Exhibit 10.1

 
SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this “Agreement”) is dated as of January 29,
2016, between Echo Therapeutics, Inc., a Delaware corporation (the “Company”),
and each purchaser identified on the signature pages hereto (each, including its
successors and permitted assigns, a “Purchaser” and collectively, the
“Purchasers”).
 
WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the
“Securities Act”), and Rule 506 promulgated thereunder, the Company desires to
issue and sell to each Purchaser, and each Purchaser, severally and not jointly,
desires to purchase from the Company, securities of the Company as more fully
described in this Agreement (the “Offering”).
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:
 
ARTICLE I.
DEFINITIONS
 
1.1           Definitions.  In addition to the terms defined elsewhere in this
Agreement: (a) capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Notes (as defined herein), and (b) the
following terms have the meanings set forth in this Section 1.1:
 
“Acquiring Person” shall have the meaning ascribed to such term in Section 4.7.
 
“Action” shall have the meaning ascribed to such term in Section 3.1(j).
 
“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405 under the
Securities Act.
 
“Board of Directors” means the board of directors of the Company.
 
“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are required by law or other governmental
action to close.
 
“Closing” means the Initial Closing and Subsequent Closing, if any, of the
purchase and sale of the Securities pursuant to Section 2.1 or 2.4.
 
“Closing Date” means each of the Initial Closing Date and the Subsequent Closing
Date, if any, and is the Business Day on which all of the Transaction Documents
have been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchasers’ obligation to pay the Subscription
Amount at such Closing, and (ii) the Company’s obligations to deliver the
Securities to be issued and sold at such Closing, in each case, have been
satisfied or waived, but in no event later than the tenth Business Day following
the date hereof in the case of the Initial Closing.
 

 
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“Commission” means the United States Securities and Exchange Commission.
 
“Common Stock” means the common stock of the Company, par value $0.01 per share,
and any other class of securities into which such securities may hereafter be
reclassified or changed.
 
“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, 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, Common Stock.
 
“Company Counsel” means, Moomjian, Waite & Coleman, LLP, 100 Jericho Quadrangle,
Suite 208, Jericho, New York 11753, Attn: Kevin W. Waite, Esq., facsimile: (516)
937-5050.
 
“Consent, Waiver and Amendment Agreement” shall have the meaning ascribed to
such term in Section 2.2(a).
 
“Conversion Price” shall have the meaning ascribed to such term in the Notes.
 
“Defaulting Purchaser” means a Purchaser that has failed to comply with its
obligation to deliver its Subsequent Closing Subscription Amount in accordance
with this Agreement.
 
“DGCL” means the Delaware General Corporation Law.
 
“Disclosure Schedules” means the Disclosure Schedules of the Company delivered
concurrently herewith.
 
 “Effective Date” means the earliest of the date that (a) the initial
Registration Statement has been declared effective by the Commission, or (b) (i)
all of the Underlying Shares have been sold pursuant to Rule 144, or (ii) may be
sold by the holders thereof pursuant to Rule 144 without the requirement for the
Company to be in compliance with the current public information required under
Rule 144 and without volume or manner-of-sale restrictions, and (c) Company
counsel has delivered to the Transfer Agent and holders a standing written
unqualified opinion that resales may then be made by such holders of the
Underlying Shares pursuant to an effective Registration Statement or the
exemption described in (b)(ii) above, which opinion shall be in form and
substance reasonably acceptable to such holders.
 
“Escrow Agreement” means the escrow agreement to be employed in connection with
the sale of the Securities, a copy of which is annexed hereto as Exhibit C.
 
“Equity Line of Credit” shall have the meaning ascribed to such term in Section
4.13.
 
“Evaluation Date” shall have the meaning ascribed to such term in Section
3.1(r).
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

 
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“Exempt Issuance” means the issuance of (a) shares of Common Stock and options
to officers, directors, or employees of the Company, prior to and after the
Initial Closing Date up to the amounts and on the terms set forth on Schedule
3.1(g) consistent with past practices, (b) securities upon the exercise or
exchange of or conversion of any Securities issued hereunder (subject to
adjustment for forward and reverse stock splits and the like that occur after
the date hereof) and/or other securities exercisable or exchangeable for or
convertible into shares of Common Stock issued and outstanding on the date of
this Agreement, provided that such securities and any term thereof have not been
amended since the date of this Agreement to increase the number of such
securities or to decrease the issue price, exercise price, exchange price or
conversion price of such securities and which securities are set forth on
Schedule 3.1(g), (c) securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the
Company, provided that any such issuance shall only be to a Person (or to the
equityholders of a Person) which is, itself or through its subsidiaries, an
operating company or an owner of an asset in a business synergistic with the
business of the Company and shall be intended to provide to the Company
substantial additional benefits in addition to the investment of funds, but
shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities, (d) securities issuable pursuant to, and in
accordance with the terms and conditions set forth in the Stock Option Plans and
such future issuances are consistent with past practices and approved by a
majority of the disinterested directors of the Company, (e) as set forth on
Schedule 3.1(g), and (f) securities issued or issuable pursuant to this
Agreement, the Notes or the Warrants, or upon exercise or conversion of any such
securities.
 
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
 
“FDA” shall have the meaning ascribed to such term in Section 3.1(nn).

“FDA Product” shall have the meaning ascribed to such term in Section 3.1(nn).

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

“Form 8-K” shall have the meaning ascribed to such term in Section 4.6.

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

“Indebtedness” means (x) any liabilities for borrowed money in excess of
$100,000 in the aggregate, (y) all guaranties, endorsements and other contingent
obligations in respect of Indebtedness of others, whether or not the same are or
should be reflected in the Company’s consolidated balance sheet (or the notes
thereto), except guaranties by endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of business; and
(z) the present value of any lease payments in excess of $100,000 due under
leases required to be capitalized in accordance with GAAP.
 
“Initial Closing” shall have the meaning ascribed to such term in Section 2.1.

“Initial Closing Date” shall mean the date upon which the Initial Closing
occurs.
 
“Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.1(o).
 

