subsidiaries to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. The Purchasers shall have no obligation with
respect to any fees or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by this Agreement.

(t) Private Placement; Integrated Offering. Assuming the accuracy of the
Purchaser’s representations and warranties set forth in Section 3.2, no
registration under the Securities Act is required for the offer and sale of the
Securities by the Company to the Purchasers as contemplated hereby. The issuance
and sale of the Securities hereunder does not contravene the rules and
regulations of the American Stock Exchange or any other Trading Market. Neither
the Company, nor any of its Affiliates, nor any Person acting on its or their
behalf has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would cause
this offering of the Securities to be integrated with prior offerings by the
Company for purposes of the Securities Act and would as a result require
registration under the Securities Act or trigger any applicable shareholder
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.

(u) Charter, Bylaws and Corporate Records. The minute books of the Company and
its Subsidiaries contain in all material respects complete and accurate records
of all meetings and other corporate actions of the board of directors,
committees of the board of directors, incorporators and stockholders of the
Company and its Subsidiaries from the date of incorporation of each such entity
to the date hereof. All material corporate decisions and actions have been
validly made or taken. All corporate books, including without limitation the
share transfer register, comply in all material respects with applicable laws
and regulations and have been regularly updated.

(v) Registration Rights. Except as set forth on Schedule 3.1(v), no Person has
any right to cause the Company to effect the registration under the Securities
Act of any securities of the Company.

 

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(w) Listing and Maintenance Requirements. Except as set forth in Schedule
3.1(w), the Company has not, in the 12 months preceding the date hereof,
received notice from any Trading Market on which the Common Stock is or has been
listed or quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market. The Company is, and
has no reason to believe that it will not in the foreseeable future continue to
be, in compliance with all such listing and maintenance requirements.

(x) Taxes. All tax returns and tax reports required to be filed with respect to
the income, operations, business or assets of the Company and its Subsidiaries
have been timely filed (or appropriate extensions have been obtained) with the
appropriate governmental agencies in all jurisdictions in which such returns and
reports are required to be filed, and all of the foregoing as filed are, in all
material respects, correct and complete and, in all material respects, reflect
accurately all liability for taxes of the Company and its Subsidiaries for the
periods to which such returns relate, and all amounts shown as owing thereon
have been paid. All income, profits, franchise, sales, use, value added,
occupancy, property, excise, payroll, withholding, FICA, FUTA and other taxes
(including interest and penalties), if any, collectible or payable by the
Company and its Subsidiaries or relating to or chargeable against any of its
material assets, revenues or income or relating to any employee, independent
contractor, creditor, stockholder or other third party through the Closing Date,
were fully collected and paid by such date if due by such date or provided for
by adequate reserves in the financial statements contained in the SEC Reports as
of and for the periods ended September 30, 2005 (other than taxes accruing after
such date) and all similar items due through the Closing Date will have been
fully paid by that date or provided for by adequate reserves, whether or not any
such taxes were reported or reflected in any tax returns or filings. No taxation
authority has sought to audit the records of the Company or any of its
Subsidiaries for the purpose of verifying or disputing any tax returns, reports
or related information and disclosures provided to such taxation authority, or
for the Company’s or any of its Subsidiaries’ alleged failure to provide any
such tax returns, reports or related information and disclosure. No material
claims or deficiencies have been asserted against or inquiries raised with the
Company or any of its Subsidiaries with respect to any taxes or other
governmental charges or levies which have not been paid or otherwise satisfied,
including claims that, or inquiries whether, the Company or any of its
Subsidiaries has not filed a tax return that it was required to file, and, to
the best of the Company’s and its Subsidiaries’ knowledge, there exists no
reasonable basis for the making of any such claims or inquiries. Neither the
Company nor any of its Subsidiaries has waived any restrictions on assessment or
collection of taxes or consented to the extension of any statute of limitations
relating to taxation.

(y) Environmental Matters. None of the premises or any properties owned,
occupied or leased by the Company or its Subsidiaries (the “Premises”) has been
used by the Company or the Subsidiaries or, to the Company’s knowledge, by any
other Person, to manufacture, treat, store, or dispose of any substance that has
been designated to be a “hazardous substance” under applicable Environmental
Laws (hereinafter defined) (“Hazardous Substances”) in violation of any
applicable Environmental Laws. To their knowledge, the Company and its
Subsidiaries have not disposed of, discharged, emitted or released any Hazardous
Substances which would require, under applicable Environmental Laws,
remediation, investigation or similar response activity. No Hazardous Substances
are present as a result of the actions of the Company or its Subsidiaries or, to
the Company’s or its Subsidiaries’ knowledge, any other Person, in, on or under
the Premises which would give rise to any liability or clean-up

 

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obligations of the Company or its Subsidiaries under applicable Environmental
Laws. The Company and its Subsidiaries and, to the Company’s or its Subsidiaries
knowledge, any other Person for whose conduct it may be responsible pursuant to
an agreement or by operation of law, are in compliance with all laws,
regulations and other federal, state or local governmental requirements, and all
applicable judgments, orders, writs, notices, decrees, permits, licenses,
approvals, consents or injunctions in effect on the date of this Agreement
relating to the generation, management, handling, transportation, treatment,
disposal, storage, delivery, discharge, release or emission of any Hazardous
Substance (the “Environmental Laws”). Neither the Company or its Subsidiaries
nor, to the Company’s or its Subsidiaries’ knowledge, any other Person for whose
conduct it may be responsible pursuant to an agreement or by operation of law
has received any written complaint, notice, order, or citation of any actual,
threatened or alleged noncompliance with any of the Environmental Laws, and
there is no proceeding, suit or investigation pending or, to the Company’s or
its Subsidiaries’ knowledge, threatened against the Company or its Subsidiaries
or, to the Company’s or its Subsidiaries’ knowledge, any such Person with
respect to any violation or alleged violation of the Environmental Laws, and, to
the knowledge of the Company or its Subsidiaries, there is no basis for the
institution of any such proceeding, suit or investigation.

(z) Disclosure. The Company confirms that neither the Company nor any other
Person acting on its behalf and at the direction of the Company, has provided
any of the Purchasers or their agents or counsel with any information that in
the Company’s reasonable judgment, at the time such information was furnished,
constitutes material, non-public information, other than information relating to
the fact that the Company was considering and engaged in the transactions
contemplated by the Transaction Documents. The Company understands and confirms
that the Purchasers will rely on the foregoing representations and covenants in
effecting transactions in securities of the Company. No representation or
warranty made by the Company in this Agreement or the Transaction Documents or
in any schedule or exhibit furnished hereto or thereto contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.

