Exhibit 10.6

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of June 29,
2015, by and among Guided Therapeutics, Inc., a Delaware corporation (the
“Company”), Aquarius Opportunity Fund (the “Lead Purchaser”), and each other
purchaser identified on the signature pages hereto (each, along with the Lead
Purchaser, including their respective successors and assigns, a “Purchaser” and
collectively, the “Purchasers”).

RECITALS

A. The Company and the Purchasers are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and
Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “Commission”) under the Securities Act.

 

B. Each Purchaser, severally and not jointly, wishes to purchase, and the
Company wishes to sell, upon the terms and conditions stated in this Agreement,
(i) shares of the Company’s Series C Convertible Preferred Stock (the “Preferred
Stock”), which shares of Preferred Stock shall be convertible into shares of the
Company’s common stock, par value $0.001 per share (the “Common Stock”) (as
converted, the “Conversion Shares”) in accordance with the terms of the
Preferred Stock, and (ii) warrants in substantially the form attached hereto as
Exhibit C (the “Warrants”) to acquire shares of Common Stock (“Warrant Shares”).

 

C. The Preferred Stock, the Warrants, the Conversion Shares, and the Warrant
Shares collectively are referred to herein as the “Securities”.

 

D. Contemporaneously with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit D (the “Registration Rights
Agreement”), pursuant to which, among other things, the Company will agree to
provide certain registration rights with respect to the Conversion Shares and
the Warrant Shares under the Securities Act and the rules and regulations
promulgated thereunder and applicable state securities laws.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers hereby
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 shall have
the meanings indicated in this Section 1.1:

“Action” means any action, suit, inquiry, notice of violation, proceeding
(including any partial proceeding such as a deposition) or investigation pending
or, to the Company’s Knowledge, threatened in writing against the Company, any
Subsidiary or any of their properties or any executive officer, director or
employee of the Company or any Subsidiary acting in his or her capacity as an
executive officer, director or employee of the Company or such Subsidiary, as
applicable, before or by any federal, state, county, local or foreign court,
arbitrator, governmental or administrative agency, regulatory authority, stock
market, stock exchange or trading facility.

“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly through one or more intermediaries, Controls, is controlled by or
is under common control with such Person, as such terms are used in and
construed under Rule 405 under the Securities Act. With respect to a Purchaser,
any investment fund or managed account that is managed on a discretionary basis
by the same investment manager as such Purchaser will be deemed to be an
Affiliate of such Purchaser.

“Board of Directors” means the board of directors of the Company.

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

“Certificate of Designation” means the Certificate of Designation to be filed
prior to the First Closing by the Company with the Secretary of State of the
State of Delaware, in the form of Exhibit B attached hereto, as amended from
time to time.

“Closing Bid Price” means, for any security as of any date, the last closing bid
price for such security on the Principal Trading Market, or, if the Principal
Trading Market begins to operate on an extended hours basis and does not
designate the closing bid price then the last bid price of such security prior
to 4:00:00 p.m., New York time, or, if the Principal Trading Market is not the
principal securities exchange or trading market for such security, the last
closing bid price of such security on the principal securities exchange or
trading market where such security is listed or traded, or if the foregoing do
not apply, the last closing bid price of such security in the over-the-counter
market on the electronic bulletin board for such security, or, if no closing bid
price is reported for such security, the average of the bid prices of any market
makers for such security as reported by OTC Markets Group Inc. If the Closing
Bid Price cannot be calculated for a security on a particular date on any of the
foregoing bases, the Closing Bid Price of such security on such date shall be
the fair market value as mutually determined by the parties. If the parties are
unable to agree upon the fair market value of such security, then the Board of
Directors of the Company shall use its good faith judgment to determine the fair
market value. The Board of Directors’ determination shall be binding upon all
parties absent demonstrable error. All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during such period.

“Common Stock” has the meaning set forth in the Recitals, and also includes any
other class of securities into which the Common Stock may hereafter be
reclassified or changed.

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

  “Company Counsel” means Jones Day.

 

  “Company’s Knowledge” means with respect to any statement made to the
Company’s Knowledge, that the statement is based upon the actual knowledge of
the executive officers of the Company having responsibility for the matter or
matters that are the subject of the statement.

 

“Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto.

“Control” (including the terms “controlling”, “controlled by” or “under common
control with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

“Convertible Note” means that certain secured promissory note issued by the
Company to Magna Equities II, LLC on June 25, 2015.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.

“GAAP” means United States generally accepted accounting principles,
consistently applied.

“Indebtedness” of any Person means, without duplication (i) all indebtedness for
borrowed money, (ii) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services, including (without limitation)
“capital leases” in accordance with generally accepted accounting principles
(other than trade payables entered into in the ordinary course of business),
(iii) all reimbursement or payment obligations with respect to letters of
credit, surety bonds and other similar instruments, (iv) all obligations
evidenced by notes, bonds, preferred stock or similar instruments, and (v) all
Contingent Obligations in respect of indebtedness or obligations of others of
the kinds referred to in clauses (i) through (iv) above.

“Lead Purchaser Counsel” means Smith, Anderson, Blount, Dorsett, Mitchell &
Jernigan, L.L.P.

“Lien” means any lien, charge, claim, encumbrance, security interest, right of
first refusal, preemptive right or other restrictions of any kind other than any
Permitted Liens.

“Material Adverse Effect” means a material adverse effect on the results of
operations, assets, prospects, business or financial condition of the Company
and the Subsidiaries, taken as a whole, except that any of the following, either
alone or in combination, shall not be deemed a Material Adverse Effect:
(i) effects caused by changes or circumstances affecting general market
conditions in the U.S. economy or which are generally applicable to the industry
in which the Company operates, provided that such effects are not borne
disproportionately by the Company, (ii) any change in interest or exchange rates
generally applicable to the market, (iii) any change that generally affects any
industry in which the Company operates or in which of its products or services
are used or distributed, (iv) effects resulting from or relating to the
announcement or disclosure of the sale of the Securities or other transactions
contemplated by the Transaction Documents, (v) effects caused by any event,
occurrence or condition resulting from or relating to the taking of any action
in accordance with the Transaction Documents, or (vi) effects arising in
connection with epidemics, pandemics, earthquakes, hostilities, acts of war,
sabotage or terrorism or military actions or any escalation or material
worsening of any such hostilities, acts of war, sabotage or terrorism or
military actions existing as of the date hereof.

“Material Contract” means any contract of the Company that has been filed as an
exhibit to the SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of
Regulation S-K.

“Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or
being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, (ii) any statutory Lien
arising in the ordinary course of business by operation of law with respect to a
liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics’ liens and other similar liens,
arising in the ordinary course of business with respect to a liability that is
not yet due or delinquent or that are being contested in good faith by
appropriate proceedings, (iv) Liens (A) upon or in any equipment acquired or
held by the Company or any of its Subsidiaries to secure the purchase price of
such equipment or indebtedness incurred solely for the purpose of financing the
acquisition or lease of such equipment, or (B) existing on such equipment at the
time of its acquisition, provided that the Lien is confined solely to the
property so acquired and improvements thereon, (v) Liens incurred in connection
with the extension, renewal or refinancing of the indebtedness secured by Liens
of the type described in clause (iv) above, provided that any extension, renewal
or replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the Indebtedness being extended, renewed or
refinanced does not increase, (vi) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payments of custom duties in
connection with the importation of goods, or (vii) liens granted in connection
with the Secured Note.

“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.

“Placement Agent” means Ladenburg Thalmann & Co. Inc.

“Principal Trading Market” means the Trading Market on which the Common Stock is
primarily listed on and quoted for trading, which, as of the date of this
Agreement and the Closing Date, shall be the OTCQB Marketplace operated by OTC
Market Group Inc.

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

“Pro Rata Share” means, with respect to any Purchaser, a percentage calculated
by dividing (i) the aggregate subscription amounts of such Purchaser at all
Closings by (ii) the aggregate subscription amounts of all Purchasers at all
Closings.

“Registration Statement” means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale by the
Purchasers of the Registrable Securities (as defined in the Registration Rights
Agreement).

“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.

“Secured Note” means that certain secured promissory note issued by the Company
to Tonaquint, Inc. on September 10, 2014, as amended.

“Short Sales” include, without limitation, (i) all “short sales” as defined in
Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not
against the box, and all types of direct and indirect stock pledges, forward
sale contracts, options, puts, calls, short sales, swaps, “put equivalent
positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar
arrangements (including on a total return basis), and (ii) sales and other
transactions through non-U.S. broker dealers or foreign regulated brokers (but
shall not be deemed to include the location and/or reservation of borrowable
shares of Common Stock).

“Subsidiary” means any subsidiary of the Company as set forth on Schedule
3.1(a), and shall, where applicable, include any subsidiary of the Company
formed or acquired after the date hereof.

“Trading Day” means a day on which the Common Stock is listed or quoted and
traded on its Principal Trading Market, or, if the Common Stock is not listed or
quoted on any Trading Market, a Business Day.

“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 NASDAQ
Global Market, The NASDAQ Global Select Market, The NASDAQ Capital Market, the
New York Stock Exchange, NYSE Arca, the NYSE MKT, the OTCQX Marketplace or the
OTCQB Marketplace (or any successor to any of the foregoing).

“Transaction Documents” means this Agreement, the schedules and exhibits
attached hereto, the Certificate of Designation, the Warrants, the Registration
Rights Agreement and any other documents or agreements explicitly contemplated
hereunder or thereunder.

“Transfer Agent” means Computershare Trust Company, N.A., the current transfer
agent of the Company, with a mailing address of 250 Royall Street, Canton,
Massachusetts 02021 and a facsimile number of (303) 262-0610, and any successor
transfer agent of the Company.