 
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“Legend Removal Date” shall have the meaning ascribed to such term in Section
4.1(c).
 
“Liens” means a lien, charge, pledge, security interest, encumbrance, right of
first refusal, preemptive right or other restriction.
 
“Lockup Agreement” means the form of Lockup Agreement annexed hereto as Exhibit
I.
 
“Majority in Interest” shall have the meaning ascribed to such term in Section
5.5.
 
“Material Adverse Effect” shall have the meaning assigned to such term in
Section 3.1(b).
 
“Material Permits” shall have the meaning ascribed to such term in Section
3.1(m).
 
“Maximum Rate” shall have the meaning ascribed to such term in Section 5.17.
 
“Money Laundering Laws” shall have the meaning ascribed to such term in Section
3.1(gg).
 
“Notes” means the senior secured convertible notes issuable pursuant to this
Agreement, in the form of Exhibit A hereto.
 
“OFAC” shall have the meaning ascribed to such term in Section 3.1(ii).
 
“Participation Maximum” shall have the meaning ascribed to such term in Section
4.17(a).
 
“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
 
“Platinum” means Platinum Partners Value Arbitrage Fund L.P.
 
“Pre-Notice” shall have the meaning ascribed to such term in Section 4.17(b).
 
“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
 
“Pro-Rata Portion” shall have the meaning ascribed to such term in Section
4.17(e).
 
“Proxy Statement” shall have the meaning ascribed to such term in Section
4.26(a).
 
 “Purchaser Party” shall have the meaning ascribed to such term in Section 4.10.
 
“Registration Rights Agreement” means the Registration Rights Agreement, dated
the date hereof, among the Company and the Purchasers, in the form of Exhibit D
attached hereto.
 
“Registration Statement” means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale of the
Underlying Shares by each Purchaser as provided for in the Registration Rights
Agreement.

 
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“Required Approvals” shall have the meaning ascribed to such term in Section
3.1(e).
 
“Required Minimum” means, as of any date, the maximum aggregate number of shares
of Common Stock then issued or potentially issuable in the future pursuant to
the Transaction Documents, including any Underlying Shares issuable upon
exercise in full of all Warrants, conversion in full of all Notes or in payment
of interest on the Notes, ignoring any conversion or exercise limits set forth
therein, and assuming that any previously unconverted Notes will be held until
the first anniversary of the issue date of such Notes.
 
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
 
“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

“Securities” means the Notes, the Warrants, and the Underlying Shares.
 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
 
“Security Agreement” means the Security Agreement to be employed in connection
with the sale of the Securities, a copy of which is annexed hereto as Exhibit E.
 
“Short Sales” means “short sales” as defined in Rule 200 of Regulation SHO under
the Exchange Act and all types of direct and indirect stock pledges, forward
sale contracts, options, puts, calls, swaps and similar arrangements (including
on a total return basis) and sales and other transactions through non-US broker
dealers or foreign regulated brokers. 
 
“Stockholder Approval” shall have the meaning ascribed to such term in Section
4.26(a).
 
“Stockholder Meeting” shall have the meaning ascribed to such term in Section
4.26(d).
 
“Stock Option Plans” means the Company’s 2003 Stock Option and Incentive Plan
and the 2008 Equity Compensation Plan, copies of which are included in the SEC
Reports.
 
“Subscription Amount” means, as to each Purchaser, the aggregate amount to be
paid for the Notes and Warrants purchased hereunder at each of the Initial
Closing and Subsequent Closing as specified below such Purchaser’s name on the
signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.
 
“Subsequent Closing” shall have the meaning ascribed to such term in Section
2.4.
 
“Subsequent Closing Date” shall have the meaning ascribed to such term in
Section 2.4.
 
“Subsequent Financing” shall have the meaning ascribed to such term in Section
4.17(a).

 
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“Subsequent Financing Notice” shall have the meaning ascribed to such term in
Section 4.17(b).
 
 “Subsidiary” means with respect to any entity at any date, any direct or
indirect corporation, limited or general partnership, limited liability company,
trust, estate, association, joint venture or other business entity of which (A)
more than 30% of (i) the outstanding capital stock having (in the absence of
contingencies) ordinary voting power to elect a majority of the board of
directors or other managing body of such entity, (ii) in the case of a
partnership or limited liability company, the interest in the capital or profits
of such partnership or limited liability company or (iii) in the case of a
trust, estate, association, joint venture or other entity, the beneficial
interest in such trust, estate, association or other entity business is, at the
time of determination, owned or controlled directly or indirectly through one or
more intermediaries, by such entity, or (B) is under the actual control of the
Company.
 
“Termination Date” shall have the meaning ascribed to such term in Section 2.1.
 
“Trading Day” means a day on which the principal Trading Market is open for
trading.
 
“Trading Market” means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE
MKT, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global
Select Market, the New York Stock Exchange, the OTC Bulletin Board, the OTCQB,
or the OTCQX (or any successors to any of the foregoing).
 
“Transaction Documents” means this Agreement, the Registration Rights Agreement,
the Security Agreement, the Notes, the Warrants, the Escrow Agreement, all
exhibits and schedules thereto and hereto and any other documents or agreements
executed in connection with the transactions contemplated hereunder.
 
“Transfer Agent” means Manhattan Transfer Registrar Company, and any successor
transfer agent of the Company.
 
“Underlying Shares” means the shares of Common Stock issued and issuable upon
conversion of the Notes and upon exercise of the Warrants and issued and
issuable in lieu of the cash payment of interest on the Notes in accordance with
the terms of the Notes and any other shares of Common Stock issued or issuable
to a Purchaser in connection with or pursuant to the Securities or Transaction
Documents.
 
“Unlegended Shares” shall have the meaning ascribed to such term in Section
4.1(c).
 
“Variable Priced Equity Linked Instruments” shall have the meaning ascribed to
such term in Section 4.13.
 
“Variable Rate Transaction” shall have the meaning ascribed to such term in
Section 4.13.