3.2 Representations and Warranties of the Purchasers.

Each Purchaser hereby, for itself and for no other Purchaser, represents and
warrants as of the date hereof and as of the Closing Date to the Company as
follows:

(a) Organization; Authority; Enforceability. Such Purchaser (other than
individuals) is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with full power and
authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations thereunder. The
execution, delivery and performance by such Purchaser of the transactions
contemplated by this Agreement has been duly authorized by all necessary
corporate or similar action on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and
when delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except (i) as limited by
laws of general application relating to bankruptcy, insolvency, reorganization,
moratorium or other similar laws

 

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affecting creditors’ rights generally, (ii) as limited by rules of law governing
specific performance, injunctive relief, or other equitable remedies and
(iii) to the extent the indemnification provisions contained in the Transaction
Documents may be limited by applicable federal or state securities laws.

(b) General Solicitation. Such Purchaser is not purchasing the Securities as a
result of any advertisement, article, notice or other communication regarding
the Securities published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

(c) No Public Sale or Distribution. Such Purchaser is (i) acquiring the Shares
and Warrants and (ii) upon exercise of the Warrants will acquire the Warrant
Shares, for its own account and not with a view towards, or for resale in
connection with, the public sale or distribution thereof; provided, however,
that by making the representations herein, such Purchaser does not agree to hold
any of the Securities for any minimum or other specific term and reserves the
right to dispose of the Securities at any time in accordance with or pursuant to
a registration statement or an exemption under the Securities Act. Such
Purchaser is acquiring the Securities hereunder in the ordinary course of its
business. Such Purchaser does not have any agreement or understanding, directly
or indirectly, with any Person to distribute any of the Securities.

(d) Accredited Investor Status. Such Purchaser is an “accredited investor” as
that term is defined in Rule 501(a) of Regulation D.

(e) Jurisdiction of Offer. Such Purchaser is a resident of (or in the case of a
corporation, trust, partnership or other legal entity, has its principal place
of business in) the jurisdiction set forth below such Purchaser’s name on
Schedule 1 attached hereto.

(f) Reliance on Exemptions. Such Purchaser understands that the Shares and
Warrants are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and
such Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Shares and Warrants.

(g) Information. Such Purchaser and its advisors, if any, have been furnished
with all publicly available materials relating to the business, finances and
operations of the Company and such other publicly available materials relating
to the offer and sale of the Shares and Warrants as have been requested by such
Purchaser. Such Purchaser and its advisors, if any, have been afforded the
opportunity to ask questions of the Company. Neither such inquiries nor any
other due diligence investigations conducted by such Purchaser or its advisors,
if any, or its representatives shall modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained herein.
Such Purchaser understands that its investment in the Shares and Warrants
involves a high degree of risk.

 

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(h) No Governmental Review. Such Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Shares and Warrants
or the fairness or suitability of the investment in the Shares and Warrants, nor
have such authorities passed upon or endorsed the merits of the offering of the
Shares and Warrants.

(i) Experience of Such Purchaser. Such Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters, including investing in companies engaged in the
business in which the Company is engaged, so as to be capable of evaluating the
merits and risks of the prospective investment in the Shares and Warrants, and
has so evaluated the merits and risks of such investment. Such Purchaser is able
to bear the economic risk of an investment in the Shares and Warrants and, at
the present time, is able to afford a complete loss of such investment.

The Company acknowledges and agrees that each Purchaser does not make or has not
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 3.2.

ARTICLE IV

OTHER AGREEMENTS OF THE PARTIES

4.1 Transfer Restrictions.

(a) The Securities may only be disposed of in compliance with state and federal
securities laws. Each Purchaser will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take pledge of) any of the Securities except in
compliance with the Securities Act, applicable state securities laws and the
respective rules and regulations promulgated thereunder. In connection with any
transfer of Securities other than pursuant to an effective registration
statement, to the Company, to an Affiliate of a Purchaser (who is an accredited
investor and executes a customary representation letter) or in connection with a
pledge as contemplated in Section 4.1(b), the Company may require the transferor
thereof to provide to the Company an opinion of counsel selected by the
transferor and reasonably acceptable to the Company, the form and substance of
which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Securities
under the Securities Act, provided, however, that in the case of a transfer
pursuant to Rule 144, no opinion shall be required if the transferor provides
the Company with a customary seller’s representation letter reasonably
satisfactory to the Company, and if such sale is not pursuant to subsection
(k) of Rule 144, a customary broker’s representation letter and a Form 144. Any
such transferee that agrees in writing to be bound by the terms of this
Agreement and the Investor Rights Agreement shall have the rights of a Purchaser
under this Agreement and the Investor Rights Agreement. Except as required by
federal securities laws and the securities laws of any state or other
jurisdiction within the United States and as expressly set forth in the
Transaction Documents, the Securities may be transferred, in whole or in part,
by any of the Purchasers at any time. The Company shall reissue certificates
evidencing the Securities upon surrender of certificates evidencing the
Securities being transferred in accordance with this Section 4.1(a).

 

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(b) The Purchasers agree to the imprinting, so long as is required by this
Section 4.1(b), of a legend on any of the Securities in substantially the
following form:

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

The Company acknowledges and agrees that a 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 Securities, in accordance
with all applicable securities laws, to a financial institution that is an
“accredited investor” as defined in Rule 501(a) under the Securities Act and, if
required under the terms of such arrangement, such Purchaser may transfer
pledged or secured Securities to the pledgees or secured parties. Such a pledge
or transfer would not be subject to approval of the Company and no opinion of
legal counsel of the pledgee, secured party or pledgor shall be required in
connection therewith; provided, however, that such Purchaser shall provide the
Company with such documentation as is reasonably requested by the Company to
ensure that the pledge is pursuant to a bona fide margin agreement with a
registered broker-dealer or a security interest in some or all of the Securities
to a financial institution that is an “accredited investor” as defined in Rule
501(a) under the Securities Act. The Company will execute and deliver such
documentation as a pledgee or secured party of Securities may reasonably request
in connection with a pledge or transfer of the Securities, including 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.

(c) Certificates evidencing the Securities shall not contain any legend
(including the legend set forth in Section 4.1(b)), (i) following any sale of
such Securities pursuant to Rule 144, or (ii) if such Securities are eligible
for sale under Rule 144(k), or (iii) if such legend is not required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the Commission). The
Company shall use its best efforts to cause its counsel to issue a legal opinion
to the Company’s transfer agent promptly upon the occurrence of any of the
events in clauses (i), (ii) or (iii) above to effect the removal of the legend
hereunder and shall also use its best efforts to cause its counsel to issue a
“blanket” legal opinion to the Company’s transfer agent promptly after the
Effective Date, if required by the Company’s transfer agent, to allow sales
pursuant to an effective Registration Statement. The

 

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Company agrees that at such time as such legend is no longer required under this
Section 4.1(c), it will, no later than three Trading Days following the delivery
by a Purchaser to the Company or the Company’s transfer agent of a certificate
representing Securities issued with a restrictive legend, deliver or cause to be
delivered to such Purchaser a certificate representing such Securities that is
free from all restrictive and other legends. The Company may not make any
notation on its records or give instructions to any transfer agent of the
Company that enlarge the restrictions on transfer set forth in this Section.

