Exhibit 10.8

 
SECURITIES PURCHASE AGREEMENT
 
THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of December __,
2013, entered into by and among BiopharmX Inc., a Delaware corporation (the
“Company”), and the Buyer(s) set forth on the signature pages affixed hereto
(individually, a “Buyer” or collectively the “Buyers”).
 
WITNESSETH:
 
WHEREAS, the Company and the Buyer(s) are executing and delivering this
Agreement in reliance upon an exemption from securities registration pursuant to
Section 4(2) and/or Rule 506 of Regulation D (“Regulation D”) and/or Regulation
S (“Regulation S”) as promulgated by the U.S. Securities and Exchange Commission
(the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”);
and
 
WHEREAS, the parties desire that, upon the terms and subject to the conditions
contained herein, the Company shall sell to the Buyers, as provided herein, and
the Buyers shall purchase up to a maximum of US$1,000,000 principal amount (the
“Maximum Amount”) (with the minimum subscription amount of $250,000) at a
purchase price of 100% (par) (the “Purchase Price”) of the Company’s 6% Secured
Convertible Promissory Notes with a term of twelve (12) months (the “Notes”)
together with the right to receive on the closing date of the Merger warrants
for no additional consideration granting the Buyers the right to purchase a
number of shares of common stock of Pubco, as defined below, equal to 100% of
the number of the Conversion Securities (the “Warrants”); and the total Purchase
Price shall be allocated among the Buyer(s) in the respective amounts set forth
on the Buyer Omnibus Signature Page(s), affixed hereto (the “Subscription
Amount”); and
 
WHEREAS, the Company intends to enter into a reverse triangular merger with a
publicly traded company, to be identified (“Pubco”), the common stock of which
(“Pubco Common Stock”) is quoted on the OTC Markets, in which merger Pubco will
cancel the outstanding shares of the Company in exchange for shares of Pubco
Common Stock (such transaction, or any other transaction that results in the
Company and its subsidiaries becoming subsidiaries of Pubco, or substantially
all of the assets of the Company and its subsidiaries becoming owned directly or
indirectly by, and their business being conducted directly or indirectly by,
Pubco, the “Merger”); and
 
WHEREAS, in anticipation of the Merger, Pubco may conduct a forward or reverse
stock split (the “Stock Split”); and
 
WHEREAS, simultaneously with or prior to the closing of the Merger, Pubco may
transfer (i) all of its pre-Merger operating assets and liabilities to a newly
formed wholly owned subsidiary (the “Split-Off Subsidiary”), and (ii) all of the
outstanding shares of capital stock of the Split-Off Subsidiary to Pubco’s
pre-Merger insiders, in exchange for the surrender and cancellation of shares of
the Pubco Common Stock held by such persons (the “Split-Off”) (the sale of the
Notes, the Merger, the Stock Split, the Split-Off and the transactions
contemplated thereby are hereinafter referred to as the “Transactions”; the
agreements contemplated by the Transactions are hereinafter referred to as the
“Transaction Documents”; and the Notes and the Security Agreement are
hereinafter referred to as the “Note Documents”); and
 
 
 

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WHEREAS, in connection with or following the Merger, Pubco intends to conduct a
private placement offering, pursuant to Regulation D and/or Regulation S under
the Securities Act and any and all applicable state securities laws (the
“PIPE”), for gross proceeds of up to US$6,000,000 (the “PIPE”) of Pubco’s
securities (the “PIPE Securities”), at an offering price per share (or per share
equivalent as converted) to be determined by the Company (the “PIPE Offering
Price”); and
 
WHEREAS, provided the Merger has been consummated, simultaneously upon the
closing of the PIPE for gross proceeds of at least $2,000,000 (the “Qualified
Financing”), the entire outstanding principal amount of, and interest accrued
but unpaid, on the Notes will automatically be converted into the Pubco’s equity
securities (the “Conversion Securities”), at a conversion price equal to 80% of
the PIPE Offering Price (the “Conversion Price”).
 
WHEREAS, the aggregate proceeds of the sale of the Notes shall be held in
escrow, pending closing of the purchase and sale of the Notes, pursuant to the
terms of an escrow agreement, substantially in the form of Exhibit D to this
Agreement, between the Company and the Escrow Agent (as defined below) (the
“Escrow Agreement”).
 
NOW, THEREFORE, in consideration of the mutual covenants and other agreements
contained in this Agreement the Company and the Buyer(s) hereby agree as
follows:
 
1.           PURCHASE AND SALE OF NOTES.
 
  (a)         Purchase of Notes and Warrants.  Subject to the satisfaction (or
waiver) of the terms and conditions of this Agreement, each Buyer agrees,
severally and not jointly, to purchase at Closing (as defined below), and the
Company agrees to sell and issue to each Buyer, severally and not jointly, at
Closing, the Notes in principal amounts and to issue the Warrants as set forth
on the Buyer Omnibus Signature Page, attached hereto as Annex A, for each Buyer
affixed hereto.  The Notes shall be substantially in the form attached as
Exhibit A to this Agreement, and the Warrants shall be substantially in the form
attached as Exhibit B to this Agreement.  Upon Buyer’s execution of this
Agreement on the Buyer Omnibus Signature Page and Buyer’s completion of the
Accredited Investor Certification, the Investor Profile, the Anti-Money
Laundering Information Form, in the form attached as Annex A to this Agreement,
and any other documents, agreements, supplements and additions thereto required
by the Company (collectively, the “Subscription Documents”) to be completed by
the Buyer, the Buyer shall wire transfer the Subscription Amount set forth on
its Buyer Omnibus Signature Page, in same-day funds, in accordance with the
instructions set forth immediately below, which Subscription Amount shall be
held in escrow pursuant to the terms of the Escrow Agreement and disbursed in
accordance therewith.
 
 
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Wire Instructions

Bank’s Name and Address:
JP Morgan Chase N.A.
919 Third Avenue
   
New York, NY 10022
Account #:
_________________________
ABA Routing #:
021000021
SWIFT:
CHASUS33 (for overseas transfers)

  (b)         Closing Date.  The initial closing of the purchase and sale of the
Notes (the “Closing”) shall take place as soon as practicable following the
satisfaction of the conditions to the Closing set forth herein (or such later
date as is mutually agreed to by the Company and the Buyer(s)).  There may be
multiple Closings until such time as subscriptions for the sale of the Notes up
to the Maximum Amount are accepted (the date of any such Closing is hereinafter
referred to as a “Closing Date”).  Each Closing shall occur on a Closing Date at
the offices of Ofsink, LLC, 900 Third Avenue, 5th Floor, New York, New York
10022 (or such other place as is mutually agreed to by the Company and the
Buyer(s)).
 
  (c)         Escrow Arrangements; Form of Payment.  Upon execution hereof by
the Buyer and pending the Closing, the Purchase Price shall be deposited in a
non-interest bearing escrow account with Ofsink, LLC, as escrow agent (the
“Escrow Agent”), pursuant to the terms of the Escrow Agreement.  Subject to the
satisfaction of the terms and conditions of this Agreement, on the Closing Date,
(i) the Escrow Agent shall deliver to the Company in accordance with the terms
of the Escrow Agreement the Purchase Price for the Notes to be issued and sold
to the Buyer(s) on such Closing Date, and (ii) the Company shall, as soon
thereafter as is practicable, deliver to the Buyer(s), the Note and the Warrant,
duly executed on behalf of the Company.
 
  (d)        The Buyer understands and agrees that the Company, in its sole and
absolute discretion, reserves the right to accept or reject this or any other
subscription for the Securities, in whole or in part, notwithstanding prior
receipt by the Buyer of notice of acceptance of this subscription.  If the
subscription is rejected in whole or the offering of the Securities is
terminated, all funds received by the Company from the Buyer will be immediately
returned without interest or offset, and this subscription shall thereafter be
of no further force or effect.  If this subscription is rejected in part, the
funds for the rejected portion of this subscription will be returned without
interest or offset, and this subscription will continue in full force and effect
to the extend this subscription was accepted.
 
2.           BUYER’S REPRESENTATIONS AND WARRANTIES.
 
Each Buyer represents and warrants, severally and not jointly, as to such Buyer,
that:
 
  (a)         Investment Purpose.  Each Buyer is acquiring the Securities, and,
upon conversion of the Notes, the Buyer will acquire the Conversion Securities
and/or the shares of Pubco Common Stock included therein (the “Conversion
Shares”) and/or the shares of Pubco Common Stock issuable upon exercise of the
Warrants (collectively, the “Warrant Shares” and together with the Notes and the
Conversion Securities, the “Securities”)), for its own account for investment
only and not with a view towards, or for resale in connection with, the public
sale or distribution thereof, except pursuant to sales registered or exempted
under the Securities Act; provided, however, that by making the representations
herein, such Buyer reserves the right to dispose of the Securities at any time
in accordance with or pursuant to an effective registration statement covering
such Securities, or an available exemption under the Securities Act.  The Buyer
agrees not to sell, hypothecate or otherwise transfer the Securities unless such
Securities are registered under the federal and applicable state securities laws
or unless, in the opinion of counsel satisfactory to the Company, an exemption
from such law is available.
 