 
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“VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b)  if any of the NASDAQ markets or exchanges is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the
nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is
not then listed or quoted for trading on the OTC Bulletin Board and if prices
for the Common Stock are then reported on the OTCQX, OTCQB or OTC Pink
Marketplace maintained by the OTC Markets Group, Inc. (or a similar organization
or agency succeeding to its functions of reporting prices), the volume weighted
average price of the Common Stock on the first such facility (or a similar
organization or agency succeeding to its functions of reporting prices), or
(d) in all other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the Purchasers
of a Majority in Interest then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the Company.
 
“Warrants” means, collectively, the Common Stock purchase warrants delivered to
the Purchasers at each Closing in accordance with Sections 2.2(a) and 2.5a(iii)
hereof, which Warrants shall be exercisable after six (6) months from the
original issuance date thereof, in the forms of Exhibits B-1 and B-2 attached
hereto.
 
“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.
 
ARTICLE II.
PURCHASE AND SALE
 
2.1           Initial Closing.  On the Initial Closing Date, upon the terms and
subject to the conditions set forth herein, substantially concurrent with the
execution and delivery of this Agreement by the parties hereto, the Company
agrees to sell, and the Purchasers, severally and not jointly, agree to
purchase, an aggregate of $1,787,000 principal amount of Notes and Warrants as
determined pursuant to Section 2.2(a) (such purchase and sale being the “Initial
Closing”).  Each Purchaser shall deliver to the Escrow Agent such Purchaser’s
Subscription Amount, and the Company shall deliver to each Purchaser its
respective Note and Warrants, as determined pursuant to Section 2.2(a), and the
Company and each Purchaser shall deliver the other items set forth in Section
2.2 deliverable at the Initial Closing.  Upon satisfaction of the covenants and
conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at such
location as the parties shall mutually agree.  Notwithstanding anything herein
to the contrary, the Initial Closing Date shall occur on or before January 15,
2015, subject to extension at the option of the Company through January 31, 2016
(the “Termination Date”).  If the Initial Closing is not held on or before the
Termination Date, the Company shall cause all subscription documents and funds
to be returned, without interest or deduction to each prospective Purchaser.

 
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2.2           Deliveries.
 
(a)           On or prior to the Initial Closing Date, the Company shall deliver
or cause to be delivered to each Purchaser the following, in form and substance
reasonably satisfactory to Platinum:
 
 
(i)             his Agreement duly executed by the Company;
 
(ii)            [reserved];
 
(iii)           a Note with a principal amount equal to each Purchaser’s
Subscription Amount registered in the name of such Purchaser;
 
(iv)          Warrants in the form of Exhibit B-1 hereto registered in the names
of such Purchaser to purchase up to a number of shares of Common Stock equal to
100% of such Purchaser’s subscription amount related to the Initial Closing
divided by the Conversion Price in effect on the Initial Closing Date with a per
share exercise price equal to the greater of (A) $1.50, or (B) 105% of the
closing price of the Common Stock as reported by Bloomberg LP for the Trading
Day immediately preceding the Initial Closing Date, subject to adjustment as
provided therein;
 
(v)            the Security Agreement duly executed by the Company;
 
(vi)           the Registration Rights Agreement duly executed by the Company;
 
(vii)          the Escrow Agreement duly executed by the Company and Escrow
Agent;
 
(viii)         the Lockup Agreement signed by each of the holders of the
Company’s securities identified on Schedule 2.2(a)(viii);
 
(ix)           the consent of the holders of the Company’s Series D Convertible
Preferred Stock;

(x)            from each of the holders identified on Schedule 2.2(a)(x) of the
Company’s Common Stock Equivalents, debt instruments and equity described on
Schedule 2.2(a)(x), a signed Consent, Waiver and Amendment Agreement in the form
annexed hereto as Exhibit K (the “Consent, Waiver and Amendment Agreement”);
 
(xi)           a certificate of the Principal Executive Officer and Chief
Executive Officer (each as defined in the Exchange Act) of the Company, dated as
of the Initial Closing Date, in which such officer shall certify that, to the
best of his knowledge, the conditions set forth in Section 2.3(b) have been
fulfilled; and
 
(xii)          Secretary’s certificate containing (i) copies of the text of the
resolutions by which the corporate action on the part of the Company necessary
to approve this Agreement and the other Transaction Documents and the
transactions and actions contemplated hereby and thereby, which shall be
accompanied by a certificate of the corporate secretary or assistant corporate
secretary of Company dated as of the Initial Closing Date certifying to the
Purchasers that such resolutions were duly adopted and have not been amended or
rescinded, (ii) an incumbency certificate dated as of the Initial Closing Date
executed on behalf of Company by its corporate secretary or one of its assistant
corporate secretaries certifying the office of each officer of Company executing
this Agreement, or any other agreement, certificate or other instrument executed
pursuant hereto, and (iii) copies of (A) the Company’s Article of Incorporation
and bylaws in effect on the Initial Closing Date, and (B) the certificate
evidencing the good standing of Company as of a day within five (5) Business
Days prior to the Initial Closing Date.

 

 
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(b)           On or prior to the Initial Closing Date, each Purchaser shall
deliver or cause to be delivered to the Company the following:
 
 
(i)
this Agreement duly executed by such Purchaser;

 
(ii)           the Registration Rights Agreement duly executed by such
Purchaser;
 
(iii)           such Purchaser’s Subscription Amount by wire transfer or as
otherwise permitted under the Escrow Agreement, to the Escrow Agent;
 
(iv)           the Escrow Agreement duly executed by such Purchaser; and
 
(v)           the Security Agreement duly executed by each Purchaser and the
Collateral Agent.
 
2.3           Closing Conditions.
 
(a)             The obligations of the Company hereunder to effect the Initial
Closing are subject to the following conditions being met:
 
(i)           the accuracy in all material respects (determined without regard
to any materiality, Material Adverse Effect or other similar qualifiers therein)
on the Initial Closing Date of the representations and warranties of the
Purchasers contained herein (unless as of a specific date therein in which case
they shall be accurate as of such date);
 
(ii)           all obligations, covenants and agreements of each Purchaser
required to be performed at or prior to the Initial Closing Date shall have been
performed; and
 
(iii)           the delivery by each Purchaser of the items set forth in Section
2.2(b) of this Agreement.
 