(d) Each Purchaser, severally and not jointly, agrees that the removal of the
restrictive legend from certificates representing Securities as set forth in
this Section 4.1 is predicated upon the Company’s reliance on, and the
Purchaser’s agreement that, and each Purchaser hereby agrees that, the Purchaser
will not sell any Securities except pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom.

4.2 Furnishing of Information.

As long as any Purchaser owns Securities, the Company covenants to timely file
(or obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. Upon the request in writing of any such holder of
Securities, the Company shall deliver to such holder a written certification of
a duly authorized officer as to whether it has complied with the preceding
sentence. As long as any Purchaser owns Securities, if the Company is not
required to file reports pursuant to the Exchange Act, it will prepare and
furnish to the Purchasers and make publicly available in accordance with Rule
144(c), such information as is required for the Purchasers to sell the
Securities under Rule 144. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request in writing,
all to the extent required from time to time to enable such Person to sell such
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144.

4.3 Integration.

The Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities in a
manner that would require the registration under the Securities Act of the sale
of the Securities to the Purchasers or that would be integrated with the offer
or sale of the Securities in violation of the rules and regulations of any
Trading Market.

4.4 Limitation on Future Financing.

From the date hereof until the earlier of 60 calendar days after the Closing
Date or 15 calendar days after the Effective Date, the Company shall not effect
an issuance of its Common Stock or Common Stock Equivalents. Notwithstanding
anything to the contrary herein, this Section 4.4 shall not apply to the
following: (a) the granting of options or other equity compensation awards or
the issuance of Common Stock or Common Stock Equivalents to employees,
independent contractors, officers and directors of the Company pursuant to any
equity compensation plan or arrangement duly adopted by a majority of the
non-employee

 

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members of the Board of Directors of the Company or a majority of the members of
a committee of non-employee directors established for such purpose (and the
exercise of such options or Common Stock Equivalents), or (b) the exercise of
any security issued by the Company in connection with the offer and sale of the
Company’s securities pursuant to this Agreement, or (c) the exercise of or
conversion of any convertible securities, options or warrants issued and
outstanding on the date hereof, or (d) the issuance of Common Stock or Common
Stock Equivalents in connection with acquisitions, mergers, strategic
investments or transactions, partnerships, license agreements, business
relationship or joint venture, the primary purpose of which is not to raise
capital, or (e) the issuance of securities pursuant to a stock split or stock
dividend or similar capital modification, or (f) the issuance of securities upon
the authorization of the Company’s Board of Directors in connection with
business conducted by the Company with vendors, lessors or financial
institutions in connection with financing transactions.

4.5 Publicity.

The Company shall, within two Business Days following the Closing Date, file a
Current Report on Form 8-K, disclosing the transactions contemplated hereby and
make such other filings and notices in the manner and time required by the
Commission. The Company and SCO Securities LLC shall consult with each other in
issuing any press releases with respect to the transactions contemplated hereby,
and neither the Company nor any Purchaser nor SCO Securities LLC shall issue any
such press release or otherwise make any such public statement without the prior
consent of the Company, with respect to any such press release of any Purchaser
or SCO Securities LLC, or without the prior consent of SCO Securities LLC, with
respect to any such press release of the Company, except if such disclosure is
required by law, in which case the disclosing party shall promptly provide the
other party with prior notice of such public statement or communication.

4.6 Shareholders Rights Plan.

No claim will be made or enforced by the Company or any other Person that
(a) any Purchaser is an “acquiring person” under any shareholders rights plan or
similar plan or arrangement in effect or hereafter adopted by the Company, or
(b) that any Purchaser could be deemed to trigger the provisions of any such
plan or arrangement; solely, in each case, by virtue of receiving Securities
under the Transaction Documents or by entering into the Transaction Documents.

4.7 Non-Public Information.

The Company covenants and agrees that neither it nor any other Person acting on
its behalf will provide any Purchaser or its agents or counsel with any
information that the Company believes constitutes material non-public
information, unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information or shall
have otherwise expressly agreed or undertaken to maintain the confidentiality of
such information. The Company understands and confirms that each Purchaser shall
be relying on the foregoing representations in effecting transactions in
securities of the Company.

 

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4.8 Use of Proceeds.

Until the date on which the Purchasers own less than 50% of the Shares issued
pursuant to this Agreement, the Company covenants and agrees that the proceeds
from the sale of the Common Stock and Warrants shall be used by the Company for
working capital and general corporate purposes; under no circumstances shall any
portion of the proceeds be applied to:

(i) accelerated repayment of debt existing on the date hereof;

(ii) the payment of dividends or other distributions on any capital stock of the
Company;

(iii) increased executive compensation (other than in the ordinary course of
business) or loans to officers, employees, stockholders or directors, unless
approved by a majority of the disinterested members of the Board of Directors,
or a majority of the members of a committee of disinterested members of the
Board of Directors established for such purpose;

(iv) the purchase of debt or equity securities of any Person, including the
Company and its Subsidiaries, except in each case: (a) in connection with
investment of excess cash in high quality (A1/P1 or better) money market
instruments having maturities of one year or less; (b) in connection with
acquisitions, mergers, strategic investments or transactions, partnerships,
license agreements, joint ventures or other business relationships, in each case
related to the business of the Company; and (c) pursuant to the repurchase
rights of the Company under options or restricted stock grants to, or employee
arrangements with, directors, employees or consultants of the Company, in each
case, granted under equity incentive plans or agreements approved by the Board
of Directors of the Company or any duly authorized committee thereof; or

(v) any expenditure not directly related to the business of the Company, except
in connection with acquisitions, mergers, strategic investments or transactions,
partnerships, license agreements, joint ventures or other business
relationships, in each case related to the business.

4.9 Reservation of Common Stock.

As of the date hereof, the Company has reserved and the Company shall continue
to reserve and keep available at all times, free of preemptive rights, a
sufficient number of shares of Common Stock for the purpose of enabling the
Company to issue Shares pursuant to this Agreement and Warrant Shares upon
exercise of the Warrants.