 
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  (b)        Residence of Buyer.  Each Buyer resides in the jurisdiction set
forth on the Buyer Omnibus Signature Page affixed hereto.
 
  (c)        Non-U.S. Person.  If a Buyer is not a person in the United States
or a U.S. Person (as defined in Rule 902(k) of Regulation S) or is not
purchasing the Notes on behalf of a person in the United States or a U.S.
Person:
 
(i)    neither the Buyer nor any disclosed principal is a U.S. Person nor are
they subscribing for the Notes for the account of a U.S. Person or for resale in
the United States and the Buyer confirms that the Notes have not been offered to
the Buyer in the United States and that this Agreement has not been signed in
the United States;
 
(ii)   The Buyer (i) as of the execution date of this Agreement is not located
within the United States, and (ii) is not purchasing the Notes for the account
or benefit of any U.S. person except in accordance with one or more available
exemptions from the registration requirements of the Securities Act or in a
transaction not subject thereto;
 
(iii)   the Buyer acknowledges that the Notes have not been registered under the
Securities Act and may not be offered or sold in the United States or to a U.S.
Person unless the securities are registered under the Securities Act and all
applicable state securities laws or an exemption from such registration
requirements is available, and further agrees that hedging transactions
involving such securities may not be conducted unless in compliance with the
Securities Act;
 
(iv)   the Buyer and if applicable, the disclosed principal for whom the Buyer
is acting, understands that the Company is the seller of the Notes and
underlying securities and that, for purposes of Regulation S, a “distributor” is
any underwriter, dealer or other person who participates pursuant to a
contractual arrangement in the distribution of securities sold in reliance on
Regulation S and that an “affiliate” is any partner, officer, director or any
person directly or indirectly controlling, controlled by or under common control
with any person in question.  Except as otherwise permitted by Regulation S, the
Buyer and if applicable, the disclosed principal for whom the Buyer is acting,
agrees that it will not, during a one year distribution compliance period, act
as a distributor, either directly or through any affiliate, or sell, transfer,
hypothecate or otherwise convey the Notes or underlying securities other than to
a non-U.S. Person;
 
 
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(v)     the Buyer and if applicable, the disclosed principal for whom the Buyer
is acting, acknowledges and understands that in the event the Notes are offered,
sold or otherwise transferred by the Buyer or if applicable, the disclosed
principal for whom the Buyer is acting, to a non-U.S Person prior to the
expiration of a one year distribution compliance period, the purchaser or
transferee must agree not to resell such securities except in accordance with
the provisions of Regulation S, pursuant to registration under the Securities
Act, or pursuant to an available exemption from registration; and must further
agree not to engage in hedging transactions with regard to such securities
unless in compliance with the Securities Act; and
 
(vi)    neither the Buyer nor any disclosed principal will offer, sell or
otherwise dispose of the Notes or the underlying securities in the United States
or to a U.S. Person unless (A) the Company has consented to such offer, sale or
disposition and such offer, sale or disposition is made in accordance with an
exemption from the registration requirements under the Securities Act and the
securities laws of all applicable states of the United States or (B) the SEC has
declared effective a registration statement in respect of such securities.
 
  (d)        Accredited Investor Status.  The Buyer meets the requirements of at
least one of the suitability standards for an “Accredited Investor” as that term
is defined in Rule 501(a)(3) of Regulation D, and as set forth on the Accredited
Investor Certification attached hereto.
 
  (e)        Accredited Investor Qualifications.  The Buyer (i) if a natural
person, represents that the Buyer has reached the age of 21 and has full power
and authority to execute and deliver this Agreement and all other related
agreements or certificates and to carry out the provisions hereof and thereof;
(ii) if a corporation, partnership, or limited liability company or partnership,
or association, joint stock company, trust, unincorporated organization or other
entity, represents that such entity was not formed for the specific purpose of
acquiring the Notes, such entity is duly organized, validly existing and in good
standing under the laws of the state of its organization, the consummation of
the transactions contemplated hereby is authorized by, and will not result in a
violation of state law or its charter or other organizational documents, such
entity has full power and authority to execute and deliver this Agreement and
all other related agreements or certificates and to carry out the provisions
hereof and thereof and to purchase and hold the Notes, the execution and
delivery of this Agreement has been duly authorized by all necessary action,
this Agreement has been duly executed and delivered on behalf of such entity and
is a legal, valid and binding obligation of such entity; or (iii) if executing
this Agreement in a representative or fiduciary capacity, represents that it has
full power and authority to execute and deliver this Agreement in such capacity
and on behalf of the subscribing individual, ward, partnership, trust, estate,
corporation, or limited liability company or partnership, or other entity for
whom the Buyer is executing this Agreement, and such individual, partnership,
ward, trust, estate, corporation, or limited liability company or partnership,
or other entity has full right and power to perform pursuant to this Agreement
and make an investment in the Company, and represents that this Agreement
constitutes a legal, valid and binding obligation of such entity.  The execution
and delivery of this Agreement will not violate or be in conflict with any
order, judgment, injunction, agreement or controlling document to which the
Buyer is a party or by which it is bound.
 
 
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  (f)         Buyer Relationship with Brokers  Subject to Section 2(h) hereof,
the Buyer’s substantive relationship with any broker for the transactions
contemplated hereby or subagent thereof (collectively, “Brokers”) through which
the Buyer is subscribing for the Notes predates such Broker’s contact with the
Buyer regarding an investment in the Notes.
 
  (g)        Solicitation.  The Buyer is unaware of, is in no way relying on,
and did not become aware of the offering of the Notes through or as a result of,
any form of general solicitation or general advertising including, without
limitation, any article, notice, advertisement or other communication published
in any newspaper, magazine or similar media or broadcast over television or
radio, in connection with the offering and sale of the Notes and is not
subscribing for the Notes and did not become aware of the offering of the Notes
through or as a result of any seminar or meeting to which the Buyer was invited
by, or any solicitation of a subscription by, a person not previously known to
the Buyer in connection with investments in securities generally.
 
  (h)        Brokerage Fees.  The Buyer has taken no action that would give rise
to any claim by any person for brokerage commissions, finders’ fees or the like
relating to this Agreement or the transaction contemplated hereby (other than
commissions to be paid by the Company to the Brokers).
 
  (i)         Buyer’s Advisors.  The Buyer and the Buyer’s attorney, accountant,
purchaser representative and/or tax advisor, if any (collectively, the
“Advisors”), as the case may be, has such knowledge and experience in financial,
tax, and business matters, and, in particular, investments in securities, so as
to enable it to utilize the information made available to it in connection with
the Notes to evaluate the merits and risks of an investment in the Notes and the
Company and to make an informed investment decision with respect thereto.
 
  (j)         Buyer Liquidity.  Each Buyer has adequate means of providing for
such Buyer’s current financial needs and foreseeable contingencies and has no
need for liquidity of its investment in the Notes for an indefinite period of
time, and after purchasing the Notes the Buyer will be able to provide for any
foreseeable current needs and possible personal contingencies.  The Buyer must
bear and acknowledges the substantial economic risks of the investment in the
Notes including the risk of illiquidity and the risk of a complete loss of this
investment.
 
  (k)        High Risk Investment.  The Buyer is aware that an investment in the
Notes and the Warrants, and upon closing of the Merger and conversion of the
Notes, the Conversion Shares, and upon exercise of the Warrants, the Warrant
Shares involves a number of very significant risks and has carefully researched
and reviewed and understands the risks of, and other considerations relating to,
the purchase of the Notes, and upon conversion of the Notes, the Conversion
Shares, and upon exercise of the Warrants, the Warrant Shares.  Buyer
acknowledges that, among other things, while the Company and its subsidiaries
shall have entered into the Security Agreement with the Collateral Agent (as
defined below), pursuant to which the Company and its subsidiaries shall have
granted and conveyed to the Collateral Agent, for the benefit of the Buyers, a
security interest in all of the tangible and intangible assets of the Company
and its subsidiaries, as security for the full and timely repayment of the
Notes, which shall be governed by the laws of the State of New York, neither
Company nor the Collateral Agent has, and neither of them intends to, (A)
review, research or obtain any report or opinion on the title of the Company and
its subsidiaries to any assets, or (B) take any action to perfect any security
interest in any assets of the Company’s subsidiaries in any jurisdiction outside
of the United States of America.
 