ARTICLE II.
PURCHASE AND SALE

2.1           Closings.

(a)    Amount. Subject to the terms and conditions set forth in this Agreement,
the purchase and sale of the Preferred Stock and Warrants shall take place in
two closings (each, a “Closing” and each date thereof, a “Closing Date”) as
follows:

(i)                 At a closing on the date of this Agreement (the “First
Closing”), the Company shall issue and sell to each Purchaser, and each
Purchaser shall purchase from the Company, the number of shares of Preferred
Stock set forth opposite such Purchaser’s name under the heading “First Closing
Preferred Stock” on Exhibit A hereto, along with a Warrant to purchase the
number of Warrant Shares set forth opposite such Purchaser’s name under the
heading “First Closing Warrant Shares” on Exhibit A hereto (rounded up to the
nearest whole share), in exchange for a payment from each Purchaser in the
amount set forth opposite such Purchaser’s name under the heading “First Closing
Subscription Amount” on Exhibit A hereto. The Lead Purchaser’s payment at the
First Closing shall be payable by wire transfer of immediately available funds
and shall be distributed as follows: (1) $75,000 shall be paid to the Lead
Purchaser Counsel; (2) $168,000 shall be paid to Company Counsel; (3) $225,000
shall be paid to the Placement Agent; and (4) the remainder shall be paid to the
Company. Each other Purchaser’s payment at the First Closing shall be payable by
wire transfer of immediately available funds to the Company.

(ii)               At a closing on the date that is five (5) Trading Days
following the effectiveness of the Charter Amendment (the “Second Closing”), the
Company shall issue and sell to each Purchaser, and each Purchaser shall
purchase from the Company, the number of shares of Preferred Stock set forth
opposite such Purchaser’s name under the heading “Second Closing Preferred
Stock” on Exhibit A hereto, along with a Warrant to purchase the number of
Warrant Shares set forth opposite such Purchaser’s name under the heading
“Second Closing Warrant Shares” on Exhibit A hereto (rounded up to the nearest
whole share), in exchange for a payment from each Purchaser in the amount set
forth opposite such Purchaser’s name under the heading “Second Closing
Subscription Amount” on Exhibit A hereto. The Lead Purchaser’s payment at the
Second Closing shall be payable by wire transfer of immediately available funds
and shall be distributed as follows: (1) $200,000 shall be paid to Company
Counsel; (2) $135,000 shall be paid to the Placement Agent; and (3) the
remainder shall be paid to the Company. Each other Purchaser’s payment at the
Second Closing shall be payable by wire transfer of immediately available funds
to the Company or, if so indicated on Exhibit A hereto, by the valid transfer to
the Company (free and clear of all encumbrances) of either a Company-issued
promissory note with an outstanding balance equal to, or shares of the Company’s
Series B Convertible Preferred Stock with an aggregate Liquidation Amount (as
defined by the terms of such Series B Convertible Preferred Stock) equal to, the
amount set forth opposite such Purchaser’s name under the heading “Second
Closing Purchase Price” on Exhibit A hereto, in lieu of cash as payment.

(b)   Closing. Each Closing of the purchase and sale of Preferred Stock and
Warrants shall take place at the offices of the Lead Purchaser Counsel on the
applicable Closing Date or at such other locations or remotely by facsimile
transmission or other electronic means as the parties may mutually agree.

2.2           Closing Deliverables. (a) On or prior to each Closing (or as
otherwise provided below), the Company shall issue, deliver or cause to be
delivered to each Purchaser the following (the “Company Deliverables”):

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

(ii)               evidence of the filing and acceptance of the Certificate of
Designation from the Secretary of State of the State of Delaware (First Closing
only);

(iii)             facsimile copies of the Preferred Stock and Warrants purchased
at the applicable Closing, each bearing the restrictive legends described
herein, with originals to follow within three Business Days of such Closing;

(iv)             a legal opinion of Company Counsel, dated as of the date of the
Closing and in the form attached hereto as Exhibit E, executed by such counsel
and addressed to the Purchasers;

(v)               the Registration Rights Agreement (First Closing only);

(vi)             a certificate of the Secretary of the Company (the “Secretary’s
Certificate”), dated as of the Closing Date, (a) certifying the resolutions
adopted by the Board of Directors of the Company or a duly authorized committee
thereof approving the transactions contemplated by this Agreement and the other
Transaction Documents and the issuance of the Securities, (b) certifying the
current versions of the certificate of incorporation, as amended, and by-laws of
the Company and (c) certifying as to the signatures and authority of persons
signing the Transaction Documents and related documents on behalf of the
Company, in the form attached hereto as Exhibit G (First Closing only, unless
there have been subsequent changes to any of the matters covered by the
Secretary’s Certificate delivered at the First Closing); and

(vii)           the Compliance Certificate referred to in Section 5.1(h).

(b)               On or prior to each Closing, each Purchaser shall deliver or
cause to be delivered to the Company the following (the “Purchaser
Deliverables”):

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

(ii)               Payment for the applicable Securities as described in Section
2.1(a) with respect to the applicable Closing;

(iii)             the Registration Rights Agreement, duly executed by such
Purchaser (First Closing only); and

(iv)             a fully completed and duly executed Selling Stockholder
Questionnaire in the form attached as Annex B to the Registration Rights
Agreement (First Closing only, unless there have been subsequent changes to the
information set forth on the Selling Stockholder Questionnaire delivered at the
First Closing).

ARTICLE III.
REPRESENTATIONS AND WARRANTIES

3.1           Representations and Warranties of the Company. Except as (i) set
forth in the schedules delivered herewith (the “Disclosure Schedules”), which
Disclosure Schedules shall be deemed a part hereof and shall qualify any
representation made herein to the extent of the disclosure contained in the
corresponding section of the Disclosure Schedules or other representations
relating to the subject matter of such disclosures, or (ii) disclosed in the SEC
Reports, the Company hereby represents and warrants as of each Closing Date
(except for the representations and warranties that speak as of a specific date,
which shall be made as of such date), to each Purchaser:

(a)                Subsidiaries. The Company has no direct or indirect
Subsidiaries other than those listed in Schedule 3.1(a) hereto. Except as
disclosed in Schedule 3.1(a) hereto, the Company owns, directly or indirectly,
all of the capital stock or comparable equity interests of each Subsidiary free
and clear of any and all Liens, and all the issued and outstanding shares of
capital stock or comparable equity interest of each Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities.

(b)               Organization and Qualification. The Company and each of its
Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite corporate
power and authority to own or lease and use its properties and assets and to
carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation or default of any of the provisions of its respective
certificate or articles of incorporation or bylaws or other organizational or
charter documents. The Company and each of its Subsidiaries is duly qualified to
conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, would not
have or reasonably be expected to result in a Material Adverse Effect, and no
Proceeding has been instituted, is pending, or, to the Company’s Knowledge, has
been threatened in writing in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.

(c)                Authorization; Enforcement; Validity. The Company has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents to which it is a
party and otherwise to carry out its obligations hereunder and thereunder,
assuming the due adoption and effectiveness of the Charter Amendment. The
Company’s execution and delivery of each of the Transaction Documents to which
it is a party and the consummation by it of the transactions contemplated hereby
and thereby (including, but not limited to, the sale and delivery of the
Preferred Stock and the Warrants and the reservation for issuance and the
subsequent issuance of the Conversion Shares upon conversion of the Preferred
Stock and the Warrant Shares upon exercise of the Warrants) have been duly
authorized by all necessary corporate action on the part of the Company
(assuming receipt of the Stockholder Approval), and no further corporate action
is required by the Company, its Board of Directors or its stockholders in
connection therewith other than in connection with the Required Approvals and
the filing of the Charter Amendment. Each of the Transaction Documents to which
it is a party has been (or upon delivery will have been) duly executed by the
Company and is, or when delivered in accordance with the terms hereof, will
constitute the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (i) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

(d)               No Conflicts. The execution, delivery and (assuming the due
adoption and effectiveness of the Charter Amendment) performance by the Company
of the Transaction Documents to which it is a party and the consummation by the
Company of the transactions contemplated hereby or thereby (including, without
limitation, the issuance of the Preferred Stock and Warrants and the reservation
for issuance and issuance of the Conversion Shares and the Warrant Shares) do
not and will not (i) conflict with or violate any provisions of the Company’s or
any Subsidiary’s certificate or articles of incorporation, bylaws or otherwise
result in a violation of the organizational documents of the Company (assuming,
in the case of the Company’s certificate of incorporation, the due adoption and
effectiveness of the Charter Amendment); (ii) conflict with, constitute a
default (or an event that with notice or lapse of time or both would result in a
default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary pursuant to, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any Material Contract; or (iii) subject to
the Required Approvals, conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations and the rules and
regulations, assuming the correctness of the representations and warranties made
by such Purchaser herein, of any self-regulatory organization to which the
Company or its securities are subject, including all applicable Trading
Markets), or by which any property or asset of the Company or a Subsidiary is
bound or affected, except in the case of clauses (ii) and (iii) such as would
not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect.

(e)                Filings, Consents and Approvals. Neither the Company nor any
of its Subsidiaries is required to obtain any consent, waiver, authorization or
order of, give any notice to, or make any filing or registration with, any court
or other federal, state, local or other governmental authority or other Person
in connection with the execution, delivery and performance by the Company of the
Transaction Documents (including the issuance of the Securities), other than (i)
the filing with the Commission of one or more Registration Statements in
accordance with the requirements of the Registration Rights Agreement,
(ii) filings required by applicable state securities laws, (iii) the filing of a
Notice of Sale of Securities on Form D with the Commission under Regulation D of
the Securities Act, (iv) the filing of any requisite notices and/or
application(s) to the Principal Trading Market for the issuance and sale of the
Securities and the listing of the Conversion Shares and Warrant Shares for
trading or quotation, as the case may be, thereon in the time and manner
required thereby, (v) the filings required in accordance with Section 4.5, (vi)
those that have been made or obtained prior to the date of this Agreement, (vii)
the Stockholder Approval and (viii) the filing of the Charter Amendment
(collectively, the “Required Approvals”).

