EXHIBIT 10.1

 
 
SECURITIES PURCHASE AGREEMENT

 
This Securities Purchase Agreement (this “Agreement”) is dated as of December
17, 2009 between Raptor Pharmaceutical Corp., a Delaware corporation (the
“Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and permitted assigns, a “Purchaser” and collectively
the “Purchasers”).
 
WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the “Securities Act”), the Company desires to issue and sell
to each Purchaser, and each Purchaser, severally and not jointly, desires to
purchase from the Company, securities of the Company 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 each Purchaser 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 set
forth in this Section 1.1:
 
                      “Accountants” shall have the meaning ascribed to such term
in Section 3.1(j).
 
“Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.
 
 “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 405 under the
Securities Act.
 
“Base Prospectus” shall have the meaning set forth in 3.1(a).

“BHCA” shall have the meaning set forth in 3.1(ss).
 
 
“Board of Directors” means the board of directors of the Company.

“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State 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 Trading Day on which all of the Transaction Documents
have been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchasers’ obligations to pay the Subscription
Amount and (ii) the Company’s obligations to deliver the Shares and Warrants, in
each case, have been satisfied or waived, but in no event later than the third
Trading Day following the date hereof.
 
“Commission” means the United States Securities and Exchange Commission.
 
“Common Stock” means the common stock of the Company, par value $0.001 per
share, and any other class of securities into which such securities may
hereafter be reclassified or changed.
 
“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
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.
 
“Contract” and “Contracts” shall have the meaning set forth in 3.1(n).

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

“Effective Date” shall have the meaning set forth in 3.1(a).
 
 
“Environmental Laws” shall have the meaning set forth in 3.1(ee).

“ERISA” shall have the meaning set forth in 3.1(aa).
 
 
“ERISA Plan” shall have the meaning set forth in 3.1(aa).
 
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“FDA” shall have the meaning ascribed to such term in Section 3.1(pp).
 
“FDCA” shall have the meaning ascribed to such term in Section 3.1(pp).
 
“Federal Reserve” shall have the meaning set forth in 3.1(ss).
 
“FINRA” shall mean Financial Industry Regulatory Authority.
 
“General Disclosure Package” shall have the meaning set forth in 3.1(f).

 
 “Indebtedness” shall have the meaning ascribed to such term in Section 3.1(xx).
 
“Intellectual Property” shall have the meaning ascribed to such term in Section
3.1(bb).
 
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433 of the Rules and Regulations, relating to the Securities
that (i) is required to be filed with the Commission by the Company, (ii) is a
“road show that is a written communication” within the meaning of Rule
433(d)(8)(i), whether or not required to be filed with the Commission or
(iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a
description of the Securities or of the offering that does not reflect the final
terms, in each case in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g).
 
“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors,
as evidenced by its being specified in Schedule I hereto.
 
“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.
 
“Material Adverse Change” shall have the meaning set forth in 3.1(k).
 
 
“Material Adverse Effect” shall have the meaning set forth in 3.1(h).

 
“Money Laundering Laws” shall have the meaning set forth in 3.1(tt).
 
“OFAC” shall have the meaning set forth in 3.1(qq).
 
 “Permitted Free Writing Prospectus(es)” shall have the meaning set forth in
3.1(g).

 
“Per Share Purchase Price” equals $2.00, subject to adjustment for reverse and
forward 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.
 
 “Pharmaceutical Product” shall have the meaning ascribed to such term in
Section 3.1(pp).
 
“Placement Agent” means Ladenburg Thalmann & Co. Inc.
 
 “Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
 
“Prospectus” means the Base Prospectus together with the Prospectus Supplement.
 
“Prospectus Supplement” means the supplement to the Base Prospectus complying
with Rule 424(b) of the Securities Act that is filed with the Commission.
 
 “Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.
 
“Registration Statement” means the registration statement on Form S-3 with
Commission file No. 333-162374, including financial statements and all exhibits
and any information deemed to be included therein by Rule 430A, Rule 430B or
Rule 430C of the Rules and Regulations, as applicable, which registers the sale
of the Shares, the Warrants and the Warrant Shares to the Purchasers.
 
 “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.
 
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
 
“Rule 462 Registration Statement” shall have the meaning set forth in 3.1(a).

“Rules and Regulations” means the rules and regulations under the Securities
Act.

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

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

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

“Series A Warrants” means, collectively, the Series A Common Stock purchase
warrants delivered to the Purchasers at the Closing in accordance with Section
2.2(a) hereof, which Warrants shall be exercisable after the six month
anniversary of issuance and have a term of exercise expiring on the five year
anniversary of the initial date of issuance, in the form of Exhibit A attached
hereto.
 
“Series B Warrants” means, collectively, the Series B Common Stock purchase
warrants delivered to the Purchasers at the Closing in accordance with Section
2.2(a) hereof, which Warrants shall be exercisable after the 6-month anniversary
of issuance and have a term of exercise expiring on the 18-month  anniversary of
the initial date of issuance, in the form of Exhibit A attached hereto.
 
“Shares” means the shares of Common Stock issued or issuable to each Purchaser
on the Closing Date pursuant to this Agreement.
 
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock). 
 
“Subscription Amount” means, as to each Purchaser, the aggregate amount of
consideration to be paid for Shares and Warrants purchased hereunder as
specified below such Purchaser’s name on the signature page of this Agreement
and next to the heading “Subscription Amount,” in United States dollars and in
immediately available funds.
 
“Subsidiary” means any subsidiary of the Company as set forth on Schedule
3.1(h), and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
 
“Trademarks” shall have the meaning ascribed to such term in Section 3.1(cc).
 
“Trading Day” means a day on which the principal Trading Market is open for
trading.
 
“Trading Market” means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE
AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, or the New York Stock Exchange (or any successors to any of the
foregoing).
 
“Transaction Documents” means this Agreement, the Warrants and any other
documents or agreements executed by the Company in connection with the
transactions contemplated hereunder.
 
“Transfer Agent” means American Stock Transfer and Trust Company, the current
transfer agent of the Company, with a postal address of 59 Maiden Lane, Plaza
Level, New York, NY 10038, an overnight delivery address of Operations Center,
6201 15th Avenue, Brooklyn, NY 11219, and a facsimile number of 718-765-8718,
and any successor transfer agent of the Company.
 
“Warrants” means the Series A Warrants and the Series B Warrants.
 
“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.
 
“WS” means Weinstein Smith LLP with offices located at 420 Lexington Avenue,
Suite 2620, New York, New York 10170-0002.
 
ARTICLE II.
 
PURCHASE AND SALE
 
2.1 Closing.  On the Closing Date, upon the terms and subject to the conditions
set forth herein, substantially concurrent with the execution and delivery of
this Agreement by the parties hereto, the Company agrees to sell, and the
Purchasers, severally and not jointly, agree to purchase, up to an aggregate of
(i) 3,747,558 Shares and (ii) Warrants as calculated pursuant to Section 2.2(a)
below.  Each Purchaser shall deliver to the Company, via wire transfer of
immediately available funds equal to such Purchaser’s Subscription Amount as set
forth on the signature page hereto executed by such Purchaser and the Company
shall deliver to each Purchaser its respective Shares and Warrants as determined
pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the
other items set forth in Section 2.2 deliverable at the Closing.  Upon
satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3,
the Closing shall occur at the offices of WS or such other location as the
parties shall mutually agree.
 
2.2 Deliveries.
 
(a) On or prior to the Closing Date, the Company shall deliver or cause to be
delivered to each Purchaser the following:
 
(i) this Agreement duly executed by the Company;
 
(ii) a legal opinion of the Los Angeles office of Paul, Hastings, Janofsky &
Walker LLP, with offices located at 515 South Flower Street, 25th Floor, Los
Angeles, California 90071, in the form previously delivered to the Placement
Agent;
 
(iii) a copy of the irrevocable instructions to the Company’s transfer agent
instructing the transfer agent to credit such Purchaser’s account or accounts
with the Shares pursuant to the information contained in the DWAC (as defined
below) equal to such Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, rounded down to the nearest whole Share, registered in the name
of such Purchaser;
 
(iv) a Series A Warrant registered in the name of such Purchaser to purchase up
to a number of shares of Common Stock equal to 50% of such Purchaser’s Shares,
with an exercise price equal $2.45, subject to adjustment therein (such Warrant
certificate may be delivered within three Trading Days of the Closing Date);
 
(v) a Series B Warrant registered in the name of such Purchaser to purchase up
to a number of shares of Common Stock equal to 50% of such Purchaser’s Shares,
with an exercise price equal to $2.45, subject to adjustment therein (such
Warrant certificate may be delivered within three Trading Days of the Closing
Date); and
 
(vi) the Base Prospectus and Prospectus Supplement (each which may be delivered
in accordance with Rule 172 under the Securities Act).
 
(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company the following:
 
(i) this Agreement duly executed by such Purchaser; and
 
(ii) such Purchaser’s Subscription Amount by wire transfer of immediately
available funds to the account as specified in writing by the Company.
 
2.3 Closing Conditions.
 
(a)           The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being met, unless expressly
waived in writing by the Company at or before Closing:
 
(i) the accuracy in all material respects on the Closing Date of the
representations and warranties of the Purchasers contained herein (unless as of
a specific date therein);
 
(ii) all obligations, covenants and agreements of each Purchaser required to be
performed at or prior to the Closing Date shall have been performed; and
 
(iii) the delivery by each Purchaser of the items set forth in Section 2.2(b) of
this Agreement.
 
(b) The respective obligations of the Purchasers hereunder in connection with
the Closing are subject to the following conditions being met:
 
(i) the accuracy in all material respects when made and on the Closing Date of
the representations and warranties of the Company contained herein (unless as of
a specific date therein);
 
(ii) all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;
 
(iii) the delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement;
 
(iv) there shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and
 
(v) from the date hereof to the Closing Date, trading in the Common Stock shall
not have been suspended by the Commission or the Company’s principal Trading
Market (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 L.P. 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 Trading Market which, in each case, in the
reasonable judgment of each Purchaser, makes it impracticable or inadvisable to
purchase the Shares and Warrants at the Closing.
 
ARTICLE III.
 
REPRESENTATIONS AND WARRANTIES
 
3.1 Representations and Warranties of the Company.  Except as set forth in the
Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof
and shall qualify any representation or otherwise made herein to the extent of
the disclosure contained in the corresponding section of the Disclosure
Schedules, the Company hereby makes the following representations and warranties
to each Purchaser:
 
(a) Compliance with Registration Requirements.  The Company meets the
requirements for use of Form S-3 and the Registration Statement relating to the
Securities which was declared effective on November 5, 2009 (the “Effective
Date”), including a base prospectus dated as of October 7, 2009 (the “Base
Prospectus”) and such amendments to such Registration Statement as may have been
required to the date of this Agreement, has been prepared by the Company under
the provisions of the Securities Act and the Rules and Regulations, and has been
filed with the Commission.  Copies of such Registration Statement and of each
amendment thereto, if any, including the Base Prospectus, heretofore filed by
the Company with the Commission have been delivered to each Purchaser.  If the
Company files a registration statement to register a portion of the Securities
and relies on Rule 462(b) of the Rules and Regulations for such registration
statement to become effective upon filing with the Commission (the “Rule 462
Registration Statement”), then any reference to the Registration Statement shall
be deemed to include the Rule 462 Registration Statement, as amended from time
to time.  The Company has filed the Base Prospectus with the Commission and
shall promptly hereafter file with the Commission the Prospectus Supplement. Any
reference herein to the Registration Statement or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 which were filed under the Exchange Act, or in respect of
the Registration Statement, other information deemed by the Rules and
Regulations to be a part of or included therein, on or before the initial
effective date or the date of the Prospectus, as the case may be. Any reference
herein to the terms “amend,” “amendment” or “supplement” with respect to the
Registration Statement or the Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act which is incorporated by
reference therein, or in respect of the Registration Statement, such other
information deemed by the Rules and Regulations to be a part of or included
therein, after the initial effective date, or the date of the Prospectus, as the
case may be.
 
(b) Effectiveness of Registration.  The Registration Statement, any Rule 462
Registration Statement and any post-effective amendment thereto have been
declared effective by the Commission under the Securities Act or have become
effective pursuant to Rule 462 under the Rules and Regulations.  The Company has
responded to all requests, if any, of the Commission for additional or
supplemental information.  No stop order suspending the effectiveness of the
Registration Statement or any Rule 462 Registration Statement is in effect and
no proceedings for such purpose have been instituted or are pending or, to the
best knowledge of the Company, are contemplated or threatened by the Commission.
 
