Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of September
23, 2002, among SuperGen, Inc., a Delaware corporation (the “Company”), and the
purchasers identified on the signature pages 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, up to $7,000,000 of the Company’s common stock, $0.001 par value per
share, and certain Warrants (as defined below), as more fully described in this
Agreement.

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 the Purchasers agree
as follows:

ARTICLE I.
DEFINITIONS

                1.1           Definitions.  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:

 

“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.

“Business Day” means any day except Saturday, Sunday and any day which shall be
a federal legal holiday or a day on which banking institutions in The City of
New York are authorized or required by law or other governmental action to
close.

“Closing” means the closing of the purchase and sale of the Securities pursuant
to Section 2.1.

“Closing Date” means the date of the Closing, which shall occur on the business
day following the date hereof.

“Closing Price” means on any particular date (a) the last reported closing bid
price per share of Common Stock on such date on the Trading Market (as reported
by Bloomberg L.P. at 4:15 PM (New York time)), or (b) if there is no such price
on such date, then the closing bid price on the Trading Market on the date
nearest preceding such date (as reported by Bloomberg L.P. at 4:15 PM (New York
time) for the closing bid price for regular session trading on such day), or
(c)  if the Common Stock is not then listed or quoted on the Trading Market and
if prices for the Common Stock are then reported in the “pink sheets” published
by the National Quotation Bureau Incorporated

 

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(or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported, or
(d) if the shares of Common Stock are not then publicly traded the fair market
value of a share of Common Stock as determined by an appraiser selected in good
faith by the Purchasers of a majority in interest of the Common Stock.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, $0.001 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 Counsel” means Wilson Sonsini Goodrich & Rosati PC, counsel to the
Company.

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

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

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

“Per Share Purchase Price” means $2.50(as appropriately adjusted for any stock
splits, stock dividends, stock combinations and other similar transactions of
the Common Stock that occur after the date of this Agreement).

“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.

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

“Purchasers’ Counsel” means Feldman & Weinstein LLP with offices located at 420
Lexington Avenue, New York, New York 10170-0002.

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

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

“Rule 144,” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rules 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.

“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 issuable to the Purchasers pursuant to
this Agreement.

“Subscription Amount” means, as to each Purchaser, the amount set forth below
such Purchaser’s signature block on the signature pages hereto.

“Subsidiary” means a “significant subsidiary” as that term is defined in
Regulation S-X.

“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 in the over-the-counter market, as reported by
the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on the OTC
Bulletin Board, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding 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: American Stock
Exchange, the New York Stock Exchange, the Nasdaq National Market or The Nasdaq
SmallCap Market.

“Transaction Documents” means this Agreement, the Registration Rights Agreement,
the Warrant 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 A,
issuable to the Purchasers at the Closing, which Warrant Shares shall have an
exercise price equal to, as to 66 2/3% of the Warrant Shares subject to the
Warrants issued to each Purchaser, $4.00, and as to the remaining 33 1/3% of the
Warrant Shares subject to the Warrants issued to each Purchaser, $5.00, which
Warrants shall be

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exercisable for a period of 4 years from their date of issuance subject to
redemption on an earlier date as set forth therein.

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

 

ARTICLE II.
PURCHASE AND SALE

            2.1        Closing.  Subject to the terms and conditions set forth
in this Agreement, at the Closing the Company shall issue and sell to each
Purchaser, and each Purchaser shall, severally and not jointly with the other
Purchasers, purchase from the Company, (a) a number of Shares equal to the
Subscription Amount set forth below such Purchaser’s address on the signature
pages to this Agreement divided by the Per Share Purchase Price for such
Subscription Amount, and (b) the Warrants as determined in accordance with
Section 2.2(a).  The Closing shall take place at the offices of Purchasers’
Counsel or at such other location or time as the parties may agree.

 

            2.2        Closing Deliveries.

 

(A)           AT THE CLOSING, THE COMPANY SHALL DELIVER OR CAUSE TO BE DELIVERED
TO EACH PURCHASER:

(I)            THIS AGREEMENT DULY EXECUTED BY THE COMPANY.

(II)           AN IRREVOCABLE INSTRUCTION TO THE COMPANY’S TRANSFER AGENT
INSTRUCTING IT TO ISSUE A CERTIFICATE EVIDENCING A NUMBER OF SHARES EQUAL TO THE
SUBSCRIPTION AMOUNT INDICATED BELOW SUCH PURCHASER’S NAME ON THE SIGNATURE PAGE
OF THIS AGREEMENT DIVIDED BY THE PER SHARE PURCHASE PRICE, REGISTERED IN THE
NAME OF SUCH PURCHASER;

(III)          A LEGAL OPINION OF COMPANY COUNSEL, IN FORM OF EXHIBIT C HERETO,
ADDRESSED TO THE PURCHASERS;

(IV)          THE REGISTRATION RIGHTS AGREEMENT DULY EXECUTED BY THE COMPANY;
AND

(V)           THE WARRANTS, 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 100% OF THE SHARES TO BE ISSUED TO SUCH
PURCHASER AT THE CLOSING.

(B)           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)           THE SUBSCRIPTION AMOUNT INDICATED BELOW SUCH PURCHASER’S ADDRESS
FOR NOTICE ON THE SIGNATURE PAGE OF THIS AGREEMENT, IN UNITED STATES DOLLARS AND
IN IMMEDIATELY AVAILABLE FUNDS, BY WIRE TRANSFER TO THE ACCOUNT DESIGNATED BY
THE COMPANY ON THE SIGNATURE PAGE HERETO; AND

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(III)          THE REGISTRATION RIGHTS AGREEMENT DULY EXECUTED BY SUCH
PURCHASER.