(b)             The respective obligations of a Purchaser hereunder to effect
the Initial Closing, unless waived by such Purchaser, are subject to the
following conditions being met:
 
(i)           the accuracy in all material respects (determined without regard
to any materiality, Material Adverse Effect or other similar qualifiers therein)
on the Initial Closing Date of the representations and warranties of the Company
contained herein (unless as of a specific date therein in which case they shall
be accurate as of such date);
 
(ii)           all obligations, covenants and agreements of the Company required
to be performed at or prior to the Initial Closing Date shall have been
performed; including but not limited to having obtained the approval by NASDAQ
as described in Section 3.1(e)(iii) and the other Required Approvals which can
be obtained prior to the Initial Closing.
 
(iii)           the Company shall have received executed signature pages to this
Agreement with an aggregate cash Subscription Amount of not less than $1,200,000
prior to the Closing;
 
(iv)           the delivery by the Company of the items set forth in Section
2.2(a) of this Agreement;

 
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(v)           there shall have been no Material Adverse Effect with respect to
the Company since the date hereof; and
 
(vi)           from the date hereof to the Initial Closing Date, trading in the
Common Stock shall not have been suspended by the Commission  or the Company’s
principal Trading Market, and, at any time prior to the Initial Closing Date,
trading in securities generally as reported by Bloomberg L.P. shall not have
been suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any Trading Market,
nor shall a banking moratorium have been declared either by the United States or
New York State authorities nor shall there have occurred any material outbreak
or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of such Purchaser, makes
it impracticable or inadvisable to purchase the Securities at the Closing.
 
2.4           Subsequent Closings.  In the event that within one hundred and
eighty (180) days after the Initial Closing Date, the Stockholder Approval is
obtained, a Closing for an additional $3,358,000 shall be held within five (5)
Business Days after the Company has provided to each Purchaser a certificate
signed by the Company’s President or Chief Executive Officer or the Company’s
Chief Financial Officer that Stockholder Approval has been obtained.  Such
notice must be given, if at all, within ten (10) Business Days after Stockholder
Approval has been obtained.  On the Subsequent Closing Date, upon the terms set
forth herein, the Company agrees to sell, and the Purchasers, severally and not
jointly, agree to purchase, an aggregate of $3,358,000 principal amount of Notes
and Warrants as determined pursuant to Section 2.5(a)(iii) (such purchase and
sale being the “Subsequent Closing”).  Each Purchaser shall deliver to the
Escrow Agent such Purchaser’s Subsequent Closing Subscription Amount on or prior
to the Subsequent Closing Date, to be held in escrow by the Escrow Agent in
accordance with the terms and conditions of the Escrow Agreement pending the
Subsequent Closing.

2.5           Subsequent Closing Deliveries.

(a)           On or prior to the Subsequent Closing, the Company shall deliver
or cause to be delivered to each Purchaser the following:
 
 
(i)      [reserved];
 
(ii)     a Note in the principal amount equal to such Purchaser’s Subsequent
Closing Subscription Amount registered in the name of such Purchaser.  The
maturity date of the Notes issued at a Subsequent Closing will be one year from
the date of the Notes issued on the Subsequent Closing Date; and
 
(iii)   Warrants in the form of Exhibit B-2 registered in the names of such
Purchaser to purchase up to a number of shares of Common Stock equal to 100% of
such Purchaser’s subscription amount related to the Subsequent Closing divided
by the Conversion Price in effect on the Subsequent Closing Date with a per
share exercise price equal to the greater of (A) $1.50, or (B) 105% of the
closing price of the Common Stock as reported by Bloomberg LP for the Trading
Day preceded the Initial Closing Date, subject to adjustment as provided
therein.

 
 
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2.6           Satisfaction of Closing Conditions.  The Escrow Agent may rely
exclusively on the certification of Platinum and the Company as to the
satisfaction of any condition to Closing set forth above, and shall have no
obligation to investigate the same.

                2.7           Exchange of Bridge Notes; Purchase Price. Each of
Platinum,  Medical Technologies Innovation Asia, Ltd. and Beijing Bio Science &
Technology Ltd. may deliver all or a portion of the Purchase Price for any
Closing by surrender of promissory notes valued at the amount then due and
outstanding under such promissory notes, and any such promissory note being
delivered as payment of the Purchase Price shall be deemed to constitute a cash
payment for purposes of the transactions contemplated herein.
 
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
 
3.1           Representations and Warranties of the Company.  Except as set
forth in the SEC Reports or the Disclosure Schedules, which Disclosure Schedules
shall be deemed a part hereof and shall qualify any representation made herein,
the Company hereby makes the following representations and warranties to each
Purchaser:
 
(a)       Subsidiaries.  All of the direct and indirect subsidiaries of the
Company and the Company’s ownership interests therein are set forth on Schedule
3.1(a).  The Company owns, directly or indirectly, all of the capital stock or
other equity interests of each Subsidiary free and clear of any Liens, and all
of the issued and outstanding shares of capital stock of each Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase securities.  If the Company has no
Subsidiaries relevant to any component of this Agreement, then such reference
shall not be applicable.
 
(b)       Organization and Qualification.  The Company and each of the
Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation nor default
of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents.  Each of the
Company and the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not reasonably be expected to result in: (i)
a material adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business, or condition (financial or otherwise) of the
Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a “Material Adverse Effect”) and, no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.

 
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(c)       Authorization; Enforcement.  The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder.  The execution
and delivery of this Agreement and each of the other Transaction Documents by
the Company and the consummation by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company, the Board of Directors
or the Company’s stockholders in connection herewith or therewith other than in
connection with the Required Approvals.  This Agreement and each other
Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms,
except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
 
(d)       No Conflicts.  The execution, delivery and performance by the Company
of this Agreement and the other Transaction Documents, the issuance and sale of
the Securities and the consummation by it of the transactions contemplated
hereby and thereby to which it is a party do not and will not: (i) conflict with
or violate any provision of the Company’s or any Subsidiary’s certificate or
articles of incorporation, bylaws or other organizational or charter documents,
(ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, result in the creation of
any Lien upon any of the properties or assets of the Company or any Subsidiary,
or give to others any rights of termination, amendment, acceleration,
adjustment, exchange, reset, exercise or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt, equity or other
instrument (evidencing Company or Subsidiary equity, debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except in
the case of each of clause (iii), such as would not reasonably be expected to
result in a Material Adverse Effect.
 