(c) Accuracy of Registration Statement.  Each of the Registration Statement, any
Rule 462(b) Registration Statement and any post-effective amendment thereto, at
the time it became effective and on the Closing Date, complied and will comply
in all material respects with the Securities Act and the Rules and Regulations,
and did not and will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading.  The Prospectus, as amended or
supplemented, as of its date and at the Closing Date, complied and will comply
in all material respects with the Securities Act and the Rules and Regulations,
and did not or will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein not
misleading, in the light of the circumstances under which they were made.  The
Base Prospectus complied when filed as part of the Registration Statement in all
material respects with the Securities Act, and the Prospectus delivered to each
Purchaser for use in connection with this offering is identical to the
electronically transmitted copies thereof filed with the Commission on EDGAR,
except to the extent permitted by Regulation S-T.
 
(d)  Documents Incorporated by Reference.  The documents incorporated or deemed
to be incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the Commission, conformed and will conform in all
material respects to the requirements of the Exchange Act, and, when read
together with the other information in the Prospectus, at the time the
Registration Statement and any amendments thereto become effective and at the
Closing Date, will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
 
(e) Company Not Ineligible Issuer.  (i) At the earliest time after the filing of
the Registration Statement relating to the Securities that the Company or
another offering participant made a bona fide offer (within the meaning of Rule
164(h)(2)) of the Rules and Regulations and (ii) as of the date of the execution
and delivery of this Agreement (with such date being used as the determination
date for purposes of this clause (ii)), the Company was not and is not an
“ineligible issuer” (as defined in Rule 405 of the Rules and Regulations).
 
(f) Disclosure at the Time of Sale.  As of the Closing Date, (A) the Issuer
General Use Free Writing Prospectus(es) issued at or prior to the Closing Date
and (B) the Base Prospectus, all considered together (collectively, the “General
Disclosure Package”), did not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  The preceding sentence does not apply to statements in or omissions
from the General Disclosure Package based upon and in conformity with written
information furnished to the Company by the Placement Agent specifically for use
therein, it being understood and agreed that the only such information furnished
by or on behalf of the Placement Agent consists of the information described as
such in Section 3.1(c) hereof.
 
(g) Distribution of Offering Material by the Company.  The Company has not
distributed and will not distribute, prior to the Closing Date, any offering
material in connection with the offering or sale of the Shares or Warrants other
than the Registration Statement, any free writing prospectus consented to by the
Placement Agent (the “Permitted Free Writing Prospectuses”), and the Prospectus.
 
(h) Due Incorporation; Subsidiaries. (i) The Company is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation.  The Company has full corporate power and
authority to conduct all the activities conducted by it, to own or lease all the
assets owned or leased by it and to conduct its business as described in the
Registration Statement and the Prospectus.  The Company is duly licensed or
qualified to do business in and in good standing as a foreign corporation in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such licensing or
qualification necessary, except to the extent that the failure to be so licensed
or qualified, or to be in such good standing, would not reasonably be expected
to have a material adverse effect on the business, properties, financial
condition or results of operations of the Company and the Subsidiaries, taken as
a whole (a “Material Adverse Effect”).  (ii) The only significant subsidiaries
(as defined in the Rules and Regulations) of the Company are the subsidiaries
listed on Schedule 3.1(h) hereto (the “Subsidiaries”).  The Subsidiaries are
duly organized, validly existing and in good standing under the laws of their
respective jurisdictions of organization.  The Subsidiaries have full corporate
power and authority to conduct all the activities conducted by them, to own or
lease all the assets owned or leased by them and to conduct their business as
described in the Registration Statement and the Prospectus except to the extent
that the failure to have such power and authority would not reasonably be
expected to have a Material Adverse Effect.  The Subsidiaries are duly licensed
or qualified to do business in and in good standing as foreign entities in all
jurisdictions in which the nature of the activities conducted by them or the
character of the assets owned or leased by them makes such licensing or
qualification necessary except to the extent that the failure to be so licensed
or qualified, or to be in such good standing, would not reasonably be expected
to have a Material Adverse Effect.  Except for the stock of the Subsidiaries and
as disclosed in the Registration Statement, the Company does not own directly or
indirectly, any shares of stock or any other equity or long-term debt securities
of any corporation or have any equity interest in any firm, partnership, joint
venture, association or other entity.  All of the outstanding shares of capital
stock of the Subsidiaries (x) have been duly authorized and validly issued, (y)
are fully paid and non-assessable, and are (z) owned by the Company free and
clear of all liens, encumbrances and claims, except in the case of subclause (z)
as would not reasonably be expected to have a Material Adverse Effect.  Except
for the stock of the Subsidiaries and as disclosed in the Registration
Statement, the Company does not own, directly or indirectly, any shares of stock
or any other equity or long-term debt securities of any corporation or have any
equity interest in any firm, partnership, joint venture, association or other
entity.
 
(i) Authorization of Securities; Capitalization.  The authorized, issued and
outstanding capital stock of the Company is as set forth in the Registration
Statement and the Prospectus under the caption “Capitalization” (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the Prospectus
or pursuant to the exercise of convertible securities or options referred to in
the Prospectus).  The outstanding shares of Common Stock and any other
outstanding capital stock of the Company have been, and the Shares and the
Warrant Shares to be issued and sold by the Company upon such issuance in
accordance with this Agreement and upon exercise in accordance with the Warrant,
as the case may be, will be, duly authorized, validly issued, fully paid and
non-assessable and will not be subject to any preemptive, first refusal, or
similar right.  The description of the Common Stock included or incorporated by
reference in the Registration Statement and the Prospectus is complete and
accurate in all material respects.  The Warrants have been duly and validly
authorized by the Company and upon delivery to the Purchaser at the Closing Date
in accordance herewith will be valid and binding obligations of the Company,
enforceable in accordance with their terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights and remedies of creditors generally or subject to general
principles of equity.  Except as set forth or incorporated by reference in the
Prospectus, the Company does not have outstanding any options to purchase, or
any rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any shares
of capital stock of the Company or of any Subsidiaries or any such warrants,
convertible securities or obligations.  Upon the issuance and delivery pursuant
to the terms of this Agreement, the Purchasers will acquire good and marketable
title to the Securities, free and clear of any liens, charge, claim,
encumbrance, pledge, security interest, defect or other restriction or equity of
any kind whatsoever, except for restrictions on transfer of the Warrants and the
Warrant Shares that may be applicable under federal and state securities laws.
The issuance and sale of the Shares and Warrants will not obligate the Company
to issue shares of Common Stock or other securities of the Company 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 any of such securities. No further approval or authorization of any
stockholder, the Board of Directors or others is required for the issuance and
sale of the Securities, not including for this purpose any Warrant Shares that
may be issuable pursuant to any adjustment under Section 9 of any Warrant (which
events giving rise to any such adjustment(s) may require approval of the Board
of Directors or stockholders).  There are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is currently a party or, to the knowledge of the
Company, between or among any of the Company’s stockholders.
 
(j) Financial Statements; Accountants.  The financial statements and schedules
included or incorporated by reference in the Registration Statement or the
Prospectus present fairly the consolidated financial condition of the Company
and the Subsidiaries as of the respective dates thereof and the consolidated
results of operations and cash flows of the Company and the Subsidiaries for the
respective periods covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the entire period
involved, except as otherwise disclosed in the Prospectus.  No other financial
statements, schedules or “non-GAAP financial measures” (as such term is defined
by the rules and regulations of the Commission) of the Company are required by
the Securities Act, the Exchange Act and the Rules and Regulations of the
Exchange Act or the Rules and Regulations to be included in the Registration
Statement or the Prospectus.  Burr, Pilger & Mayer, LLP (the “Accountants”) who
have reported on such financial statements and schedules for the year ended
August 31, 2009, are independent accountants with respect to the Company as
required by the Securities Act and the Rules and Regulations and by Rule 3600T
of the Public Accounting Oversight Board.  Except as described in the Prospectus
and as preapproved in accordance with the requirements set forth in Section 10A
of the Exchange Act, Burr, Pilger & Mayer, LLP has not engaged in any
“prohibited activities” (as defined in Section 10A of the Exchange Act) on
behalf of the Company.  The statements included in the Registration Statement
with respect to the Accountants pursuant to Rule 509 of Regulation S-K of the
Rules and Regulations are true and correct in all material respects.
 
(k) No Material Adverse Changes.  Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, except as
set forth or incorporated by reference in the Prospectus, (i) there has not been
and will not have been a material adverse change in the business, properties,
financial condition or results of operations of each of the Company and the
Subsidiaries, taken as a whole, arising for any reason whatsoever (a “Material
Adverse Change”) or a Material Adverse Change in the capitalization of the
Company, (ii) the Company has not incurred any material liabilities or
obligations, direct or contingent, nor has it entered into any material
transactions not in the ordinary course of business, other than pursuant to this
Agreement and the transactions referred to herein, and (iii) the Company has not
paid or declared any dividends or other distributions of any kind on any class
of its capital stock.  Except for the issuance of the Securities contemplated by
this Agreement or as set forth on Schedule 3.1(k), and except with respect to
the execution, delivery and performance by the Company of that certain placement
agent agreement by and between the Company and the Placement Agent, no event,
liability, fact, circumstance, occurrence or development has occurred or exists,
or is reasonably expected to occur or exist, with respect to the Company or its
Subsidiaries or their respective business, prospects, properties, operations,
assets or financial condition that would be required to be disclosed by the
Company under applicable securities laws at the time this representation is made
or deemed made that has not been publicly disclosed at least one (1) Trading Day
prior to the date that this representation is made.
 
(l) Investment Company.  The Company is not an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an
“investment company,” as such terms are defined in the Investment Company Act of
1940, as amended.
 
(m)  Litigation.  Except as set forth or incorporated by reference in the
Prospectus, there are no actions, suits or proceedings pending, or to the
Company’s knowledge, threatened against or affecting, the Company or any of the
Subsidiaries or any of their respective officers in their capacity as such,
before or by any federal or state court, commission, regulatory body including
FINRA and the Trading Market, administrative agency or other governmental body,
domestic or foreign, wherein an unfavorable ruling, decision or finding would
reasonably be expected to have a Material Adverse Effect.  Neither the Company
nor any of the Subsidiaries has received any notice of proceedings relating to
the revocation or modification of any authorization, approval, order, license,
certificate, franchise or permit.  There are no pending investigations known to
the Company involving the Company or any of the Subsidiaries by any governmental
agency having jurisdiction over the Company or any of the Subsidiaries or their
respective businesses or operations.
 
(n) Necessary Licenses, Compliance with Laws and Regulations and Performance of
Obligations and Contracts.  Each of the Company and the Subsidiaries has, (i)
all governmental and other regulatory licenses, permits, consents, orders,
approvals and other authorizations necessary to carry on its business as
described in the Prospectus, as currently conducted, (ii) complied in all
material respects with all laws, regulations and orders applicable to it or its
business and (iii) performed all obligations required to be performed by it, and
is not in default under any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement, lease or other
agreement or instrument (individually, a “Contract” and collectively,
“Contracts”) to which it is a party or by which its property is bound, except in
the case of subclauses (i), (ii) and (iii), as would not reasonably be expected
to have a Material Adverse Effect. To the best knowledge of the Company, no
other party under any Contract to which it or the Subsidiaries is a party is in
default in any respect thereunder except to the extent such default would not
reasonably be expected to have a Material Adverse Effect, or has given written,
or to the knowledge of the officers and directors of the Company oral, notice to
the Company, the Subsidiaries or any of their respective officers or directors
of such other party’s intention to terminate, cancel or refuse to renew any
Contract.  Each of the Company and the Subsidiaries is not in violation of any
provision of its certificate of incorporation, by-laws or other applicable
governing documents, except to the extent such violation would not reasonably be
expected to have a Material Adverse Effect.
 
(o) No Consent of Governmental Body Needed.  No consent, approval, authorization
or order of, or any filing or declaration with, any court or governmental agency
or body is required in connection with the authorization, issuance, transfer,
sale or delivery of the Securities by the Company or in connection with the
execution, delivery and performance of this Agreement by the Company, except as
have been obtained under the Securities Act and such as may be required under
state securities or Blue Sky laws or the by-laws and rules of the FINRA in
connection with the purchase by the Purchasers of the Securities to be sold by
the Company.
 
(p) Agreement Duly Authorized and No Breach of Obligations or Charter.  The
Company has full corporate power and authority to enter into this
Agreement.  This Agreement has been duly authorized, executed and delivered by
the Company and this Agreement constitutes a valid and binding agreement of the
Company enforceable against the Company in accordance with the terms hereof,
except as the enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors’ rights generally or general equitable principles.  The execution and
delivery by the Company of this Agreement and the performance of this Agreement,
the consummation of the transactions contemplated hereby, and the application of
the net proceeds from the offering and sale of the Securities to be sold by the
Company in the manner set forth in the Prospectus under “Use of Proceeds” do not
(i) violate the certificate of incorporation or by-laws of the Company or
applicable governing documents of any of the Subsidiaries or (ii) result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of the Company or any of its Subsidiaries pursuant to the terms or provisions
of, or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or give any other party a right to terminate any of
its obligations under, or result in the acceleration of any obligation under any
Contract to which the Company or any of the Subsidiaries is a party or by which
the Company or any of the Subsidiaries or any of its properties is bound, or
violate or conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to the
business or properties of the Company or any of the Subsidiaries, except in the
case of subclause (ii) as would not reasonably be expected to have a Material
Adverse Effect.
 