4.10 Listing of Common Stock.

The Company hereby agrees to use commercially reasonable efforts to maintain the
listing of the Common Stock on the American Stock Exchange or any applicable
Trading Market. The Company further agrees, if the Company applies to have the
Common Stock traded on any other Trading Market, it will include in such
application the Shares and the Warrant Shares, and will take such other action
as is necessary to cause the Shares and Warrant Shares to be listed on such
other Trading Market as promptly as possible to the extent that any of the
Common Stock is listed thereon.

 

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4.11 Business Operations. Until the earlier of: (i) the fourth year anniversary
of the Closing Date and (ii) the date that the Purchasers own less than 50% of
the Shares originally issued pursuant to this Agreement, the Company shall
comply with the following covenants:

(a) Insurance. The Company and its Subsidiaries shall maintain insurance
policies such that the representations contained in the first sentence of
Section 3.1(p) hereof continue to be true and correct and shall, from time to
time upon the written request of the Purchasers, promptly furnish or cause to be
furnished to the Purchasers evidence, in form and substance reasonably
satisfactory to the Purchasers, of the maintenance of all insurance maintained
by it.

(b) Corporate Existence; Licenses. The Company shall preserve and maintain and
cause its Subsidiaries to preserve and maintain their corporate existence and
good standing in the jurisdiction of their incorporation and the rights,
privileges and franchises of the Company and its Subsidiaries (except, in each
case, in the event of a merger or consolidation in which the Company or its
Subsidiaries, as applicable, is not the surviving entity) in each case where the
failure to so preserve or maintain would have a Material Adverse Effect on the
financial condition, business or operations of the Company and its Subsidiaries
taken as a whole. The Company shall, and shall cause its Subsidiaries to,
maintain at all times all material licenses and permits from any governmental
agency or instrumentality thereof necessary to the conduct of its business and
as required by any governmental agency or instrumentality thereof, including
without limitation all FDA clearances and approvals.

(c) Taxes and Claims. The Company and its Subsidiaries shall duly pay and
discharge (a) all taxes, assessments and governmental charges upon or against
the Company or its properties or assets prior to the date on which penalties
attach thereto, unless and to the extent that such taxes are being diligently
contested in good faith and by appropriate proceedings, and appropriate reserves
therefor have been established, and (b) all material lawful claims, whether for
labor, materials, supplies, services or anything else which might or would, if
unpaid, become a lien or charge upon the properties or assets of the Company or
its Subsidiaries, unless and to the extent only that the same are being
contested in good faith and by appropriate proceedings and appropriate reserves
therefor have been established.

(d) Affiliate Transactions. Until the date on which the Purchasers hold less
than 50% of the Shares issued pursuant to this Agreement, except for
transactions approved by a majority of the disinterested members of the board of
directors of the Company, or a majority of the members of a committee of
disinterested directors established for such purpose, neither the Company nor
any of its Subsidiaries shall enter into any transaction with any (i) director,
officer, employee or holder of more than 5% of the outstanding capital stock of
any class or series of capital stock of the Company or any of its Subsidiaries,
(ii) member of the immediate family of any such person, or (iii) corporation,
partnership, trust or other entity in which any such person, or member of the
immediate family of any such person, is a director, officer, trustee, partner or
holder of more than 5% of the outstanding capital stock thereof.

 

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4.12 Securities Law Compliance.

(a) Securities Act. The Company shall timely prepare and file with the
Securities and Exchange Commission the form of notice of the sale of securities
pursuant to the requirements of Regulation D regarding the sale of the Common
Stock and Warrants under this Agreement.

(b) State Securities Law Compliance — Sale. The Company shall timely prepare and
file such applications, consents to service of process (but not including a
general consent to service of process) and similar documents and take such other
steps and perform such further acts as shall be required by the state securities
law requirements of each jurisdiction where a Purchaser resides, as indicated on
Schedule 1, with respect to the sale of the Common Stock and Warrants under this
Agreement.

ARTICLE V

INDEMNIFICATION, TERMINATION AND DAMAGES

5.1 Survival of Representations.

Except as otherwise provided below in this Section 5.1, the representations and
warranties of the Company and the Purchasers contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing Date and shall continue in full force and effect for a period of two
(2) years from the Closing Date; provided, however, that the Company’s
warranties and representations under Sections 3.1(a) (Subsidiaries), 3.1(g)
(Capitalization), 3.1(x) (Taxes) and 3.1(y) (Environmental Matters) shall
survive the Closing Date and continue in full force and effect until the
expiration of all applicable statutes of limitation. The Company’s and the
Purchasers’ warranties and representations shall in no way be affected or
diminished in any way by any investigation of (or failure to investigate) the
subject matter thereof made by or on behalf of the Company or the Purchasers.

5.2 Indemnification.

(a) The Company agrees to indemnify and hold harmless the Purchasers, their
Affiliates, each of their officers, directors, employees and agents and their
respective successors and assigns, from and against any losses, damages, or
expenses which are caused by or arise out of (i) any breach or default in the
performance by the Company of any covenant or agreement made by the Company in
this Agreement or in any of the Transaction Documents; (ii) any breach of
warranty or representation made by the Company in this Agreement or in any of
the Transaction Documents; and/or (iii) any and all third party actions, suits,
proceedings, claims, demands, judgments, costs and expenses (including
reasonable legal fees and expenses) incident to any of the foregoing.

(b) The Purchasers, severally and not jointly, agree to indemnify and hold
harmless the Company, its Affiliates, each of their officers, directors,
employees and agents and their respective successors and assigns, from and
against any losses, damages, or expenses which are caused by or arise out of
(A) any breach or default in the performance by the Purchasers of any covenant
or agreement made by the Purchasers in this Agreement or in any of the

 

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Transaction Documents; (B) any breach of warranty or representation made by the
Purchasers in this Agreement or in any of the Transaction Documents; and (C) any
and all third party actions, suits, proceedings, claims, demands, judgments,
costs and expenses (including reasonable legal fees and expenses) incident to
any of the foregoing; provided, however, that a Purchaser’s liability under this
Section 5.2(b) shall not exceed the Purchase Price paid by such Purchaser
hereunder.

5.3 Indemnity Procedure.

A party or parties hereto agreeing to be responsible for or to indemnify against
any matter pursuant to this Agreement is referred to herein as the “Indemnifying
Party” and the other party or parties claiming indemnity is referred to as the
“Indemnified Party”. An Indemnified Party under this Agreement shall, with
respect to claims asserted against such party by any third party, give written
notice to the Indemnifying Party of any liability which might give rise to a
claim for indemnity under this Agreement within sixty (60) Business Days of the
receipt of any written claim from any such third party, but not later than
twenty (20) days prior to the date any answer or responsive pleading is due, and
with respect to other matters for which the Indemnified Party may seek
indemnification, give prompt written notice to the Indemnifying Party of any
liability which might give rise to a claim for indemnity; provided, however,
that any failure to give such notice will not waive any rights of the
Indemnified Party except to the extent the rights of the Indemnifying Party are
materially prejudiced.