(C)           ALL REPRESENTATIONS AND WARRANTIES OF THE OTHER PARTY CONTAINED
HEREIN SHALL REMAIN TRUE AND CORRECT AS OF THE CLOSING DATE;

(D)           AS OF THE CLOSING DATE, THERE SHALL HAVE BEEN NO MATERIAL ADVERSE
EFFECT (AS DEFINED IN SECTION 3.1(B)) WITH RESPECT TO THE COMPANY SINCE THE DATE
HEREOF; AND

(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 SUCH 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, NOR SHALL THERE HAVE OCCURRED ANY
MATERIAL OUTBREAK OR ESCALATION OF HOSTILITIES OR OTHER NATIONAL OR
INTERNATIONAL CALAMITY OF SUCH MAGNITUDE IN ITS EFFECT ON, OR ANY MATERIAL
ADVERSE CHANGE IN, ANY FINANCIAL MARKET WHICH, IN EACH CASE, IN THE REASONABLE
JUDGMENT OF THE INVESTORS, MAKES IT IMPRACTICABLE OR INADVISABLE TO PURCHASE THE
SHARES AT THE CLOSING.

ARTICLE III.
REPRESENTATIONS AND WARRANTIES

            3.1        Representations and Warranties of the Company Except as
set forth under the corresponding section of the disclosure letter supplied by
the Company to the Purchaser as of the date of this Agreement (the “Disclosure
Schedules”), the Company hereby makes the following representations and
warranties to each Purchaser as of the date hereof:

 

(A)           SUBSIDIARIES.  SCHEDULE 3.1(A) LISTS THE COMPANY’S SUBSIDIARIES,
NONE OF WHICH IS MATERIAL TO THE COMPANY.  THE COMPANY OWNS, DIRECTLY OR
INDIRECTLY, ALL OF THE CAPITAL STOCK OR OTHER EQUITY INTERESTS OF EACH
SUBSIDIARY FREE AND CLEAR OF ANY LIEN, CHARGE, SECURITY INTEREST, ENCUMBRANCE,
RIGHT OF FIRST REFUSAL OR OTHER RESTRICTION (COLLECTIVELY, “LIENS”), AND ALL THE
ISSUED AND OUTSTANDING SHARES OF CAPITAL STOCK OR OTHER EQUITY INTERESTS OF EACH
SUBSIDIARY ARE VALIDLY ISSUED AND ARE FULLY PAID, NON-ASSESSABLE AND FREE OF
PREEMPTIVE AND SIMILAR RIGHTS.

(B)           ORGANIZATION AND QUALIFICATION.  THE COMPANY IS AN ENTITY DULY
ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE
JURISDICTION OF ITS ORGANIZATION, WITH THE REQUISITE POWER AND AUTHORITY TO OWN
AND USE ITS PROPERTIES AND ASSETS AND TO CARRY ON ITS BUSINESS AS CURRENTLY
CONDUCTED.  THE COMPANY IS NOT IN VIOLATION OF ANY OF THE PROVISIONS OF ITS
RESPECTIVE CERTIFICATE OR ARTICLES OF INCORPORATION, BYLAWS OR OTHER
ORGANIZATIONAL OR CHARTER DOCUMENTS.  THE COMPANY 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, INDIVIDUALLY OR
IN THE AGGREGATE, (I) ADVERSELY AFFECT THE LEGALITY, VALIDITY OR ENFORCEABILITY
OF ANY TRANSACTION DOCUMENT, (II) HAVE OR

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RESULT IN OR BE REASONABLY LIKELY TO HAVE OR RESULT IN A MATERIAL ADVERSE EFFECT
ON THE RESULTS OF OPERATIONS, ASSETS, BUSINESS OR CONDITION (FINANCIAL OR
OTHERWISE) OF THE COMPANY AND THE SUBSIDIARIES, TAKEN AS A WHOLE, OR (III)
ADVERSELY IMPAIR 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), A “MATERIAL ADVERSE EFFECT”).

(C)           AUTHORIZATION; ENFORCEMENT.  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 HEREUNDER OR THEREUNDER.  THE EXECUTION AND DELIVERY OF EACH OF THE
TRANSACTION DOCUMENTS BY THE COMPANY AND THE CONSUMMATION BY IT OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY HAVE BEEN DULY AUTHORIZED BY ALL
NECESSARY ACTION ON THE PART OF THE COMPANY AND NO FURTHER CONSENT OR ACTION IS
REQUIRED BY THE COMPANY, ITS BOARD OF DIRECTORS OR STOCKHOLDERS 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
ENFORCEABLE AGAINST THE COMPANY IN ACCORDANCE WITH ITS TERMS, SUBJECT TO LAWS OF
GENERAL APPLICATION RELATING TO BANKRUPTCY, INSOLVENCY AND THE RELIEF OF DEBTORS
AND RULES OF LAW GOVERNING SPECIFIC PERFORMANCE, INJUNCTIVE RELIEF OR OTHER
EQUITABLE REMEDIES, EXCEPT THAT THE INDEMNIFICATION PROVISIONS OF THE
REGISTRATION RIGHTS AGREEMENT MAY FURTHER BE LIMITED BY PRINCIPLES OF PUBLIC
POLICY.

(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 HEREBY AND THEREBY DO NOT AND WILL NOT (I) CONFLICT
WITH OR VIOLATE ANY PROVISION OF THE COMPANY’S OR ANY SUBSIDIARY’S 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 SUBSIDIARY DEBT OR OTHERWISE) OR
OTHER AGREEMENT TO WHICH THE COMPANY OR ANY SUBSIDIARY IS A PARTY OR BY WHICH
ANY PROPERTY OR ASSET OF THE COMPANY OR ANY SUBSIDIARY 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 SUBSIDIARY IS SUBJECT (INCLUDING FEDERAL AND STATE
SECURITIES LAWS AND REGULATIONS), OR BY WHICH ANY PROPERTY OR ASSET OF THE
COMPANY OR A SUBSIDIARY IS BOUND OR AFFECTED; EXCEPT IN THE CASE OF EACH OF
CLAUSES (II) AND (III), SUCH AS WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE,
HAVE OR REASONABLY BE EXPECTED TO 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 THE FILING WITH THE COMMISSION OF THE REGISTRATION STATEMENT, THE
APPLICATION(S) TO EACH TRADING MARKET FOR THE LISTING OF THE

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SHARES AND WARRANT SHARES FOR TRADING THEREON IN THE TIME AND MANNER REQUIRED
THEREBY, AND APPLICABLE BLUE SKY FILINGS (COLLECTIVELY, THE “REQUIRED
APPROVALS”).

(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.  THE COMPANY HAS RESERVED FROM ITS DULY AUTHORIZED CAPITAL STOCK THE
MAXIMUM NUMBER OF SHARES OF COMMON STOCK ISSUABLE PURSUANT TO THIS AGREEMENT AND
THE WARRANTS.