(q) Title to Property.  The Company and each of the Subsidiaries has good and
marketable title to all properties and assets described in the Prospectus or in
documents incorporated by reference in the Prospectus as being owned
respectively by it, free and clear of all liens, charges, encumbrances or
restrictions, except (i) as set forth or incorporated by reference in the
Prospectus, or (ii) as would not reasonably be expected to have a Material
Adverse Effect.  Each of the Company and the Subsidiaries has valid, subsisting
and enforceable leases or farmouts for the properties described or incorporated
by reference in the Prospectus as leased or controlled by it, with such
exceptions as are not material and do not materially interfere with the use made
and proposed to be made of such properties by the Company and its Subsidiaries.
 
(r) Documents Described in Registration Statement.  There is no document or
Contract of a character required to be described or incorporated by reference in
the Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described or filed as required.  All such
documents and Contracts described or incorporated by reference in the
Registration Statement or the Prospectus or filed as an exhibit to the
Registration Statement were duly authorized, executed and delivered by the
Company or Subsidiaries, constitutes valid and binding agreements of the Company
or such Subsidiaries and are enforceable against the Company or such
Subsidiaries in accordance with the terms thereof, except as the enforcement may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors’ rights generally or
general equitable principles.
 
(s) Statistical and Market Data.  All statistical or market-related data
included in the Registration Statement or the Prospectus are based on or derived
from sources that the Company believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data from such
sources to the extent the Company believes is required.
 
(t) No Price Stabilization or Manipulation.  Neither the Company nor any of its
directors, officers or, to the Company’s knowledge, controlling persons has
taken, directly or indirectly, any action intended to cause or result in, or
which might reasonably be expected to cause or result in, or which has
constituted, stabilization or manipulation, under the Securities Act or
otherwise, of the price of any security of the Company to facilitate the sale or
resale of the Securities.
 
(u) No Registration Rights.  No holder of securities of the Company has rights
to register any securities of the Company because of the filing of the
Registration Statement, the Prospectus or the offering of the Securities, except
for rights that have been duly waived by such holder, have expired or have been
fulfilled by registration prior to the date of this Agreement.
 
(v) Stock Exchange Listing.  The Common Stock is listed on the NASDAQ Capital
Market under the ticker symbol “RPTP”. The issuance and listing on the Trading
Market of the Shares and Warrant Shares (other than any Warrant Shares that may
be issuable pursuant to any adjustment under Section 9 of any Warrant (which
events giving rise to any such adjustment(s) may require approval of the Board
of Directors or stockholders)) requires no further approvals, including but not
limited to, the approval of the Company’s stockholders. The issuance and sale of
the Securities hereunder does not contravene the rules and regulations of the
Trading Market.  The Company is and has no current reason to believe that it
will not in the foreseeable future continue to be, in compliance with all such
listing and maintenance requirements.
 
(w) Labor Matters.  The Company is not involved in any material labor dispute
nor, to the knowledge of the Company, is any such dispute threatened. None of
the Company’s or its Subsidiaries’ employees is a member of a union that relates
to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining
agreement, and the Company believes that its and its Subsidiaries’ relationships
with their employees are good.  No executive officer, to the knowledge of the
Company, is, or is now expected to be, in violation of any material term of any
employment contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any restrictive covenant in favor of
any third party, and to the knowledge of the Company, the continued employment
of each such executive officer does not subject the Company or any of its
Subsidiaries to any liability with respect to any of the foregoing matters.  The
Company and its Subsidiaries are in compliance with all U.S. federal, state,
local and foreign laws and regulations relating to employment and employment
practices, terms and conditions of employment and wages and hours, except where
the failure to be in compliance would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
 
(x) Foreign Corrupt Practices; No Unlawful Contributions or Payments.  Neither
the Company nor any of the Subsidiaries nor, to the best of the Company’s
knowledge, any of its/their respective officers, directors, employees or agents,
has (i) made any contribution or other payment to any official of, or candidate
for, any federal, state or foreign office in violation of any law or of the
character required to be disclosed in the Prospectus, (ii) directly or
indirectly, used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to foreign or domestic political activity, (iii)
failed to disclose fully any contribution made by the Company (or made by any
person acting on its behalf of which the Company is aware) which is in violation
of law, or (iv) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended.
 
(y) Taxes.  The Company and each of the Subsidiaries has filed all federal,
state and foreign income and franchise tax returns and has paid all taxes
required to be filed or paid by it and, if due and payable, any related or
similar assessment, fine or penalty levied against it, other than any which the
Company or any of its Subsidiaries are contesting in good faith.  The Company
has made adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 3(j) above in respect of all material federal,
state and foreign income and franchise taxes for all periods as to which the tax
liability of the Company has not been finally determined. There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction to which the Company is subject, and the officers of the Company or
of any Subsidiary know of no basis for any such claim.
 
(z) Insurance.  The Company and each of the Subsidiaries carries, or is covered
by, insurance in such amounts and covering such risks as it believes is adequate
for the conduct of its business and the value of its properties and is customary
for companies engaged in similar industries, including, but not limited to,
directors and officers insurance coverage.  Neither the Company nor any
Subsidiary 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.
 
(aa)  Defined Benefit Plans.  Neither the Company nor any of the Subsidiaries
has maintained or contributed to a defined benefit plan as defined in
Section 3(35) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) within the past six (6) years, other than a “multiemployer plan.”  No
plan maintained or contributed to by the Company that is subject to ERISA (an
“ERISA Plan”) (or any trust created thereunder) has engaged in a “prohibited
transaction” within the meaning of Section 406 of ERISA or Section 4975 of the
Code that could subject the Company or any of the Subsidiaries to any material
tax penalty on prohibited transactions and that has not adequately been
corrected.  Each ERISA Plan is in compliance in all material respects with all
reporting, disclosure and other requirements of the Code and ERISA as they
relate to such ERISA Plan, except for any noncompliance which would not result
in the imposition of a material tax or monetary penalty.  With respect to each
ERISA Plan that is intended to be “qualified” within the meaning of
Section 401(a) of the Code, either (i) a determination letter has been issued by
the Internal Revenue Service stating that such ERISA Plan and the attendant
trust are qualified thereunder (or may rely on an advisory or opinion letter
issued by the IRS as to such qualification), or (ii) the remedial amendment
period under Section 401(b) of the Code with respect to the establishment of
such ERISA Plan has not ended and a determination letter application will be
filed with respect to such ERISA Plan prior to the end of such remedial
amendment period.  Neither the Company nor any of the Subsidiaries has
completely or partially withdrawn from a “multiemployer plan,” as defined in
Section 3(37) of ERISA within the past six (6) years.
 
(bb) Intellectual Property. To the Company’s knowledge, except as set forth or
incorporated by reference in the Prospectus, each of the Company and the
Subsidiaries owns, is licensed or otherwise has adequate rights to use Company
technology (including but not limited to patented, patentable and unpatented
inventions and unpatentable, proprietary or confidential information, systems or
procedures), designs, processes, trade secrets, know how, copyrights and other
works of authorship, computer programs and technical data and information
(collectively, the “Intellectual Property”) that are used in and are material to
its business as currently conducted.  Neither the Company nor any of the
Subsidiaries has received any written threat of or written notice of
infringement of or conflict with asserted intellectual property rights of others
with respect to the Company’s or the Subsidiaries’ use of any of the
Intellectual Property. Within the previous year, except as described in the
Prospectus or the SEC Reports, the Company has not terminated or abandoned any
of its Intellectual Property. Neither the Company nor any Subsidiary has, within
the previous year, received a written notice that any of its Intellectual
Property has expired, terminated or been abandoned, or is expected to expire or
terminate or be abandoned, within two (2) years from the date of this
Agreement.  The Company and its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of its trade secrets,
except where failure to do so would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
 
(cc) Trademarks. To the Company’s knowledge, except as set forth or incorporated
by reference in the Prospectus, the Company and the Subsidiaries own, are
licensed or otherwise have the right to use, all trademarks and trade names that
are used in and are material to its business as described in the Prospectus, as
currently conducted (collectively, the “Trademarks”).  Neither the Company nor
any of the Subsidiaries has received any written notice of infringement of or
conflict with asserted trademark rights of others with respect to the Company’s
or the Subsidiaries’ use of any of the Trademarks.  Within the previous year,
except as described in the Prospectus or the SEC Reports, the Company nor any
Subsidiary has received a notice (written or otherwise) that any of, the
Trademarks has expired, terminated or been abandoned, or is expected to expire
or terminate or be abandoned, within two (2) years from the date of this
Agreement.  The Company and its Subsidiaries have taken reasonable security
measures to protect the value of all of the Trademarks, except where failure to
do so could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
 
(dd) Related Party Transactions.  No relationship, direct or indirect, exists
between or among the Company or any Subsidiary on the one hand, and the
directors, officers, stockholders, customers or suppliers of the Company on the
other hand, that is required to be described in the Prospectus and that is not
so described or incorporated therein by reference, including any transaction
required to be disclosed pursuant to Item 404(a) of regulation S-K.
 
(ee) Environmental Matters.  The Company (i) is in compliance with any and all
applicable federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, “Environmental
Laws”), (ii) has received all permits, licenses or other approvals required of
it under applicable Environmental Laws to conduct its businesses and (iii) is in
compliance with all terms and conditions of any such permit, license or
approval, except in the case of subclauses (i) – (iii) as would not reasonably
be expected to have a Material Adverse Effect.
 
(ff) Controls and Procedures; Disclosure Controls and Procedures; Internal
Control Over Financial Reporting and Internal Accounting Controls; No Material
Weakness in Internal Controls.  The Company has established and maintains
disclosure controls and procedures (as such term is defined in Rule 13a-15 and
15d-15 under the Exchange Act), that (A) are designed to ensure that material
information relating to the Company, including its consolidated subsidiaries, is
made known to the Company’s principal executive officer and its principal
financial officer by others within those entities, particularly during the
periods in which the periodic reports required under the Exchange Act are being
prepared; (B) provide for the periodic evaluation of the effectiveness of such
disclosure controls and procedures as of the end of the period covered by the
Company’s most recent annual or quarterly report filed with the Commission; and
(C) are effective in all material respects to perform the functions for which
they were established. The Company maintains (i) effective internal control over
financial reporting as defined in  Rules 13a-15 and 15d-15 under the Exchange
Act, and (ii) a system of internal accounting controls sufficient to provide
reasonable assurance that (A) transactions are executed in accordance with
management’s general or specific authorizations; (B) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(C) access to assets is permitted only in accordance with management’s general
or specific authorization; and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Except as disclosed in the General
Disclosure Package and the Prospectus, or in any document incorporated by
reference therein, since the end of the Company’s most recent audited fiscal
year, there has been no change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting. The Company is
not aware of (A) any significant deficiency in the design or operation of its
internal control over financial reporting which is reasonably likely to
adversely affect the Company’s ability to record, process, summarize and report
financial data or any material weaknesses in internal controls, except as
disclosed in the General Disclosure Package and the Prospectus, or in any
document incorporated by reference therein, since the end of the Company’s most
recent audited fiscal year; or (B) any fraud, whether or not material, that
involves management or other employees who have a significant role in the
Company’s internal controls.
 
(gg) Off-Balance Sheet Transactions.  Except as described in the General
Disclosure Package and the Prospectus, there are no material off-balance sheet
transactions (including, without limitation, transactions related to, and the
existence of, “variable interest entities” within the meaning of Financial
Accounting Standards Board Interpretation No. 46), arrangements, obligations
(including contingent obligations), or any other relationships with
unconsolidated entities or other persons, that may have a material current or
future effect on the Company’s financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures, capital
resources, or significant components of revenues or expenses.
 
(hh) Sarbanes-Oxley.  The Company is in compliance in all material respects with
all applicable effective provisions of the Sarbanes-Oxley Act of 2002 and the
rules and regulations of the Commission promulgated thereunder.
 
(ii) FINRA Affiliations.  There are no affiliations with any FINRA member firm
among the Company’s officers, directors or, to the knowledge of the Company, any
five percent (5%) or greater stockholder of the Company, except as set forth in
the Prospectus.
 
(jj) Regulation M Compliance.  The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities (other than for the Placement
Agent’s placement of the Securities), or (iii) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company, except any such agreement which has previously been terminated.
 