 
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  (l)         Reliance on Exemptions.  Each Buyer understands that the Notes 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
Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire such securities.
 
  (m)       Information.  Each Buyer and its Advisors have been furnished with
all documents and materials relating to the business, finances and operations of
the Company and its subsidiaries and information that Buyer requested and deemed
material to making an informed investment decision regarding its purchase of the
Notes.  Each Buyer and its Advisors have been afforded the opportunity to review
such documents and materials and the information contained therein.  Each Buyer
and its Advisors have been afforded the opportunity to ask questions of the
Company and its management.  Each Buyer understands that such discussions, as
well as any written information provided by the Company, were intended to
describe the aspects of the Company’s and its subsidiaries’ business and
prospects which the Company believes to be material, but were not necessarily a
thorough or exhaustive description, and except as expressly set forth in this
Agreement, the Company makes no representation or warranty with respect to the
completeness of such information and makes no representation or warranty of any
kind with respect to any information provided by any entity other than the
Company.  Some of such information may include projections as to the future
performance of the Company and its subsidiaries, which projections may not be
realized, may be based on assumptions which may not be correct and may be
subject to numerous factors beyond the Company’s and its subsidiaries’
control.  Additionally, the Buyer understands and represents that he is
purchasing the Notes notwithstanding the fact that the Company and its
subsidiaries may disclose in the future certain material information the
Subscriber has not received, including the financial results of the Company and
its subsidiaries for their current fiscal quarters.  Neither such inquiries nor
any other due diligence investigations conducted by such Buyer or its Advisors
shall modify, amend or affect such Buyer’s right to rely on the Company’s
representations and warranties contained in Section 3 below.  Each Buyer has
sought such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision with respect to its investment in the
Notes.
 
  (n)        No Other Representations or Information.  In evaluating the
suitability of an investment in the Notes, the Buyer has not relied upon any
representation or information (oral or written) with respect to the Company or
its subsidiaries, or otherwise, other than as stated in this Agreement.  No oral
or written representations have been made, or oral or written information
furnished, to the Buyer or its Advisors, if any, in connection with the offering
of the Notes.
 
  (o)        No Governmental Review.  Each Buyer 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 Notes (or the
Conversion Shares or Warrant Shares), or the fairness or suitability of the
investment in the Notes (or the Conversion Shares or the Warrant Shares), nor
have such authorities passed upon or endorsed the merits of the offering of the
Notes (or the Conversion Shares or the Warrant Shares).
 
 
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  (p)        Transfer or Resale.  Each Buyer understands that: (i) the Notes
have not been and are not being registered under the Securities Act or any state
securities laws, and may not be offered for sale, sold, assigned or transferred
unless (A) subsequently registered thereunder, or (B) such Buyer shall have
delivered to the Company an opinion of counsel, in a generally acceptable form,
to the effect that such securities to be sold, assigned or transferred may be
sold, assigned or transferred pursuant to an exemption from such registration
requirements; (ii) any sale of such securities made in reliance on Rule 144
under the Securities Act (or a successor rule thereto) (“Rule 144”) may be made
only in accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of such securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder; and (iii) except as otherwise set forth in
this Agreement, neither the Company nor any other person is under any obligation
to register such securities under the Securities Act or any state securities
laws or to comply with the terms and conditions of any exemption
thereunder.  The Company reserves the right to place stop transfer instructions
against the shares and certificates for the Conversion Shares and the Warrant
Shares to the extent specifically set forth under this Agreement.  There can be
no assurance that there will be any market or resale for the Notes or the
Warrants (or the Conversion Shares or the Warrant Shares), nor can there be any
assurance that the Notes or the Warrants (or the Conversion Shares or the
Warrant Shares) will be freely transferable at any time in the foreseeable
future.
 
  (q)        Legends.  Each Buyer understands that the certificates or other
instruments representing the Notes and the Warrants (and the Conversion Shares
and the Warrant Shares) shall bear a restrictive legend in substantially the
following form (and a stop transfer order may be placed against transfer of such
stock certificates):
 
 
For U.S. Persons:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE
SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A
THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A
TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE,
FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION,
IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.
 
 
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For Non-U.S. Persons:

THESE SECURITIES REPRESENTED HEREBY WERE ISSUED IN AN OFFSHORE TRANSACTION TO
PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S) PURSUANT TO
REGULATION S PROMULGATED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “1933 ACT”). ACCORDINGLY, NONE OF THE SECURITIES REPRESENTED HEREBY
HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND,
UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR,
DIRECTLY OR INDIRECTLY, TO U.S. PERSONS EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT, AND IN EACH CASE ONLY
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE
WITH THE 1933 ACT.

The legend set forth above shall be removed and the Company within three (3)
business days shall issue, or cause to be issued, a certificate without such
legend to the holder of the Notes and the Warrants (and if applicable, the
Conversion Shares and/or the Warrant Shares) upon which it is stamped, if,
unless otherwise required by state securities laws, (i) the Buyer or its broker
make the necessary representations and warranties to the transfer agent for the
Pubco Common Stock that it has complied with the prospectus delivery
requirements in connection with a sale transaction, provided the Notes and the
Warrants (and the Conversion Shares and the Warrant Shares) are registered under
the Securities Act or (ii) in connection with a sale transaction, after such
holder provides the Company or Pubco, as the case may be, with an opinion of
counsel satisfactory to the Company or Pubco, as the case may be, which opinion
shall be in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale, assignment or
transfer of the Notes or the Warrants (or the Conversion Shares or the Warrant
Shares) may be made without registration under the Securities Act.
 
  (r)         Organization and Standing of Buyer.   If such Buyer is an entity,
it is a corporation, partnership or other entity duly incorporated or organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization.
 
 
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  (s)        Authorization, Enforcement.  Such Buyer has the requisite power and
authority to enter into and perform this Agreement, the other Subscription
Documents, the Transactions and to purchase the Notes being sold to it
hereunder. The execution, delivery and performance of this Agreement and the
other Subscription Documents by such Buyer and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate or partnership action, and no further consent or
authorization of such Buyer or its Board of Directors, stockholders, partners,
members, as the case may be, is required.  This Agreement and the other
Subscription Documents have been duly authorized, executed and delivered by such
Buyer and upon execution of this Agreement and the Subscription Documents by the
other parties hereto and thereto, constitute, or shall constitute when executed
and delivered, a valid and binding obligation of such Buyer enforceable against
such Buyer in accordance with the terms hereof and thereof, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies.
 
  (t)         No Conflicts. The execution, delivery and performance of this
Agreement and the other Subscription Documents and the consummation by such
Buyer of the transactions contemplated hereby and thereby or relating hereto do
not and will not (i) if the Buyer is not an individual, result in a violation of
such Buyer’s charter documents or bylaws or other organizational documents or
(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 or obligation to which such Buyer is a party or by which
its properties or assets are bound, or result in a violation of any law, rule,
or regulation, or any order, judgment or decree of any court or governmental
agency applicable to such Subscriber or its properties (except for such
conflicts, defaults and violations as would not, individually or in the
aggregate, have a material adverse effect on such Buyer).  Such Buyer is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under this Agreement and the other
Subscription Documents or to purchase the Notes in accordance with the terms
hereof, provided that for purposes of the representation made in this sentence,
such Buyer is assuming and relying upon the accuracy of the relevant
representations and agreements of the Company herein.
 
  (u)        Receipt of Documents.  Each Buyer, its counsel and/or its Advisors
have received and read in their entirety:  (i) this Agreement and each
representation, warranty and covenant set forth herein; and (ii) all due
diligence and other information necessary to verify the accuracy and
completeness of such representations, warranties and covenants; each Buyer has
received answers to all questions such Buyer submitted to the Company regarding
an investment in the Company; and each Buyer has relied on the information
contained therein and has not been furnished any other documents, literature,
memorandum or prospectus.
 