(f)                Issuance of the Securities. The Preferred Stock and Warrants
have been duly authorized and, when issued and paid for in accordance with the
terms of the Transaction Documents, will be duly and validly issued, free and
clear of all Liens, other than restrictions on transfer provided for in the
Transaction Documents or imposed by applicable securities laws, and shall not be
subject to preemptive or similar rights of stockholders. Assuming the due
adoption and effectiveness of the Charter Amendment, the Conversion Shares
issuable upon conversion of the Preferred Stock and the Warrant Shares issuable
upon exercise of the Warrants have been duly authorized and, when issued and
paid for in accordance with the terms of the Transaction Documents and the
Preferred Stock or exercise of the Warrants, as applicable, will be duly and
validly issued, fully paid and nonassessable, free and clear of all Liens, other
than restrictions on transfer provided for in the Transaction Documents or
imposed by applicable securities laws, and shall not be subject to preemptive or
similar rights of stockholders. Assuming the accuracy of the representations and
warranties of such Purchaser in this Agreement, the Securities issued to such
Purchaser will be issued in compliance with all applicable federal and state
securities laws. As of each Closing Date, the Company shall have reserved from
its duly authorized capital stock the number of shares of Common Stock required
as of such date pursuant to Section 4.2.

(g)                Capitalization. The numbers of shares and type of all
authorized, issued and outstanding capital stock, options and other securities
of the Company (whether or not presently convertible into or exercisable or
exchangeable for shares of capital stock of the Company) are as set forth in the
section entitled “Description of Securities” in its Prospectus filed with the
Commission on May 7, 2015. Except as set forth in Schedule 3.1(g), the Company
has not issued any capital stock since the date of such Prospectus. No Person
has any right of first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by the Transaction
Documents that have not been effectively waived as of the Closing Date. Except
as a result of the purchase and sale of the Preferred Stock and Warrants, there
are no outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of Common Stock
or Common Stock Equivalents. The issuance and sale of the Preferred Stock and
Warrants will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Purchasers) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. All of the outstanding
shares of capital stock of the Company are validly issued, fully paid and
nonassessable, have been issued in compliance with all applicable federal and
state securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase 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, other than the Stockholder Approval. There are no stockholders
agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the Company’s
Knowledge, between or among any of the Company’s stockholders.

(h)               SEC Reports; Disclosure Materials. The Company has filed all
reports, schedules, forms, statements and other documents required to be filed
by it under the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the two (2) 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, being collectively referred to herein as the “SEC
Reports”, and the SEC Reports, together with the Disclosure Schedules, being
collectively referred to as the “Disclosure Materials”). As of their respective
filing dates, or to the extent corrected by a subsequent amendment, the SEC
Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company has never been an issuer subject to Rule 144(i) under
the Securities Act.

(i)                 Financial Statements.

(i)                 The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing (or to the extent corrected by a subsequent
amendment). Such financial statements have been prepared in accordance with GAAP
applied on a consistent basis during the periods involved, except as may be
otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by
GAAP, and fairly present in all material respects the financial position of the
Company and its consolidated subsidiaries taken as a whole as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial
year-end audit adjustments.

(ii)               Except as included therein, no historical or pro forma
financial statements or supporting schedules are required to be included or
incorporated by reference in the SEC Reports under the Securities Act or the
Exchange Act.

(j)                 Material Changes. Since the date of the latest financial
statements included within the SEC Reports, except as specifically disclosed in
a subsequent SEC Report filed prior to the date hereof, (i) there have been no
events, occurrences or developments that have had or would reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect, (ii) the Company has not incurred any material liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered materially its method of accounting or the manner in which it keeps its
accounting books and records, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock (other than in connection with repurchases of unvested stock
issued to employees of the Company or pursuant to the express terms of
outstanding securities of the Company), and (v) the Company has not issued any
equity securities to any officer, director or Affiliate, except Common Stock
issued pursuant to existing Company stock option or stock purchase plans or
executive and director compensation arrangements disclosed in the SEC Reports.
Except for the issuance of the Preferred Stock and Warrants contemplated by this
Agreement, no event, liability or development has occurred or exists with
respect to the Company or its Subsidiaries or their respective businesses,
properties, operations or financial condition, that would be required to be
disclosed by the Company under applicable securities laws at the time this
representation is made that has not been publicly disclosed at least one (1)
Trading Day prior to the date that this representation is made.

(k)               Litigation. There is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) except as specifically disclosed in the SEC
Reports, would, if there were an unfavorable decision, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary nor, to the Company’s Knowledge,
any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been, and to the
Company’s Knowledge there is not pending or contemplated, any investigation by
the Commission involving the Company or any current or former director or
executive officer of the Company. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed
by the Company or any of its Subsidiaries under the Exchange Act or the
Securities Act.

(l)                 Employment Matters. No material labor dispute exists or, to
the Company’s Knowledge, is imminent with respect to any of the employees of the
Company which would have or reasonably be expected to result in a Material
Adverse Effect. None of the Company’s or any Subsidiary’s employees is a member
of a union that relates to such employee’s relationship with the Company, and
neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and each Subsidiary believes that its
relationship with its employees is good. No executive officer of the Company (as
defined in Rule 501(f) of the Securities Act) has notified the Company or any
such Subsidiary that such officer intends to leave the Company or any such
Subsidiary or otherwise terminate such officer’s employment with the Company or
any such Subsidiary. To the Company’s Knowledge, no executive officer, 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 other contract or agreement or any restrictive
covenant in favor of a third party, and to the Company’s Knowledge, the
continued employment of each such executive officer does not subject the Company
or any Subsidiary to any liability with respect to any of the foregoing matters,
except in each case, matters that, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect.

(m)             Compliance. Neither the Company nor any of its Subsidiaries (i)
is in default under or in violation of (and no event has occurred that has not
been waived that, with notice or lapse of time or both, would result in a
default by the Company or any of its Subsidiaries under), nor has the Company or
any of its Subsidiaries received written notice of a claim that it is in default
under or that it is in violation of, any Material Contract (whether or not such
default or violation has been waived), (ii) is in violation of any order of any
court, arbitrator or governmental body having jurisdiction over the Company or
its properties or assets, or (iii) is in violation of, or in receipt of written
notice that it is in violation of, any statute, rule or regulation of any
governmental authority applicable to the Company, except in each case as would
not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect.

(n)               Regulatory Permits. The Company and each of its Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct
their respective businesses as currently conducted and as described in the SEC
Reports, except where the failure to possess such permits, individually or in
the aggregate, has not and would not have or reasonably be expected to result in
a Material Adverse Effect (“Material Permits”), and neither the Company nor any
of its Subsidiaries has received any notice of Proceedings relating to the
revocation or modification of any such Material Permits.

(o)               Title to Assets. Neither the Company nor any of its
Subsidiaries owns any real property. The Company and its Subsidiaries have good
and marketable title to all tangible personal property owned by them that is
material to the business of the Company and its Subsidiaries, taken as a whole,
in each case free and clear of all Liens except such as do not materially affect
the value of such property and do not interfere with the use made and proposed
to be made of such property by the Company and any of its Subsidiaries. Any real
property and facilities held under lease by the Company and any of its
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
Subsidiaries.

(p)               Patents and Trademarks. To the Company’s Knowledge, the
Company and the Subsidiaries own, possess, license or have other rights to use,
all patents, patent applications, trade and service marks, trade and service
mark applications and registrations, trade names, trade secrets, inventions,
copyrights, licenses, technology, know-how and other intellectual property
rights and similar rights described in the SEC Reports as necessary or material
for use in connection with their respective businesses and which the failure to
so have would have or reasonably be expected to result in a Material Adverse
Effect (collectively, the “Intellectual Property Rights”). Neither the Company
nor any Subsidiary has received a notice (written or otherwise) that any of the
Intellectual Property Rights used by the Company or any Subsidiary violates or
infringes upon the rights of any Person. There is no pending or, to the
Company’s Knowledge, threatened action, suit, proceeding or claim by any Person
that the Company’s business as now conducted infringes or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary rights of
another. To the Company’s Knowledge, there is no existing infringement by
another Person of any of the Intellectual Property Rights that would have or
would reasonably be expected to have a Material Adverse Effect. To the Company’s
Knowledge, all patent applications and patents within the Intellectual Property
Rights have been prosecuted with a duty of candor, and there is no material fact
known by the Company that would preclude the issuance of patents with respect to
said patent applications or that would render any issued patents invalid or
unenforceable. There is no pending or, to the Company’s Knowledge, threatened
action, suit, proceeding or claim by another Person challenging the Company’s
rights in or to any material Intellectual Property Rights, or challenging
inventorship, validity or scope of any such Intellectual Property Rights. The
Company and its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their Intellectual Property
Rights, except where failure to do so would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. None of the
technology employed by the Company or its Subsidiaries has been obtained or is
being used by the Company or the respective Subsidiary, as applicable, in
violation of any contractual obligation binding on the Company or the respective
Subsidiary, as applicable, or, to the Company’s Knowledge, any of its executive
officers, directors or employees or otherwise in violation of the rights of any
Person.

(q)               Insurance. The Company and each of its Subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as the Company believes to be prudent and
customary in the businesses and locations in which the Company and the
Subsidiaries are engaged. Neither the Company nor any of its Subsidiaries has
received any notice of cancellation of any such insurance, nor, to the Company’s
Knowledge, will it or any Subsidiary be unable to renew their respective
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business without a significant increase in cost.

(r)                Transactions With Affiliates and Employees. None of the
executive officers or directors of the Company and, to the Company’s Knowledge,
none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees,
executive officers and directors), that would be required to be disclosed
pursuant to Item 404 of Regulation S-K.

(s)                Certain Fees. Except for compensation payable to the
Placement Agent or as expressly set forth in this Agreement, no person or entity
will have, as a result of the transactions contemplated by this Agreement, any
valid right, interest or claim against or upon the Company or a Purchaser for
any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of the Company.

(t)                 Private Placement. Assuming the accuracy of such Purchaser’s
representations and warranties set forth in Section 3.2, no registration under
the Securities Act is required for the offer and sale of the Securities by the
Company to such Purchaser under the Transaction Documents. The issuance and sale
of the Securities hereunder does not contravene the rules and regulations of the
Principal Trading Market.

(u)               Investment Company The Company is not, and is not an Affiliate
of, and immediately after receipt of payment for the Preferred Stock and
Warrants will not be, or be an Affiliate of, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended. The Company shall
conduct its business in a manner so that it will not become subject to the
Investment Company Act of 1940, as amended.

(v)               Registration Rights. Other than the Purchasers, no Person has
any right to cause the Company to effect the registration under the Securities
Act of any securities of the Company other than those securities which are
currently registered on an effective registration statement on file with the
Commission.