(e)       Filings, Consents and Approvals.  The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents,
other than: (i) the filings with the Commission pursuant to the Registration
Rights Agreement, (ii) the filings required pursuant to Section 4.6 of this
Agreement, (iii) the notice and application(s) to the NASDAQ Capital Market for
the issuance and sale of the Notes and Warrant Shares and the listing of the
Underlying Shares for trading thereon in the time and manner required thereby,
(iv) the filing of Form D with the Commission and such filings as are required
to be made under applicable state securities laws, (v) the Stockholder Approval
with respect to the Subsequent Closing, and (vi) the Stockholder Approval with
respect to Underlying Shares issuable upon application of Sections 4.17 and 4.23
of this Agreement, or as required pursuant to the terms of the Notes and
Warrants, but only to the extent such components of the Stockholder Approval are
required by the NASDAQ Capital Market (collectively, the “Required Approvals”).

 
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(f)       Issuance of the Securities.  The Securities are duly authorized and,
when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company other than restriction on transfer
arising pursuant to applicable securities laws..  The Company has reserved from
its duly authorized capital stock a number of shares of Common Stock for
issuance of the Underlying Shares at least equal to the Required Minimum on the
date hereof.
 
(g)       Capitalization.  The capitalization of the Company is as set forth in
Schedule 3.1(g). Except as set forth in the SEC Reports, no Person has any right
of first refusal, preemptive right, right of participation, or any similar right
to participate in the transactions contemplated by the Transaction
Documents.  Except as disclosed on Schedule 3.1(g), there are no outstanding
options, employee or incentive stock option plans, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or acquire any
shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock or Common Stock Equivalents. Except as
set forth on Schedule 3.1(g), the issuance and sale of the Securities will not
obligate the Company to issue shares of Common Stock or other securities to any
Person (other than the Purchasers) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset
price under any of such securities. All of the outstanding shares of capital
stock of the Company are duly authorized, validly issued, fully paid and
nonassessable, have been issued in material compliance with all federal and
state securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities. Except as contemplated by Section 3.1(e), no further
approval or authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the Securities.  There are no
stockholders agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company is a party or, to
the knowledge of the Company, between or among any of the Company’s
stockholders.
 
(h)       SEC Reports; Financial Statements.  The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or
such shorter period as the Company was required by law or regulation to file
such material) (the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein filed prior to the date hereof,
being collectively referred to herein as the “SEC Reports”) on a timely basis or
has received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension.  As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing.  Such financial statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved
(“GAAP”), except as may be otherwise specified in such financial statements or
the notes thereto and except that unaudited financial statements may not contain
all footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. The Company is, and has no reason to
believe that it will not in the foreseeable future continue to be in compliance
with all its reporting requirements under the Securities Act and Exchange Act.

 
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(i)       Material Changes; Undisclosed Events, Liabilities or
Developments.  Since the date of the latest audited financial statements
included within the SEC Reports, except as specifically disclosed in a
subsequent SEC Report filed prior to the date hereof or on Schedule 3.1(i): (i)
there has been no event, occurrence or development that has had or that would
reasonably be expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any material liabilities (contingent or otherwise) other than
(A) trade payables and accrued expenses incurred in the ordinary course of
business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or disclosed in
filings made with the Commission, (iii) the Company has not altered its method
of accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer,
director or Affiliate except pursuant to the existing Stock Option Plans as set
forth on Schedule 3.1(i). The Company does not have pending before the
Commission any request for confidential treatment of information.  Except for
the issuance of the Securities contemplated by this Agreement, or as set forth
on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or
development has occurred or exists or is reasonably expected to occur or exist
with respect to the Company or its Subsidiaries or their respective businesses,
properties, operations, assets or financial condition, that would be required to
be disclosed by the Company under applicable securities laws at the time this
representation is made or deemed made that has not been publicly disclosed at
least two Trading Days prior to the date that this representation is made.
 
(j)       Litigation.  Except as set forth in the SEC Reports, there is no
action, suit, inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities.  There is no outstanding stop order or other order
suspending the effectiveness of any registration statement filed by the Company
or any Subsidiary under the Exchange Act or the Securities Act.
 
(k)       Labor Relations.  No labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company, which
would reasonably be expected to result in a Material Adverse Effect.  None of
the Company’s or its Subsidiaries’ employees is a member of a union that relates
to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining
agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good.  To the knowledge of the Company, no executive
officer of the Company or any Subsidiary, is, or is now expected to be, in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or
any other contract or agreement or any restrictive covenant in favor of any
third party, and the continued employment of each such executive officer does
not subject the Company or any of its Subsidiaries to any liability with respect
to any of the foregoing matters.  The Company and its Subsidiaries are in
compliance with all U.S. federal, state, local and foreign laws and regulations
relating to employment and employment practices, terms and conditions of
employment and wages and hours, except where the failure to be in compliance
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 
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(l)       Compliance.  To the Company’s knowledge, neither the Company nor any
Subsidiary, except as disclosed on Schedule 3.1(l): (i) is in default under or
in violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary received notice of a
claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (ii) is in violation of any judgment,
decree or order of any court, arbitrator or other governmental authority or
(iii) is or has been in violation of any statute, rule, ordinance or regulation
of any governmental authority, including without limitation all foreign,
federal, state and local laws relating to taxes, environmental protection,
occupational health and safety, product quality and safety and employment and
labor matters, except in each case as would not reasonably be expected to result
in a Material Adverse Effect.
 
(m)       Regulatory Permits.  The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits would not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation or
modification of any Material Permit.
 