(G)           CAPITALIZATION.  THE NUMBER OF SHARES AND TYPE OF ALL AUTHORIZED,
ISSUED AND OUTSTANDING CAPITAL STOCK OF THE COMPANY IS SET FORTH IN SCHEDULE
3.1(G) OF THE DISCLOSURE SCHEDULES.  NO SECURITIES OF THE COMPANY ARE ENTITLED
TO PREEMPTIVE OR SIMILAR RIGHTS, AND 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 DISCLOSED
IN SCHEDULE 3.1(G), THERE ARE NO OUTSTANDING OPTIONS, WARRANTS, SCRIPT RIGHTS TO
SUBSCRIBE TO, CALLS OR COMMITMENTS OF ANY CHARACTER WHATSOEVER RELATING TO, OR
SECURITIES, RIGHTS OR OBLIGATIONS CONVERTIBLE INTO OR EXERCISABLE 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 SUBSIDIARY IS OR MAY BECOME BOUND TO
ISSUE ADDITIONAL SHARES OF COMMON STOCK, OR SECURITIES OR RIGHTS CONVERTIBLE
INTO OR EXERCISABLE OR EXCHANGEABLE FOR 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.  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) THEREOF, FOR THE TWO YEARS
PRECEDING THE DATE HEREOF (OR SUCH SHORTER PERIOD AS THE COMPANY WAS REQUIRED BY
LAW TO FILE SUCH MATERIAL) (THE FOREGOING MATERIALS BEING COLLECTIVELY REFERRED
TO HEREIN AS THE “SEC REPORTS” AND, TOGETHER WITH THE SCHEDULES TO THIS
AGREEMENT, THE “DISCLOSURE MATERIALS”) 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.  THE COMPANY HAS DELIVERED TO THE PURCHASERS A
COPY OF ALL SEC REPORTS FILED WITHIN THE 10 DAYS PRECEDING THE DATE HEREOF.  AS
OF THEIR RESPECTIVE DATES, THE SEC REPORTS COMPLIED IN ALL MATERIAL RESPECTS
WITH THE REQUIREMENTS OF THE SECURITIES ACT AND THE EXCHANGE ACT AND THE RULES
AND REGULATIONS OF THE COMMISSION PROMULGATED THEREUNDER, AND NONE OF THE SEC
REPORTS, WHEN FILED, CONTAINED ANY UNTRUE STATEMENT OF A MATERIAL FACT OR
OMITTED TO STATE A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY IN
ORDER TO MAKE THE STATEMENTS THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER
WHICH THEY WERE MADE, NOT MISLEADING.  THE FINANCIAL STATEMENTS OF THE COMPANY
INCLUDED IN THE SEC REPORTS 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
APPLIED ON A CONSISTENT BASIS DURING THE PERIODS INVOLVED (“GAAP”), EXCEPT AS
MAY BE OTHERWISE SPECIFIED IN SUCH FINANCIAL STATEMENTS OR THE NOTES THERETO,
AND FAIRLY PRESENT IN ALL

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MATERIAL RESPECTS THE FINANCIAL POSITION OF THE COMPANY AND ITS CONSOLIDATED
SUBSIDIARIES 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, IMMATERIAL, YEAR-END AUDIT ADJUSTMENTS.

(I)            MATERIAL CHANGES.   SINCE THE DATE OF THE MOST RECENT QUARTERLY
REPORT ON FORM 10-Q, EXCEPT AS SPECIFICALLY DISCLOSED IN THE SEC REPORTS, (I)
THERE HAS BEEN NO EVENT, OCCURRENCE OR DEVELOPMENT THAT HAS HAD OR THAT COULD
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT, (II) THE COMPANY
HAS NOT INCURRED ANY LIABILITIES (CONTINGENT OR OTHERWISE) OTHER THAN (A) TRADE
PAYABLES AND ACCRUED EXPENSES INCURRED IN THE ORDINARY COURSE OF BUSINESS
CONSISTENT WITH PAST PRACTICE AND (B) LIABILITIES NOT REQUIRED TO BE REFLECTED
IN THE COMPANY’S FINANCIAL STATEMENTS PURSUANT TO GAAP OR REQUIRED TO BE
DISCLOSED IN FILINGS MADE WITH THE COMMISSION, (III) THE COMPANY HAS NOT ALTERED
ITS METHOD OF ACCOUNTING OR THE IDENTITY OF ITS AUDITORS, (IV) THE COMPANY HAS
NOT DECLARED OR MADE ANY DIVIDEND OR DISTRIBUTION OF CASH OR OTHER PROPERTY TO
ITS STOCKHOLDERS OR PURCHASED, REDEEMED OR MADE ANY AGREEMENTS TO PURCHASE OR
REDEEM ANY SHARES OF ITS CAPITAL STOCK, AND (V) THE COMPANY HAS NOT ISSUED ANY
EQUITY SECURITIES TO ANY OFFICER, DIRECTOR OR AFFILIATE, EXCEPT PURSUANT TO
EXISTING COMPANY STOCK OPTION PLANS.  THE COMPANY DOES NOT HAVE PENDING BEFORE
THE COMMISSION ANY REQUEST FOR CONFIDENTIAL TREATMENT OF INFORMATION.

(J)            LITIGATION.  THERE IS NO ACTION, SUIT, INQUIRY, NOTICE OF
VIOLATION, PROCEEDING OR INVESTIGATION PENDING OR, TO THE KNOWLEDGE OF THE
COMPANY, THREATENED AGAINST OR AFFECTING THE COMPANY, ANY SUBSIDIARY 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) COULD, IF THERE WERE AN UNFAVORABLE DECISION,
INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT.  NEITHER THE COMPANY NOR ANY SUBSIDIARY, TO THE
KNOWLEDGE OF THE COMPANY NOR ANY DIRECTOR OR OFFICER THEREOF, IS OR HAS BEEN THE
SUBJECT OF ANY ACTION INVOLVING A CLAIM OF VIOLATION OF OR LIABILITY UNDER
FEDERAL OR STATE SECURITIES LAWS OR A CLAIM OF BREACH OF FIDUCIARY DUTY.  THERE
HAS NOT BEEN, AND TO THE KNOWLEDGE OF THE COMPANY, THERE IS NOT PENDING OR
CONTEMPLATED, ANY INVESTIGATION BY THE COMMISSION INVOLVING THE COMPANY OR ANY
CURRENT OR FORMER DIRECTOR OR OFFICER OF THE COMPANY.  THE COMMISSION HAS NOT
ISSUED ANY STOP ORDER OR OTHER ORDER SUSPENDING THE EFFECTIVENESS OF ANY
REGISTRATION STATEMENT FILED BY THE COMPANY OR ANY SUBSIDIARY UNDER THE EXCHANGE
ACT OR THE SECURITIES ACT.