(w)              Listing and Maintenance Requirements. The Company’s 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 terminate 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.
The Company has not, in the twelve (12) months preceding the date hereof,
received written notice from any Trading Market on which the Common Stock is
listed or quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market. The Company is, and
has no reason to believe that it will not in the foreseeable future continue to
be, in compliance in all material respects with all listing and maintenance
requirements of the Principal Trading Market on the date hereof.

(x)               Application of Takeover Protections; Rights Agreements. The
Company and the 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 charter documents
or the laws of its state of incorporation that is or could reasonably be
expected to become applicable to the Purchasers as a result of the Purchasers
and the Company fulfilling their obligations or exercising their rights under
the Transaction Documents, including, without limitation, the Company’s issuance
of the Securities and the Purchasers’ ownership of the Securities.

(y)               Disclosure. The Company confirms that it has not provided, and
to the Company’s Knowledge, none of its executive officers or directors nor any
other Person acting on its or their behalf has provided, such Purchaser or its
agents or counsel with any information that it believes constitutes material,
non-public information except insofar as the existence, provisions and terms of
the Transaction Documents and the proposed transactions hereunder may constitute
such information, all of which will be disclosed by the Company in the Press
Release as contemplated by Section 4.5. The Company understands and confirms
that such Purchaser will rely on the foregoing representations in effecting
transactions in securities of the Company.

(z)                No Integrated Offering. Assuming the accuracy of such
Purchaser’s representations and warranties set forth in Section 3.2, none of the
Company, its Subsidiaries nor, to the Company’s Knowledge, any Person acting on
its behalf has, directly or indirectly, at any time within the past six (6)
months, made any offers or sales of any Company security or solicited any offers
to buy any security under circumstances that would (i) eliminate the
availability of the exemption from registration under Regulation D under the
Securities Act in connection with the offer and sale by the Company of the
Securities as contemplated hereby or (ii) cause the offering of the Securities
pursuant to the Transaction Documents to be integrated with prior offerings by
the Company for purposes of stockholder approval provisions, including, without
limitation, under the rules and regulations of the Principal Trading Market.

(aa)            No General Solicitation. Neither the Company nor, to the
Company’s Knowledge, any person acting on behalf of the Company has offered or
sold any of the Securities by any form of general solicitation or general
advertising.

(bb)           Foreign Corrupt Practices. Neither the Company, nor to the
Company’s Knowledge, any agent or other person acting on behalf of the Company,
has: (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (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.

(cc)            Off Balance Sheet Arrangements. There is no transaction,
arrangement, or other relationship between the Company (or any Subsidiary) and
an unconsolidated or other off balance sheet entity that is required to be
disclosed by the Company in SEC Reports and is not so disclosed and would have
or reasonably be expected to result in a Material Adverse Effect.

(dd)           Acknowledgment Regarding Purchaser’s Purchase of Securities. The
Company acknowledges and agrees that each Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated hereby and thereby. The Company further
acknowledges that each Purchaser is not 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 and any advice
given by each Purchaser or any of its representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is
merely incidental to the Purchaser’s purchase of the Securities. 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.

(ee)            Regulation M Compliance. The Company has not, and to the
Company’s 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 of the Company
or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company.

(ff)             PFIC. Neither the Company nor any Subsidiary is or intends to
become a “passive foreign investment company” within the meaning of Section 1297
of the U.S. Internal Revenue Code of 1986, as amended.

(gg)            OFAC. Neither the Company nor any Subsidiary nor, to the
Company’s Knowledge, any director, executive officer, agent, employee, Affiliate
or Person acting on behalf of the Company or any Subsidiary is currently subject
to any U.S. sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department (“OFAC”); and the Company will not directly or
indirectly use the proceeds of the sale of the Securities, or lend, contribute
or otherwise make available such proceeds to any Subsidiary, joint venture
partner or other Person or entity, towards any sales or operations in Cuba,
Iran, North Korea, Sudan, Syria, or any other country sanctioned by OFAC or for
the purpose of financing the activities of any Person currently subject to any
U.S. sanctions administered by OFAC.

(hh)           Government Licenses. The Company possesses such permits,
certificates, licenses, approvals, consents and other authorizations
(collectively, “Governmental Licenses”) issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct the
business of the Company as described in the SEC Reports, including without
limitation, all such approvals, certificates, authorizations and permits
required by the United States Food and Drug Administration (the “FDA”) and/or
other federal, state, local or foreign agencies or bodies engaged in the
regulation of clinical trials, medical devices, or biohazardous substances or
materials, except where the failure so to possess would not, individually or in
the aggregate, have or reasonably be expected to have a Material Adverse Effect;
the Company is in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except where the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and effect would
not, individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect; and the Company has not received any written notice of
proceedings relating to the revocation or modification of any such Governmental
Licenses which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have or reasonably be expected to
have a Material Adverse Effect. Where required by applicable laws and
regulations of the FDA or any foreign regulatory authority, the Company has
submitted to the FDA or any foreign regulatory authority any application, or
amendment or supplement thereto, for a clinical trial it has conducted or
sponsored or is conducting or sponsoring, except where such failure would not,
individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect; all such submissions were in material compliance with
applicable laws and rules and regulations when submitted and no material
deficiencies have been asserted by the FDA or such foreign regulatory authority
with respect to any such submissions, except any deficiencies which would not,
individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect.

(ii)               Shell Company. The Company is not, and was not in the past,
an “ineligible issuer” (as defined in Rule 405 promulgated under the Securities
Act).

(jj)               Bad Actor Disqualification. Neither the Company nor, to the
Company’s Knowledge after its reasonable inquiry, any of its directors or
executive officers is or has been, within the periods of time applicable
thereunder, subject to any event as set forth in Rule 506(d) under the
Securities Act that would disqualify the Company from relying on the exemption
afforded by Regulation D (or any event that would require disclosure if such
event occurred prior to September 23, 2013).

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

(a)                Organization; Authority. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the applicable Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder. The execution and delivery of this
Agreement by such Purchaser and performance by such Purchaser of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate or, if such Purchaser is not a corporation, such
partnership, limited liability company or other applicable like action, on the
part of such Purchaser. Each Transaction Document to which it is a party has
been duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

(b)               No Conflicts. The execution, delivery and performance by such
Purchaser of this Agreement and the Registration Rights Agreement and the
consummation by such Purchaser of the transactions contemplated hereby and
thereby will not (i) result in a violation of the organizational documents of
such Purchaser, (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which such Purchaser is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws) applicable to such
Purchaser, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of such Purchaser to perform its obligations hereunder.

(c)                Investment Intent. Such Purchaser understands that the
Securities are “restricted securities” and have not been registered under the
Securities Act or any applicable state securities law and is acquiring such
Securities as principal for its own account and not with a view to, or for
distributing or reselling such Securities or any part thereof in violation of
the Securities Act or any applicable state securities laws, provided, however,
that by making the representations herein, such Purchaser does not agree to hold
any of the Securities for any minimum period of time and reserves the right,
subject to the provisions of this Agreement and the Registration Rights
Agreement, at all times to sell or otherwise dispose of all or any part of such
Securities pursuant to an effective registration statement under the Securities
Act or under an exemption from such registration and in compliance with
applicable federal and state securities laws. Such Purchaser is acquiring the
Securities hereunder in the ordinary course of its business. Such Purchaser does
not presently have any agreement, plan or understanding, directly or indirectly,
with any Person to distribute or effect any distribution of any of the
Securities (or any securities which are derivatives thereof) to or through any
person or entity; such Purchaser is not a registered broker-dealer under Section
15 of the Exchange Act or an entity engaged in a business that would require it
to be so registered as a broker-dealer.

(d)               Purchaser Status. At the time such Purchaser was offered the
Preferred Stock and Warrants, it was, and at the date hereof it is, and on each
date on which it converts the Preferred Stock or exercises the Warrants it will
be, an “accredited investor” as defined in Rule 501(a) under the Securities Act.

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

(f)                Experience of the Purchaser. Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. Such Purchaser understands
that investment in the Securities involves a high degree of risk. 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.

(g)                Access to Information. Such Purchaser acknowledges that it
has had the opportunity to review the Disclosure Materials and has been afforded
(i) the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and
conditions of the offering of the Securities and the merits and risks of
investing in the Securities; (ii) access to information about the Company and
the Subsidiaries and their respective financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. Neither such inquiries nor any other
investigation conducted by or on behalf of such Purchaser or its representatives
or counsel shall modify, amend or affect such Purchaser’s right to rely on the
truth, accuracy and completeness of the Disclosure Materials and the Company’s
representations and warranties contained in the Transaction Documents.

(h)               Brokers and Finders. Except as expressly set forth in this
Agreement, no Person will have, as a result of the transactions contemplated by
this Agreement, any valid right, interest or claim against or upon the Company
or such Purchaser for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of such
Purchaser.

(i)                 Independent Investment Decision. Such Purchaser has
independently evaluated the merits of its decision to purchase Securities
pursuant to the Transaction Documents. Such Purchaser understands that nothing
in this Agreement or any other materials presented by or on behalf of the
Company to such Purchaser in connection with the purchase of the Securities
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.

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

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

(l)                 Regulation M. Such Purchaser is aware that the
anti-manipulation rules of Regulation M under the Exchange Act may apply to
sales of Common Stock and other activities with respect to the Common Stock by
such Purchaser.

(m)             Residency. Such Purchaser’s offices in which its investment
decision with respect to the Securities was made are located at the address
immediately below such Purchaser’s name on its signature page hereto.

The Company and each of the Purchasers acknowledge and agree that no party to
this Agreement has made or makes any representations or warranties with respect
to the transactions contemplated hereby other than those specifically set forth
in this Article III and the Transaction Documents.

ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

4.1           Transfer Restrictions.

(a)                Compliance with Laws. Notwithstanding any other provision of
this Article IV, each Purchaser covenants that the Securities may be disposed of
only pursuant to an effective registration statement under, and in compliance
with the requirements of, the Securities Act, or pursuant to an available
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act, and in compliance with any applicable state
and federal securities laws. In connection with any transfer of the Securities
other than (i) pursuant to an effective registration statement, (ii) to the
Company, (iii) pursuant to Rule 144 (provided that the Purchaser provides the
Company with reasonable assurances (in the form of seller and, if applicable,
broker representation letters) that the securities may be sold pursuant to such
rule) or (iv) in connection with a bona fide pledge as contemplated in Section
4.1(b), the Company may require the transferor thereof to provide to the Company
an opinion of counsel selected by the transferor and reasonably acceptable to
the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Securities under the Securities Act. As a
condition of transfer, any such transferee shall agree in writing to be bound by
the terms of this Agreement and the Registration Rights Agreement and shall have
the rights of a Purchaser under this Agreement and the Registration Rights
Agreement with respect to such transferred Securities.

         (b)          Legends. Certificates evidencing the Securities shall bear
any legend as required by the “blue sky” laws of any state and a restrictive
legend in substantially the following form, until such time as they are not
required under Section 4.1(c):

[NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON [EXERCISE]
[CONVERSION] OF THESE SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE
NOT BEEN REGISTERED] UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR
(B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER
AGENT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

The Company acknowledges and agrees that a Purchaser may from time to time
pledge, and/or grant a security interest in, some or all of the legended
Securities in connection with applicable securities laws, pursuant to a bona
fide margin agreement in compliance with a bona fide margin loan. Such a pledge
would not be subject to approval or consent of the Company and no legal opinion
of legal counsel to the pledgee, secured party or pledgor shall be required in
connection with the pledge, but such legal opinion shall be required in
connection with a subsequent transfer or foreclosure following default by the
Purchaser transferee of the pledge. No notice shall be required of such pledge,
but Purchaser’s transferee shall promptly notify the Company of any such
subsequent transfer or foreclosure of such legended Securities. Each Purchaser
acknowledges that the Company shall not be responsible for any pledges relating
to, or the grant of any security interest in, any of the Securities or for any
agreement, understanding or arrangement between any Purchaser and its pledgee or
secured party. At the appropriate Purchaser’s expense, the Company will execute
and deliver such reasonable documentation as a pledgee or secured party of
Securities may reasonably request in connection with a pledge or transfer of the
Securities, including, to the extent required by applicable law, the preparation
and filing of any required prospectus supplement under Rule 424(b)(3) of the
Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of selling stockholders thereunder. Each Purchaser
acknowledges and agrees that, except as otherwise provided in Section 4.1(c),
any Securities subject to a pledge or security interest as contemplated by this
Section 4.1(b) shall continue to bear the legend set forth in this Section
4.1(b) and be subject to the restrictions on transfer set forth in Section
4.1(a).

(c)           Removal of Legends. The legend set forth in Section 4.1(b) shall
be removed and the Company shall issue a certificate without such legend or any
other legend to the holder of the applicable Securities upon which it is stamped
or issue to such holder by electronic delivery at the applicable balance account
at the Depository Trust Company (“DTC”), if (i) such Securities are registered
for resale under the Securities Act (provided that, if the Purchaser is selling
pursuant to the effective registration statement registering the Securities for
resale, the Purchaser agrees to only sell such Securities during such time that
such registration statement is effective and not withdrawn or suspended, and
only as permitted by such registration statement), (ii) such Securities are sold
or transferred pursuant to Rule 144 (if the transferor is not an Affiliate of
the Company), or (iii) such Securities are eligible for sale under Rule 144,
without the requirement for the Company to be in compliance with the current
public information required under Rule 144 as to such securities and without
volume or manner-of-sale restrictions. Any fees associated with the removal of
such legend shall be borne by the Company. Following the effectiveness date of
the relevant Registration Statement, or at such earlier time as a legend is no
longer required for applicable Securities, the Company will no later than three
(3) Trading Days (such third (3rd) Trading Day, the “Deadline Date”) following
the delivery by a Purchaser to the Company (with notice to the Company) of (i) a
legended certificate representing Conversion Shares or Warrant Shares (endorsed
or with stock powers attached, signatures guaranteed, and otherwise in form
necessary to affect the reissuance and/or transfer), (ii) a Conversion Notice in
the manner stated in the Preferred Stock to effect the conversion of such
Preferred Stock in accordance with its terms, or (iii) an Exercise Notice in the
manner stated in the Warrants to effect the exercise of such Warrant in
accordance with its terms, and, in each case, an opinion of counsel to the
extent required by Section 4.1(a), deliver or cause to be delivered to the
Purchaser or the transferee of the Purchaser, as applicable, a certificate
representing such Securities that is free from all restrictive and other
legends. The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer set
forth in this Section 4.1(c). Certificates for Conversion Shares or Warrant
Shares subject to legend removal hereunder may be transmitted by the Transfer
Agent to a Purchaser by crediting the account of the Purchaser’s prime broker
with DTC as directed by the Purchaser.

 

(d)           Acknowledgement. Each Purchaser hereunder acknowledges its primary
responsibilities under the Securities Act and accordingly will not sell or
otherwise transfer the Securities or any interest therein without complying with
the requirements of the Securities Act and applicable law. While the
Registration Statement remains effective, each Purchaser hereunder may sell the
Conversion Shares or Warrant Shares in accordance with the plan of distribution
contained in the Registration Statement and if it does so it will comply
therewith and with the related prospectus delivery requirements unless an
exemption therefrom is available. Each Purchaser, severally and not jointly with
the other Purchasers, agrees that if it is notified by the Company in writing at
any time that the Registration Statement registering the resale of the
Conversion Shares or the Warrant Shares is not effective or that the prospectus
included in such Registration Statement no longer complies with the requirements
of Section 10 of the Securities Act, the Purchaser will refrain from selling
such Conversion Shares or Warrant Shares until such time as the Purchaser is
notified by the Company that such Registration Statement is effective or such
prospectus is compliant with Section 10 of the Securities Act, unless such
Purchaser is able to, and does, sell such Conversion Shares or Warrant Shares
pursuant to an available exemption from the registration requirements of Section
5 of the Securities Act. Both the Company and the Transfer Agent, and their
respective directors, executive officers, employees and agents, may rely on this
Section 4.1(d), and each Purchaser hereunder will indemnify and hold harmless
each of such persons from any breaches or violations of this Section 4.1(d);
provided, that each Purchaser’s indemnification obligation will in no event
exceed the net proceeds received by such Purchaser upon a sale of Conversion
Shares or Warrant Shares in breach or violation of this Section 4.1(d).

 

(e)           Buy-In. If the Company shall fail for any reason or for no reason
to issue to a Purchaser unlegended certificates before or on the Deadline Date,
then, in addition to all other remedies available to such Purchaser, if after
the Deadline Day, such Purchaser purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
holder of shares of Common Stock that such Purchaser anticipated receiving from
the Company without any restrictive legend (a “Buy-In”), then the Company shall,
within three (3) Trading Days after such Purchaser’s request promptly honor its
obligation to deliver to such Purchaser a certificate or certificates
representing such shares of Common Stock and pay cash to the Purchaser in an
amount equal to the excess (if any) of the Purchaser’s total purchase price for
such shares over the product of (a) such number of shares of Common Stock, times
(b) the Closing Bid Price on the Deadline Date.

 

4.2  Reservation of Common Stock. The Company shall take all action necessary to
at all times during the period the Preferred Stock or Warrants are outstanding
have authorized, and reserved for the purpose of issuance under the Preferred
Stock and Warrants, (i) prior to effectiveness of the Charter Amendment, no less
than 60 million shares and (ii) from and after effectiveness of the Charter
Amendment, at least the number of shares of Common Stock then issuable upon
conversion of the Preferred Stock or exercise of the Warrants issued pursuant to
this Agreement (or any greater amount required pursuant to the applicable
Preferred Stock or Warrants), without taking into account any limitations on
conversion of the Preferred Stock or exercise of the Warrants set forth in the
Preferred Stock or Warrants, respectively.

4.3  Furnishing of Information. In order to enable the Purchasers to sell the
Securities under Rule 144, until the date that the Securities cease to be
Registrable Securities (as defined in the Registration Rights Agreement) (and
for no less than twelve (12) months from the Closing), the Company shall use its
commercially reasonable efforts 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. During
such period, if the Company is not required to file reports pursuant to the
Exchange Act, it will prepare and furnish to the Purchasers and make publicly
available in accordance with Rule 144(c) such information as is required for the
Purchasers to sell the Securities under Rule 144.

4.4           Integration. The Company shall not, and shall use its commercially
reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that will be integrated
with the offer or sale of the Securities in a manner that would require the
registration under the Securities Act of the sale of the Securities to the
Purchasers, or that will be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of the Principal Trading Market such
that it would require stockholder approval prior to the closing of such other
transaction unless stockholder approval is obtained before the closing of such
subsequent transaction.

4.5     Securities Laws Disclosure; Publicity. By 9:00 A.M., New York City time,
on the Trading Day immediately following the date hereof, the Company shall
issue a press release (the “Press Release”) disclosing all material terms of the
transactions contemplated hereby. On or before 9:00 A.M., New York City time, on
the fourth (4th) Trading Day immediately following the execution of this
Agreement, the Company will file a Current Report on Form 8-K with the
Commission describing the terms of the Transaction Documents (and including as
exhibits to such Current Report on Form 8-K the material Transaction Documents
(including, without limitation, this Agreement, the form of Preferred Stock, the
form of Warrant and the Registration Rights Agreement)). Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser or
an Affiliate of any Purchaser, or include the name of any Purchaser or an
Affiliate of any Purchaser in any press release or filing with the Commission
(other than the Registration Statement) or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (i) as
required by federal securities law in connection with (A) any registration
statement contemplated by the Registration Rights Agreement and (B) the filing
of final Transaction Documents (including signature pages thereto) with the
Commission, (ii) in subsequent filings with the Commission that repeat
disclosure previously consented to by the Purchasers, and (iii) to the extent
such disclosure is required by law, request of the Staff of the Commission or
Principal Trading Market regulations, in which case the Company shall provide
the Purchasers with prior written notice of such disclosure permitted under this
subclause (iii). From and after the issuance of the Press Release, no Purchaser
shall be in possession of any material, non-public information in connection
with the transactions contemplated by the Transaction Documents received from
the Company, any Subsidiary or any of their respective executive officers,
directors, employees or agents, that is not disclosed in the Press Release
unless such Purchaser shall have executed a written agreement regarding the
confidentiality and use of such information that, by its terms, expressly
contemplates that such Purchaser’s confidentiality obligations shall survive the
issuance of the Press Release (a “Surviving NDA”). In addition, effective upon
the issuance of the Press Release, except with respect to any Surviving NDA
executed by a Purchaser, the Company acknowledges and agrees that any and all
confidentiality or similar obligations under any agreement, whether written or
oral, between the Company, any of its Subsidiaries or any of their respective
officers, directors, affiliates or agents, on the one hand, and any Purchaser or
any of its affiliates, on the other hand, shall terminate. Each Purchaser,
severally and not jointly with the other Purchasers, covenants that until such
time as the transactions contemplated by this Agreement are required to be
publicly disclosed by the Company as described in this Section 4.5, such
Purchaser will maintain the confidentiality of all disclosures made to it in
connection with this transaction (including the existence and terms of this
transaction).