(n)       Title to Assets.  Except as disclosed on Schedule 3.1(n), the Company
and the Subsidiaries have good and marketable title in fee simple to all real
property (if any) owned by them and good and marketable title in all personal
property owned by them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for Permitted
Liens and (i) Liens as do not materially affect the value of such property and
do not materially interfere with the use made and proposed to be made of such
property by the Company and the Subsidiaries and (ii) Liens for the payment of
federal, state or other taxes, for which appropriate reserves have been made in
accordance with GAAP and, the payment of which is neither delinquent nor subject
to penalties.  Any real property and facilities held under lease by the Company
and the Subsidiaries are held by them under valid, subsisting and enforceable
leases with which the Company and the Subsidiaries are in compliance.
 
(o)       Intellectual Property.
 
(i)          The term “Intellectual Property Rights” means:
 
 
1.
the name of the Company and each Subsidiary, all fictional business names,
trading names, registered and unregistered trademarks, service marks, and
applications of the Company and each Subsidiary (collectively, “Marks'');

 
 
2.
all patents and patent applications of the Company and each
Subsidiary  (collectively, “Patents'');

 
 
3.
all copyrights in both published works and unpublished works of the Company and
each Subsidiary (collectively, “Copyrights”);

 
 
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4.
all rights in mask works of the Company and each Subsidiary (collectively,
“Rights in Mask Works''); and

 
 
5.
all know-how, trade secrets, confidential information, customer lists, software,
technical information, data, process technology, plans, drawings, and blue
prints (collectively, “Trade Secrets''); owned, used, or licensed by the Company
and each Subsidiary as licensee or licensor.

 
(ii)           Agreements. Except as set forth in the SEC Reports, there are no
outstanding and, to Company’s knowledge, no threatened disputes or disagreements
with respect to any agreements relating to any Intellectual Property Rights to
which the Company is a party or by which the Company is bound.
 
(iii)           Know-How Necessary for the Business.  Except as set forth in the
SEC Reports, the Intellectual Property Rights are all those necessary for the
operation of the Company’s businesses as it is currently conducted or as
represented, in writing, to the Purchaser to be conducted. The Company is the
owner of all right, title, and interest in and to each of the Intellectual
Property Rights, free and clear of all Liens, and has the right to use all of
the Intellectual Property Rights.  To the Company’s knowledge, no employee of
the Company has entered into any contract that restricts or limits in any way
the scope or type of work in which the employee may be engaged or requires the
employee to transfer, assign, or disclose information concerning his work to
anyone other than of the Company.
 
(iv)           Patents. Except as set forth in the SEC Reports, the Company is
the owner of all right, title and interest in and to each of the Patents, free
and clear of all Liens.  All of the issued Patents are currently in compliance
with formal legal requirements (including payment of filing, examination, and
maintenance fees and proofs of working or use), are valid and enforceable, and
are not subject to any maintenance fees or taxes or actions falling due within
ninety days after the Initial Closing Date.  No Patent has been or is now
involved in any interference, reissue, reexamination, or opposition
proceeding.  Except as set forth in the SEC Reports, to the Company’s knowledge:
(1) there is no potentially interfering patent or patent application of any
third party, and (2) no Patent is infringed or has been challenged or threatened
in any way. To the Company’s knowledge, none of the products manufactured and
sold, nor any process or know-how used, by the Company infringes or is alleged
to infringe any patent or other proprietary right of any other Person.
 
(v)           Trademarks. The Company is the owner of all right, title, and
interest in and to each of the Marks, free and clear of all Liens.  All Marks
that have been registered with the United States Patent and Trademark Office are
currently in compliance with all formal legal requirements (including the timely
post-registration filing of affidavits of use and incontestability and renewal
applications), are valid and enforceable, and are not subject to any maintenance
fees or taxes or actions falling due within ninety days after the Initial
Closing Date.  No Mark has been or is now involved in any opposition,
invalidation, or cancellation and, to the Company’s knowledge, no such action is
threatened with respect to any of the Marks.  To the Company’s knowledge: (1)
there is no potentially interfering trademark or trademark application of any
third party, and (2) no Mark is infringed or has been challenged or threatened
in any way. To the Company’s knowledge, none of the Marks used by the Company
infringes or is alleged to infringe any trade name, trademark, or service mark
of any third party.
 

 
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(vi)           Copyrights. The Company is the owner of all right, title, and
interest in and to each of the Copyrights, free and clear of all Liens.  All the
Copyrights have been registered and are currently in compliance with formal
requirements, are valid and enforceable, and are not subject to any maintenance
fees or taxes or actions falling due within ninety days after the Initial
Closing Date.  To the Company’s knowledge, no Copyright is infringed or has been
challenged or threatened in any way. To the Company’s knowledge, none of the
subject matter of any of the Copyrights infringes or is alleged to infringe any
copyright of any third party or is a derivative work based on the work of a
third party. All works encompassed by the Copyrights have been marked with the
proper copyright notice.
 
(vii)           Trade Secrets. With respect to each Trade Secret, the
documentation relating to such Trade Secret is current, accurate, and sufficient
in detail and content to identify and explain it and to allow its full and
proper use without reliance on the knowledge or memory of any individual. The
Company has taken all reasonable precautions to protect the secrecy,
confidentiality, and value of its Trade Secrets.  The Company has good title and
an absolute (but not necessarily exclusive) right to use the Trade Secrets. The
Trade Secrets are not part of the public knowledge or literature, and, to the
Company’s knowledge, have not been used, divulged, or appropriated either for
the benefit of any Person (other the Company) or to the detriment of the
Company. No Trade Secret is subject to any adverse claim or has been challenged
or threatened in any way.
 
(p)       Insurance.  The Company and the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and
the Subsidiaries are engaged, including, but not limited to, directors and
officers insurance coverage.  Neither the Company nor any Subsidiary has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without a
significant increase in cost.
 