(K)           LABOR RELATIONS.  NO MATERIAL LABOR DISPUTE EXISTS OR, TO THE
KNOWLEDGE OF THE COMPANY, IS IMMINENT WITH RESPECT TO ANY OF THE EMPLOYEES OF
THE COMPANY.

(L)            COMPLIANCE.  THE COMPANY (I) IS NOT IN DEFAULT UNDER OR IN
VIOLATION OF (AND NO EVENT HAS OCCURRED THAT HAS NOT BEEN WAIVED THAT, WITH
NOTICE OR LAPSE OF TIME OR BOTH, WOULD RESULT IN A DEFAULT BY THE COMPANY
UNDER), NOR HAS THE COMPANY RECEIVED NOTICE OF A CLAIM THAT IT IS IN DEFAULT
UNDER OR THAT IT IS IN VIOLATION OF, ANY INDENTURE, LOAN OR CREDIT AGREEMENT OR
ANY OTHER AGREEMENT OR INSTRUMENT TO WHICH IT IS A PARTY OR BY

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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 RELATING TO TAXES,
ENVIRONMENTAL PROTECTION, OCCUPATIONAL HEALTH AND SAFETY, PRODUCT QUALITY AND
SAFETY AND EMPLOYMENT AND LABOR MATTERS, EXCEPT IN EACH CASE AS WOULD NOT,
INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT.

(M)          REGULATORY PERMITS.  THE COMPANY AND THE SUBSIDIARIES POSSESS ALL
CERTIFICATES, AUTHORIZATIONS AND PERMITS ISSUED BY THE APPROPRIATE FEDERAL,
STATE, LOCAL OR FOREIGN REGULATORY AUTHORITIES NECESSARY TO CONDUCT THEIR
RESPECTIVE BUSINESSES AS DESCRIBED IN THE SEC REPORTS, EXCEPT WHERE THE FAILURE
TO POSSESS SUCH PERMITS WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT (“MATERIAL
PERMITS”), AND NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS RECEIVED ANY NOTICE OF
PROCEEDINGS RELATING TO THE REVOCATION OR MODIFICATION OF ANY MATERIAL PERMIT.

(N)           TITLE TO ASSETS.  THE COMPANY AND THE SUBSIDIARIES HAVE GOOD AND
MARKETABLE TITLE IN FEE SIMPLE TO ALL REAL PROPERTY OWNED BY THEM THAT IS
MATERIAL TO THE BUSINESS OF THE COMPANY AND THE SUBSIDIARIES AND GOOD AND
MARKETABLE TITLE IN ALL PERSONAL PROPERTY OWNED BY THEM THAT IS MATERIAL TO THE
BUSINESS OF THE COMPANY AND THE SUBSIDIARIES, IN EACH CASE FREE AND CLEAR OF ALL
LIENS, EXCEPT FOR LIENS AS DO NOT MATERIALLY AFFECT THE VALUE OF SUCH PROPERTY
AND DO NOT MATERIALLY INTERFERE WITH THE USE MADE AND PROPOSED TO BE MADE OF
SUCH PROPERTY BY THE COMPANY AND THE SUBSIDIARIES.  ANY REAL PROPERTY AND
FACILITIES HELD UNDER LEASE BY THE COMPANY AND THE SUBSIDIARIES ARE HELD BY THEM
UNDER VALID, SUBSISTING AND ENFORCEABLE LEASES OF WHICH THE COMPANY AND THE
SUBSIDIARIES ARE IN COMPLIANCE.

(O)           PATENTS AND TRADEMARKS.  THE COMPANY AND THE SUBSIDIARIES HAVE, OR
HAVE RIGHTS TO USE, ALL PATENTS, PATENT APPLICATIONS, TRADEMARKS, TRADEMARK
APPLICATIONS, SERVICE MARKS, TRADE NAMES, COPYRIGHTS, LICENSES AND OTHER SIMILAR
RIGHTS THAT ARE NECESSARY OR MATERIAL FOR USE IN CONNECTION WITH THEIR
RESPECTIVE BUSINESSES AS DESCRIBED IN THE SEC REPORTS AND WHICH THE FAILURE TO
SO HAVE COULD, INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR REASONABLY BE EXPECTED
TO RESULT IN A MATERIAL ADVERSE EFFECT (COLLECTIVELY, THE “INTELLECTUAL PROPERTY
RIGHTS”).  NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS RECEIVED A WRITTEN NOTICE
THAT THE INTELLECTUAL PROPERTY RIGHTS USED BY THE COMPANY OR ANY SUBSIDIARY
VIOLATES OR INFRINGES UPON THE RIGHTS OF ANY PERSON.  EXCEPT AS SET FORTH IN THE
SEC REPORTS, TO THE KNOWLEDGE OF THE COMPANY, ALL SUCH INTELLECTUAL PROPERTY
RIGHTS ARE ENFORCEABLE AND THERE IS NO EXISTING INFRINGEMENT BY ANOTHER PERSON
OF ANY OF THE INTELLECTUAL PROPERTY RIGHTS.

(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.  THE COMPANY HAS NO 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

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COVERAGE FROM SIMILAR INSURERS AS MAY BE NECESSARY TO CONTINUE ITS BUSINESS
WITHOUT A SIGNIFICANT INCREASE IN COST.