  (v)        Pubco.  Each Buyer acknowledges and agrees that no consent of Buyer
to the identity of Pubco will be required, provided that at the time of the
Merger:
 
   (i)       Pubco is a corporation incorporated and in good standing in a state
of the United States;
 
 
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   (ii)    the Pubco Common stock is quoted on the OTC Markets or listed on a
U.S. national securities exchange and not subject to any notice of suspension or
delisting;
 
   (iii)   Pubco has complied with all applicable federal and state securities
laws and regulations, including being current in all of its reporting
obligations under federal securities laws and regulations; and all prior
issuances of securities have been either registered under the Securities Act, or
exempt from registration;

   (iv)   Pubco is not in violation or breach of, conflict with, in default
under (with or without the passage of time or the giving of notice or both) any
provisions of (a) Pubco incorporation documents or (b) any mortgage, indenture,
lease, license or any other agreement or instrument;

   (v)    no order suspending the effectiveness of any registration statement of
Pubco under the Securities Act or the Exchange Act has been issued by the U.S.
Securities and Exchange Commission (the “SEC”) and, to Pubco’s knowledge, no
proceedings for that purpose have been initiated or threatened by the SEC;

   (vi)    Pubco is not and has not, and the past and present officers,
directors and affiliates of Pubco are not and have not, been the subject of, nor
does any officer or director of Pubco have any reason to believe that Pubco or
any of its officers, directors or affiliates will be the subject of, any civil
or criminal proceeding or investigation by any federal or state agency alleging
a violation of securities laws;

   (vii)   Pubco is not and has not been the subject of any voluntary or
involuntary bankruptcy proceeding, nor is it or has it been a party to any
material litigation or, within the past two years, the subject of any threat of
material litigation (litigation shall be deemed “material” if the amount at
issue exceeds the lesser of US$10,000 per matter or US$25,000 in the aggregate);

   (viii)  Pubco has not, and the past and present officers, directors and
affiliates of Pubco have not, been the subject of, nor does any officer or
director of Pubco have any reason to believe that Pubco or any of its officers,
directors or affiliates will be the subject of, any civil, criminal or
administrative investigation or proceeding brought by any federal or state
agency;

   (ix)     After giving effect to the Split-Off but prior to giving effect to
the Merger, Pubco does not have any liabilities, contingent or otherwise,
including but not limited to notes payable and accounts payable; and
 
   (x)      the issued and outstanding share capital of Pubco, immediately prior
to Merger, has been duly authorized and is validly issued, are fully paid,
non-assessable, and has been issued in accordance with all applicable laws,
including, but not limited to, the Securities Act.
 
 
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  (w)       Each Buyer understands that prior to the Merger, Pubco will be a
“shell company” as defined in Rule 12b-2 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and that upon the filing of a Current
Report on Form 8-K reporting the consummation of the Merger and the Transactions
and otherwise containing Form 10 information discussed below, Pubco will cease
to be a shell company.  Pursuant to Rule 144(i), securities issued by a current
or former shell company (such as the Securities) that otherwise meet the holding
period and other requirements of Rule 144 nevertheless cannot be sold in
reliance on Rule 144 until one year after post-Merger Pubco (a) is no longer a
shell company; and (b) has filed current “Form 10 information” (as defined in
Rule 144(i)) with the SEC reflecting that it is no longer a shell company, and
provided that at the time of a proposed sale pursuant to Rule 144, post-Merger
Pubco is subject to the reporting requirements of section 13 or 15(d) of the
Exchange Act and has filed all reports and other materials required to be filed
by section 13 or 15(d) of the Exchange Act, as applicable, during the preceding
12 months (or for such shorter period that the issuer was required to file such
reports and materials), other than Form 8-K reports.  As a result, the
restrictive legends on certificates for the securities cannot be removed except
in connection with an actual sale meeting the foregoing requirements or pursuant
to an effective registration statement.
 
  (x)        Confidentiality.  Each Buyer acknowledges and agrees that all of
the information received by it in connection with the transactions contemplated
by this Agreement and the other Transactions is of a confidential nature and may
be regarded as material non-public information under Regulation FD promulgated
by the SEC and that such information has been furnished to the Buyer for the
sole purpose of enabling the Buyer to consider and evaluate an investment in the
Notes.  The Buyer agrees that it will treat such information in a confidential
manner, will not use such information for any purpose other than evaluating an
investment in the Notes, will not, directly or indirectly, trade or permit the
Buyer’s agents, representatives or affiliates to trade in any securities of the
Company or Pubco (from the moment such Buyer has learned the identity of Pubco)
while in possession of such information and will not, directly or indirectly,
disclose or permit the Buyer’s agents, representatives or affiliates to disclose
any of such information without the Company’s prior written consent.  The Buyer
shall make its agents, affiliates and representatives aware of the confidential
nature of the information contained herein and the terms of this section
including the Buyer’s agreement to not disclose such information, to not trade
in the Company’s or Pubco’s (from the moment such Buyer has learned the identity
of Pubco) securities while in the possession of such information and to be
responsible for any disclosure or other improper use of such information by such
agents, affiliates or representatives.  Likewise, without the Company’s prior
written consent, the Buyer will not, directly or indirectly, make any
statements, public announcements or other release or provision of information in
any form to any trade publication, to the press or to any other person or entity
whose primary business is or includes the publication or dissemination of
information related to the transactions contemplated by this Agreement.  The
Company acknowledges that the information covered by this Section 2(v) will no
longer be deemed material, non-public information under Regulation FD upon
termination of this Agreement.
 
  (y)        No Legal Advice from the Company.  Each Buyer acknowledges that it
had the opportunity to review this Agreement and the transactions contemplated
by this Agreement with its own legal counsel and investment and tax
Advisors.  Each Buyer is relying solely on such Advisors and not on any
statements or representations of the Company or any of its employees,
representatives or agents for legal, tax, economic and related considerations or
investment advice with respect to this investment, the transactions contemplated
by this Agreement or the securities laws of any jurisdiction.
 
 
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  (z)         No Group Participation.  Each Buyer and its affiliates is not a
member of any group, nor is any Buyer acting in concert with any other person,
including any other Buyer, with respect to its acquisition of the Notes and the
Warrants (and the Conversion Shares and the Warrant Shares).
 
  (aa)       Reliance.  Any information which the Buyer has heretofore furnished
or is furnishing herewith to the Company or any Broker is complete and accurate
and may be relied upon by the Company and any Broker in determining the
availability of an exemption from registration under U.S. federal and state
securities laws in connection with the offering of securities as described in
the Transmittal Letter.  The Buyer further represents and warrants that it will
notify and supply corrective information to the Company immediately upon the
occurrence of any change therein occurring prior to the Company’s issuance of
the Notes.  Within five (5) days after receipt of a request from the Company or
any Broker, the Buyer will provide such information and deliver such documents
as may reasonably be necessary to comply with any and all laws and ordinances to
which the Company or any Broker is subject.
 
  (bb)      (For ERISA plan Buyers only).  The fiduciary of the ERISA plan
represents that such fiduciary has been informed of and understands the
Company’s investment objectives, policies and strategies, and that the decision
to invest “plan assets” (as such term is defined in ERISA) in the Company is
consistent with the provisions of ERISA that require diversification of plan
assets and impose other fiduciary responsibilities.  The Buyer fiduciary or Plan
(a) is responsible for the decision to invest in the Company; (b) is independent
of the Company or any of its affiliates; (c) is qualified to make such
investment decision; and (d) in making such decision, the Buyer fiduciary or
Plan has not relied primarily on any advice or recommendation of the Company or
any of its affiliates;
 
  (cc)       Anti-Money Laundering; OFAC.
 
(i)      [The Buyer should check the Office of Foreign Assets Control (“OFAC”)
website at http://www.treas.gov/ofac before making the following
representations.] The Buyer represents that the amounts invested by it in the
Company in the Notes were not and are not directly or indirectly derived from
activities that contravene U.S. federal or state or international laws and
regulations, including anti-money laundering laws and regulations.  U.S. federal
regulations and Executive Orders administered by OFAC prohibit, among other
things, the engagement in transactions with, and the provision of services to,
certain foreign countries, territories, entities and individuals.  The lists of
OFAC prohibited countries, territories, persons and entities can be found on the
OFAC website at http://www.treas.gov/ofac.  In addition, the programs
administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or
entities in certain countries regardless of whether such individuals or entities
appear on the OFAC lists;
 

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

1 These individuals include specially designated nationals, specially designated
narcotics traffickers and other parties subject to OFAC sanctions and embargo
programs.
 