(q)       Transactions With Affiliates and Employees.  Except as set forth in
the SEC Reports, none of the officers or directors of the Company or any
Subsidiary and, to the knowledge of the Company, none of the 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, providing for the borrowing of money from or lending of
money to or otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee, stockholder, member or partner, in each case in
excess of $50,000 other than for: (i) payment of salary or consulting fees for
services rendered, (ii) reimbursement for expenses incurred on behalf of the
Company or any Subsidiary, and (iii) other employee benefits, including stock
option agreements under any stock option plan of the Company except as disclosed
on Schedule 3.1(q).

 
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(r)       Sarbanes-Oxley; Internal Accounting Controls.  Except as set forth in
the SEC Reports, the Company and the Subsidiaries are in material compliance
with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that
are effective as of the date hereof, and any and all applicable rules and
regulations promulgated by the Commission thereunder that are effective as of
the date hereof and as of each Closing Date.  Except as set forth in the SEC
Reports, the Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
the Subsidiaries and designed such disclosure controls and procedures to ensure
that information required to be disclosed by the Company in the reports it files
or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and
forms.  The Company’s certifying officers have evaluated the effectiveness of
the disclosure controls and procedures of the Company and the Subsidiaries as of
the end of the period covered by the most recently filed periodic report under
the Exchange Act (such date, the “Evaluation Date”).  The Company presented in
its most recently filed periodic report under the Exchange Act the conclusions
of the certifying officers about the effectiveness of the disclosure controls
and procedures based on their evaluations as of the Evaluation Date.  Since the
Evaluation Date, there have been no changes in the internal control over
financial reporting (as such term is defined in the Exchange Act) of the Company
and its Subsidiaries that have materially affected, or is reasonably likely to
materially affect, the internal control over financial reporting of the Company
and its Subsidiaries.
 
(s)       Certain Fees.  Except as set forth on Schedule 3.1(s), no brokerage,
finder’s fees, commissions or due diligence fees are or will be payable by the
Company or any Subsidiary to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by the Transaction Documents.  The Purchasers
shall have no obligation with respect to any such fees or with respect to any
claims made by or on behalf of other Persons for fees of a type contemplated in
this Section 3.1(s) that may be due in connection with the transactions
contemplated by the Transaction Documents.
 
(t)       Investment Company. The Company is not, and is not an Affiliate of,
and immediately after receipt of payment for the Securities, will not be or be
an Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.  The Company shall conduct its business in a
manner so that it will not become an “investment company” subject to
registration under the Investment Company Act of 1940, as amended.
 
(u)       Registration Rights.  No Person has any right to cause the Company or
any Subsidiary to effect the registration under the Securities Act of any
securities of the Company or any Subsidiary, except for the Purchasers.

 
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(v)       Reporting Company/Shell Company.  The Company is a publicly-held
company subject to reporting obligations pursuant to Sections 12(b) and 13 of
the Exchange Act.  Pursuant to the provisions of the Exchange Act, the Company
has timely filed all reports and other materials required to be filed by the
Company thereunder with the SEC during the preceding twelve months.  The Company
has no reason to believe that it will not in the year following the Initial
Closing continue to be in compliance with all listing and reporting requirements
applicable to the Company as of the Initial Closing Date.  As of a Closing Date,
the Company is not a “shell company” (as defined in Rule 405) of the Securities
Act and has never been a “shell company”.
 
(w)      Application of Takeover Protections.  The Company and the Board of
Directors will have taken as of the Initial Closing Date all necessary action,
if any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of
incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the Purchasers as a result
of the Purchasers and the Company fulfilling their obligations or exercising
their rights under the Transaction Documents, including without limitation as a
result of the Company’s issuance of the Securities and the Purchasers’ ownership
of the Securities.
 
(x)       Disclosure.  The Company understands and confirms that the Purchasers
will rely on the foregoing representation in effecting transactions in
securities of the Company.  All of the disclosure furnished by or on behalf of
the Company to the Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby, including the
Disclosure Schedules to this Agreement, when taken together as a whole, is true
and correct and does not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.  The Company acknowledges and agrees that no Purchaser makes or has
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2
hereof.
 
(y)       No Integrated Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, neither the Company,
nor any of its Affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would cause the
Offering of the Securities to be integrated with prior offerings by the Company
for purposes of: (i) the Securities Act which would require the registration of
any such securities under the Securities Act, or (ii) any applicable shareholder
approval provisions of any Trading Market on which any of the securities of the
Company are listed or designated.
 
(z)        [Reserved]
 
(aa)      Tax Status. Except for matters that would not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and its Subsidiaries each (i) has made or filed all United
States federal, state and local income and all foreign income and franchise tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) 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 and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for periods subsequent
to the periods to which such returns, reports or declarations apply.  There are
no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Company or of any Subsidiary know
of no basis for any such claim.

 
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(bb)    Foreign Corrupt Practices.  Neither the Company nor any Subsidiary, nor
to the knowledge of the Company or any Subsidiary, any agent or other person
acting on behalf of the Company or any Subsidiary, has: (i) directly or
indirectly, used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by the
Company or any Subsidiary (or made by any person acting on its behalf of which
the Company is aware) which is  in violation of law or (iv) violated in any
material respect any provision of FCPA.
 
(cc)     Accountants and Lawyers.  The Company’s accounting firm is set forth on
Schedule 3.1(cc) of the Disclosure Schedules.  To the knowledge and belief of
the Company, such accounting firm: (i) is a registered public accounting firm as
required by the Exchange Act and (ii) shall express its opinion with respect to
the financial statements to be included in the Company’s Annual Report for the
fiscal year ending December 31, 2015.  There are no disagreements of any kind
presently existing, or reasonably anticipated by the Company to arise, between
the Company and such accountants.
 
(dd)    Acknowledgment Regarding Purchasers’ Purchase of Securities.  The
Company acknowledges and agrees that each of the Purchasers is acting solely in
the capacity of an arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated thereby.  The Company further
acknowledges that no Purchaser is acting as a financial advisor or fiduciary of
the Company (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated thereby and any advice given by any
Purchaser or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is
merely incidental to the Purchasers’ purchase of the Securities.  The Company
further represents to each Purchaser that the Company’s decision to enter into
this Agreement and the other Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.
 