4.6           Shareholder Rights Plan. No claim will be made or enforced by the
Company or, with the consent of the Company, any other Person, that any
Purchaser is an “acquiring person” under any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or similar anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that any Purchaser could be deemed to trigger the provisions of
any such plan or arrangement, in either case solely by virtue of receiving
Securities under the Transaction Documents or under any other written agreement
between the Company and the Purchasers; provided, however, that no such
Purchaser owns any equity in the Company prior to its purchase of the Securities
hereunder.

4.7           Non-Public Information. Except with respect to the material terms
and conditions of the transactions contemplated by the Transaction Documents,
including this Agreement, or as expressly required by any applicable securities
law, 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 regarding the Company that the Company believes constitutes
material non-public information without the express written consent of such
Purchaser, unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information. The Company
understands and confirms that each Purchaser shall be relying on the foregoing
covenant in effecting transactions in securities of the Company.

4.8           Use of Proceeds. The Company shall use the net proceeds from the
sale of the Preferred Stock and Warrants hereunder for general corporate
purposes, but, except as otherwise provided for herein, shall not use such
proceeds for: (a) the satisfaction of any portion of the Company’s debt (other
than payment of accounts payable in the ordinary course of the Company’s
business and prior practices, and repayment pursuant to their respective terms
of the Secured Note and the Convertible Note), (b) the redemption of any Common
Stock or Common Stock Equivalents or (c) the settlement of any outstanding
litigation.

4.9           Indemnification of Purchasers. Subject to the provisions of this
Section 4.9, 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)(i) any material breach of any of the
representations, warranties, covenants or agreements not qualified by
materiality or (ii) any breach of any of the representations, warranties,
covenants or agreements qualified by materiality, in each case 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 its 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 the Transaction Documents or any agreements or
understandings the Purchaser may have with any such stockholder or any
violations by the Purchaser of state or federal securities laws or any conduct
by such Purchaser which constitutes fraud, gross negligence, willful misconduct
or malfeasance). To the extent that the foregoing undertaking by the Company may
be unenforceable for any reason, the Company shall make the maximum contribution
to the payment and satisfaction of each of such indemnified liabilities that is
permissible under applicable law. Promptly after receipt by any Person (the
“Indemnified Person”) of notice of any demand, claim or circumstances which
would or might give rise to a claim or the commencement of any action,
proceeding or investigation in respect of which indemnity may be sought pursuant
to this Section 4.9, such Indemnified Person shall promptly notify the Company
in writing and the Company shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Person, and
shall assume the payment of all reasonable fees and expenses relating to such
action, proceeding or investigation; provided, however, that the failure of any
Indemnified Person so to notify the Company shall not relieve the Company of its
obligations hereunder except to the extent that the Company is actually and
materially prejudiced by such failure to notify. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company and the Indemnified Person shall have mutually agreed to
the retention of such counsel; (ii) the Company shall have failed promptly to
assume the defense of such proceeding and to employ counsel reasonably
satisfactory to such Indemnified Person in such proceeding; or (iii) in the
reasonable judgment of counsel to such Indemnified Person, representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The Company shall not be liable for
any settlement of any proceeding effected without its prior written consent,
which consent shall not be unreasonably withheld, delayed or conditioned.
Without the prior written consent of the Indemnified Person, which consent shall
not be unreasonably withheld, delayed or conditioned, the Company shall not
effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Person is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Person, unless such settlement
includes an unconditional release of such Indemnified Person from all liability
arising out of such proceeding.

4.10       Principal Trading Market Listing. The Company shall comply in all
respects with any filing or other requirements of the Principal Trading Market
in connection with the transactions (including the issuance of Securities)
contemplated by this Agreement.

4.11       Form D; Blue Sky. The Company agrees to timely file a Form D with the
Commission with respect to the Securities as required under Regulation D and to
provide a copy thereof, promptly upon the written request of any Purchaser. The
Company, on or before each Closing Date, shall take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for or
to qualify the Securities for sale to the Purchasers under applicable securities
or “Blue Sky” laws of the states of the United States (or to obtain an exemption
from such qualification) and shall provide evidence of such actions promptly
upon the written request of any Purchaser.

4.12       Delivery of Preferred Stock and Warrants After Closing. The Company
shall deliver, or cause to be delivered, the respective Preferred Stock and
Warrants purchased by each Purchaser to such Purchaser within three (3) Trading
Days of the applicable Closing Date.

4.13       Short Sales and Confidentiality After The Date Hereof. Each Purchaser
shall not, and shall cause its Trading Affiliates not to, engage, directly or
indirectly, in any transactions in the Company’s securities (including, without
limitation, any Short Sales involving the Company’s securities) during the
period from the date hereof until the earlier of such time as (i) the
transactions contemplated by this Agreement are first publicly announced as
described in Section 4.5 or (ii) this Agreement is terminated in full pursuant
to Section 6.18. For as long as each Purchaser holds Registrable Securities (as
defined in the Registration Rights Agreement), such Purchaser shall not, and
shall cause its Trading Affiliates not to, engage, directly or indirectly, in
any Short Sales of the Company’s securities. Notwithstanding the foregoing, no
Purchaser makes any representation, warranty or covenant hereby that it will not
engage in Short Sales in the securities of the Company after such time that such
Purchaser no longer holds any Registrable Securities. Notwithstanding the
foregoing, in the event that such Purchaser 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 apply only
with respect to the portion of assets managed by the portfolio manager that have
knowledge about the financing transaction contemplated by this Agreement.
Moreover, notwithstanding the foregoing, in the event that any Purchaser has
sold Securities pursuant to Rule 144 prior to the effectiveness date of the
relevant Registration Statement and the Company has failed to deliver
certificates without legends prior to the settlement date for such sale
(assuming that such certificates meet the requirements set forth in Section
4.1(c) for the removal of legends), the provisions of this Section 4.13 shall
not prohibit such Purchaser from entering into net Short Sales for the purpose
of delivering shares of Common Stock in settlement of such sale.

4.14       Participation in Future Financing.

(a)                If the Company or any of the Subsidiaries issues any Common
Stock or Common Stock Equivalents for cash consideration other than in an Exempt
Issuance (as defined in the Certificate of Designations) (a “Subsequent
Financing”), from the date hereof until the date that is six (6) months from the
final Closing Date, each Purchaser who has purchased at least 1,000 shares of
Preferred Stock (a “Major Purchaser”) shall have the right to participate, up to
an amount equal to such Major Purchaser’s Participation Percentage, in the
Subsequent Financing on the same terms, conditions and price provided to the
other investors in the Subsequent Financing. For purposes of the foregoing
sentence, the “Participation Percentage” means, with respect to any Major
Purchaser, a percentage calculated by multiplying fifty percent (50%) by a
fraction, the numerator of which is the aggregate subscription amounts of such
Major Purchaser at all Closings, and the denominator of which is the aggregate
subscription amounts of all Major Purchasers at all Closings. In addition, if
the Company conducts a Subsequent Financing at any time while any Preferred
Stock is outstanding, each Purchaser shall have the right, in its sole
discretion, to surrender any or all shares of Preferred Stock held by such
Purchaser to the Company and receive, in exchange therefor, a number of the
securities issued in such Subsequent Financing calculated by dividing the
aggregate Stated Value of the shares of Preferred Stock so surrendered by the
price at which the securities are provided for in such Subsequent Financing.

(b)               At least three (3) Trading Days prior to the closing of the
Subsequent Financing, the Company shall deliver to each Purchaser a written
notice via e-mail of its intention to effect a Subsequent Financing (a
“Subsequent Financing Notice” and the date of such Purchaser’s receipt thereof,
the “Subsequent Financing Notice Date”). The Subsequent Financing Notice shall
describe in reasonable detail the proposed terms of such Subsequent Financing,
(i) the amount of proceeds intended to be raised thereunder and (ii) the Person
or Persons through or with whom such Subsequent Financing is proposed to be
effected (in the case of subclause (ii), only if such information is known and
the Company is not otherwise prohibited from disclosing such information) and
shall include a term sheet or similar document relating thereto as an
attachment. Notwithstanding the foregoing, the Subsequent Financing Notice
pertains to a public offering in which the pricing information regarding the
securities to be issued has not been determined, the Subsequent Financing Notice
may omit such pricing information provided it indicates the approximate date and
time that such pricing information will be determined.

(c)                If a Major Purchaser desires to participate in such
Subsequent Financing (or a Purchaser desires to surrender Preferred Stock in
such Subsequent Financing) pursuant to Section 4.14(a), it must provide written
notice via e-mail (the “Acceptance Notice”) to the Company (i) on the Subsequent
Financing Notice Date, if such Purchaser receives the Subsequent Financing
Notice no later than 10:00 A.M., New York City time, on any Trading Day, or (ii)
on the next Trading Day following the Subsequent Financing Notice Date, if the
conditions of clause (i) are not satisfied. The Acceptance Notice must state
that the Purchaser is willing to participate in the Subsequent Financing,
include the amount of such Purchaser’s participation (or, if applicable, the
number of shares of Preferred Stock to be surrendered), and, if applicable,
contain a representation and warranty that the Purchaser has such funds ready,
willing, and available for investment on the terms set forth in the Subsequent
Financing Notice. In the event that pricing information was omitted from the
Subsequent Financing Notice pursuant to the last sentence of Section 4.15(b),
the Purchaser’s Acceptance Notice may be made conditional upon the Purchaser’s
review and approval of the omitted pricing information. If the Purchaser
delivers to the Company such a conditional Acceptance Notice, the Company shall
deliver in writing the final pricing information to the Purchaser as promptly as
practicable after such information has been determined, whereupon Purchaser
shall have three (3) hours to notify the Company that it wishes to confirm or
withdraw its prior Acceptance Notice. If the Company receives no Acceptance
Notice from a Purchaser within the time periods described in the first sentence
of this Section 4.15(c), such Purchaser shall be deemed to have notified the
Company that it does not elect to participate.