The Indemnifying Party shall have the right, at its election, to take over the
defense or settlement of such claim by giving written notice to the Indemnified
Party at least fifteen (15) days prior to the time when an answer or other
responsive pleading or notice with respect thereto is required. If the
Indemnifying Party makes such election, it may conduct the defense of such claim
through counsel of its choosing (subject to the Indemnified Party’s approval of
such counsel, which approval shall not be unreasonably withheld), shall be
solely responsible for the expenses of such defense and shall be bound by the
results of its defense or settlement of the claim. The Indemnifying Party shall
not settle any such claim without prior notice to and consultation with the
Indemnified Party, and no such settlement involving any equitable relief or
which might have an adverse effect on the Indemnified Party may be agreed to
without the written consent of the Indemnified Party (which consent shall not be
unreasonably withheld). So long as the Indemnifying Party is diligently
contesting any such claim in good faith, the Indemnified Party may pay or settle
such claim only at its own expense and the Indemnifying Party will not be
responsible for the fees of separate legal counsel to the Indemnified Party,
unless the named parties to any proceeding include both parties or
representation of both parties by the same counsel would be inappropriate in the
reasonable opinion of the Indemnified Party, due to conflicts of interest or
otherwise. If the Indemnifying Party does not make such election, or having made
such election does not, in the reasonable opinion of the Indemnified Party
proceed diligently to defend such claim, then the Indemnified Party may (after
written notice to the Indemnifying Party), at the expense of the Indemnifying
Party, elect to take over the defense of and proceed to handle such claim in its
discretion and the Indemnifying Party shall be bound by any defense or
settlement that the Indemnified Party may make in good faith with respect to
such claim. In connection therewith, the Indemnifying Party will fully cooperate
with the Indemnified Party should the Indemnified Party elect to take over the
defense of any such claim. The parties agree to cooperate in defending such
third party claims and the Indemnified Party

 

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shall provide such cooperation and such access to its books, records and
properties as the Indemnifying Party shall reasonably request with respect to
any matter for which indemnification is sought hereunder; and the parties hereto
agree to cooperate with each other in order to ensure the proper and adequate
defense thereof.

With regard to claims of third parties for which indemnification is payable
hereunder, such indemnification shall be paid by the Indemnifying Party upon the
earlier to occur of: (i) the entry of a judgment against the Indemnified Party
and the expiration of any applicable appeal period, or if earlier, five (5) days
prior to the date that the judgment creditor has the right to execute the
judgment; (ii) the entry of an unappealable judgment or final appellate decision
against the Indemnified Party; or (iii) a settlement of the claim.
Notwithstanding the foregoing, the reasonable expenses of counsel to the
Indemnified Party shall be reimbursed on a current basis by the Indemnifying
Party. With regard to other claims for which indemnification is payable
hereunder, such indemnification shall be paid promptly by the Indemnifying Party
upon demand by the Indemnified Party.

ARTICLE VI

MISCELLANEOUS

6.1 Fees and Expenses.

The Company shall be responsible for the payment of the Purchasers’ reasonable
and documented legal fees and other third-party expenses relating to the
preparation, negotiation and execution of this Agreement and the Transaction
Documents and the consummation of the transactions contemplated herein, in an
aggregate amount not to exceed $70,000 unless otherwise agreed in writing by the
Company; provided, that the limit set forth in this Section 6.1 shall not apply
to registration fees and expenses as described in Section 4 of the Investor
Rights Agreement.

6.2 Entire Agreement.

The Transaction Documents, together with the exhibits and schedules thereto,
contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral or
written, with respect to such matters, which the parties acknowledge have been
merged into such documents, exhibits and schedules.

6.3 Notices.

Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified on
the signature pages attached hereto prior to 5:00 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number on
the signature pages attached hereto on a day that is not a Trading Day or later
than 5:00 p.m. (New York City time) on any Trading Day, (c) the Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom

 

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such notice is required to be given. The address for such notices and
communications shall be as follows:

If to the Purchasers, at each Purchaser’s address set forth under its name on
Schedule 1 attached hereto, or with respect to the Company, addressed to:

Antares Pharma, Inc.

707 Eagleview Blvd.

Suite 414

Exton, PA 19341

Attention: President

Facsimile No.: (610) 458 0756

or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Company shall be sent to:

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103-2921

Attention: Joanne R. Soslow

Facsimile No.: (215) 963-5001

Copies of notices to any Purchaser shall be sent to the addresses, if any,
listed on Schedule 1 attached hereto.

6.4 Amendments; Waivers.

No provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by the Company and each
Purchaser or, in the case of a waiver, by the party against whom enforcement of
any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.

6.5 Construction.

The headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.

6.6 Successors and Assigns.

This Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Company may not assign this
Agreement or any rights or

 

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obligations hereunder without the prior written consent of each Purchaser. Any
Purchaser may assign any or all of its rights under this Agreement to any
Person, provided such transferee agrees in writing to be bound, with respect to
the transferred Securities, by the provisions hereof that apply to the
Purchasers.

6.7 No Third-Party Beneficiaries.

This Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person, except as otherwise
set forth in Article V.

6.8 Governing Law.

All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law thereof.

6.9 Jurisdiction; Venue; Service of Process.

This Agreement shall be subject to the exclusive jurisdiction of the Federal
District Court, Southern District of New York and if such court does not have
proper jurisdiction, the State Courts of New York County, New York. The parties
to this Agreement agree that any breach of any term or condition of this
Agreement shall be deemed to be a breach occurring in the State of New York by
virtue of a failure to perform an act required to be performed in the State of
New York and irrevocably and expressly agree to submit to the jurisdiction of
the Federal District Court, Southern District of New York and if such court does
not have proper jurisdiction, the State Courts of New York County, New York for
the purpose of resolving any disputes among the parties relating to this
Agreement or the transactions contemplated hereby. The parties irrevocably
waive, to the fullest extent permitted by law, any objection which they may now
or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement, or any judgment entered by any
court in respect hereof brought in New York County, New York, and further
irrevocably waive any claim that any suit, action or proceeding brought in
Federal District Court, Southern District of New York and if such court does not
have proper jurisdiction, the State Courts of New York County, New York has been
brought in an inconvenient forum. Each of the parties hereto consents to process
being served in any such suit, action or proceeding, by mailing a copy thereof
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing in this Section 6.9 shall affect or limit
any right to serve process in any other manner permitted by law.

6.10 Execution.

This Agreement may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original thereof.