(kk) Certain Fees.  Except for fees payable to the Placement Agent as set forth
in the Prospectus Supplement, 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 placement of the Securities nor will the Purchasers have any
obligation with respect to any such fees or commission due to actions of the
Company with respect to the placement of the Securities. In addition, the
Company acknowledges that as of the date hereof, an employee of the Placement
Agent beneficially owns approximately 4% of the outstanding Common Stock of the
Company (which excludes warrants beneficially owned by such employee to purchase
Common Stock of the Company that are not exercisable within sixty (60) days of
the date hereof).  The Placement Agent has advised the Company that this
employee has agreed with the Placement Agent not to publicly sell or dispose of
such securities of the Company for a period of 180 days following the Closing.
 
(ll) Listing and Maintenance Requirements.  The Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act nor has the Company received any notification that the Commission is
contemplating terminating such registration.
 
(mm) Application of Takeover Protections.  The Company and its board of
directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s Certificate of Incorporation (or
similar charter documents) or the laws of its state of incorporation that is
applicable to the Purchasers as a result of the Company’s issuance of the Shares
and Warrants and the Purchasers’ ownership of the Shares and Warrants as of the
Closing Date.
 
(nn) Acknowledgment Regarding Purchasers’ Purchase of Securities.  The Company
acknowledges and agrees that each of the Purchasers is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby.  The Company further acknowledges
that no Purchaser is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby.  The Company further represents to each
Purchaser that the Company’s decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.
 
(oo) Acknowledgement Regarding Purchaser’s Trading Activity.  Anything in this
Agreement or elsewhere herein to the contrary notwithstanding (except for
Sections 3.2(f) and 4.14 hereof), it is understood and acknowledged by the
Company that: (i) none of the Purchasers have been asked by the Company to
agree, nor, to the knowledge of the Company, has any Purchaser agreed, to desist
from purchasing or selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by the Company or to hold the
Securities for any specified term; (ii) past or future open market or other
transactions by any Purchaser, specifically including, without limitation, Short
Sales or “derivative” transactions, before or after the closing of this or
future private placement transactions, may negatively impact the market price of
the Company’s publicly-traded securities; (iii) any Purchaser, and
counter-parties in “derivative” transactions to which any such Purchaser is a
party, directly or indirectly, presently may have a “short” position in the
Common Stock, and (iv) each Purchaser shall not be deemed to have any
affiliation with or control over any arm’s length counter-party in any
“derivative” transaction.  The Company further understands and acknowledges that
(y) one or more Purchasers may engage in hedging activities at various times
during the period that the Securities are outstanding, including, without
limitation, during the periods that the value of the Warrant Shares deliverable
with respect to Securities are being determined, and (z) such hedging activities
(if any) could reduce the value of the existing stockholders' equity interests
in the Company at and after the time that the hedging activities are being
conducted.  The Company acknowledges that such aforementioned hedging activities
do not constitute a breach of any of the Transaction Documents.
 
(pp) FDA.  As to each product subject to the jurisdiction of the U.S. Food and
Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as
amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged,
labeled, tested, distributed, sold, and/or marketed by the Company or any of its
Subsidiaries (each such product, a “Pharmaceutical Product”), such
Pharmaceutical Product is being manufactured, packaged, labeled, tested,
distributed, sold and/or marketed by the Company in compliance with all
applicable requirements under FDCA and similar laws, rules and regulations
relating to registration, investigational use, premarket clearance, licensure,
or application approval, good manufacturing practices, good laboratory
practices, good clinical practices, product listing, quotas, labeling,
advertising, record keeping and filing of reports, except where the failure to
be in compliance would not have a Material Adverse Effect.  Except as otherwise
described or incorporated by reference in the Prospectus, there is no pending
or, to the Company's knowledge, threatened, action (including any lawsuit,
arbitration, or legal or administrative or regulatory proceeding, charge,
complaint, or investigation) against the Company or any of its Subsidiaries, and
none of the Company or any of its Subsidiaries has received any notice, warning
letter or other communication from the FDA or any other governmental entity,
which (i) contests the premarket clearance, licensure, registration, or approval
of, the uses of, the distribution of, the manufacturing or packaging of, the
testing of, the sale of, or the labeling and promotion of any Pharmaceutical
Product, (ii) withdraws its approval of, requests the recall, suspension, or
seizure of, or withdraws or orders the withdrawal of advertising or sales
promotional materials relating to, any Pharmaceutical Product, (iii) imposes a
clinical hold on any clinical investigation by the Company or any of its
Subsidiaries, (iv) enjoins production at any facility of the Company or any of
its Subsidiaries, (v) enters or proposes to enter into a consent decree of
permanent injunction with the Company or any of its Subsidiaries, or (vi)
otherwise alleges any violation of any laws, rules or regulations by the Company
or any of its Subsidiaries, and which, either individually or in the aggregate,
would have a Material Adverse Effect.  The properties, business and operations
of the Company have been and are being conducted in all material respects in
accordance with all applicable laws, rules and regulations of the FDA except
where failure to be in such compliance would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.  The
Company has not been informed by the FDA that the FDA will prohibit the
marketing, sale, license or use in the United States of any product proposed to
be developed, produced or marketed by the Company nor has the FDA expressed any
material concern as to approving or clearing for marketing any product being
developed or proposed to be developed by the Company that the Company reasonably
believes cannot be adequately addressed by the Company.
 
(qq) Office of Foreign Assets Control.  Neither the Company nor, to the
Company's knowledge, any director, officer, agent, employee or Affiliate of the
Company is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”).
 
(rr) U.S. Real Property Holding Corporation.  The Company is not a U.S. real
property holding corporation within the meaning of Section 897 of the Internal
Revenue Code of 1986, as amended.
 
(ss) Bank Holding Company Act.  Neither the Company nor any of its Subsidiaries
or, to the knowledge of the Company, Affiliates is subject to the Bank Holding
Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of
Governors of the Federal Reserve System (the “Federal Reserve”).  Neither the
Company nor any of its Subsidiaries or, to the knowledge of the Company,
Affiliates owns or controls, directly or indirectly, five percent (5%) or more
of the outstanding shares of any class of voting securities or twenty-five
percent or more of the total equity of a bank or any entity that is subject to
the BHCA and to regulation by the Federal Reserve.  Neither the Company nor any
of its Subsidiaries or, to the knowledge of the Company, Affiliates exercises a
controlling influence over the management or policies of a bank or any entity
that is subject to the BHCA and to regulation by the Federal Reserve.
 
(tt) Money Laundering.  The operations of the Company are and have been
conducted at all times in compliance with applicable financial record-keeping
and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, applicable money laundering statutes and applicable
rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.
 
(uu)  No Integrated Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, neither the Company,
nor any of its Affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any sales of any security, under circumstances that
would cause sales of the Securities pursuant to this Agreement to be integrated
with prior sales of securities of the Company by the Company for purposes of any
applicable shareholder approval provisions of any Trading Market on which the
Company’s securities are currently listed.
 
(vv)  SEC Reports.  The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company 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 or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, not including the Prospectus, 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
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, 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.
 
(ww)  Disclosure.  Except with respect to the material terms and conditions of
the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor, to its knowledge, any other Person acting on its behalf,
has provided any of the Purchasers or their agents or counsel with any
information that it believes constitutes or might constitute material,
non-public information which is not otherwise disclosed in the Prospectus
Supplement.   The Company understands and confirms that the Purchasers will rely
on the foregoing representation in effecting transactions in the Securities and
other securities of the Company.  The Company acknowledges and agrees that no
Purchaser makes or has made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof.
 
3.2 Representations and Warranties of the Purchasers.  Each Purchaser, for
itself and for no other Purchaser, hereby represents and warrants as of the date
hereof and as of the Closing Date to the Company as follows (unless as of a
specific date therein):
 
(a) Organization; Authority.  Such Purchaser is either an individual or an
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with full right, corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each other Transaction Document to which it
is party and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and performance by such Purchaser
of the transactions contemplated by this Agreement and each other Transaction
Document to which it is a party have been duly authorized by all necessary
corporate, partnership, limited liability company or similar action, as
applicable, 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 as the enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors’ rights generally or general equitable
principles. In addition, each Purchaser acknowledges that as of the date hereof,
an employee of the Placement Agent beneficially owns approximately 4% of the
outstanding Common Stock of the Company (which excludes warrants beneficially
owned by such employee to purchase Common Stock of the Company that are not
exercisable within sixty (60) days of the date hereof).  The Placement Agent has
advised the Company that this employee has agreed with the Placement Agent not
to publicly sell or dispose of such securities of the Company for a period of
180 days following the Closing.
 
(b) Understandings or Arrangements.  Such Purchaser is acquiring the Securities
as principal for its own account and has no direct or indirect arrangement or
understandings with any other persons or any current intention to distribute or
regarding the distribution of such Securities (this representation and warranty
not limiting such Purchaser’s right to sell the Securities in compliance with
applicable federal and state securities laws).
 
(c) Access.  Such Purchaser is acquiring the Securities hereunder in the
ordinary course of its business.  Such Purchaser represents that (i) it has had
full access to the General Disclosure Package prior to or in connection with its
receipt of this Agreement and is relying only on such information and documents
in making its decision to purchase the Securities; and (ii) it has had full
access to and the opportunity to review all filings made by the Company with the
Commission, and that it was able to read, review, download and print each such
filing.
 
(d) Purchaser Status.  At the time such Purchaser was offered the Securities, it
was, and as of the date hereof it is, and on each date on which it exercises any
Warrants, it will be either: (i) an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act.  Such Purchaser is not required to be registered as a broker-dealer under
Section 15 of the Exchange Act.
 
(e) Experience of Such Purchaser.  Such Purchaser, either alone or together with
its representatives (in such case, such representative shall deliver on the
Closing Date a certificate in form and substance reasonably satisfactory to the
Company to such effect), 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 and has requested, received,
reviewed and considered all information it deemed relevant in making an informed
decision to purchase the Securities.
 
(f) Certain Transactions and Confidentiality.  Other than consummating the
transactions contemplated hereunder, such Purchaser has not, nor has any Person
acting on behalf of or pursuant to any understanding with such Purchaser,
directly or indirectly executed any purchases or sales, including Short
Sales, of the securities of the Company during the period commencing as of the
time that such Purchaser first received a term sheet (written or oral) of the
Company or any other Person representing the Company setting forth the material
terms of the transactions contemplated hereunder and ending immediately prior to
the public announcement of the transactions contemplated by this Agreement and
other Transaction Documents.  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to
purchase the Securities covered by this Agreement.  Such Purchaser has
maintained the confidentiality of all disclosures made to it in connection with
the transactions contemplated by this Agreement (including the existence and
terms of this Agreement). Notwithstanding the foregoing, for avoidance of doubt,
nothing contained herein shall constitute a representation or warranty, or
preclude any actions, with respect to the identification of the availability of,
or securing of, available shares to borrow in order to effect Short Sales or
similar transactions after the public announcement of the transactions
contemplated by this Agreement and other Transaction Documents.
 
(g) Other Fees.  Such Purchaser acknowledges that the Company has agreed to pay
the Placement Agent a fee, as set forth in the Prospectus Supplement in respect
of the sale of the Securities.
 
(h) Advice of Counsel.  Such Purchaser understands, agrees and acknowledges that
nothing in the General Disclosure Package, and any amendments or supplements
thereto, this Agreement or any other Transaction Document constitutes legal, tax
or investment advice. Such Purchaser has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Securities.
 
(i) Associations.  Such Purchaser represents that, except as set forth on the
signature page hereto, (i) it has had no position, office or other material
relationship within the past three years with the Company or persons known to it
to be Affiliates of the Company, (ii) it is not a, and it has no direct or
indirect affiliation or association with any, FINRA member or an Associated
Person (as such term is defined under FINRA Membership and Registration Rules
Section 1011(b)) as of the date hereof, and (iii) neither it nor any group of
investors (as identified in a public filing made with the Commission) of which
it is a member, acquired, or obtained the right to acquire, 20% or more of the
Common Stock (or securities convertible or exercisable for Common Stock) or the
voting power of the Company on a post-transaction basis.
 
The Company acknowledges and agrees that, except as expressly permitted in
Section 3.1, the representations contained in Section 3.2 shall not modify,
amend or affect such Purchaser’s right to rely on the Company’s representations
and warranties contained in this Agreement or any representations and warranties
of the Company contained in any other Transaction Document or any other document
or instrument executed and/or delivered in connection with this Agreement or the
consummation of the transaction contemplated hereby.  Notwithstanding any
investigation made by any Purchaser, all covenants, agreements, representations
and warranties made by any Purchaser herein shall survive the execution of this
Agreement, the delivery to the Purchaser of the Securities being purchased and
the payment therefor.
 
ARTICLE IV.
 
OTHER AGREEMENTS OF THE PARTIES
 
Each covenant and agreement of the Company and each Purchaser set forth in this
Article IV shall continue in full force and effect in accordance with its terms
as set forth in this Article IV, except that if no period is set forth in this
Article IV with respect to such covenant or agreement then for so long as any
Warrant remains outstanding, unexpired and unexercised.
 