 
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(ii)     To the best of the Buyer’s knowledge, none of: (1) the Buyer; (2) any
person controlling or controlled by the Buyer; (3) if the Buyer is a
privately-held entity, any person having a beneficial interest in the Buyer; or
(4) any person for whom the Buyer is acting as agent or nominee in connection
with this investment is a country, territory, individual or entity named on an
OFAC list, or a person or entity prohibited under the OFAC Programs.  Please be
advised that the Company may not accept any amounts from a prospective investor
if such prospective investor cannot make the representation set forth in the
preceding paragraph.  The Buyer agrees to promptly notify the Company should the
Buyer become aware of any change in the information set forth in these
representations.  The Buyer understands and acknowledges that, by law, the
Company may be obligated to “freeze the account” of the Buyer, either by
prohibiting additional subscriptions from the Buyer, declining any redemption
requests and/or segregating the assets in the account in compliance with
governmental regulations, and a Broker may also be required to report such
action and to disclose the Buyer’s identity to OFAC.  The Buyer further
acknowledges that the Company may, by written notice to the Buyer, suspend the
redemption rights, if any, of the Buyer if the Company reasonably deems it
necessary to do so to comply with anti-money laundering regulations applicable
to the Company or any Broker or any of the Company’s other service
providers.  These individuals include specially designated nationals, specially
designated narcotics traffickers and other parties subject to OFAC sanctions and
embargo programs;
 
(iii)    To the best of the Buyer’s knowledge, none of: (1) the Buyer; (2) any
person controlling or controlled by the Buyer; (3) if the Buyer is a
privately-held entity, any person having a beneficial interest in the Buyer; or
(4) any person for whom the Buyer is acting as agent or nominee in connection
with this investment is a senior foreign political figure2, or any immediate
family3 member or close associate4 of a senior foreign political figure, as such
terms are defined in the footnotes below; and
 

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

2
A “senior foreign political figure” is defined as a senior official in the
executive, legislative, administrative, military or judicial branches of a
foreign government (whether elected or not), a senior official of a major
foreign political party, or a senior executive of a foreign government-owned
corporation. In addition, a “senior foreign political figure” includes any
corporation, business or other entity that has been formed by, or for the
benefit of, a senior foreign political figure.

 
3
“Immediate family” of a senior foreign political figure typically includes the
figure’s parents, siblings, spouse, children and in-laws.

 
4
A “close associate” of a senior foreign political figure is a person who is
widely and publicly known to maintain an unusually close relationship with the
senior foreign political figure, and includes a person who is in a position to
conduct substantial domestic and international financial transactions on behalf
of the senior foreign political figure

 
 
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(iv)    If the Buyer is affiliated with a non-U.S. banking institution (a
“Foreign Bank”), or if the Buyer receives deposits from, makes payments on
behalf of, or handles other financial transactions related to a Foreign Bank,
the Buyer represents and warrants to the Company that: (1) the Foreign Bank has
a fixed address, other than solely an electronic address, in a country in which
the Foreign Bank is authorized to conduct banking activities; (2) the Foreign
Bank maintains operating records related to its banking activities; (3) the
Foreign Bank is subject to inspection by the banking authority that licensed the
Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not
provide banking services to any other Foreign Bank that does not have a physical
presence in any country and that is not a regulated affiliate.
 
3.           REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
 
The Company represents and warrants to each of the Buyers that:
 
  (a)        Organization and Qualification.  The Company and each of its
subsidiaries is a corporation or other business entity duly organized and
validly existing in good standing under the laws of the jurisdiction of its
formation, and has the requisite corporate power to own its properties and to
carry on its business as now being conducted.  The Company and each of its
subsidiaries is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the business
conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not have a Material
Adverse Effect, as defined below.  Each subsidiary of the Company is identified
on Schedule 3(a) attached hereto.
 
  (b)        Authorization, Enforcement, Compliance with Other Instruments.  (i)
The Company and each of its subsidiaries that is party to this Agreement or any
of the Note Documents has the requisite corporate power and authority to enter
into and perform, as the case may be, under this Agreement and Escrow Agreement,
all Note Documents and all other agreements and documents that are exhibits
hereto and thereto or are contemplated hereby or thereby or necessary or
desirable to effect the transactions contemplated hereby  and thereby to which
it is a party and to issue the Notes and the Warrants (and the Conversion Shares
and the Warrant Shares) in accordance with the terms hereof and thereof, (ii)
the execution and delivery of this Agreement and the Note Documents by the
Company and each such subsidiary and the consummation by it of the transactions
contemplated hereby and thereby, including, without limitation, the issuance of
the Notes and the Warrants (and the Conversion Shares and the Warrant Shares)
have been duly authorized by the Company’s or such subsidiary’s Board of
Directors, and no further consent or authorization is required by the Company or
such subsidiary, their respective Board of Directors or their respective
stockholders, (iii) this Agreement and the Note Documents will be duly executed
and delivered by the Company and each of its subsidiaries that is party thereto,
(iv) this Agreement and the Note Documents when executed will constitute the
valid and binding obligations of the Company and each of its subsidiaries that
is party thereto enforceable against the Company and each such subsidiary in
accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and remedies.
 
 
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  (c)        Capitalization.  The capital structure of the Company illustrating
the authorized and outstanding capital stock is set forth on Schedule 3(c)
hereto.  All of the outstanding shares have been duly authorized, validly issued
and are fully paid and nonassessable.  No shares of the Company’s capital stock
or any of its subsidiaries are subject to preemptive rights or any other similar
rights or any liens or encumbrances suffered or permitted by the Company.  As of
the date of this Agreement, except as set forth on Schedule 3(c), (i) there are
no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries, (ii) there
are no outstanding debt securities other than as set forth in Schedule 3(c)
hereto, and (iii) there are no agreements or arrangements under which the
Company or any of its subsidiaries is obligated to register the sale of any of
their securities under the Securities Act.  There are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Notes as described in this Agreement.  The
Notes and the Warrants (and the Conversion Shares and the Warrant Shares) when
issued, will be free and clear of all pledges, liens, encumbrances and other
restrictions (other than those arising under applicable securities laws as a
result of the issuance of the Notes and the Warrants).  Except as set forth on
Schedule 3(c), no co-sale right, right of first refusal or other similar right
exists with respect to the Notes or the Warrants (or the Conversion Shares or
the Warrant Shares) or the issuance and sale thereof.  The issue and sale of the
Notes and the Warrants (and the Conversion Shares and the Warrant Shares) will
not result in a right of any holder of Company securities to adjust the
exercise, exchange or reset price under such securities.  The Company has made
available to the Buyer true and correct copies of the Company’s Certificate of
Incorporation, and as in effect on the date hereof (the “Certificate of
Incorporation”), and the Company’s By-laws, as in effect on the date hereof (the
“By-laws”), and the terms of all securities exercisable for Company Common Stock
and the material rights of the holders thereof in respect thereto other than
stock options issued to employees and consultants.
 
  (d)        Issuance of Securities.  The Notes are duly authorized and, upon
issuance in accordance with the terms hereof, shall be duly issued, fully paid
and nonassessable, are free from all taxes, liens and charges with respect to
the issue thereof.  Upon conversion of the Notes in accordance with the
Transaction Documents, the Conversion Shares will be duly issued, fully paid and
nonassessable.
 
 
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  (e)        No Conflicts.  The execution, delivery and performance of this
Agreement and the Note Documents by the Company and each of its subsidiaries
that is party hereto or thereto, and the consummation by the Company and each of
its subsidiaries that is party hereto or thereto of the transactions
contemplated hereby and thereby will not (i) result in a violation of the
Certificate of Incorporation, any certificate of designations of any outstanding
series of preferred stock of the Company or the By-laws (or equivalent
constitutive document) of the Company or any of its subsidiaries or (ii) violate
or conflict with, or result in a breach of any provision of, 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
the Company or any subsidiary is a party, or result in a violation of any law,
rule, regulation, order, judgment or decree (including U.S. federal and state
securities laws and regulations) applicable to the Company or any subsidiary or
by which any property or asset of the Company or any subsidiary is bound or
affected except for those which could not reasonably be expected to have a
material adverse effect on the assets, business, condition (financial or
otherwise), results of operations or future prospects of the Company and its
subsidiaries taken as a whole (a “Material Adverse Effect”).  Except those which
could not reasonably be expected to have a Material Adverse Effect, neither the
Company nor any subsidiary is in violation of any term of or in default under
its constitutive documents.  Except as set forth in Schedule 3(e), and except
those which could not reasonably be expected to have a Material Adverse Effect,
neither the Company nor any subsidiary is in violation of any term of or in
default under any material contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or
regulation applicable to the Company or any subsidiary.  The business of the
Company and its subsidiaries is not being conducted, and shall not be conducted
in violation of any material law, ordinance, or regulation of any governmental
entity.  Except as specifically contemplated by this Agreement and as required
under the Securities Act and any applicable state securities laws, neither the
Company nor any of its subsidiaries is required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its
obligations under or contemplated by this Agreement or the Note Documents in
accordance with the terms hereof or thereof.  All consents, authorizations,
orders, filings and registrations which the Company or any of its subsidiaries
is required to obtain pursuant to the preceding sentence have been obtained or
effected on or prior to the date hereof.  The Company is unaware of any facts or
circumstance, which might give rise to any of the foregoing.
 
  (f)        Absence of Litigation.  Except as set forth on Schedule 3(f), there
is no action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
against or affecting the Company or any subsidiary, wherein an unfavorable
decision, ruling or finding would (i) adversely affect the validity or
enforceability of, or the authority or ability of the Company or any of its
subsidiaries to perform its obligations under, this Agreement, any of the Note
Documents or the Transaction Documents, or (ii) have a Material Adverse Effect.
 