 

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6.11 Severability.

If any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

6.12 Replacement of Securities.

If any certificate or instrument evidencing any Securities is mutilated, lost,
stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity, if requested by the Company.

6.13 Remedies.

In addition to being entitled to exercise all rights provided herein or granted
by law, including recovery of damages, each of the Purchasers and the Company
will be entitled to specific performance under the Transaction Documents. The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be adequate.

6.14 Payment Set Aside.

To the extent that the Company makes a payment or payments to any Purchaser
pursuant to any Transaction Document or a Purchaser enforces or exercises its
rights thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall, to the extent
permissible under applicable law, be revived and continued in full force and
effect as if such payment had not been made or such enforcement or setoff had
not occurred.

6.15 Independent Nature of Purchasers’ Obligations and Rights.

The obligations of each Purchaser under any Transaction Document 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 any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an

 

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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
Transaction Document. Each Purchaser shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in their review and negotiation of the Transaction
Documents. For reasons of administrative convenience only, Purchasers and their
respective counsel have chosen to communicate with the Company through Wiggin
and Dana LLP, but such counsel does not represent any of the Purchasers in this
transaction other than SCO Securities LLC. The Company has elected to provide
all Purchasers with the same terms and Transaction Documents for the convenience
of the Company and not because it was required or requested to do so by the
Purchasers.

6.16 Waiver of Trial by Jury.

THE PARTIES HERETO IRREVOCABLY WAIVE TRIAL BY JURY IN ANY SUIT, ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

6.17 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
assurances as may be reasonably requested by any other party to better evidence
and reflect the transactions described herein and contemplated hereby and to
carry into effect the intents and purposes of this Agreement, and further agrees
to take promptly, or cause to be taken, all actions, and to do promptly, or
cause to be done, all things necessary, proper or advisable under applicable law
to consummate and make effective the transactions contemplated hereby, to obtain
all necessary waivers, consents and approvals, to effect all necessary
registrations and filings, and to remove any injunctions or other impediments or
delays, legal or otherwise, in order to consummate and make effective the
transactions contemplated by this Agreement for the purpose of securing to the
parties hereto the benefits contemplated by this Agreement.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Common Stock and
Warrant Purchase Agreement as of the date first above written.

 

COMPANY: ANTARES PHARMA, INC. By:  

 

Name:   Title:  

 

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PURCHASERS:

 

Print Exact Name:  

 

 

By:  

 

Name:   Title:  

 

Address:  

 

 

 

Telephone:  

 

Facsimile:  

 

Email:  

 

SSN/EIN:  

 

 

Amount of Investment:$  

 

[Omnibus Antares Pharma, Inc. Common Stock and Warrant Purchase Agreement
Signature Page]

 

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Schedule 1

to Common Stock and Warrant Purchase Agreement

Purchasers and Shares of Common Stock and Warrants

 

Name, Address and Fax Number of Purchaser

  

Copies of Notices to

   Shares of
Common Stock
Purchased    Common Stock
Underlying
Warrants    Purchase
Price

Anthony B. Fair

2882 Cypress Lake Road

Statesboro, GA 30458

Telephone: (912) 489-8606

Fax: (912)764-8282

      40,000    30,000    $ 50,000

Atlas Master Fund, Ltd

Scott Schroeder, Authorized Signatory

c/o Balasny Asset Management

650 Madison Avenue, 19th Floor

New York, NY 10022

Telephone: (212) 808-2310

Fax: (212) 588-1130

e-mail: asilberstem@bam-us.con

      135,784    101,838    $ 169,730

Bedrock Capital LP

James Smith, Manager

P.O. Box 1320

St. Thomas, US Virgin Islands 00804

Telephone: (340) 715-5555

Fax: (340) 715-5554

e-mail: jimsmyth@bloomberg.net

      190,000    142,500    $ 237,500

 

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Name, Address and Fax Number of Purchaser

  

Copies of Notices to

   Shares of
Common Stock
Purchased    Common Stock
Underlying
Warrants    Purchase
Price

Bristol Investment Fund, Ltd.

c/o Bristol Capital Advisors, LLC

10990 Wilshire Boulevard, Suite 1410

Los Angeles, California 90024

Attention: Amy Wang, Esq.

Telephone: (310) 696-0333

Fax: (310) 696-0334

e-mail: pkessler@bristolcompanies.net

amy@bristolcompanies.net

      400,000    300,000    $ 500,000

Christopher A. Basta

18 Peppermill Lane

Dix Hills, NY 11746

Telephone: (212) 703-6064

Fax: (212) 703-6153

e-mail: cbasta1@bloomberg.net

      30,000    22,500    $ 37,500

Cranshire Capital, LP

Lawrence A. Prosser, CFO

666 Dundee Road, Suite 1901

Northowok, IL 60062

Telephone: (847) 562-9030

Fax: (847) 562-9031

e-mail: mkopin@cranshirecapital.com

      160,000    120,000    $ 200,000

 

36

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Name, Address and Fax Number of Purchaser

  

Copies of Notices to

   Shares of
Common Stock
Purchased    Common Stock
Underlying
Warrants    Purchase
Price

Crescent International Ltd.

Maxi Brezzi, Authorized Signatory

c/o Cantara (Switzerland) S.A

84 Avenue Louis Cascu

CH.1216 Cointrin/Geneva Switzerland

Telephone: +41 22 791 7256

Fax: +41 22 791 7171

e-mail: info@cantara.dmitrust.com

      240,000    180,000    $ 300,000

Davis B. Fox and Jill Spitzer-Fox

1620 E. Prospect Street

Seattle, WA 98112

Telephone: (206) 322-7282

e-mail: davisbfox39@msn.com

      40,000    30,000    $ 50,000

Dennis Carleton and Margaret Carleton

25 Pineybranch Road

Cranbury, NJ 08512

Telephone: (609) 448-1521

      20,000    15,000    $ 25,000

Gregory C. Lowney & Maryanne K. Snyder

15207 NE 68th Street

Redmond, WA 98052

Telephone: (425) 882-1629

Fax: (425) 885-2907

email: mksnyder@aol.com

gclowney@aol.com

      60,000    45,000    $ 75,000

 

37

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Name, Address and Fax Number of Purchaser

  

Copies of Notices to

   Shares of
Common Stock
Purchased    Common Stock
Underlying
Warrants    Purchase
Price

Gregory P. Kusnick and Karen Gustafson-Kusnick

715 Second Avenue Unit 1904

Seattle, WA 98104

Telephone: (266) 322-4048

Fax: (266) 322-4514

e-mail: kusnick@cognomen.com & Gustafson@cognomen.com

      60,000    45,000    $ 75,000

Harborview Master Fund LP

Harbour House, 2nd Floor

Waterfront Drive, Road Town

Tortola, British Virgin Islands

Telephone: (284) 494-4770

Fax: (284) 494-4771

e-mail: junno@beaconsecurities.com

      60,000    45,000    $ 75,000

Hudson Bay Fund, LP

120 Broadway, 40th Floor

New York, NY 10271

Telephone: (212) 571-1244

Fax: (212) 571-1279

Contact: Yoav Roth

e-mail: yroth@hudsonbaycapital.com

      600,000    450,000    $ 750,000

Iroquois Master Fund Ltd.