4.1 Warrant Shares.  If all or any portion of a Warrant is exercised at a time
when there is an effective registration statement to cover the issuance of the
Warrant Shares or if the Warrant is exercised via cashless exercise, the Warrant
Shares issued pursuant to any such exercise shall be issued free of all
legends.  If at any time following the date hereof a Purchaser (or holder)
provides a notice of exercise with respect to a Warrant to the Company and at
such time the Registration Statement (or any subsequent registration statement
registering the sale of the Warrant Shares) is not effective or is not otherwise
available for the issuance of the Warrant Shares, the Company shall immediately
notify such Purchaser (or holder of the Warrants) in writing that such
registration statement is not then effective and thereafter shall promptly
notify such Purchaser (or holder) when the registration statement is effective
again and available for the issuance of the Warrant Shares (it being understood
and agreed that the foregoing shall not limit the ability of the Company to
issue, or any Purchaser to sell, any of the Warrant Shares in compliance with
applicable federal and state securities laws).  The Company shall use
commercially reasonable efforts to keep a registration statement (including the
Registration Statement) registering the issuance of the Warrant Shares effective
during the term of the outstanding, unexercised Warrants.
 
4.2 Furnishing of Information.  Until the earliest of the time that (i) no
Purchaser owns Securities or (ii) the Warrants have terminated or expired, 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.  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 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 use commercially reasonable efforts to take such further action as any
Purchaser (which at such time owns any Shares or Warrants) may reasonably
request, to the extent required from time to time to enable such Person to sell
such Securities without registration under the Securities Act, including without
limitation, within the requirements of the exemption provided by under 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 for purposes of the rules and regulations of any Trading Market such
that it would require shareholder approval prior to the closing of such other
transaction unless shareholder approval is obtained before the closing of such
subsequent transaction.
 
4.4 Securities Laws Disclosure; Publicity.  The Company shall, by 8:30 a.m. (New
York City time) on the Trading Day immediately following the date hereof, issue
a press release disclosing the material terms of the transactions contemplated
hereby, and issue a Current Report on Form 8-K (“Signing 8-K”) disclosing the
material terms of the transactions contemplated hereby, and including the
material Transaction Documents as exhibits thereto within the time required by
the Exchange Act.  The Company may, by 8:30 a.m. (New York City time) on the
Trading Day immediately following the Closing Date, issue a Current Report on
Form 8-K (“Closing 8-K”) disclosing the material terms of the transactions
contemplated hereby.  From and after the issuance of such press release, the
Company shall have publicly disclosed all material, non-public information
delivered to any of the Purchasers by the Company or any of its subsidiaries, or
any of their respective officers, directors, employees or agents in connection
with the transactions contemplated by the Transaction Documents.  The Company
and each Purchaser shall consult with each other in issuing any other press
releases with respect to the transactions contemplated hereby, and neither the
Company nor any Purchaser shall issue any such other press release nor otherwise
make any such public statement with respect to the transactions contemplated
hereby without the prior consent of the Company, with respect to any other press
release of any Purchaser, or without the prior consent of each Purchaser, with
respect to any other press release of the Company, which consent shall not
unreasonably be withheld or delayed, 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 (a) as required by federal securities law in
connection with the filing of final Transaction Documents (including signature
pages thereto) with the Commission and (b) to the extent such disclosure is
required by law or Trading Market regulations, in which case the Company shall,
other than with respect to the inclusion of signature pages to the Transaction
Documents that are attached as exhibits to the Signing 8-K, provide the
Purchasers with prior notice of such disclosure permitted under this clause (b).
 
4.5 RESERVED.
 
4.6 Non-Public Information.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company covenants and agrees that, neither it, nor any other Person acting on
its behalf will provide 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 with the Company regarding the confidentiality and use of such
information.  The Company understands and confirms that each Purchaser shall be
relying on the foregoing covenant in effecting transactions in securities of the
Company.
 
4.7 Use of Proceeds.  The Company shall use the net proceeds from the sale of
the Securities hereunder as disclosed in the Prospectus.
 
4.8 Indemnification of Purchasers.   Subject to the provisions of this Section
4.8, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against a Purchaser
in any capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such Purchaser, with
respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of such Purchaser’s representations,
warranties or covenants under any Transaction Document or any agreement or
understanding such Purchaser or any of its Affiliates may have with any such
stockholder or any violations by such Purchaser or any of its Affiliates of
state or federal securities laws or any conduct by such Purchaser or any of its
Affiliates which constitutes fraud, gross negligence, willful misconduct or
malfeasance).  If any action shall be brought against any Purchaser Party in
respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and the Company
shall have the right to assume the defense thereof with counsel of its own
choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Purchaser Party except to the extent that (i)
the employment thereof has been specifically authorized by the Company in
writing, (ii) the Company has failed after a reasonable period of time to assume
such defense and to employ counsel or (iii) in such action there is, in the
reasonable opinion of counsel, a material conflict on any material issue between
the position of the Company and the position of such Purchaser Party, in which
case the Company shall be responsible for the reasonable fees and expenses of no
more than one such separate counsel.  The Company will not be liable to any
Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed; or (z) to the extent, but only to the extent
that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or agreements made
by such Purchaser Party in this Agreement or in the other Transaction Documents.
The indemnification required by this Section 4.8 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or are incurred. The indemnity
agreements contained herein shall be in addition to any cause of action or
similar right of any Purchaser Party against the Company or others, and (y) any
liabilities the Company may be subject to pursuant to law.
 
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 pursuant to any exercise of the Warrants.
 
4.10 Listing of Common Stock. The Company hereby agrees to use its commercially
reasonable efforts to maintain the listing or quotation of the Common Stock on
the Trading Market on which it is currently listed, and on or before the
Closing, the Company shall file a Listing of Additional Shares notification with
Nasdaq (the “LAS”) in respect of the Shares and Warrant Shares and promptly
respond to all comments (if any) from such Trading Market in respect of such
LAS, until it receives written confirmation, via e-mail or otherwise, that the
review process for the LAS has been completed. The Company further agrees, if
the Company applies to have the Common Stock traded on any other Trading Market,
it will then include in such application all of the Shares and Warrant Shares,
and will use commercially reasonable efforts to take such other action as is
necessary to cause all of the Shares and Warrant Shares to be listed or quoted
on such other Trading Market as promptly as possible.  The Company will then use
commercially reasonable efforts to take all action reasonably necessary to
continue the listing and trading of its Common Stock on a Trading Market and
will use commercially reasonable efforts to comply in all respects with the
Company’s reporting, filing and other obligations under the bylaws or rules of
the Trading Market.
 
4.11 DWAC.  No later than one (1) business day after the execution of this
Agreement by the Purchaser and the Company, the Purchaser shall direct the
broker-dealer at which the account or accounts to be credited with the Shares
being purchased by such Purchaser are maintained, which broker/dealer shall be a
DTC participant, to set up a Deposit/Withdrawal at Custodian (“DWAC”)
instructing American Stock Transfer & Trust Company, the Company’s transfer
agent, to credit such account or accounts with the Shares by means of an
electronic book-entry delivery. Such DWAC shall indicate the settlement date for
the deposit of the Shares, which date shall be provided to the Purchaser by the
Placement Agent.
 
4.12 Subsequent Equity Sales.  The Company shall not, for a period of 90 days
after the date of the Prospectus Supplement, but in no event ending later than
March 22, 2010 (the “Lock-Up Period”), without the prior written consent of the
Purchasers, (1) offer to sell, sell, pledge, contract to sell, purchase any
option to sell, grant any option for the purchase of, lend, or otherwise dispose
of, or require the Company to file with the Commission a registration statement
under the Act to register, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or warrants or
other rights to acquire shares of Common Stock of which they are now, or may in
the future become, the beneficial owner (within the meaning of Rule 13d-3 under
the Exchange Act) (other than (A) the Shares and Warrants to be sold hereunder
and the Warrant Shares issuable upon exercise of the Warrants sold hereunder,
(B) pursuant to employee stock option plans or Rule10b5-1 plans, or upon the
conversion or exchange of outstanding convertible or exchangeable, which
includes, without limitation, (i) the issuance of securities upon the exercise
or conversion of any options or convertible or exchangeable securities issued by
the Company prior to the date hereof and (ii) the grant of options, warrants,
Common Stock or other convertible or exchangeable securities under any duly
authorized Company stock option, restricted stock plan or stock purchase plan
whether now existing or hereafter approved by the Company and its stockholders
in the future, and the issuance of Common Stock in respect thereof, (C) the
issuance of securities of the Company in connection with any equity line of
credit, (D) in the event the Company’s securities are included in a nationally
recognized stock index, the issuance in any manner whatsoever by the Company of
Common Stock to certain index funds that track such stock index, (E) (i) any
shares of Common Stock issued or sold (whether as a milestone payment or
otherwise) in connection with any joint venture, partnering or other arrangement
with any strategic investor or partner of the Company or (ii) the issuance of
securities pursuant to any contract or agreement to which the Company or any of
its subsidiaries is a party as of the date hereof, or (F) (i) any share of
Common Stock issued or sold (whether as a milestone payment or otherwise) in
connection with any acquisition made by the Company or (ii) the issuance of
securities of the Company in connection with a Strategic Transaction, or (2)
enter into any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise; except that, if (i) during the period that begins on the date
that is 15 calendar days plus three business days before the last day of the
Lock-Up Period and ends on the last day of the Lock-Up Period, the Company
issues an earnings release or material news or a material event relating to the
Company occurs, or (ii) prior to the expiration of the Lock-Up Period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the Lock-Up Period, the restrictions imposed by
this section shall continue to apply until the expiration of the date that is
15 calendar days plus three business days after the date on which the issuance
of the earnings release or the material news or material event occurs, provided,
however, this provision will not apply if (x) within three days of the
termination of the Lock-Up Period, the Company delivers to the Purchasers a
certificate, signed by the Chief Financial Officer or Chief Executive Officer of
the Company, certifying on behalf of the Company that the Company’s shares of
Common Stock are, as of the date of delivery of such certificate, “actively
trading securities,” as defined in Regulation M under the Exchange Act, or (y)
the Purchasers shall waive in writing such extension.  For purposes of this
paragraph, a “Strategic Transaction” means a transaction or relationship in
which the Company issues shares of Common Stock, Common Stock Equivalents or
convertible or exchangeable securities to a person or entity that the Company
determines in good faith is, itself or through its subsidiaries, in a business
synergistic with, or strategic to, the business of the Company or any subsidiary
thereof. Without limiting the foregoing, a “Strategic Transaction” shall include
(a) any acquisition or license by the Company or any of its subsidiaries of any
business, assets or intellectual property of any person or entity, and (b) any
joint venture, partnership, collaboration or other arrangement with respect to
any product candidate or potential product candidate of the Company or any of
its subsidiaries.
 
4.13 Equal Treatment of Purchasers.  No consideration (including any
modification of any Transaction Document) shall be offered or paid to any
Purchaser to amend or consent to a waiver or modification of any provision of
any of the Transaction Documents unless the same consideration is also offered
to all of the Purchasers which then own any Securities.  For clarification
purposes, this provision constitutes a separate right granted to each Purchaser
by the Company and negotiated separately by each Purchaser, and is intended for
the Company to treat the Purchasers as a class and shall not in any way be
construed as the Purchasers acting in concert or as a group with respect to the
purchase, disposition or voting of Securities or otherwise.
 
4.14 Certain Transactions and Confidentiality. Each Purchaser, severally and not
jointly with the other Purchasers, covenants that neither it nor any Affiliate
acting on its behalf or pursuant to any understanding with it will execute any
purchases or sales, including Short Sales of any of the Company’s securities
during the period commencing with the execution of this Agreement and ending at
such time that the transactions contemplated by this Agreement are first
publicly announced pursuant to the initial press release as described in Section
4.4.  Each Purchaser, severally and not jointly with the other Purchasers,
covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company pursuant to the initial press
release as described in Section 4.4, such Purchaser will maintain the
confidentiality of the existence and terms of this transaction and the
information included in the Disclosure Schedules.  Notwithstanding the foregoing
and notwithstanding anything contained in this Agreement to the contrary, the
Company expressly acknowledges and agrees that (i) no Purchaser makes any
representation, warranty or covenant hereby that it will not engage in effecting
transactions in any securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.4, (ii) no
Purchaser shall be restricted or prohibited from effecting any transactions in
any securities of the Company in accordance with applicable securities laws from
and after the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in
Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality to the
Company or its Subsidiaries after the issuance of the initial press release as
described in Section 4.4.  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the
covenant set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.
 
4.15  Delivery of Warrants After Closing.  The Company shall deliver, or cause
to be delivered, the respective Warrant certificates purchased by each Purchaser
to such Purchaser within 3 Trading Days of the Closing Date.
 