  (g)       Acknowledgment Regarding Buyer’s Purchase of the Notes and the
Warrants.  The Company acknowledges and agrees that each Buyer is acting solely
in the capacity of an arm’s length purchaser with respect to this Agreement, the
Note Documents and the transactions contemplated hereby and thereby.  The
Company further acknowledges that each Buyer is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to
this Agreement, the Note Documents and the transactions contemplated hereby and
thereby and any advice given by such Buyer or any of their respective
representatives or agents in connection with this Agreement, the Note Documents
and the transactions contemplated hereby and thereby is merely incidental to
such Buyer’s purchase of the Notes and the Warrants (and the Conversion Shares
and the Warrant Shares).  The Company further represents to the Buyers that the
Company’s decision to enter into this Agreement and the Note Documents has been
based solely on the independent evaluation by the Company and its
representatives.
 
 
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  (h)         No General Solicitation.  Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Notes and the Warrants
(or the Conversion Shares or the Warrant Shares).
 
  (i)          No Integrated Offering.  Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of the
Notes under the Securities Act or cause this offering of the Notes to be
integrated with prior offerings by the Company for purposes of the Securities
Act.
 
  (j)          Employee Relations.  Neither Company nor any subsidiary is
involved in any labor dispute nor, to the knowledge of the Company, is any such
dispute threatened.  Neither Company nor any subsidiary is party to any
collective bargaining agreement.  None of the Company’s or its subsidiaries’
employees is a member of a union, and the Company believes that its and its
subsidiaries’ relationship with their respective employees is good.
 
  (k)         Intellectual Property Rights.  The Company owns or possesses all
patents, trademarks, domain names (whether or not registered) and any patentable
improvements or copyrightable derivative works thereof, websites and
intellectual property rights relating thereto, service marks, trade names,
copyrights, licenses and authorizations, and all rights with respect to the
foregoing, which are necessary for the conduct of its business as now conducted
without any conflict with the rights of others except for such conflicts that
would not result in a Material Adverse Effect.  Neither Company nor any
subsidiary has received any notice of infringement of, or conflict with, the
asserted rights of others with respect to any intellectual property that it
utilizes.
 
  (l)          Environmental Laws.
 
(i)       The Company and each subsidiary has complied with all applicable
Environmental Laws (as defined below), except for violations of Environmental
Laws that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect.  There is no pending
or, to the knowledge of the Company, threatened civil or criminal litigation,
written notice of violation, formal administrative proceeding, or investigation,
inquiry or information request, relating to any Environmental Law involving the
Company or any subsidiary, except for litigation, notices of violations, formal
administrative proceedings or investigations, inquiries or information requests
that, individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect.  For purposes of this Agreement,
“Environmental Law” means any national, state, provincial or local law, statute,
rule or regulation or the common law relating to the environment or occupational
health and safety, including without limitation any statute, regulation,
administrative decision or order pertaining to (i) treatment, storage, disposal,
generation and transportation of industrial, toxic or hazardous materials or
substances or solid or hazardous waste; (ii) air, water and noise pollution;
(iii) groundwater and soil contamination; (iv) the release or threatened release
into the environment of industrial, toxic or hazardous materials or substances,
or solid or hazardous waste, including without limitation emissions, discharges,
injections, spills, escapes or dumping of pollutants, contaminants or chemicals;
(v) the protection of wild life, marine life and wetlands, including without
limitation all endangered and threatened species; (vi) storage tanks, vessels,
containers, abandoned or discarded barrels, and other closed receptacles; (vii)
health and safety of employees and other persons; and (viii) manufacturing,
processing, using, distributing, treating, storing, disposing, transporting or
handling of materials regulated under any law as pollutants, contaminants, toxic
or hazardous materials or substances or oil or petroleum products or solid or
hazardous waste.  As used above, the terms “release” and “environment” shall
have the meaning set forth in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (“CERCLA”).
 
 
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   (ii)      To the knowledge of the Company there is no material environmental
liability with respect to any solid or hazardous waste transporter or treatment,
storage or disposal facility that has been used by the Company or any
subsidiary.
 
   (iii)     The Company and its subsidiaries (i) have received all permits,
licenses or other approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (ii) are in compliance with all terms
and conditions of any such permit, license or approval.
 
  (m)       Title.  Except as set forth on Schedule 3(m), each of the Company
and its subsidiaries has good and marketable title to all of its personal
property and assets free and clear of any material restriction, mortgage, deed
of trust, pledge, lien, security interest or other charge, claim or encumbrance
which would have a Material Adverse Effect. Except as set forth on Schedule
3(m), with respect to properties and assets it leases, each of the Company and
its subsidiaries is in material compliance with such leases and holds a valid
leasehold interest free of any liens, claims or encumbrances which would have a
Material Adverse Effect.
 
  (n)        No Material Adverse Breaches, etc.  Neither Company nor any
subsidiary is subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation which in the judgment of the
Company’s officers has or is expected in the future to have a Material Adverse
Effect.  Neither Company nor any subsidiary is in breach of any contract or
agreement which breach, in the judgment of the Company’s officers, has or is
expected to have a Material Adverse Effect.
 
  (o)        Tax Status.  Except as set forth in Schedule 3(o), the Company and
each subsidiary has made and filed all federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which it
is subject and (unless and only to the extent that the Company or such
subsidiary has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith, and has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply.  Except as set
forth in Schedule 3(o), there are no unpaid taxes in any material amount claimed
to be due from the Company or any subsidiary by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such
claim.
 
 
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  (p)        Certain Transactions.  Except as set forth in Schedule 3(p), and
except for arm’s length transactions pursuant to which the Company or any
subsidiary makes payments in the ordinary course of business upon terms no less
favorable than it could obtain from third parties, none of the officers,
directors, or employees of the Company or any subsidiary is presently a party to
any transaction with the Company or any subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.
 
  (q)        Rights of First Refusal.  Except as set forth on Schedule 3(q), the
Company is not obligated to offer the securities offered hereunder on a right of
first refusal basis or otherwise to any third parties including, but not limited
to, current or former stockholders of the Company, underwriters, brokers, agents
or other third parties.
 
  (r)         Reliance.  The Company acknowledges that the Buyers are relying on
the representations and warranties made by the Company hereunder and that such
representations and warranties are a material inducement to the Buyer purchasing
the Notes.  The Company further acknowledges that without such representations
and warranties of the Company made hereunder, the Buyers would not enter into
this Agreement.
 
  (s)        Brokers’ Fees.  The Company does not have any liability or
obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.
 
4.           COVENANTS.
 
  (a)        Best Efforts.  Each party shall use its best efforts timely to
satisfy each of the conditions to be satisfied by it as provided in Sections 5
and 6 of this Agreement.
 
  (b)        Form D.  The Company agrees to file a Form D with respect to the
offer and sale of the Notes and the Warrants as required under Regulation
D.  The Company shall take such action as the Company shall reasonably determine
is necessary to qualify the Notes and the Warrants (and the Conversion Shares
and the Warrant Shares), or obtain an exemption for the Notes and the Warrants
(and the Conversion Shares and the Warrant Shares) for sale to the Buyers at the
Closing pursuant to this Agreement under applicable securities or “Blue Sky”
laws of the states of the United States.
 
  (c)        Use of Proceeds.  The Company shall use 100% of the net proceeds
from the sale of the Notes (after deducting fees and expenses (including legal
fees and expenses and fees payable to the Escrow Agent and the Collateral Agent)
(i) to pay fees and expenses (including legal fees and expenses) related to the
Merger and (ii) for general working capital purposes.
 
 
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  (d)        Corporate Existence.  So long as any of the Notes remain
outstanding, the Company shall not, and shall cause each of its subsidiaries not
to, directly or indirectly consummate any merger, reorganization, restructuring,
reverse stock split consolidation, sale of all or substantially all of its
assets, enter into a change of control transaction, or any similar transaction
or related transactions (each such transaction, an “Organizational Change”),
other than the Merger and the Split-Off, unless, prior to the consummation of
such an Organizational Change, the Company obtains the written consent of each
Buyer.  In any such case, the Company will make appropriate provision with
respect to such holders’ rights and interests to insure that the provisions of
this Section 4(d) will thereafter be applicable to the Notes.
 
  (e)        Resales Absent Effective Registration Statement.  Each of the
Buyers understands and acknowledges that (i) this Agreement and the agreements
contemplated hereby may require the Company to cause Pubco to issue and deliver
the Conversion Shares and the Warrant Shares to the Buyers with legends
restricting their transferability under the Securities Act, and (ii) it is aware
that resales of such Conversion Shares and the Warrant Shares may not be made
unless, at the time of resale, there is an effective registration statement
under the Securities Act covering such Buyer’s resale(s) or an applicable
exemption from registration.
 