(Q)           TRANSACTIONS WITH AFFILIATES AND EMPLOYEES.  EXCEPT AS SET FORTH
IN THE SEC REPORTS, NONE OF THE OFFICERS OR DIRECTORS OF THE COMPANY AND, TO THE
KNOWLEDGE OF THE COMPANY, NONE OF THE EMPLOYEES OF THE COMPANY IS PRESENTLY A
PARTY TO ANY TRANSACTION WITH THE COMPANY OR ANY SUBSIDIARY (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, ANY ENTITY IN WHICH ANY OFFICER, DIRECTOR, OR ANY SUCH
EMPLOYEE HAS A SUBSTANTIAL INTEREST OR IS AN OFFICER, DIRECTOR, TRUSTEE OR
PARTNER.

(R)            INTERNAL ACCOUNTING CONTROLS.  THE COMPANY AND THE SUBSIDIARIES
MAINTAIN A SYSTEM OF INTERNAL ACCOUNTING CONTROLS SUFFICIENT 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
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES 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.

(S)           SOLVENCY.  BASED ON THE FINANCIAL CONDITION OF THE COMPANY AS OF
THE CLOSING DATE, (I) THE COMPANY’S FAIR SALEABLE VALUE OF ITS ASSETS EXCEEDS
THE AMOUNT THAT WILL BE REQUIRED TO BE PAID ON OR IN RESPECT OF THE COMPANY’S
EXISTING DEBTS AND OTHER LIABILITIES (INCLUDING KNOWN CONTINGENT LIABILITIES) AS
THEY MATURE; (II) THE COMPANY’S ASSETS DO NOT CONSTITUTE UNREASONABLY SMALL
CAPITAL TO CARRY ON ITS BUSINESS FOR THE CURRENT FISCAL YEAR AS NOW CONDUCTED
AND AS PROPOSED TO BE CONDUCTED INCLUDING ITS CAPITAL NEEDS TAKING INTO ACCOUNT
THE PARTICULAR CAPITAL REQUIREMENTS OF THE BUSINESS CONDUCTED BY THE COMPANY,
AND PROJECTED CAPITAL REQUIREMENTS AND CAPITAL AVAILABILITY THEREOF; AND (III)
THE CURRENT CASH FLOW OF THE COMPANY, TOGETHER WITH THE PROCEEDS THE COMPANY
WOULD RECEIVE, WERE IT TO LIQUIDATE ALL OF ITS ASSETS, AFTER TAKING INTO ACCOUNT
ALL ANTICIPATED USES OF THE CASH, WOULD BE SUFFICIENT TO PAY ALL AMOUNTS ON OR
IN RESPECT OF ITS DEBT WHEN SUCH AMOUNTS ARE REQUIRED TO BE PAID.  THE COMPANY
DOES NOT INTEND TO INCUR DEBTS BEYOND ITS ABILITY TO PAY SUCH DEBTS AS THEY
MATURE (TAKING INTO ACCOUNT THE TIMING AND AMOUNTS OF CASH TO BE PAYABLE ON OR
IN RESPECT OF ITS DEBT).

(T)            CERTAIN FEES.  EXCEPT FOR FEES PAYABLE TO RODMAN & RENSHAW, INC.,
NO BROKERAGE OR FINDER’S FEES OR COMMISSIONS ARE OR WILL BE PAYABLE BY THE
COMPANY TO ANY BROKER, FINANCIAL ADVISOR OR CONSULTANT, FINDER, PLACEMENT AGENT,
INVESTMENT BANKER, BANK OR OTHER PERSON WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.  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.

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(U)           PRIVATE PLACEMENT. ASSUMING THE ACCURACY OF THE PURCHASERS
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 ANY
TRADING MARKET AND NO STOCKHOLDER APPROVAL IS REQUIRED FOR THE COMPANY TO
FULFILL ITS OBLIGATIONS UNDER THE TRANSACTION DOCUMENTS, INCLUDING ISSUING AND
DELIVERING TO THE PURCHASERS THE MAXIMUM NUMBER OF SECURITIES CONTEMPLATED BY
THIS AGREEMENT AND THE MAXIMUM NUMBER OF WARRANT SHARES ISSUABLE UPON EXERCISE
IN FULL OF THE WARRANTS BASED ON THEIR PRESENT EXERCISE PRICE.

(V)           LISTING AND MAINTENANCE REQUIREMENTS.  THE COMPANY HAS NOT, IN THE
TWO YEARS PRECEDING THE DATE HEREOF, RECEIVED NOTICE (WRITTEN OR ORAL) 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 OF THE TRADING MARKET.

(W)          INVESTMENT COMPANY. THE COMPANY IS NOT, AND IS NOT AN AFFILIATE OF,
AN “INVESTMENT COMPANY” WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF
1940, AS AMENDED.

(X)            REGISTRATION RIGHTS.  THE COMPANY HAS NOT GRANTED OR AGREED TO
GRANT TO ANY PERSON ANY RIGHTS (INCLUDING “PIGGY-BACK” REGISTRATION RIGHTS) TO
HAVE ANY SECURITIES OF THE COMPANY REGISTERED WITH THE COMMISSION OR ANY OTHER
GOVERNMENTAL AUTHORITY THAT HAVE NOT BEEN SATISFIED.

(Y)           DISCLOSURE.  THE COMPANY CONFIRMS THAT, NEITHER THE COMPANY NOR
ANY OTHER PERSON ACTING ON ITS BEHALF HAS PROVIDED ANY OF THE PURCHASERS OR
THEIR AGENTS OR COUNSEL WITH ANY INFORMATION THAT CONSTITUTES OR MIGHT
CONSTITUTE MATERIAL, NON-PUBLIC INFORMATION.   THE COMPANY UNDERSTANDS AND
CONFIRMS THAT THE PURCHASERS WILL RELY ON THE FOREGOING REPRESENTATIONS AND
COVENANTS IN EFFECTING TRANSACTIONS IN SECURITIES OF THE COMPANY.  ALL
DISCLOSURE PROVIDED TO THE PURCHASERS REGARDING THE COMPANY, ITS BUSINESS AND
THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING THE DISCLOSURE SCHEDULES TO THIS
AGREEMENT, FURNISHED BY OR ON BEHALF OF THE COMPANY ARE TRUE AND CORRECT AND DO
NOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE ANY
MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS MADE THEREIN, IN LIGHT
OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.