4.16 Capital Changes.  Until the one year anniversary of the Closing Date, the
Company shall not undertake a reverse or forward stock split or reclassification
of the Common Stock without the prior written consent of the Purchasers holding
a majority in interest of the Shares.
 
ARTICLE V.
 
MISCELLANEOUS
 
5.1 Termination.  This Agreement may be terminated by any Purchaser, as to such
Purchaser’s obligations hereunder only and without any effect whatsoever on the
obligations between the Company and the other Purchasers, by written notice to
the other parties, if the Closing has not been consummated on or before December
22, 2009; provided, however, that no such termination will affect the right of
any party to sue for any breach by the other party (or parties).
 
5.2 Fees and Expenses.  Except as expressly set forth in the Transaction
Documents to the contrary, 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 Transfer
Agent fees, stamp taxes and other taxes and duties (other than any income taxes
or duties) levied in connection with the delivery of any Securities to the
Purchasers.
 
5.3 Entire Agreement.  The Transaction Documents, together with the exhibits and
schedules thereto, the Prospectus and the Prospectus Supplement, 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.
 
5.4 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 set
forth on the signature pages attached hereto prior to 5:30 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 set forth on the signature pages attached hereto on a day that is not a
Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c)
the second (2nd) 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 signature pages attached
hereto.
 
5.5 Amendments; Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers holding at least 67% in
interest of the Shares then outstanding or, in the case of a waiver, by the
party against whom enforcement of any such waived provision 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 any party to exercise
any right hereunder in any manner impair the exercise of any such right.
 
5.6 Headings.  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.
 
5.7 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 each Purchaser which at such time owns any
Shares or Warrants (other than by merger or other Fundamental Transaction (as
defined in the Warrants) in which the Company is not the surviving entity).  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 that such
transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of the Transaction Documents that apply to the
“Purchasers.”
 
5.8 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 (i) as otherwise set forth in Section 4.8 and (ii) that
Ladenburg, the placement agent for the transaction, shall be an express
third-party beneficiary of the representations and warranties of the Company and
Purchasers hereunder.
 
5.9 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 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 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 or is an inconvenient venue for such proceeding.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under 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 other manner permitted by law.  If
either party shall commence an action or proceeding to enforce any provisions of
the Transaction Documents, then, in addition to the obligations of the Company
under Section 4.8, the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorneys’ fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.
 
5.10 Survival.  Notwithstanding any investigation at any time made by or on
behalf of any party to this Agreement, or of any information any party to this
Agreement may have, all representations and warranties made in this Agreement
(and the indemnification obligations of the Company with respect to its
representations and warranties contained in this Agreement) shall survive the
Closing and continue in effect for a period of two (2) years from the date
hereof; provided, however, that if a bona fide claim for indemnification is
asserted before the expiration of the survival period of a representation or
warranty in accordance with Section 4.8, the representation or warranty which is
the subject of the claim shall continue in effect with respect to such claim
until the claim is settled, adjudicated or otherwise resolved.
 
5.11 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 or by e-mail delivery of a “.pdf” format data file, 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 or “.pdf” signature page were an original thereof.
 
5.12 Severability.  If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
 
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 (in the case of mutilation), 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.  The applicant
for a new certificate or instrument under such circumstances shall also pay any
reasonable third-party costs (including customary indemnity) 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 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
contained in the Transaction Documents and hereby agree to waive and not to
assert 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 or non-performance of the obligations of any other
Purchaser under any Transaction Document.  Nothing contained herein or in any
other 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 Documents.  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, each Purchaser and
its respective counsel have chosen to communicate with the Company through
WS.  WS does not represent any of the Purchasers and only represents Ladenburg.
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 any of the Purchasers.
 
5.17 Saturdays, Sundays, Holidays,
etc.                                                                If the last
or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then such action may be
taken or such right may be exercised on the next succeeding Business Day.
 
5.18 Construction. The parties agree that each of them and/or their respective
counsel has reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments hereto. In
addition, each and every reference to share prices and shares of Common Stock in
any Transaction Document shall be subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.
 
5.19 WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.
 

 
(Signature Pages Follow)
 

 

 
 

--------------------------------------------------------------------------------

 

 
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.
 

RAPTOR PHARMACEUTICAL CORP.
 
 
Address for Notice:
9 Commercial Blvd., Suite 200
Novato, CA  94949
Attention:  Christopher M. Starr, Ph.D., CEO
By: /s/ Christopher M. Starr, Ph.D.
     Name: Christopher M. Starr, Ph.D.
     Title: Chief Executive Officer and Director
 
With a copy to (which shall not constitute notice):
Fax: 415-382-1368
Paul, Hastings, Janofsky & Walker, LLP
Attention:  Siobhan McBreen Burke, Esq.
515 South Flower Street, 25th Floor
Los Angeles, CA  90071
 
 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 
 

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[PURCHASER SIGNATURE PAGES TO RPTP SECURITIES PURCHASE AGREEMENT]

 
Ayer Capital Management, LP
(Ayer Capital Partners Master Fund, L.P.)
By:
/s/ Jay Venkatesan
Authorized Signatory:
Jay Venkatesan
Title:
Portfolio Manager
Number of Units:
654,658
 
Integrated Core Strategies (US) LLC
By:
/s/ Larry Statsky
Authorized Signatory:
Larry Statsky
Title:
Chief Administrative Officer
Number of Units:
375,000
 
Capital Ventures International
By:
/s/ Martin Kobinger
Authorized Signatory:
Martin Kobinger
Title:
Investment Manager
Number of Units:
250,000
 
CNH Diversified Opportunities Master Account, L.P.
By:
/s/ Bradley D. Asness
Authorized Signatory:
Bradley D. Asness
Title:
General Counsel & Authorized Signatory
Number of Units:
200,000
 
 
Cummings Bay Capital
By:
/s/ Michael Gregory
Authorized Signatory:
Michael Gregory
Title:
Authorized Person
Number of Units:
165,000
 
Straus Partners, L.P.
By:
/s/ Ravinder Holder
Authorized Signatory:
Ravender Holder
Title:
General Partner
Number of Units:
153,060
 
Opus Point Capital Preservation Fund, LP
By:
/s/ Michael S. Weiss
Authorized Signatory:
Michael S. Weiss
Title:
Fund Manager
Number of Units:
150,000
 
Cranshire Capital LP
By:
/s/ Keith A. Goodman
Authorized Signatory:
Keith A. Goodman
Title:
COO – Downsview Capital, Inc., the General Partner
Number of Units:
125,000
 
Platinum PPLO
By:
s/s Michael Goldberg
Authorized Signatory:
Michael Goldberg
Title:
Portfolio Manager
Number of Units:
125,000
 
Cynergy Healthcare Investors LLC 2009
By:
/s/ Patrick Adams
Authorized Signatory:
Patrick Adams
Title:
Managing Member/President
Number of Units:
125,000
 
Perceptive Life Sciences Master Fund Ltd
By:
/s/ Joseph Edelman
Authorized Signatory:
Joseph Edelman
Title:
C.E.O/Managing Member
Number of Units:
125,000
 
RHP Master Fund, Ltd.
By:
/s/ Keith Marlowe
Authorized Signatory:
Keith Marlowe
Title:
Director
Number of Units:
125,000
 
Royal Capital Management Corp.
By:
/s/ Margaret Haddock
Authorized Signatory:
Margaret Haddock
Title:
Manager, Financial Control
Number of Units:
125,000
 
 
 
 
 
Midsummer Ventures, LP
By:
/s/ Michel Amsalem
Authorized Signatory:
Michel Amsalem
Title:
Authorized Signatory
Number of Units:
100,000
 
Straus Healthcare Partners, L.P.
By:
/s/ Ravinder Holder
Authorized Signatory:
Ravinder Holder
Title:
General Partner
Number of Units:
96,940
 
RCG PB Ltd.
By:
/s/ Jeff Solomon
Authorized Signatory:
Jeff Solomon
Title:
Authorized Signatory
Number of Units:
93,750
 
Geneve Corp
By:
/s/Michael Gregory
Authorized Signatory:
Michael Gregory
Title:
Authorized Person
Number of Units:
85,000
 
Rosalind Capital Partners L.P. (ROSA)
By:
/s/ Steven Salamon
Authorized Signatory:
Steven Salamon
Title:
President, Rosalind Advisors, Inc.
Number of Units:
84,898

 
 

--------------------------------------------------------------------------------

 

 
DAFNA LifeScience Select Ltd
By:
/s/ Nathan Fischel, MD, CFA
Authorized Signatory:
Nathan Fischel, MD, CFA
Title:
Managing Member
Number of Units:
83,700
 
Ayer Capital Management, LP
(Epworth – Ayer Capital)
By:
/s/ Jay Venkatesan
Authorized Signatory:
Jay Venkatesan
Title:
Portfolio Manager
Number of Units:
80,776
 
Hammerman Capital Partners, LP
By:
/s/ Jason Hammerman
Authorized Signatory:
Jason Hammerman
Title:
Managing Member
Number of Units:
50,000
 
Opus Point Healthcare Innovations Fund, LP
By:
/s/ Michael S. Weiss
Authorized Signatory:
Michael S. Weiss
Title:
Fund Manager
Number of Units:
50,000

 
 

--------------------------------------------------------------------------------

 

 
BBS Capital Fund, LP
By:
/s/ Berke Bakay
Authorized Signatory:
Berke Bakay
Title:
Principal
Number of Units:
50,000
 
BioHedge Holdings Limited
By:
/s/ Steven Salamon
Authorized Signatory:
Steven Salamon
Title:
President, Rosalind Advisors, Inc.
Number of Units:
40,102
 
Octagon Capital Partners
By:
/s/ Steven Hart
Authorized Signatory:
Steven Hart
Title:
General Partner
Number of Units:
37,500
 
Ramius Enterprise Master Fund Ltd.
By:
/s/ Jeff Solomon
Authorized Signatory:
Jeff Solomon
Title:
Authorized Signatory
Number of Units:
31,250
 
 
 
 
 
Opus Pont Healthcare (Low Net) Fund, LP
By:
/s/ Michael S. Weiss
Authorized Signatory:
Michael S. Weiss
Title:
Fund Manager
Number of Units:
25,000
 
Opus Point Healthcare Value Fund, LP
By:
/s/ Michael S. Weiss
Authorized Signatory:
Michael S. Weiss
Title:
Fund Manager
Number of Units:
25,000
 
Iroquois Master Fund Ltd.
By:
/s/ Joshua Silverman
Authorized Signatory:
Joshua Silverman
Title:
Authorized Signatory
Number of Units:
25,000

 
DAFNA LifeScience Ltd
By:
/s/ Nathan Fischel, MD, CFA
Authorized Signatory:
Nathan Fischel, MD, CFA
Title:
Managing Member
Number of Units:
23,300
 
 
 
 
 
 
DAFNA LifeScience Market Neutral Ltd
By:
/s/ Nathan Fischel, MD, CFA
Authorized Signatory:
Nathan Fischel, MD, CFA
Title:
Managing Member
Number of Units:
18,000

 
 

--------------------------------------------------------------------------------

 

 
Ayer Capital Management, LP
(Ayer Capital Partners Kestrel Fund, LP)
By:
/s/ Jay Venkatesan
Authorized Signatory:
Jay Venkatesan
Title:
Portfolio Manager
Number of Units:
14,566
 
Lion Gate Capital
By:
/s/ Kenneth Rickel
Authorized Signatory:
Kenneth Rickel
Title:
President
Number of Units:
35,058

Information for Delivery of uncertificated Securities by DWAC :  [PROVIDE THIS
UNDER SEPARATE COVER]

EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

[SIGNATURE PAGES CONTINUE]

 
 

--------------------------------------------------------------------------------

 

SCHEDULE I
 
ISSUER FREE WRITING PROSPECTUS
 
None.
 

 
 

--------------------------------------------------------------------------------

 

SCHEDULE 3.1(h)
 
SUBSIDIARIES
 

 
Name of SubsidiaryJurisdiction of Organization

Raptor Pharmaceuticals
Corp.                                                                           Delaware

TPTX,
Inc.                                                                           Delaware

Name of Indirect SubsidiaryJurisdiction of Organization

Raptor Therapeutics
Inc.                                                                           Delaware

Raptor Discoveries
Inc.                                                                           Delaware

 
 

--------------------------------------------------------------------------------

 

Exhibit A

Form of Series [A/B] Warrant

 
 

--------------------------------------------------------------------------------

 

 
[SERIES A/B] WARRANT
 
Warrant No. ___
Issue Date: December __, 2009

 
(“Issue Date”)

 
Raptor Pharmaceutical Corp., a Delaware corporation (the “Company”), hereby
certifies that, for value received, _______________or its permitted registered
assigns (the “Holder”), is entitled to purchase from the Company up to a total
of ___________ shares of common stock, $0.001 par value (the “Common Stock”), of
the Company (each such share, a “Warrant Share” and all such shares, the
“Warrant Shares”) at an exercise price equal to $2.45 per share (as adjusted
from time to time as provided herein, the “Exercise Price”), at any time and
from time to time on or after June __, 2010 [the date occurring 180 days from
the Issue Date] (the “Trigger Date”) and through and including the _____ 1
anniversary of the Issue Date.
 