  (f)         Variable Rate Transactions.  From the date hereof and so long as
the Notes remain outstanding, the Company shall be prohibited from effecting or
entering into an agreement to effect any issuance by the Company or any of its
subsidiaries of Company’s Common Stock or Common Stock Equivalents for cash
consideration (or a combination of units thereof) involving a Variable Rate
Transaction.  “Common Stock Equivalents” means any securities of the Company or
any of its subsidiaries that would entitle the holder thereof to acquire at any
time Company’s Common Stock, including, without limitation, any debt, preferred
stock, right, option, warrant or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Company’s Common Stock. “Variable Rate Transaction”
means a transaction in which the Company (i) issues or sells any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive, additional shares of Company’s Common Stock either
(A) at a conversion price, exercise price or exchange rate or other price that
is based upon, and/or varies with, the trading prices of or quotations for the
shares of Company’s Common Stock at any time after the initial issuance of such
debt or equity securities or (B) with a conversion, exercise or exchange price
that is subject to being reset at some future date after the initial issuance of
such debt or equity security or upon the occurrence of specified or contingent
events directly or indirectly related to the business of the Company or the
market for the Company’s Common Stock or (ii) issues or sells any amortizing
convertible security that amortizes prior to its maturity date, whereby it is
required to or has the option to (or the investor in such security has the
option to require the Company to) make such amortization payments in shares of
Company’s Common Stock (whether or not such payments in stock are subject to
certain equity conditions) any or (iii) enters into any agreement, including,
but not limited to, an equity line of credit, whereby it may sell securities at
a future determined price.  Any Buyer shall be entitled to obtain injunctive
relief against the Company to preclude any such issuance, which remedy shall be
in addition to any right to collect damages.
 
 
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5.           CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
 
The obligation of the Company hereunder to issue and sell the Notes to the
Buyer(s) at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are
for the Company’s sole benefit and may be waived by the Company at any time in
its sole discretion:
 
  (a)        Each Buyer shall have executed this Agreement and the required
Subscription Documents and delivered them to the Company.
 
  (b)       The Buyer(s) shall have delivered to the Escrow Agent the Purchase
Price for Notes in respective amounts as set forth on the signature page(s)
affixed hereto and the Escrow Agent shall have delivered the net proceeds to the
Company by wire transfer of immediately available U.S. funds pursuant to the
wire instructions provided by the Company.
 
  (c)        The representations and warranties of the Buyer(s) contained in
this Agreement shall be true and correct in all material respects as of the date
when made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date), and the
Buyer(s) shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Buyer(s) at or prior to the Closing
Date.
 
6.           CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE.
 
  (a)        The obligation of the Buyer(s) hereunder to purchase the Notes at
the Closing is subject to the satisfaction, at or before the Closing Date, of
each of the following conditions:
 
   (i)      The Company and each subsidiary of the Company indicated in the
Security Agreement (as defined below) shall have executed and delivered the
security agreement of even date herewith, substantially in the form attached
hereto as Exhibit C (the “Security Agreement”), with SCM Capital LLC, as
collateral agent (the “Collateral Agent”), pursuant to which the Company and
each such subsidiary shall have granted and conveyed to the Collateral Agent,
for the benefit of the Buyers, a second priority security (subordinated only to
an existing secured indebtedness of the Company identified in Schedule 6(a)(i)
hereto) interest in all of its tangible and intangible assets, now owned or
hereafter acquired by it, as security for the full and timely repayment of the
Notes in accordance with the terms of the Notes.
 
   (ii)      The representations and warranties of the Company contained in this
Agreement shall be true and correct in all material respects (except to the
extent that any of such representations and warranties is already qualified as
to materiality in Section 3 above, in which case, such representations and
warranties shall be true and correct without further qualification) as of the
date when made and as of the Closing Date as though made at that time (except
for representations and warranties that speak as of a specific date) and the
Company shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior to the Closing
Date.
 
 
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   (iii)    The Company shall have obtained any and all consents, permits,
approvals, registrations and waivers necessary or appropriate for consummation
of the purchase and sale of the Notes, all of which shall be in full force and
effect.
 
   (iv)    The Buyers shall have received a certificate, executed by the
President or Chief Executive Officer of the Company, dated as of the Closing
Date, to the foregoing effect and as to such other matters as may be reasonably
requested by the Buyers, including, without limitation, an update as of the
Closing Date regarding the representation contained in Section 3(c) above.
 
   (v)     The Company shall have executed and delivered to the Buyers the Notes
in the respective amounts set forth on the Buyer Omnibus Signature Pages affixed
hereto.
 
   (vi)    The Company shall have performed and complied in all material
respects with all agreements, covenants and conditions to closing required to be
performed and complied by it or them under the Security Agreement, unless such
agreements, covenants and conditions have been waived by the Buyers.
 
7.           INDEMNIFICATION; COLLATERAL AGENT.
 
  (a)         Indemnification of Buyers.  In consideration of the Buyer’s
execution and delivery of this Agreement and purchase of the Notes and the
Warrants (and if applicable, the Conversion Shares and the Warrant Shares)
hereunder, and in addition to all of the Company’s other obligations under this
Agreement, the Company shall defend, protect, indemnify and hold harmless the
Buyer(s) and each other holder of the Notes and the Warrants (and if applicable,
the Conversion Shares and the Warrant Shares), and all of their officers,
directors, employees and agents (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(collectively, the “Buyer Indemnitees”) from and against any and all actions,
causes of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Buyer Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the
“Indemnified Liabilities”), incurred by the Buyer Indemnitees or any of them as
a result of, or arising out of, or relating to (a) any material
misrepresentation by Company or any material breach of any covenant, agreement,
obligation, representation or warranty by the Company contained in this
Agreement or the Note Documents, or (b) after any applicable notice and/or cure
periods, any breach or default in performance by the Company of any covenant or
undertaking to be performed by the Company hereunder.  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 the Indemnified Liabilities, which is permissible under applicable law.
 
  (b)        Indemnification of the Company.  Each of the Buyers agrees to
indemnify and hold harmless the Company and its respective officers, directors,
employees, agents, control persons and affiliates from and against all losses,
liabilities, claims, damages, costs, fees and expenses whatsoever (including,
but not limited to, reasonable attorneys’ fees and disbursements, and any and
all expenses incurred in investigating, preparing or defending against any
litigation commenced or threatened) based upon or arising out of any actual or
alleged false acknowledgment, representation or warranty, or misrepresentation
or omission to state a material fact, or breach by the Buyer of any covenant or
agreement made by the Buyer herein or in any other document delivered in
connection with this Agreement or the Note Documents.
 
 
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  (c)        Authority of Collateral Agent.  Each Buyer hereby irrevocably
appoints, designates and authorizes the Collateral Agent to take such action on
its behalf under the provisions of the Security Agreement and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
the Security Agreement, together with such powers as are reasonably incidental
thereto, and grants and affirms the immunities and indemnities provided to the
Collateral Agent Related Persons (as defined below) and its affiliates in each
of the Security Agreement.  Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any of the Security Agreement, the
Collateral Agent shall not have any duties or responsibilities, except those
expressly set forth in the Security Agreement, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any of the Security Agreement or otherwise exist against
the Collateral Agent. Each Buyer acknowledges that none of the Collateral Agent
Related Persons has made any representation or warranty to it, and that no act
by the Collateral Agent hereinafter taken, including any review of the affairs
of the Company, shall be deemed to constitute any representation or warranty by
any Collateral Agent-Related Person to any Buyer.  Each Buyer represents to the
Collateral Agent that it has, independently and without reliance upon any
Collateral Agent-Related Person and based on such documents and information as
it has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company and made its own decision to enter into this
Agreement and to invest in the Notes.  Each Buyer also represents that it will,
independently and without reliance upon any Collateral Agent Related Person and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the Note Documents, and to
make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company.  Except for notices, reports and other
documents expressly herein required to be furnished to the Buyers by the
Collateral Agent, the Collateral Agent shall not have any duty or responsibility
to provide any Buyer with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of the Company which may come into the possession of any of the
Collateral Agent Related Persons.  “Collateral Agent Related Persons” means the
Collateral Agent and any successor agent arising hereunder, together with their
respective affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such persons and affiliates.
 
8.           GOVERNING LAW: MISCELLANEOUS.
 
  (a)         Governing Law.  This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York without regard
to the principles of conflict of laws.  The parties further agree that any
action between them shall be heard exclusively in federal or state court sitting
in the New York County, New York, and expressly consent to the jurisdiction and
venue of the Supreme Court of New York, sitting in New York County and the
United States District Court for the Southern District of New York for the
adjudication of any civil action asserted pursuant to this paragraph.
 