(Z)            FORM S-3 ELIGIBILITY.  THE COMPANY IS ELIGIBLE TO REGISTER FOR
RESALE OF ITS COMMON STOCK FOR RESALE BY THE PURCHASERS UNDER FORM S-3
PROMULGATED UNDER THE SECURITIES ACT.

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                3.2           Representations and Warranties of the Purchasers. 
Each Purchaser hereby, for itself and for no other Purchaser, represents and
warrants to the Company as follows:

 

(A)           ORGANIZATION; AUTHORITY.  SUCH PURCHASER IS AN ENTITY DULY
ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE
JURISDICTION OF ITS ORGANIZATION WITH THE REQUISITE CORPORATE OR PARTNERSHIP
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 ACTION ON THE PART OF SUCH PURCHASER.
 EACH OF THIS AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT HAS BEEN DULY
EXECUTED BY SUCH PURCHASER, AND WHEN DELIVERED BY SUCH PURCHASER IN ACCORDANCE
WITH TERMS HEREOF, WILL CONSTITUTES THE VALID AND LEGALLY BINDING OBLIGATION OF
SUCH PURCHASER, ENFORCEABLE AGAINST IT IN ACCORDANCE WITH ITS TERMS.

(B)           INVESTMENT INTENT.  SUCH PURCHASER IS ACQUIRING THE SECURITIES AS
PRINCIPAL FOR ITS OWN ACCOUNT FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW
TO OR FOR DISTRIBUTING OR RESELLING SUCH SECURITIES OR ANY PART THEREOF, WITHOUT
PREJUDICE, HOWEVER, TO SUCH PURCHASER’S RIGHT AT ALL TIMES TO SELL OR OTHERWISE
DISPOSE OF ALL OR ANY PART OF SUCH SECURITIES IN COMPLIANCE WITH APPLICABLE
FEDERAL AND STATE SECURITIES LAWS.  NOTHING CONTAINED HEREIN SHALL BE DEEMED A
REPRESENTATION OR WARRANTY BY SUCH PURCHASER TO HOLD SECURITIES FOR ANY PERIOD
OF TIME.  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.

(C)           PURCHASER STATUS.  AT THE TIME SUCH PURCHASER WAS OFFERED THE
SECURITIES, IT WAS, AND AT THE DATE HEREOF IT IS AN “ACCREDITED INVESTOR” AS
DEFINED IN RULE 501(A) UNDER THE SECURITIES ACT.  THE PURCHASER IS NOT REQUIRED
TO BE REGISTERED AS A BROKER-DEALER UNDER SECTION 15 OF THE EXCHANGE ACT.

(D)           EXPERIENCE OF SUCH PURCHASERSUCH PURCHASER, EITHER ALONE OR
TOGETHER WITH ITS REPRESENTATIVES, HAS SUCH KNOWLEDGE, SOPHISTICATION AND
EXPERIENCE IN BUSINESS AND FINANCIAL MATTERS SO AS TO BE CAPABLE OF EVALUATING
THE MERITS AND RISKS OF THE PROSPECTIVE INVESTMENT IN THE SECURITIES, 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 SECURITIES AND, AT THE PRESENT
TIME, IS ABLE TO AFFORD A COMPLETE LOSS OF SUCH INVESTMENT.

(E)           TAX LIABILITY SUCH PURCHASER HAS REVIEWED WITH ITS OWN TAX
ADVISORS THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THIS
INVESTMENT AND THE TRANSACTIONS CONTEMPLATED BY THE AGREEMENTS.  WITH RESPECT TO
SUCH MATTERS, SUCH PURCHASER RELIES SOLELY ON SUCH ADVISORS AND NOT ON ANY
STATEMENTS OR REPRESENTATIONS OF THE COMPANY OR ANY OF ITS AGENTS OTHER THAN THE
REPRESENTATIONS AND WARRANTIES SET FORTH HEREIN.  SUCH PURCHASER UNDERSTANDS
THAT IT (AND NOT THE COMPANY) SHALL BE RESPONSIBLE FOR ITS OWN TAX LIABILITY
THAT MAY ARISE AS A RESULT OF THIS INVESTMENT OR THE TRANSACTIONS CONTEMPLATED
BY THE AGREEMENTS.

(F)            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.

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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)           SECURITIES MAY ONLY BE DISPOSED OF IN COMPLIANCE WITH STATE AND
FEDERAL SECURITIES LAWS.  IN CONNECTION WITH ANY TRANSFER OF SECURITIES OTHER
THAN PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, TO THE COMPANY, TO AN
AFFILIATE OF A PURCHASER 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, THE FORM AND SUBSTANCE
OF WHICH OPINION SHALL BE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT
THAT SUCH TRANSFER DOES NOT REQUIRE REGISTRATION OF SUCH TRANSFERRED SECURITIES
UNDER THE SECURITIES ACT.  AS A CONDITION OF TRANSFER, ANY SUCH TRANSFEREE SHALL
AGREE IN WRITING TO BE BOUND BY THE TERMS OF THIS AGREEMENT AND SHALL HAVE THE
RIGHTS OF A PURCHASER UNDER THIS AGREEMENT AND THE REGISTRATION RIGHTS
AGREEMENT.

(B)           THE PURCHASERS AGREE TO THE IMPRINTING, SO LONG AS IS REQUIRED BY
THIS SECTION 4.1(B), OF THE FOLLOWING LEGEND ON ANY THE SECURITIES:

[NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE] 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.

The Company acknowledges and agrees that a Purchaser may from time to time
pledge pursuant to a bona fide margin agreement or grant a security interest in
some or all of the Securities 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 legal opinion of legal counsel of the pledgee,
secured party or pledgor shall be required in connection therewith.  Further, no
notice shall be required of such pledge.  At the appropriate Purchaser’s
expense, the Company will execute and deliver such reasonable

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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) of the Securities Act or other applicable provision of the Securities
Act to appropriately amend the list of Selling Stockholders thereunder.