This Warrant is being issued pursuant to that certain securities purchase
agreement, dated December 17, 2009, by and between the Company and the
purchasers identified therein (the “Purchase Agreement”).  All such warrants are
referred to herein, collectively, as the “Warrants.” The original issuance of
the Warrants and the Warrant Shares by the Company pursuant to the Subscription
Agreement has been registered pursuant to a Registration Statement on Form S-3
(File No.  333-162374) (together with any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act, the “Registration
Statement”).
 
1. Definitions.  In addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein have the meanings given
to such terms in the Purchase Agreement.

2. List of Warrant Holders.  The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder (which shall include the initial
Holder or, as the case may be, any registered assignee to which this Warrant is
permissibly assigned hereunder from time to time).  The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual written notice to the contrary.

3. List of Transfers; Restrictions on Transfer.

(a) This Warrant and the Warrant Shares are subject to the restrictions on
transfer set forth in this Section 3.

(b) Subject to compliance with any applicable securities laws and the terms and
conditions set forth in this Warrant, this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of this Warrant with a
properly executed Notice of Assignment (in the form attached hereto) at the
principal office of the Company (or, if another office or agency has been
designated by the Company for such purpose, then at such other office or
agency).  The Company shall register any such transfer of all or any portion of
this Warrant in the Warrant Register, upon surrender of this Warrant, with the
Form of Assignment attached hereto duly completed and signed, to the Company at
its address specified herein.  Upon any such registration or transfer, a new
Warrant to purchase Common Stock, in substantially the form of this Warrant (any
such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so
transferred shall be issued to the transferee and a New Warrant evidencing the
remaining portion of this Warrant not so transferred, if any, shall be issued to
the transferring Holder.  The acceptance of the New Warrant by the transferee
thereof shall be deemed the acceptance by such transferee of all of the rights
and obligations in respect of the New Warrant that the Holder has in respect of
this Warrant.

4.  
Exercise and Duration of Warrants.

(a) All or any part of this Warrant shall be exercisable by the registered
Holder at any time and from time to time on or after the Trigger Date and
through and including the Expiration Date, subject to the conditions and
restrictions contained in this Warrant.  At 5:00 p.m., New York City time, on
the Expiration Date, the portion of this Warrant not exercised prior thereto in
accordance herewith shall be and become void and of no value and this Warrant
shall be terminated and no longer outstanding.

(b) The Holder may exercise this Warrant in accordance herewith by delivering to
the Company (i) an Exercise Notice, in the form attached hereto (the “Exercise
Notice”), completed and duly signed, and (ii) payment of the aggregate Exercise
Price, or, if available, pursuant to the cashless exercise procedure specified
in Section 10(b) below  and all taxes required to be paid by the Holder, if any,
pursuant to Section 6, which shall be paid by wire transfer of immediately
available funds for the number of Warrant Shares as to which this Warrant is
being exercised.  The date such items are delivered to the Company (as
determined in accordance with the notice provisions hereof) is an “Exercise
Date.” On or before the first (1st) Business Day following the date on which the
Company has received the Exercise Notice, the Company shall transmit to a
facsimile number set forth in the Exercise Notice a confirmation of receipt of
the Exercise Notice to the Holder and also will notify the Company’s transfer
agent.    Notwithstanding anything herein to the contrary, the Holder shall not
be required to physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the Warrant has
been exercised in full, in which case, the Holder shall surrender this Warrant
to the Company for cancellation within three (3) Trading Days of the date the
final Exercise Notice is delivered to the Company.  Partial exercises of this
Warrant resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the outstanding
number of Warrant Shares purchasable hereunder in an amount equal to the
applicable number of Warrant Shares purchased.  The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and the date of
such purchases.  The Company shall deliver any objection to any Exercise Notice
within 1 Business Day of receipt of such notice.  In the event of any dispute or
discrepancy, the records of the Company shall be controlling and determinative
in the absence of manifest error. The Holder and any assignee, by acceptance of
this Warrant, acknowledge and agree that, by reason of the provisions of this
paragraph, following the purchase of a portion of the Warrant Shares hereunder,
the number of Warrant Shares available for purchase hereunder at any given time
may be less than the amount stated on the face hereof.

5.  
Delivery of Warrant Shares.

(a) Upon exercise of this Warrant in accordance herewith, the Company shall
promptly (but in no event later than three Trading Days after the Exercise Date)
issue or cause to be issued and cause to be delivered to or upon the written
order of the Holder and in such name or names as the Holder may designate, a
certificate for the Warrant Shares issuable upon such exercise, free of
restrictive legends unless the Registration Statement is not then effective or
the Warrant Shares are not freely transferable without volume restrictions
pursuant to Rule 144 under the Securities Act.  The Holder, or any Person
permissibly so designated by the Holder to receive Warrant Shares, shall be
deemed to have become the holder of record of such Warrant Shares as of the
Exercise Date with respect thereto.  If the Warrant Shares can be issued without
restrictive legends, the Company shall, upon the written request of the Holder,
use its commercially reasonable efforts to deliver, or cause to be delivered,
Warrant Shares hereunder electronically through the Depository Trust and
Clearing Corporation (“DTC”) or another established clearing corporation
performing similar functions, if available.

(b) If by the close of the third Trading Day after the date on which delivery of
certificates representing the Warrant Shares issuable in connection with the
exercise of this Warrant is required hereunder, the Company fails to deliver to
the Holder a certificate representing the required number of Warrant Shares in
the manner required pursuant to Section 5(a) hereof, and if after such third
Trading Day and prior to the receipt of such Warrant Shares, the Holder is
required by its broker to purchase (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Shares which the Holder anticipated receiving upon such exercise (a
“Buy-In”), then the Company shall, (1) pay in cash to the Holder the amount by
which (x) the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (A) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue times (B) the
price at which the sell order giving rise to such purchase obligations was
executed, and (2) at the option of the Holder, either reinstate the portion of
the Warrant and equivalent number of Warrant Shares for which such exercise was
not honored or deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its exercise and
delivery obligations hereunder.  For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted exercise of shares of Common Stock with an aggregate sale price
giving rise to such purchase obligation of $10,000, under clause (1) of the
immediately preceding sentence the Company shall be required to pay the Holder
$1,000.  The Holder shall provide the Company written notice indicating the
amounts payable to the Holder in respect of the Buy-In and, upon request of the
Company, evidence of the amount of such loss.

(c) To the extent permitted by law, the Company’s obligations to issue and
deliver Warrant Shares in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the
same.  Nothing herein shall limit a Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with respect to the
Company’s failure to timely deliver certificates representing shares of Common
Stock upon exercise of the Warrant as required pursuant to the terms hereof.

6. Charges, Taxes and Expenses.  Issuance and delivery of certificates for
shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, transfer agent fee or other
incidental expense in respect of the issuance of such certificates, all of which
taxes and expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder and the Company may require,
as a condition to the transfer thereof, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.  The Holder shall be
responsible for all other tax liability or expense that may arise as a result of
holding or transferring this Warrant or receiving Warrant Shares upon exercise
hereof.

7. Replacement of Warrant.  If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity (which shall not include a surety bond), if
requested.  Applicants for a New Warrant under such circumstances shall also
comply with such other reasonable regulations and procedures and pay such other
reasonable third-party costs as the Company may prescribe.  If a New Warrant is
requested as a result of a mutilation of this Warrant, then the Holder shall
deliver such mutilated Warrant to the Company as a condition precedent to the
Company’s obligation to issue the New Warrant.

8. Reservation of Warrant Shares; Listing.  The Company covenants that it will
at all times reserve and keep available out of the aggregate of its authorized
but unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares that are then issuable and deliverable
upon the exercise of this entire Warrant, free from preemptive rights or any
other contingent purchase rights of persons other than the Holder (taking into
account the adjustments and restrictions of Section 9 hereof).  The Company
covenants that all Warrant Shares so issuable and deliverable shall, upon
issuance in accordance with the terms hereof (including the payment of the
applicable Exercise Price (in cash or through a “cashless exercise”)), be duly
and validly authorized, issued and fully paid and nonassessable.  The Company
will from time to time take all commercially reasonable actions which may be
necessary so that the Warrant Shares, upon their issuance upon the exercise of
Warrants, will be listed on the principal securities exchanges and markets
within the United States of America, if any, on which other shares of Common
Stock are then listed.

9. Certain Adjustments.  The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 9.

(a) Stock Dividends and Splits.  If the Company, at any time while this Warrant
is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes
a distribution on any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, or (iii) combines outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such
event.  Any adjustment made pursuant to clause (i) of this paragraph shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.

(b) Subsequent Rights Offerings.  If the Company, at any time while the Warrant
is outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to the Holders) entitling them to subscribe for or purchase
shares of Common Stock at a price per share less than the VWAP on the record
date mentioned below, then, the Exercise Price shall be multiplied by a
fraction, of which the denominator shall be the number of shares of the Common
Stock outstanding on the date of issuance of such rights, options or warrants
plus the number of additional shares of Common Stock offered for subscription or
purchase, and of which the numerator shall be the number of shares of the Common
Stock outstanding on the date of issuance of such rights, options or warrants
plus the number of shares which the aggregate offering price of the total number
of shares so offered (assuming receipt by the Company in full of all
consideration payable upon exercise of such rights, options or warrants) would
purchase at such VWAP.  Such adjustment shall be made whenever such rights,
options or warrants are issued, and shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
rights, options or warrants.  Notwithstanding anything herein to the contrary,
the foregoing provisions in this Section 9(b) shall not apply to, or be
triggered by, any rights issued by the Company (either separately or that attach
to any securities of the Company) in connection with any stockholder rights
agreement, poison pill or other similar anti-takeover provision under the
Company’s certificate of incorporation, bylaws or other documents.

(c) Pro Rata Distributions.  If the Company, at any time while this Warrant is
outstanding, shall distribute to all holders of Common Stock (and not to the
Holders) evidences of its indebtedness or assets (including cash and cash
dividends) or rights or warrants to subscribe for or purchase any security) for
no consideration, then in each such case the Exercise Price shall be adjusted by
multiplying the Exercise Price in effect immediately prior to the record date
fixed for determination of stockholders entitled to receive such distribution by
a fraction of which the denominator shall be the VWAP determined as of the
record date mentioned above, and of which the numerator shall be such VWAP on
such record date less the then per share fair market value at such record date
of the portion of such assets or evidence of indebtedness so distributed
applicable to one outstanding share of the Common Stock as determined by the
Board of Directors in good faith.  In either case the adjustments shall be
described in a statement provided to the Holder of the portion of assets or
evidences of indebtedness so distributed or such subscription rights applicable
to one share of Common Stock.  Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record
date mentioned above.  Notwithstanding anything herein to the contrary, the
foregoing provisions in this Section 9(c) shall not apply to, or be triggered
by, any rights issued by the Company (either separately or that attach to any
securities of the Company) in connection with any stockholder rights agreement,
poison pill or other similar anti-takeover provision under the Company’s
certificate of incorporation, bylaws or other documents

(d) Fundamental Transaction. If, at any time while this Warrant is outstanding,
(i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another Person,
(ii) the Company, directly or indirectly, effects any sale, lease, license,
assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct
or indirect, purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders of 50% or more
of the outstanding Common Stock, (iv) the Company, directly or indirectly, in
one or more related transactions effects any reclassification, reorganization or
recapitalization of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property, (v) the Company, directly or indirectly, in one or
more related transactions consummates a stock or share purchase agreement or
other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby
such other Person acquires more than 50% of the outstanding shares of Common
Stock (not including any shares of Common Stock held by the other Person or
other Persons making or party to, or associated or affiliated with the other
Persons making or party to, such stock or share purchase agreement or other
business combination) (each a “Fundamental Transaction”), then, upon any
subsequent exercise of this Warrant, the Holder shall have the right to receive,
for each Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental Transaction, at the
option of the Holder (without regard to any limitation in Section 11(a) on the
exercise of this Warrant), the number of shares of common stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a
result of such Fundamental Transaction by a holder of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
Fundamental Transaction (without regard to any limitation in Section 11(a) on
the exercise of this Warrant).  For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration.  If holders of Common
Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as
to the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction.  Notwithstanding anything to the
contrary, in the event of a Fundamental Transaction that is (1) an all cash
transaction, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the
Exchange Act, or (3) a Fundamental Transaction involving a person or entity not
traded on a national securities exchange, including, but not limited to, the
Nasdaq Global Select Market, the Nasdaq Global Market, or the Nasdaq Capital
Market, the Company or any Successor Entity (as defined below) shall, at the
Holder’s option, exercisable at any time concurrently with, or within 30 days
after, the consummation of the Fundamental Transaction, purchase this Warrant
from the Holder by paying to the Holder an amount of cash equal to the Black
Scholes Value of the remaining unexercised portion of this Warrant on the date
of the consummation of such Fundamental Transaction.  “Black Scholes Value”
means the value of this Warrant based on the Black and Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable Fundamental
Transaction for pricing purposes and reflecting (A) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable Fundamental Transaction
and the Termination Date, (B) an expected volatility equal to the greater of
100% and the 100 day volatility obtained from the HVT function on Bloomberg as
of the Trading Day immediately following the public announcement of the
applicable Fundamental Transaction, (C) the underlying price per share used in
such calculation shall be the sum of the price per share being offered in cash,
if any, plus the value of any non-cash consideration, if any, being offered in
such Fundamental Transaction and (D) a remaining option time equal to the time
between the date of the public announcement of the applicable Fundamental
Transaction and the Termination Date.  The Company shall cause any successor
entity in a Fundamental Transaction in which the Company is not the survivor
(the “Successor Entity”) to assume in writing all of the obligations of the
Company under this Warrant and the other Transaction Documents in accordance
with the provisions of this Section 9(d).  Upon the occurrence of any such
Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant and the other Transaction Documents
referring to the “Company” shall refer instead to the Successor Entity), and may
exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant and the other Transaction
Documents with the same effect as if such Successor Entity had been named as the
Company herein.