 
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  (b)        Irrevocable Subscription.  Each of the Buyers hereby acknowledges
and agrees that the subscription hereunder is irrevocable by such Buyer, except
as required by applicable law, and that this Agreement shall survive the death
or disability of the Buyer and shall be binding upon and inure to the benefit of
the parties and their heirs, executors, administrators, successors, legal
representatives, and permitted assigns.  If the Buyer is more than one person,
the obligations of the Buyer hereunder shall be joint and several and the
agreements, representations, warranties, and acknowledgments herein shall be
deemed to be made by and be binding upon each such person and such person’s
heirs, executors, administrators, successors, legal representatives, and
permitted assigns.
 
  (c)        Expenses.  Each of the parties hereto shall pay its own fees and
expenses (including the fees of any attorneys, accountants, appraises or others
engaged by such party) in connection with this Agreement and the transactions
contemplated hereby whether or not the transactions contemplated hereby are
consummated.
 
  (d)        Counterparts.  This Agreement may be executed in two or more
identical counterparts, all of which 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.  Facsimile and e-mailed copies of
signatures shall be deemed to be originals for purposes of the effectiveness of
this Agreement.
 
  (e)         Headings.  The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
 
  (f)         Severability.  If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
 
  (g)        Entire Agreement, Amendments.  This Agreement supersedes all other
prior oral or written agreements between the Buyer(s), the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein (including any term sheet), and this Agreement, the Note
Documents and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor any
Buyer makes any representation, warranty, covenant or undertaking with respect
to such matters.  No provision of this Agreement may be waived or amended other
than by an instrument in writing signed by the party to be charged with
enforcement.
 
 
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  (h)        Notices.  Any notices, consents, waivers, or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon confirmation of receipt, when sent by facsimile;
(iii) upon receipt when sent by U.S. certified mail, return receipt requested,
or (iv) one (1) day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the
same.  The addresses and facsimile numbers for such communications shall be:
 
If to the Company, to:
BiopharmX Inc.
500 Ellis Street
Mountain View, California 94043
Attn: Mr. Jim Pekarsky
Facsimile: (650) 900-4130
   
With a copy to (which copy should
not constitute a notice hereunder):
 
Ofsink, LLC
900 Third Avenue, 5th Floor
New York, NY 10022
Attn: Darren L. Ofsink, Esq.
Facsimile: 646-224-9844

 
If to the Buyer(s), to its address and facsimile number set forth on the Buyer
Omnibus Signature Page affixed hereto.  Each party shall provide five (5) days’
prior written notice to the other party of any change in address or facsimile
number.
 
  (i)         Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
Neither the Company nor any Buyer shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other party
hereto; provided, however, that the Company may assign this Agreement and its
rights and obligations hereunder and under the Notes to Pubco without the
consent of any Buyer if simultaneously therewith the Company enters into a note
payable to Pubco in the aggregate principal amount of all outstanding Notes, for
a term equal to the term of the Notes, and bearing interest at the same rate as
the Notes, and other appropriate documentation to provide the holders of the
Notes with the rights and benefits provided by the Note Documents.
 
  (j)         No Third Party Beneficiaries.  This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
 
  (k)        Survival.  Unless this Agreement is terminated under Section 9(n),
the representations and warranties of the Company and the Buyer(s) contained in
Sections 2 and 3, the agreements and covenants set forth in Sections 4 and 9,
and the indemnification provisions set forth in Section 7, shall survive the
Closing for a period of two (2) years following the date on which the Notes are
repaid in full or converted as provided in the Transactions.  The Buyer(s) shall
be responsible only for its own representations, warranties, agreements and
covenants hereunder.
 
  (l)         Publicity.  The Company shall have the right to approve, before
issuance any press release or any other public statement with respect to the
transactions contemplated hereby made by any other party; and the Company shall
be entitled, without the prior approval of any Buyer, to issue any press release
or other public disclosure with respect to such transactions required under
applicable securities or other laws or regulations or as it otherwise deems
appropriate.
 
 
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  (m)       Further Assurances.  Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
 
  (n)       Termination.  In the event that the initial Closing shall not have
occurred by January 31, 2014 (the “Closing Deadline”), either the Company or a
Buyer shall have the option to terminate this Agreement by providing five (5)
days’ written notice to other parties to the Agreement; provided, however, that
the right to terminate this Agreement under this Section 8(n) shall not be
available to any party whose breach of any provision of or whose failure to
perform any obligation under this Agreement has been the cause of, or has
resulted in, the failure of the transactions to occur on or before the Closing
Deadline.  If this Agreement is terminated pursuant to this Section 8(n), there
shall be no liability or obligation on the part of the Buyers or the Company, or
any of their respective officers, directors, shareholders, agents or affiliates,
except that, notwithstanding anything to the contrary contained in this
Agreement, no party shall be relieved of or released from any liabilities or
damages arising out of its material breach of or material failure to perform its
obligations under this Agreement.
 
  (o)        No Strict Construction.  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.
 
  (p)        Remedies.  In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, the Buyer and
the Company will be entitled to specific performance under this Agreement.  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 the defense that a remedy at law would be adequate.
 
 
 

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  (q)        ANTI MONEY LAUNDERING REQUIREMENTS
 
The USA PATRIOT Act
 
What is money laundering?
 
How big is the problem and why is it important?
         
The USA PATRIOT Act is designed to detect, deter, and punish terrorists in the
United States and abroad.  The Act imposes new anti-money laundering
requirements on brokerage firms and financial institutions.  Since May 24, 2002,
all brokerage firms have been required to have new, comprehensive anti-money
laundering programs.
 
To help you understand these efforts, we want to provide you with some
information about money laundering and our steps to implement the USA PATRIOT
Act.
 
Money laundering is the process of disguising illegally obtained money so that
the funds appear to come from legitimate sources or activities.  Money
laundering occurs in connection with a wide variety of crimes, including illegal
arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism.
 
The use of the U.S. financial system by criminals to facilitate terrorism or
other crimes could well taint our financial markets.  According to the U.S.
State Department, one recent estimate puts the amount of worldwide money
laundering activity at US$1 trillion a year.

What are we required to do to eliminate money laundering?
 
Under new rules required by the USA PATRIOT Act, our anti-money laundering
program must designate a special compliance officer, set up employee training,
conduct independent audits, and establish policies and procedures to detect and
report suspicious transaction and ensure compliance with the new laws.
 
 
As part of our required program, we may ask you to provide various
identification documents or other information.  Until you provide the
information or documents we need, we may not be able to effect any transactions
for you.

 
[Signature Page Follows]
 
 
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IN WITNESS WHEREOF, the Buyers and the Company have caused this Securities
Purchase Agreement to be duly executed as of the date first written above.

 
COMPANY:
     
BIOPHARMX INC.
       
By:
     
Name:
   
Title:

 
BUYERS:
 
The Buyers executing the Signature Page and the Subscription Documents in the
form attached hereto as Annex A and delivering the same to the Company or its
agents shall be deemed to have executed this Agreement and agreed to the terms
hereof.

 
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
 
 
 

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Annex A

BUYER SIGNATURE PAGE
to
Securities Purchase Agreement

The undersigned, desiring to enter into the Securities Purchase Agreement, dated
as of ____________, 20131 (the “Securities Purchase Agreement”), between the
undersigned, BiopharmX Inc., a Delaware corporation (the “Company”), and the
other parties thereto, in or substantially in the form furnished to the
undersigned, and (ii) purchase the Notes of the Company as set forth below,
hereby agrees to purchase such Notes from the Company and further agrees to join
the Securities Purchase Agreement as a party thereto, with all the rights and
privileges pertaining thereto, and to be bound in all respects by the terms and
conditions thereof.  The undersigned specifically acknowledges having read the
representations section in the Securities Purchase Agreement entitled “Buyer’s
Representations and Warranties,” and hereby represents that the statements
contained therein are complete and accurate with respect to the undersigned as a
Buyer.

The Buyer hereby elects to purchase US$____________ principal amount of Notes
(to be completed by the Buyer) under the Securities Purchase Agreement.

BUYER (individual)
 
BUYER (entity)
               
Signature
 
Name of Entity
               
Print Name
 
Signature
             
 
 
 
 
Print Name:
  Signature (if Joint Tenants or Tenants in Common)  
Title:
          Address of Principal Residence:  
Address of Executive Offices:
 
                                     
Social Security Number(s):
 
IRS Tax Identification Number:
               
Telephone Number:
 
Telephone Number:
               
Facsimile Number:
 
Facsimile Number:
               
E-mail Address:
 
E-mail Address:
       

DATED: ________________________1

 

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1 Will reflect the Closing Date. Not to be completed by Buyer.
 
 
 

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SCHEDULE I
 
SCHEDULE OF BUYERS

Closing
Date
 
Name
 
Amount of
Subscription
                                                                               
                                                                               
                                       

 
 
 

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