(d)               The Company may effect the remaining portion of such
Subsequent Financing on the terms and with the Persons set forth in the
Subsequent Financing Notice. The Company must provide each Purchaser with a
second Subsequent Financing Notice, and each Purchaser will again have the right
of participation set forth above in this Section 4.15, if the Subsequent
Financing subject to the initial Subsequent Financing Notice is not consummated
for any reason on materially the terms set forth in such Subsequent Financing
Notice within thirty (30) Trading Days after the date of the initial Subsequent
Financing Notice.

(e)                The Company and each Purchaser agree that if a Purchaser
elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision
whereby such Purchaser shall be required to agree to any restrictions on trading
as to any of the Securities purchased hereunder or be required to consent to any
amendment to or termination of, or grant any waiver, release or the like under
or in connection with, this Agreement, without the prior written consent of such
Purchaser.

(f)                Notwithstanding anything to the contrary in this Section 4.15
and unless otherwise agreed to by such Purchaser, if the Company delivers
Subsequent Financing Notice to a Purchaser, the Company shall either confirm in
writing to the Purchaser that the transaction with respect to the Subsequent
Financing has been abandoned or shall publicly disclose its intention to issue
the securities in the Subsequent Financing, in either case in such a manner such
that the Purchaser will not be in possession of any material, non-public
information, by the tenth (10th) Trading Day following delivery of the
Subsequent Financing Notice. If by such tenth (10th) Trading Day, no public
disclosure regarding a transaction with respect to the Subsequent Financing has
been made, and no notice regarding the abandonment of such transaction has been
received by a Purchaser, such transaction shall be deemed to have been
abandoned, and the Purchaser shall not be deemed to be in possession of any
material, non-public information with respect to the Company or any of its
Subsidiaries.

4.15          Charter Amendment.

(a)    Each Purchaser acknowledges that, as of the date of this Agreement, the
Company does not have sufficient authorized shares of Common Stock available for
issuance upon conversion of all of the Preferred Stock or exercise of all of the
Warrants issued pursuant to this Agreement and, therefore, any attempts at
conversion of the Preferred Stock or exercise of the Warrants will be contingent
upon availability of sufficient shares of Common Stock at the time of any
particular conversion or exercise, as applicable. Notwithstanding anything to
the contrary in the Transaction Documents, upon submission to the Company of any
Notice of Conversion (as defined in the Certificate of Designations) or any
Exercise Notice (as defined in the Warrants) at any time prior to the
effectiveness of the Charter Amendment, if there are insufficient shares of
authorized Common Stock available for issuance in accordance with such Notice of
Conversion or Exercise Notice, and the Company is not otherwise in breach of
this Section 4.15, each Purchaser agrees that any Notice of Conversion (as
defined in the Certificate of Designations) or Exercise Notice (as defined in
the Warrants) shall be deemed immediately withdrawn, without any penalty to the
Company, upon delivery, within one (1) Trading Day after receipt of such Notice
of Conversion or Exercise Notice, of a certificate of an officer of the Company
stating that there are insufficient shares of Common Stock available for
issuance in accordance with such Notice of Conversion or Exercise Notice.

(b)   On or before the ninetieth (90th) day following the date of this Agreement
(the “Stockholders Meeting Deadline”), the Company shall hold a meeting of its
stockholders (which meeting may be an annual or special meeting) (the
“Stockholders Meeting”) at which the Company shall seek, and use its
commercially reasonable efforts to obtain, approval from the Company’s
stockholders for either or both of the following proposals: (i) the increase of
the Company’s authorized shares of Common Stock by at least 100,000,000,
provided that the Proposal shall also expressly indicate that a portion of such
additional shares shall be used to satisfy the Company’s obligations to issue
Conversion Shares under the Preferred Stock and issue Warrant Shares under the
Warrants, and (ii) a reverse stock split of the Company’s Common Stock (such
proposal or proposals in subclauses (i) and (ii) for which approval of the
Company’s stockholders is actually sought, the “Charter Amendment,” the approval
from the Company’s stockholders of the Charter Amendment, if and when given, the
“Stockholder Approval,” and the date on which the Stockholder Approval is given,
the “Stockholder Approval Date”). In connection with the Charter Amendment, the
Company will prepare and promptly file with the Commission proxy materials
(including a proxy statement and form of proxy) for use at the Stockholders
Meeting and, after receiving and promptly responding to any comments of the
Commission thereon, shall promptly mail such proxy materials to the stockholders
of the Company. Each Purchaser shall promptly furnish in writing to the Company
such information relating to such Purchaser and its investment in the Company as
the Company may reasonably request for inclusion in the Proxy Statement. The
Company will comply with Section 14(a) of the Exchange Act and the rules
promulgated thereunder in relation to any proxy statement (as amended or
supplemented, the “Proxy Statement”) and any form of proxy to be sent to the
stockholders of the Company in connection with the Stockholders Meeting, and the
Proxy Statement shall not, on the date that the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to stockholders or at
the time of the Stockholders Meeting, contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein not false or misleading, or omit to state any material
fact necessary to correct any statement in any earlier communication with
respect to the solicitation of proxies for the Stockholders Meeting that has
become false or misleading.

(c)    Subject to its fiduciary obligations under applicable law (as determined
in good faith by the Board of Directors after consultation with the Company’s
outside counsel), the Board of Directors shall recommend to the Company’s
stockholders that they vote in favor of the Charter Amendment (the “Board
Recommendation”) and take all commercially reasonable action to solicit the
approval of the stockholders for the Charter Amendment unless the Board of
Directors shall have modified, amended or withdrawn the Board Recommendation
pursuant to the provisions of the immediately succeeding sentence. Whether or
not the Board of Directors modifies, amends or withdraws the Board
Recommendation pursuant to the immediately preceding sentence, the Company
shall, in accordance with Section 146 of the Delaware General Corporation Law
and the provisions of its certificate of incorporation and bylaws, (i) take all
action necessary to convene the Stockholders Meeting on or prior to the
Stockholders Meeting Deadline, to consider and vote upon the approval of the
Charter Amendment, (ii) submit the Charter Amendment at the Stockholders Meeting
to the stockholders of the Company for their approval, and (iii) conditioned
upon receipt of the Stockholder Approval, promptly file the Charter Amendment
with the Secretary of State of the State of Delaware.

(d)   The Company and the Purchasers hereby declare that it is impossible to
measure in money the damages which will accrue to the parties hereto by reason
of the failure of any party to perform any of its obligations set forth in this
Section 4.15. Therefore, the Purchasers shall have the right to seek specific
performance of such obligations, and if the Purchasers shall institute any
action or proceeding to enforce the provisions hereof, the Company hereby waives
the claim or defense that the party instituting such action or proceeding has an
adequate remedy at law.

ARTICLE V. 

CONDITIONS PRECEDENT TO CLOSING

 

5.1           Conditions Precedent to the Obligations of the Purchasers to
Purchase Securities. The obligation of each Purchaser to acquire Preferred Stock
and Warrants at any Closing is subject to the fulfillment to such Purchaser’s
satisfaction, on or prior to the applicable Closing Date, of each of the
following conditions (except to the extent expressly applicable to a particular
Closing), any of which may be waived by such Purchaser (as to itself only):

(a)                Representations and Warranties. The representations and
warranties of the Company contained herein shall be true and correct in all
material respects (except for those representations and warranties which are
qualified as to materiality, in which case such representations and warranties
shall be true and correct in all respects) as of the date when made and as of
such Closing Date, as though made on and as of such date, except for such
representations and warranties that speak as of a specific date.

(b)               Performance. The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by it at or prior to such Closing.

(c)                No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents.

(d)               Consents. The Company shall have obtained in a timely fashion
any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Securities (including all
Required Approvals), all of which shall be and remain so long as necessary in
full force and effect.

(e)                Adverse Changes. Since the date of execution of this
Agreement, no event or series of events shall have occurred that has had or
would reasonably be expected to have a Material Adverse Effect.

(f)                No Suspensions of Trading in Common Stock. The Common Stock
shall not have been suspended, as of such Closing Date, by the Commission or the
Principal Trading Market from trading on the Principal Trading Market nor shall
suspension by the Commission or the Principal Trading Market have been
threatened, as of such Closing Date, either (A) in writing by the Commission or
the Principal Trading Market or (B) by falling below the minimum listing
maintenance requirements of the Principal Trading Market, if any.

(g)                Company Deliverables. The Company shall have delivered the
Company Deliverables in accordance with Section 2.2(a).

(h)               Compliance Certificate. The Company shall have delivered to
each Purchaser a certificate, dated as of such Closing Date and signed by its
Chief Executive Officer or its Chief Financial Officer, dated as of such Closing
Date, certifying to the fulfillment of the conditions specified in Sections
5.1(a) and (b) in the form attached hereto as Exhibit G.

(i)                 Extension of Secured Note. The Company shall have entered
into an amendment agreement with Tonaquint, Inc. that extends the date upon
which the balance is due under the Secured Note until at least June 30, 2016.

(j)                 Assurances from Transfer Agent. The Company shall have
delivered to each Purchaser reasonable evidence that the Transfer Agent shall be
willing and able to issue and deliver shares of Common Stock to each Purchaser
in accordance with the terms and conditions (including, but not limited to, the
time period and legend requirements) of the Transaction Documents.

(k)               Initial Registration Statement and Charter Amendment. With
respect to the Second Closing only, (i) a Registration Statement covering the
resale by the Purchasers of all Registrable Securities (as defined in the
Registration Rights Agreement) required to be registered on such Registration
Statement in accordance with the Registration Rights Agreement shall be
effective and (ii) the Charter Amendment shall have been filed with the
Secretary of State of the State of Delaware and shall be effective.