641 Lexington Avenue, 26th Floor

New York, NY 10022

Telephone: (212) 974-3070

Fax: (212) 207-3452

Contact: Joshua Silverman

      280,000    210,000    $ 350,000

 

38

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Name, Address and Fax Number of Purchaser

  

Copies of Notices to

   Shares of
Common Stock
Purchased    Common Stock
Underlying
Warrants    Purchase
Price

James Karanfilian

235 South Dwight Place

Englewood, N.J. 07631

Telephone: 201-567-4163

      10,000    7,500    $ 12,500

Jay R. Solan

15 Mohawk Drive

Livingston, New Jersey 07039

Telephone: (973) 992-7734

Fax: (973) 992-7734

e-mail: jaysloan245@aol.com

      20,000    15,000    $ 25,000

John Curley

58 Valley View Avenue

Summit, NJ 07901

Telephone: (908) 277-4213

Fax: (908) 277-7608

e-mail: Jaccurley@com.net

      40,000    30,000    $ 50,000

John Peter Christensen

Casa Del Lago

2900 North Flagler Drive

West Palm Beach, FL 33407

Telephone: (561) 655-1060

Fax: (561) 655-1060

e-mail: ri6Johnkahuna@adelphia.net

      40,000    30,000    $ 50,000

KMF Partners

Karen Fleiss

1970 Avenue of the Americas

17th Floor

New York, NY 10020

Telephone: (212) 332-2496

Fax: (212) 332-2030

e-mail: maureen@kmfpartners.com

      120,000    90,000    $ 150,000

 

39

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Name, Address and Fax Number of Purchaser

  

Copies of Notices to

   Shares of
Common Stock
Purchased    Common Stock
Underlying
Warrants    Purchase
Price

Kendu Partners Company

Michael W. Engman, General Partner

220 Bush Street, Suite 660

San Franscisco, CA 94104

Telephone: (415) 293-3818

Fax: (415) 781-4641

e-mail: mike.engman@fimat.com

      80,000    60,000    $100,000

MDNH Partners LP

Herb Kurlan, Managing Partner

220 Bush Street, Suite 650

San Francisco, CA 94104

Telephone: (415) 387-1995

Fax: (415) 781-8344

e-mail: herb.kurlan@mdnhpartners.com

      40,000    30,000    $50,000

Midsouth Investors Fund LP

1776 Peachtree Street NW

Suite 412 North

Atlanta, GA 30309

Telephone: (615) 254-0992

Fax: (615) 254-1603

Contact: Lyman O. Heidtke

      100,000    75,000    $125,000

Monarch Capital Fund Ltd.

Harbout House, 2nd Floor

Waterfront Drive, Road Town

Tortola, British Virgin Islands

Telephone: (284) 494 4770

Fax: (284) 494 4771

e-mail: jouno@beaconsewrities.com

      80,000    60,000    $100,000

 

40

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Name, Address and Fax Number of Purchaser

  

Copies of Notices to

   Shares of
Common Stock
Purchased    Common Stock
Underlying
Warrants    Purchase
Price

Nathan Sugarman

205 Harding Drive

South Orange, N.J. 07079

(973) 763-1040

e-mail: zifelm@aol

      60,000    45,000    $ 75,000

Nite Capital LP

Keith A Goodman, Manager of the General Partner

100 East Cook Avenue, Ste 201

Libertyville, IL 60048

Telephone: (847) 968-7658

Fax: (847) 968-7658

e-mail: keith@nitecapital.com

      240,000    180,000    $ 300,000

Nu Vision Holdings

1010 Northern Blvd. Ste. 208

Great Neck, N.Y. 11021

Telephone: (516) 466-7844

Fax: (516) 466-7304

e-mail: Steve.Kevorkian@Verizon.net

      175,000    131,250    $ 218,750

Perceptive Life Sciences Master Fund, Ltd.

7284 W. Palmetto Park Road, Suite 306

Boca Raton, FL 33433

Telephone: (561) 391-7770

Fax: (561) 391-7776

contact: Andrew C. Sankin

e-mail: sankin@perceptivelife.com

      800,000    600,000    $ 1,000,000

 

41

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Name, Address and Fax Number of Purchaser

  

Copies of Notices to

   Shares of
Common Stock
Purchased    Common Stock
Underlying
Warrants    Purchase
Price

Peter H. Weiss

8000 SE 22nd Street

Mercer Island, WA 98040

Telephone: (206) 365-0014

Fax: (413) 691-2134

e-mail: pweiss78@alumni.princeton.edu

      30,000    22,500    $ 37,500

RAQ, LLC

c/o Paramount Biocapital Investments LLC

787 Seventh Avenue, 48th Floor

New York, NY 10019

Telephone: (212) 554-4345

Fax: (212) 554-4355

Contact: Lindsay A. Rosenwald M.D.

e-mails: svacamboli@paramountbio.com; mahill@paramountbio.com

      260,000    195,000    $ 325,000

Robert O’Mara

8 Youngs Road

Basking Ridge, N.J. 07920

Telephone: (973) 538-6370

      160,000    120,000    $ 200,000

Roland E. Wheeler

4160 W. Eaglesode

Wenataile, WA 98801

Telephone: (509) 670-9068

Fax: (509) 667-8058

e-mail: swheeler@oasismedarow.com

      60,000    45,000    $ 75,000

 

42

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Name, Address and Fax Number of Purchaser

  

Copies of Notices to

   Shares of
Common Stock
Purchased    Common Stock
Underlying
Warrants    Purchase
Price

Rubicon Global Value Fund, L.P

One SW Columbia St., Suite 850

Portland, Oregon 97258

Telephone: (503) 548-4800

Fax: (503) 548-4805

e-mail: steve@rubiconglobalholdings.com

      50,000    37,500    $ 62,500

Samax Family Limited Partnership

413 N. Queens Avenue

Massapequa, N. Y 11758

Telephone: (516) 287-5050

Fax: (516) 223-1448

e-mail: drm1313@optonline.net & amargvlies@alliedmedical.org

      30,000    22,500    $ 37,500

Sanford Gaffe and Ethel Gaffe

6876 Adriano Drive

Boynton Beach, Fl 33437

Telephone: (561) 733-5844

e-mail: sangat@bellsouth.net

      40,000    30,000    $ 50,000

SDS Capital Group SPC, Ltd.