(C)           CERTIFICATES EVIDENCING THE SHARES AND WARRANT SHARES SHALL NOT
CONTAIN ANY LEGEND (INCLUDING THE LEGEND SET FORTH IN SECTION 4.1(B)), (I) WHILE
A REGISTRATION STATEMENT (INCLUDING THE REGISTRATION STATEMENT) COVERING THE
RESALE OF SUCH SECURITY IS EFFECTIVE UNDER THE SECURITIES ACT, OR (II) FOLLOWING
ANY SALE OF SUCH SHARES OR WARRANT PURSUANT TO RULE 144, OR (III) IF SUCH SHARES
OR WARRANT SHARES ARE ELIGIBLE FOR SALE UNDER RULE 144(K), OR (IV) IF SUCH
LEGEND IS NOT REQUIRED UNDER APPLICABLE REQUIREMENTS OF THE SECURITIES ACT
(INCLUDING JUDICIAL INTERPRETATIONS AND PRONOUNCEMENTS ISSUED BY THE STAFF OF
THE COMMISSION).  THE COMPANY SHALL CAUSE ITS COUNSEL TO ISSUE THE LEGAL OPINION
TO THE COMPANY’S TRANSFER AGENT ON THE EFFECTIVE DATE.  IF ALL OR ANY PORTION OF
A WARRANT IS EXERCISED AT A TIME WHEN THERE IS AN EFFECTIVE REGISTRATION
STATEMENT TO COVER THE RESALE OF THE WARRANT SHARES, SUCH WARRANT SHARES SHALL
BE ISSUED FREE OF ALL LEGENDS.  THE COMPANY AGREES THAT FOLLOWING THE EFFECTIVE
DATE OR 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 SHARES OR WARRANT SHARES, AS THE CASE MAY BE, 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)           IN ADDITION TO SUCH PURCHASER’S OTHER AVAILABLE REMEDIES, THE
COMPANY SHALL PAY TO A PURCHASER, IN CASH, AS LIQUIDATED DAMAGES AND NOT AS A
PENALTY, FOR EACH $1,000 OF SHARES OR WARRANT SHARES (BASED ON THE CLOSING PRICE
OF THE COMMON STOCK ON THE DATE SUCH SECURITIES ARE SUBMITTED TO THE COMPANY’S
TRANSFER AGENT) SUBJECT TO SECTION 4.1(C), $10 PER TRADING DAY (INCREASING TO
$20 PER TRADING DAY 3 TRADING DAYS AFTER SUCH DAMAGES HAVE BEGUN TO ACCRUE) FOR
EACH TRADING DAY AFTER SUCH THIRD TRADING DAY UNTIL SUCH CERTIFICATE IS
DELIVERED.

                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 of any such Person, the Company shall
deliver to such Person 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 such
laws, 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, 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.

 

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                4.3        Integration.  The Company shall not, and shall use
its best efforts to ensure that no Affiliate of the Company shall, 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 for purposes of the rules and regulations of any Trading Market.

 

                4.4           Limitation on Future Financing.  Until 90 days
after the Effective Date, the Company shall not undertake or enter into, or
publicly announce an intention to undertake or enter into, any financing
pursuant to which the Company issues any Common Stock or Common Stock
Equivalents entitling any Person to acquire shares of Common Stock.

 

                4.5           Securities Laws Disclosure; Publicity.  The
Company shall  by 8:30 a.m., Eastern time, on the Business Day following the
date of this Agreement, issue a press release or file a Current Report on Form
8-K, in each case reasonably acceptable to the Purchasers disclosing in
reasonable detail the material terms of the transactions contemplated hereby and
(ii) make such other filings and notices in the manner and time required by the
Commission.  The Company and the Purchasers shall consult with each other in
issuing any press releases with respect to the transactions contemplated hereby,
and neither party shall issue any such press release or otherwise make any such
public statement without the prior consent of the other, which consent shall not
unreasonably be withheld, 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.  Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except to the extent such disclosure is required by law or Trading
Market regulations, in which case the Company shall provide the Purchasers with
prior notice of such disclosure.

 

                4.6           Shareholders Rights Plan.  No claim will be made
or enforced by the Company or any other Person that 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 that any Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by
virtue of receiving Securities under the Transaction Documents or under any
other agreement between the Company and the Purchasers.

 

                4.7           Non-Public Information.  The Company covenants and
agrees that neither it nor any other Person acting on its behalf has provided or
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.  The Company understands and
confirms that each Purchaser shall be relying on the foregoing representations
in effecting transactions in securities of the Company.

 

                4.8           Use of Proceeds.  The Company shall use the net
proceeds from the sale of the Securities hereunder for working capital purposes
and not for the satisfaction of any portion of the Company’s debt (other than
payment of trade payables in the ordinary course of the

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COMPANY’S BUSINESS AND PRIOR PRACTICES), TO REDEEM ANY COMPANY EQUITY OR
EQUITY–EQUIVALENT SECURITIES OR TO SETTLE ANY OUTSTANDING LITIGATION.

                4.9           Reservation and Listing of Securities.

 

(A) THE COMPANY SHALL MAINTAIN A RESERVE FROM ITS DULY AUTHORIZED SHARES OF
COMMON STOCK FOR ISSUANCE PURSUANT TO THE TRANSACTION DOCUMENTS IN SUCH AMOUNT
AS MAY BE REQUIRED TO FULFILL ITS OBLIGATIONS IN FULL UNDER THE TRANSACTION
DOCUMENTS.

(B) THE COMPANY SHALL: (I) IN THE TIME AND MANNER REQUIRED BY ANY TRADING MARKET
ON WHICH THE COMMON STOCK IS THEN TRADED OR LISTED, PREPARE AND FILE WITH SUCH
TRADING MARKET AN ADDITIONAL SHARES LISTING APPLICATION COVERING A NUMBER OF
SHARES OF COMMON STOCK AT LEAST EQUAL TO THE SHARES OF COMMON STOCK ISSUABLE
UNDER THIS AGREEMENT AND PURSUANT TO THE WARRANTS, (II) TAKE ALL STEPS NECESSARY
TO CAUSE SUCH SHARES OF COMMON STOCK TO BE APPROVED FOR LISTING ON EACH SUCH
TRADING MARKET AS SOON AS POSSIBLE THEREAFTER, (III) PROVIDE TO THE PURCHASERS
EVIDENCE OF SUCH LISTING, AND (IV) MAINTAIN THE LISTING OF SUCH COMMON STOCK ON
EACH SUCH TRADING MARKET OR ON EACH TRADING MARKET ON WHICH THE COMMON STOCK IS
THEN TRADED OR LISTED.  FAILURE TO OBTAIN SUCH LISTING PRIOR TO THE EFFECTIVE
DATE SHALL BE DEEMED AN EVENT UNDER THE REGISTRATION RIGHTS AGREEMENT.