5.2           Conditions Precedent to the Obligations of the Company to sell
Securities. The Company’s obligation to sell and issue the Preferred Stock and
Warrants at any Closing to each Purchaser is subject to the fulfillment to the
satisfaction of the Company on or prior to the applicable Closing Date of the
following conditions, any of which may be waived by the Company:

(a)                Representations and Warranties. The representations and
warranties made by such Purchaser in Section 3.2 shall be true and correct in
all material respects (except for those representations and warranties which are
qualified as to materiality, in which case such representations and warranties
shall be true and correct in all respects) as of the date when made, and as of
such Closing Date as though made on and as of such date, except for
representations and warranties that speak as of a specific date.

(b)               Performance. The Purchaser shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by such Purchaser at or prior to such Closing Date.

(c)                No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents.

(d)               Consents. The Company shall have obtained in a timely fashion
any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Securities, all of which shall
be and remain so long as necessary in full force and effect.

(e)                Purchaser Deliverables. The Purchaser shall have delivered
its Purchaser Deliverables in accordance with Section 2.2(b).

ARTICLE VI.
MISCELLANEOUS

6.1           Fees and Expenses. Except as otherwise expressly set forth in
Section 2.1(a), the Company and the Purchasers shall each pay the fees and
expenses of their respective advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party in connection with 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 levied in connection with the sale and issuance of the Securities to the
Purchasers. Each Purchaser, severally and not jointly with any other Purchaser,
shall be responsible for all other tax liability that may arise as a result of
holding or transferring the Securities by it.

6.2           Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules. At or after any Closing, and without further
consideration, the Company and the Purchasers will execute and deliver to the
other such further documents as may be reasonably requested in order to give
practical effect to the intention of the parties under the Transaction
Documents.

6.3           Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via e-mail or facsimile (provided the
sender receives a machine-generated confirmation of successful transmission) at
the e-mail address or facsimile number specified in this Section 6.3 prior to
5:00 P.M., New York City time, on a Trading Day, (b) the next Trading Day after
the date of transmission, if such notice or communication is delivered via
e-mail or facsimile at the e-mail address or facsimile number specified in this
Section 6.3 on a day that is not a Trading Day or later than 5:00 P.M., New York
City time, on any Trading Day, (c) the Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service with
next day delivery specified, 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 follows:

If to the Company:

 

Guided Therapeutics Inc.

5835 Peachtree Corners East

Suite D

Norcross, GA 30092

Telephone No.: (770) 242-8723

Facsimile No.: (770) 242-8639

Attention: President

E-mail: president@guidedinc.com

 

With a copy, which shall not constitute notice, to:

 

Jones Day

1420 Peachtree St. NE

Suite 800

Atlanta, Georgia 30309

Telephone No.: (404) 581-3939

Facsimile No.: (404) 581-8330

Attention: Heith D. Rodman

E-mail: hdrodman@jonesday.com

 

If to a Purchaser: To the address, facsimile number or e-mail address set forth
under such

                               Purchaser’s name on the signature page hereof;

 

If to the Lead Purchaser, with a copy, which shall not constitute notice, to:

 

Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.

150 Fayetteville Street

Suite 2300
                Raleigh, North Carolina 27601

Telephone No.: (919) 821-6714

Facsimile No.: (919) 821-6800

Attention: Margaret Rosenfeld

E-mail: mrosenfeld@smithlaw.com

 

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

 

6.4           Amendments; Waivers. Except as expressly provided in this
Agreement, no provision of this Agreement may be waived or amended except in a
written instrument signed, in the case of amendment, by the Company and the
holders of at least a majority in interest of the Preferred Stock still held by
all Purchasers or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.

6.5           Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party. This Agreement
shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the Transaction
Documents.

6.6           Successors and Assigns. The provisions of this Agreement shall
inure to the benefit of and be binding upon the parties and their successors and
permitted assigns. This Agreement, or any rights or obligations hereunder, may
not be assigned by the Company without the prior written consent of at least a
majority in interest of the Securities still held by Purchasers. Any Purchaser
may assign its rights hereunder in whole or in part to any Person to whom such
Purchaser assigns or transfers any Securities in compliance with the Transaction
Documents and applicable law, provided such transferee shall agree in writing to
be bound, with respect to the transferred Securities, by the terms and
conditions of this Agreement that apply to the “Purchasers”.

6.7           No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.

6.8           Survival. Subject to applicable statute of limitations, the
representations, warranties, agreements and covenants contained herein shall
survive each Closing and the delivery of the Securities.

6.9           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 signature page were an original thereof.

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

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

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

6.13       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.

6.14       Adjustments in Share Numbers and Prices. In the event of any stock
split, subdivision, dividend or distribution payable in shares of Common Stock
(or other securities or rights convertible into, or entitling the holder thereof
to receive directly or indirectly shares of Common Stock), combination or other
similar recapitalization or event occurring after the date hereof and prior to
the Closing, each reference in any Transaction Document to a number of shares or
a price per share shall be deemed to be amended to appropriately account for
such event.

6.15       Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law.

6.16       Dispute Resolution. The parties (a) hereby irrevocably and
unconditionally submit to the jurisdiction of the state courts of the State of
North Carolina and to the jurisdiction of the United States District Court for
the Eastern District of North Carolina for the purpose of any suit, action or
other proceeding arising out of or based upon this Agreement, (b) agree not to
commence any suit, action or other proceeding arising out of or based upon this
Agreement except in the state courts of the State of North Carolina or the
United States District Court for the Eastern District of North Carolina, and (c)
hereby waive, and agree not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that the suit, action
or proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement or the subject matter
hereof may not be enforced in or by such court.

WAIVER OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER
TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF
THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS
(INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES
HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY
HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

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

  GUIDED THERAPEUTICS, INC.           By:  /s/ Gene S. Cartwright  
        Name:  Gene S. Cartwright            Title:  President and Chief
Executive Officer

 

 

 

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  NAME OF PURCHASER: Aquarius Opportunity Fund           By: EOS INVESTMENT
LTD., ITS INVESTMENT Manager         By:      /s/ Gregory Pepin   Name: Gregory
Pepin   Title: Managing Director       Tax ID: n/a        Address for Notice:  
    __________________________________________  
__________________________________________       Telephone No.:
______________________________       Facsimile No.:
_______________________________       Email:
_____________________________________       Attention:
__________________________________

 

 

Delivery Instructions:

(if different than above)

 

c/o _______________________________

 

Street: ____________________________

 

City/State/Zip: ______________________

 

Attention: __________________________

 

Telephone No.: ____________________________

 

 

 

 

 

 

 

 

 

  NAME OF PURCHASER: ProMed Partners LP           By: EOS INVESTMENT LTD., ITS
INVESTMENT Manager             By:      /s/ David B. Musket   Name:       David
B. Musket   Title: Managing Member       Tax ID:        Address for Notice:    
  __________________________________________  
__________________________________________       Telephone No.:
______________________________       Facsimile No.:
_______________________________       Email:
_____________________________________       Attention:
__________________________________

 

 

Delivery Instructions:

(if different than above)

 

c/o _______________________________

 

Street: ____________________________

 

City/State/Zip: ______________________

 

Attention: __________________________

 

Telephone No.: ____________________________

 

 

 

 

 

 

 

 

 

 

  NAME OF PURCHASER:  David B. Musket               By:      /s/ David Musket  
Name:    Title:        Tax ID: n/a        Address for Notice:      
__________________________________________  
__________________________________________       Telephone No.:
______________________________       Facsimile No.:
_______________________________       Email:
_____________________________________       Attention:
__________________________________

 

 

Delivery Instructions:

(if different than above)

 

c/o _______________________________

 

Street: ____________________________

 

City/State/Zip: ______________________

 

Attention: __________________________

 

Telephone No.: ____________________________

 

 

 

 

 

 

 

 

 

 

 

  NAME OF PURCHASER:  John Imhoff               By:      /s/ John Imhoff  
Name:    Title:        Tax ID: n/a        Address for Notice:      
__________________________________________  
__________________________________________       Telephone No.:
______________________________       Facsimile No.:
_______________________________       Email:
_____________________________________       Attention:
__________________________________

 

 

Delivery Instructions:

(if different than above)

 

c/o _______________________________

 

Street: ____________________________

 

City/State/Zip: ______________________

 

Attention: __________________________

 

Telephone No.: ____________________________

 

 

 

 

 

 

 

 

 

 

 

  NAME OF PURCHASER:  Delores Maloof               By:      /s/ Delores Maloof  
Name:    Title:        Tax ID: n/a        Address for Notice:      
__________________________________________  
__________________________________________       Telephone No.:
______________________________       Facsimile No.:
_______________________________       Email:
_____________________________________       Attention:
__________________________________

 

 

Delivery Instructions:

(if different than above)

 

c/o _______________________________

 

Street: ____________________________

 

City/State/Zip: ______________________

 

Attention: __________________________

 

Telephone No.: ____________________________

 

 

 

 

 

 

 

 

 

 

 

EXHIBITS:

A: Schedule of Purchasers

B: Certificate of Designation of Series C Preferred Stock

C: Form of Warrant

D: Form of Registration Rights Agreement

E: Form of Opinion of Company Counsel

F: Form of Secretary’s Certificate

G: Form of Officer’s Certificate

 

SCHEDULES:

3.1(a) Subsidiaries

 

 

 

 

 

 

 

 

Exhibit A

Schedule of Purchasers

 

Purchaser Name: First Closing Preferred Stock First Closing Warrant Shares First
Closing Purchase Price Second Closing Preferred Stock Second Closing Warrant
Shares Second Closing Purchase Price Series B Rollover (y/n) Aquarius
Opportunity Fund 3,334 52,642,105 $2,500,500 2,000 31,578,947 $1,500,000 N
ProMed Partners LP n/a n/a n/a 67 1,057,895 $50,250 Y David B. Musket n/a n/a
n/a 533 8,415,789 $399,750 Y John Imhoff n/a n/a n/a 667 10,531,579 $500,250 Y
Delores Maloof n/a n/a n/a 136 2,147,368 $102,000 Y