c/o SDS Management, LLC

53 Old Forest Avenue, 2nd Floor

Old Greenwich, CT 06870

Telephone: (203) 967-5850

Fax: (203) 967-5851

Contact: Steve Derby, Director

      1,600,000    1,200,000    $ 2,000,000

 

43

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Name, Address and Fax Number of Purchaser

  

Copies of Notices to

   Shares of
Common Stock
Purchased    Common Stock
Underlying
Warrants    Purchase
Price

Steven M. Sack

1795 Harvard Avenue

Merrick, N.Y. 11566

Telephone: (516) 377-3940

Fax: (516) 623-9115

e-mail: StevenSack54@hotmail.com

      115,000    86,250    $ 143,750

Steven Mitchell Sack PSP

Steven Mitchell Sack, Trustee

U/A Dated 1/1/94

PBO Steven Mitchell Sack

#4000-6635

1795 Harvard Avenue

Merrick, NY 11566

Telephone: (516) 377-3940

Fax: (516) 623-9115

stevensack54@hotmail.com

      480,000    360,000    $ 600,000

T2, Ltd.

James Smith, Manager

25 Highland Park Village

STE 100-382

Dallas, TX 75205

Telephone: (214) 461-7256

Fax: (214) 461-7257

e-mail: jimsmyth@bloomberg.net

      160,000    120,000    $ 200,000

 

44

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Name, Address and Fax Number of Purchaser

  

Copies of Notices to

   Shares of
Common Stock
Purchased    Common Stock
Underlying
Warrants    Purchase
Price

TCMP3 Partners

Walter Schenker, Principal

c/o Titan Capital Management

7 Century Drive, Suite 201

Parsippany, NJ 07054

Telephone: (973) 829-1335

Fax: (973) 540-0702

e-mail: wschenker@titancap.org

      80,000    60,000    $ 100,000

Trust U/W Renee Weiss

Peter H. Weiss, Trustee

P.O. Box 1682

Mercer Island, WA 98040

Telephone: (206) 365-0014

Fax: (413) 691-2134

e-mail: pweiss78@alumni.princeton.edu

      60,000    45,000    $ 75,000

Valesco Healthcare Overseas Fund, Ltd.

787 Seventh Avenue, 48th Floor

New York, NY 10019

Telephone: (212) 554-4307

Fax: (212) 554-4361

Contact: I. Keith Maher

e-mail: kmaher@valescocapital.com

      101,400    76,050    $ 126,750

 

45

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Name, Address and Fax Number of Purchaser

  

Copies of Notices to

   Shares of
Common Stock
Purchased    Common Stock
Underlying
Warrants    Purchase
Price

Valesco Healthcare Partners II L.P.

787 Seventh Avenue, 48th Floor

New York, NY 10019

Telephone: (212) 554-4307

Fax: (212) 554-4361

Contact: I. Keith Maher

e-mail: kmaher@valescocapital.com

      98,800    74,100    $ 123,500

Valesco Healthcare Partners I L.P.

787 Seventh Avenue, 48th Floor

New York, NY 10019

Telephone: (212) 554-4307

Fax: (212) 554-4361

Contact: I. Keith Maher

e-mail: kmaher@valescocapital.com

      59,800    44,850    $ 74,750

Visium Balanced Fund, LP

Mark Gottlieb, Authorized Signatory

650 Madison Avenue, 19th Floor

New York, NY 10022

Telephone: (212) 808-2300

e-mail: mgottlieb@bam-us.com

      280,516    210,387    $ 350,645

Visium Balanced Offshore Fund, LTD

Mark Gottlieb, Authorized Signatory

650 Madison Avenue, 19th Floor

New York, NY 10022

Telephone: (212) 808-2300

e-mail: mgottlieb@bam-us.com

      309,960    232,470    $ 387,450

 

46

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Name, Address and Fax Number of Purchaser

  

Copies of Notices to

   Shares of
Common Stock
Purchased    Common Stock
Underlying
Warrants    Purchase
Price

Visium Long Bias Fund, LP

Mark Gottlieb, Signatory

650 Madison Avenue, 19th floor

New York, NY 10022

Telephone: (212) 808-2300

e-mail: mgottlieb@bam-us.com

      42,904    32,178    $ 53,630

Visium Long Bias Offshore Fund, LTD

Mark Gottlieb, Signatory

650 Madison Avenue, 19th Floor

New York, NY 10022

Telephone: (212) 808-2300

e-mail: mgottlieb@bam-us.com

      230,836    173,127    $ 288,545

Whalehaven Capital Fund Limited

14 Par-La-Ville Road, 3rd Floor

P.O. Box HM1027

Hamilton HMDX Bermuda

Telephone: (441) 295-8313

Fax: (441) 295-5262

Contact: Evan Schemenauer

e-mail: evan@whalehavencapital.com

      400,000    300,000    $ 500,000

Totals:

      8,770,000    6,577,500    $ 10,962,500

 

47

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Name, Address and Fax Number of Purchaser

  

Copies of Notices to

   Shares of
Common Stock
Purchased    Common Stock
Underlying
Warrants    Purchase
Price Placement Agent Warrants            

SCO Securities LLC

1285 Avenue of the Americas, 35th Floor

New York, NY 10019

Jeffrey B. Davis

T: (212) 554-4158

F: (212) 554-4058Email: JDavis@SCOGroup.com

  

Michael Grundei, Esq.

Wiggin & Dana LLP

400 Atlantic Street

Stamford, CT 06901

Tel: 203-363-7630

Fax: 203-363-7676

Email: mgrundei@wiggin.com

   0    318,000    0

Lake End Capital LLC

33 Tall Oaks Drive

Summit, NJ 07901

Telephone: (212) 554-4158

Fax: (212) 554-4058

Contact: Jeffrey B. Davis

e-mail: jdavis@scogroup.com

      0    106,000    0

Mark Alvino

c/o SCO Securities LLC

1285 Avenue of the Americas, 35th Floor

New York, NY 10019

Telephone: (212) 554-4235

Fax: (212) 554-4058

      0    53,000    0

Howard Fischer

SCO Securities LLC

1285 Avenue of the Americas, 35th Floor

New York, NY 10019

Telephone: (212) 554-4235

Fax: (212) 554-4058

      0    53,000    0

Dawson James Securities

925 South Federal Highway

6th Floor

Boca Raton, FL 33432

Attn: Robert D. Keyser, Jr.

      0    347,000    0

 

48