(e) Number of Warrant Shares.  Simultaneously with any adjustment to the
Exercise Price pursuant to paragraph (a) of this Section 9, the number of
Warrant Shares that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the adjusted number of Warrant
Shares shall be the same as the aggregate Exercise Price in effect immediately
prior to such adjustment.

(f) Calculations.  All calculations under this Section 9 shall be made to the
nearest cent or the nearest 1/100th of a share, as applicable.  The number of
shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.

(g) De Minimis Adjustments.  No adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or decrease of at
least $0.01 in such price; provided, however, that any adjustment which by
reason of this Section 9(f) is not required to be made shall be carried forward
and taken into account in any subsequent adjustments under this Section 9.  All
calculations under this Section 9 shall be made by the Company in good faith and
shall be made to the nearest cent or to the nearest one hundredth of a share, as
applicable.  No adjustment need be made for a change in the par value or no par
value of the Company’s Common Stock.

(h) Notice of Adjustments.  Upon the occurrence of each adjustment pursuant to
this Section 9, the Company at its expense will promptly compute such adjustment
in accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment, including a statement of the adjusted Exercise Price and
adjusted number or type of Warrant Shares or other securities issuable upon
exercise of this Warrant (as applicable), describing the transactions giving
rise to such adjustments and showing the facts upon which such adjustment is
based.  Upon written request, the Company will promptly deliver a copy of each
such certificate to the Holder and to American Stock Transfer and Trust Company,
LLC, the transfer agent of the Company.

(i) Notice of Corporate Events.  If, while this Warrant is outstanding, the
Company (i) declares a dividend or any other distribution of cash, securities or
other property in respect of its Common Stock, including without limitation any
granting of rights or warrants to subscribe for or purchase any capital stock of
the Company, (ii) solicits stockholder approval for any Fundamental Transaction
or (iii) authorizes the voluntary dissolution, liquidation or winding up of the
affairs of the Company, then, the Company shall deliver to the Holder at least
10 Trading Days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend or distribution, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend or distribution are to be determined or (y) the date on which such
Fundamental Transaction is expected to become effective or close; provided,
however, that the failure to deliver such notice or any defect therein or in the
mailing thereof shall not affect the validity of the corporate action required
to be specified in such notice.   To the extent that any notice provided
hereunder constitutes, or contains, material, non-public information regarding
the Company or any of the Subsidiaries, the Company shall simultaneously file
such notice with the Commission pursuant to a Current Report on Form 8-K.  The
Holder shall remain entitled to exercise this Warrant during the period
commencing on the date of such notice to the effective date of the event
triggering such notice except as may otherwise be expressly set forth herein.

10.  
Payment of Exercise Price.

(a) Cash Exercise Price.  The Holder shall pay the Exercise Price by wire
transfer of immediately available funds to the Company.
 
 
(b) Cashless Exercise.  If at the time of exercise hereof there is no effective
registration statement registering, or the prospectus contained therein is not
available for, the issuance of the Warrant Shares to the Holder and at such time
the number as described in clause (A) below is greater than the number as
described in clause (B) below, then this Warrant may also be exercised, in whole
or in part, at such time by means of a “cashless exercise” in which the Holder
shall be entitled to receive a certificate for the number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 
 (A) = the VWAP on the Trading Day immediately preceding the date on which
Holder elects to exercise this Warrant by means of a “cashless exercise,” as set
forth in the applicable Exercise Notice;

 
(B) = the Exercise Price of this Warrant, as adjusted hereunder; and

 
(X) = the number of Warrant Shares that would be issuable upon exercise of this
Warrant in accordance with the terms of this Warrant if such exercise were by
means of a cash exercise rather than a cashless exercise.

“VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time), (b)  if the OTC Bulletin Board is not a Trading Market, the volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then
listed or quoted for trading on the OTC Bulletin Board and if prices for the
Common Stock are then reported in the “Pink Sheets” published by Pink OTC
Markets, Inc. (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) in all other cases, the fair market value of a share of Common
Stock as determined by the Board of Directors of the Company in good faith.
 
11. Limitations on Exercise.  Notwithstanding anything to the contrary contained
herein, the number of Warrant Shares that may be acquired by the Holder upon any
exercise of this Warrant (or otherwise in respect hereof) shall be limited to
the extent necessary to ensure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by
the Holder and its affiliates and any other Persons whose beneficial ownership
of Common Stock would be aggregated with the Holder’s for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
does not exceed 4.99% of the total number of issued and outstanding shares of
Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise).  For such purposes, beneficial ownership shall be
determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder.  Each delivery of an Exercise Notice by
the Holder will constitute a representation by the Holder that it has evaluated
the limitation set forth in this Section and determined that issuance of the
full number of Warrant Shares requested in such Exercise Notice is permitted
under this Section.  The Company’s obligation to issue shares of Common Stock in
excess of the limitation referred to in this Section shall be suspended (and,
except as provided below, shall not terminate or expire notwithstanding any
contrary provisions hereof) until such time, if any, as such shares of Common
Stock may be issued in compliance with such limitation and in no event later
than 5:00 p.m., New York City time, on the Expiration Date.  This provision
shall not restrict the number of shares of Common Stock which a Holder may
receive or beneficially own in order to determine the amount of securities or
other consideration that such Holder may receive in the event of a Fundamental
Transaction as contemplated in Section 9 of this Warrant.  By written notice to
the Company, which will not be effective until the 61st day after such notice is
delivered to the Company, the Holder may waive the provisions of this Section
but only to change the beneficial ownership limitation to 9.9% of the number of
shares of the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock upon exercise of this Warrant, and the
provisions of this Section 11 shall continue to apply.  Upon such a change by a
Holder of the beneficial ownership limitation from such 4.99% limitation to such
9.9% limitation, the beneficial ownership limitation may not be further waived
by such Holder.

12. No Fractional Shares.  No fractional Warrant Shares will be issued in
connection with any exercise of this Warrant.  In lieu of any fractional shares
that would otherwise be issuable, the Company shall pay cash equal to the
product of such fraction multiplied by the closing price of one Warrant Share as
reported by the applicable Trading Market on the Exercise Date.

13. Notices.  Any and all notices or other communications or deliveries
hereunder (including, without limitation, any Exercise Notice) shall be in
writing and shall be deemed given and effective on the earliest of (i) the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile number specified in this Section 13 at or prior to 5:00 p.m.  (New
York City time) on a Trading Day, (ii) 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 13 on a day that is not a Trading Day
or later than 5:00 p.m.  (New York City time) on any Trading Day, (iii) the
Trading Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given.  The addresses for such notices or
communications shall be: (a) if to the Company, to 9 Commercial Blvd., Suite
200, Novato, CA 94949, Attention: Chief Financial Officer, Facsimile No.: (415)
382-1368 (or such other address as the Company shall indicate in writing in
accordance with this Section 13) or (b) if to the Holder, to the address or
facsimile number appearing on the Warrant Register (or such other address as the
Company shall indicate in writing in accordance with this Section 13).

14. Warrant Agent.  The Company shall serve as warrant agent under this
Warrant.  Upon 30 days’ notice to the Holder, the Company may appoint a new
warrant agent.  Any corporation into which the Company or any new warrant agent
may be merged or any corporation resulting from any consolidation to which the
Company or any new warrant agent shall be a party or any corporation to which
the Company or any new warrant agent transfers substantially all of its
corporate trust or stockholders services business shall be a successor warrant
agent under this Warrant without any further act.  Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last
address as shown on the Warrant Register.

15. Miscellaneous.

(a) This Warrant shall be binding on and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.  Subject to the
preceding sentence, nothing in this Warrant shall be construed to give to any
Person other than the Company and the Holder any legal or equitable right,
remedy or cause of action under this Warrant.  This Warrant may be modified or
amended or the provisions hereof waived with the written consent of the Company
and Holders holding Warrants at least equal to a majority of the Warrant Shares
issuable upon exercise of all then outstanding Warrants.

(b) All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance with the
provisions of the Purchase Agreement.

(c) The headings herein are for convenience only, do not constitute a part of
this Warrant and shall not be deemed to limit or affect any of the provisions
hereof.

(d) In case any one or more of the provisions of this Warrant shall be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Warrant shall not in any way be affected
or impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

(e) Prior to exercise of this Warrant, the Holder hereof shall not, by reason of
by being a Holder, be entitled to any rights of a stockholder with respect to
the Warrant Shares.

(f) This Warrant may be executed by facsimile signature.

(g) The Holder acknowledges that the Warrant Shares acquired upon the exercise
of this Warrant, if not registered or exercised via a cashless exercise, will
have restrictions upon resale imposed by state and federal securities laws.

--------------------------------------------------------------------------------

 
 
1 18-month anniversary of Issue Date  for the B warrants and 5 year anniversary
of the Issue Date for the A Warrants.

 
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its authorized officer as of the date first indicated above.
 

 
RAPTOR PHARMACEUTICAL CORP.
 

 

 
By:___________________________
 
Name:
 
Title:
 

 

 
 

--------------------------------------------------------------------------------

 

 
EXERCISE NOTICE
 
 
RAPTOR PHARMACEUTICAL CORP.
 
 
WARRANT NO.  ___
 
 
DATED ___________, ______
 
 

 
 
Ladies and Gentlemen:
 
 
(1)            The undersigned hereby elects to exercise the above-referenced
Warrant with respect to ____________ shares of Common Stock.  Capitalized terms
used herein and not otherwise defined herein have the respective meanings set
forth in the Warrant.
 
 
(2)            Payment shall take the form of (check applicable box):
 
[  ] in lawful money of the United States by wire transfer of immediately
available funds to the Company; or
 
[ ] [if permitted] the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection 10(b), to
exercise this Warrant with respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise procedure set forth in subsection
10(b).
 
 (4)            The Warrant Shares shall be delivered to the following DWAC
Account Number or by physical delivery of a certificate to:

_______________________________

_______________________________

_______________________________
 
 (5)            By its delivery of this Exercise Notice, the undersigned
represents and warrants to the Company that in giving effect to the exercise
evidenced hereby the Holder will not beneficially own in excess of the number of
shares of Common Stock (as determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934) permitted to be owned under Section 11 of this
Warrant to which this notice relates.
 
 
HOLDER:
 
 
___________________________________
 
 
(Print Name)
 
 
By:__________________________________
 
 
Name:
 
 
Title:
 

 
 

--------------------------------------------------------------------------------

 

 
WARRANT ORIGINALLY ISSUED ___________, 2009
 
 
WARRANT NO.  ____
 
 
NOTICE OF ASSIGNMENT
 
 
To be completed and signed only upon transfer of Warrant
 
 
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
__________ the right represented by the within Warrant to purchase __________
shares of Common Stock to which the within Warrant relates and appoints
__________ attorney to transfer said right on the books of the Company with full
power of substitution in the premises.
 
 
Dated:
 
 
TRANSFEROR:
 
 
___________________________________
 
 
(Print Name)
 
 
By:__________________________________
 
 
Name:
 
 
Title:
 
 

 
 
TRANSFEREE:
 
 
___________________________________
 
 
(Print Name)
 
 
__________________________________
 
 
__________________________________
 
 
(Address of Transferee)
 
 

 
 
In the presence of:
 
 
_______________________________