ARTICLE V.
MISCELLANEOUS

                5.1           Fees and Expenses.  Except as otherwise set forth
in this Agreement, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement.  The Company shall pay all stamp and other taxes
and duties levied in connection with the sale of the Securities.

 

                5.2           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.

 

                5.3           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 in this Section prior to 6:30 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 specified in this Section on a day that is not a Trading
Day or later than 6:30 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 such
notice is required to be given.  The address for such notices and communications
shall be as set forth on the

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SIGNATURE PAGES HERETO OR SUCH OTHER ADDRESS AS MAY BE DESIGNATED IN WRITING
HEREAFTER, IN THE SAME MANNER, BY SUCH PERSON.

 

                5.4           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 of the Purchasers 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.

 

                5.5           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.

 

                5.6           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
obligations hereunder without the prior written consent of the Purchasers. Any
Purchaser may assign any or all of its rights under this Agreement to any Person
to whom such Purchaser assigns or transfers any Securities, provided such
transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions hereof that apply to the “Purchasers.”

 

                5.7           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
Section 4.6 and 4.7.

 

                5.8           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.  Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether
brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York, Borough of
Manhattan.  Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
Borough of Manhattan for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of the any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is
improper.  Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such

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PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES
THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND
NOTICE THEREOF.  NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY
ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH PARTY HERETO
(INCLUDING ITS AFFILIATES, AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES) HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. IF EITHER PARTY SHALL
COMMENCE AN ACTION OR PROCEEDING TO ENFORCE ANY PROVISIONS OF A TRANSACTION
DOCUMENT, THEN THE PREVAILING PARTY IN SUCH ACTION OR PROCEEDING SHALL BE
REIMBURSED BY THE OTHER PARTY FOR ITS ATTORNEYS FEES AND OTHER COSTS AND
EXPENSES INCURRED WITH THE INVESTIGATION, PREPARATION AND PROSECUTION OF SUCH
ACTION OR PROCEEDING.

                5.9           Survival.  The representations, warranties,
agreements and covenants contained herein shall survive the Closing and the
delivery and exercise of the Securities, as applicable.

 

                5.10         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.

 

                5.11         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.

 

                5.12         Rescission and Withdrawal Right.  Notwithstanding
anything to the contrary contained in (and without limiting any similar
provisions of) the Transaction Documents, whenever any Purchaser exercises a
right, election, demand or option under a Transaction Document and the Company
does not timely perform its related obligations within the periods therein
provided, then such Purchaser may rescind or withdraw, in its sole discretion
from time to time upon written notice to the Company, any relevant notice,
demand or election in whole or in part without prejudice to its future actions
and rights.

 

                5.13         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.  The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Securities.

 

                5.14         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

 

18

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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.

                5.15         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 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.

 

                5.16         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
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.

 

*******************************

19

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

 

COMPANY:

 

 

Address for Notice:

SUPERGEN, INC.

4140 Dublin Blvd

 

Suite 200

 

Dublin, California 94568

By:

/s/ JOSEPH RUBINFELD

Tel: (925) 560-0100

 

Name:

Joseph Rubinfeld

Fax: (925) 560-0101

 

Title:

President/CEO

 

 

Wire Instructions of the Company:

 

PURCHASERS:

 

SMITHFIELD FIDUCIARY LLC

 

Address for Notice:

 

 

c/o Highbridge Capital Management, LLC

 

 

9 West 57th Street, 27th Floor

By: 

/s/ ADAM J. CHILL

 

New York, New York 10019

 

Name:

Adam J. Chill

 

Attn: Ari J. Storch/ Adam J. Chill

 

Title:

Authorized Signatory

 

Fax:  (212) 751-0755

 

 

 

 

Phone: (212) 287-4720

 

Subscription Amount:  $2,500,000

 

CRANSHIRE CAPITAL L.P.

 

Address for Notice:

 

 

 

 

 

Downsview Capital, Inc.

By:

/s/ MITCHELL D. KOPIN

 

The General Partner

 

Name:

Mitchell D. Kopin

 

666 Dundee Road, Suite 1901

 

Title:

President — Downsview Capital, Inc.

 

Northbrook, IL  60062

 

 

The General Partner

 

 

 

Subscription Amount:  $500,000

 

AIG DKR SOUNDSHORE PRIVATE INVESTORS HOLDING FUND LTD.

 

 

Address for Notice:

 

 

29 Richmond Road

By:

/s/ ANTHONY GIORDANO

 

Pembroke HM08 Bermuda

 

Name:

Anthony Giordano

 

 

 

Title:

Director

 

 

 

Subscription Amount:  $416,000

 

20

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[SIGNATURE PAGE TO PURCHASE AGREEMENT CONTINUED]

 

OMICRON MASTER TRUST

 

Address for Notice:

By:  Omicron Capital L.P., as subadvisor

 

c/o Omicron Capital L.P.

By:  Omicron Capital Inc., its general partner

 

153 E. 53rd Street

 

 

48th Floor

 

 

New York, New York 10022

By:

/s/ BRUCE BERNSTEIN

 

Attn:  Brian Daly

 

Name: 

Bruce Bernstein

 

Fax:  (212) 508-7028

 

Title:

President

 

 

 

Subscription Amount:  $600,000

 

OTATO L.P.

 

Address for Notice:

 

 

c/o OTA LLC

 

 

1 Manhattanville Road

By:

/s/ JAMES SANTORI

 

Purchase, NY  10577

 

Name:

James Santori

 

 

 

Title:

CFO

 

 

 

Subscription Amount:  $250,000

 

 

MAINFIELD ENTERPRISES INC.

 

Address for Notice:

 

 

c/o Sage Capital Growth Inc.

 

 

660 Madison Avenue, 18th Floor

By:

/s/ AVI VIGDER

 

New York, NY  10021

 

Name:

Avi Vigder

 

Attn:  Danny Golan

 

Title:

Director

 

Fax: (212) 651-9010

 

 

Subscription Amount:  $250,000

 

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