(ee)     [Reserved]
 
(ff)      Regulation M Compliance.  The Company has not, and to its knowledge no
one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any Person any compensation for soliciting another to purchase any other
securities of the Company, except as set forth herein.
 
(gg)    Money Laundering.  The operations of the Company and its Subsidiaries
are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, applicable money laundering
statutes and applicable rules and regulations thereunder (collectively, the
“Money Laundering Laws”), and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the
Company or any Subsidiary with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company or any Subsidiary, threatened.

 
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(hh)    Stock Option Plans. Each stock option granted by the Company under the
Stock Option Plans was granted (i) in accordance with the terms of such Stock
Option Plans and (ii) with an exercise price at least equal to the fair market
value of the Common Stock on the date such stock option would be considered
granted under GAAP and applicable law. No stock option granted under any Stock
Option Plan has been backdated.  The Company has not knowingly granted, and
there is no and has been no Company policy or practice to knowingly grant, stock
options prior to, or otherwise knowingly coordinate the grant of stock options
with, the release or other public announcement of material information regarding
the Company or its Subsidiaries or their financial results or prospects.
 
(ii)       Office of Foreign Assets Control.  Neither the Company nor any
Subsidiary nor, to the Company's knowledge, any director, officer, agent,
employee or affiliate of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”).
 
(jj)       Private Placement. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, no registration under
the Securities Act is required for the offer and sale of the Securities by the
Company to the Purchasers as contemplated hereby. The issuance and sale of the
Securities hereunder does not contravene the rules and regulations of the
Trading Market.
 
(kk)     No General Solicitation.  Neither the Company nor any person acting on
behalf of the Company has offered or sold any of the Securities by any form of
general solicitation or general advertising.  The Company has offered the
Securities for sale only to the Purchasers and certain other “accredited
investors” within the meaning of Rule 501 under the Securities Act.
 
(ll)      Indebtedness and Seniority.  As of the date hereof, all Indebtedness
and Liens of the Company and the principal terms thereof are set forth on
Schedule 3.1(ll).  Except as set forth on Schedule 3.1(ll), as of each Closing
Date, no Indebtedness or other equity of the Company is or will be senior to the
Notes in right of payment, whether with respect to interest or upon liquidation
or dissolution, or otherwise, other than indebtedness secured by purchase money
security interests (which is senior only as to underlying assets covered
thereby) and capital lease obligations (which is senior only as to the property
covered thereby).
 
(mm)   Listing and Maintenance Requirements.   The Common Stock is listed on the
NASDAQ Capital Market under the symbol ECTE.  Except as set forth in the SEC
Reports, the Company has not, in the twelve (12) months preceding the date
hereof, received notice from any Trading Market on which the Common Stock is or
has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market.

 
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(nn)    FDA.  Except as set forth on Schedule 3.1(nn), as to each product
subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”)
under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations
thereunder (“FDCA”) that is manufactured, packaged, labeled, tested,
distributed, sold, and/or marketed by the Company or any of its Subsidiaries
(each such product, a “FDA Product”), such FDA Product is being manufactured,
packaged, labeled, tested, distributed, sold and/or marketed by the Company in
compliance with all applicable requirements under FDCA and similar laws,
rules and regulations relating to registration, investigational use, premarket
clearance, licensure, or application approval, good manufacturing practices,
good laboratory practices, good clinical practices, product listing, quotas,
labeling, advertising, record keeping and filing of reports, except where the
failure to be in compliance would not reasonably be expected to have a Material
Adverse Effect.  There is no pending, completed or, to the Company’s knowledge,
threatened, action (including any lawsuit, arbitration, or legal or
administrative or regulatory proceeding, charge, complaint, or investigation)
against the Company or any of its Subsidiaries, and none of the Company or any
of its Subsidiaries has received any notice, warning letter or other
communication from the FDA or any other governmental entity, which (i) contests
the premarket clearance, licensure, registration, or approval of, the uses of,
the distribution of, the manufacturing or packaging of, the testing of, the sale
of, or the labeling and promotion of any FDA Product, (ii) withdraws its
approval of, requests the recall, suspension, or seizure of, or withdraws or
orders the withdrawal of advertising or sales promotional materials relating to,
any FDA Product, (iii) imposes a clinical hold on any clinical investigation by
the Company or any of its Subsidiaries, (iv) enjoins production at any facility
of the Company or any of its Subsidiaries, (v) enters or proposes to enter into
a consent decree of permanent injunction with the Company or any of its
Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or
regulations by the Company or any of its Subsidiaries, and which, either
individually or in the aggregate, would have a Material Adverse Effect.   The
properties, business and operations of the Company have been and are being
conducted in accordance with all applicable laws, rules and regulations of the
FDA, except for any such non-compliance that would not reasonably be expected to
have a Material Adverse Effect.  The Company has not been informed by the FDA
that the FDA will prohibit the marketing, sale, license or use in the United
States of any product proposed to be developed, produced or marketed by the
Company nor has the FDA expressed any concern as to approving or clearing for
marketing any product being developed or proposed to be developed by the
Company.
 
(oo)          No Disqualification Events.  To the Company’s knowledge, with
respect to the Securities to be offered and sold hereunder in reliance on Rule
506 under the Securities Act, none of the Company, any of its predecessors, any
affiliated issuer, any director, executive officer, other officer of the Company
participating in the offering hereunder, any beneficial owner of 20% or more of
the Company’s outstanding voting equity securities, calculated on the basis of
voting power, nor any promoter (as that term is defined in Rule 405 under the
Securities Act) connected with the Company in any capacity at the time of sale
(each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is
subject to any of the “Bad Actor” disqualifications described in Rule
506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”),
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The
Company has exercised reasonable care to determine whether any Issuer Covered
Person is subject to a Disqualification Event. The Company has complied, to the
extent applicable, with its disclosure obligations under Rule 506(e), and has
furnished to the Purchasers a copy of any disclosures provided thereunder

 
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(pp)          Health Regulatory Matters.  The Company and its Subsidiaries have
complied in all material respects with all statutes and regulations related to
the research, manufacture and sale of its products to the extent applicable to
the Company’s and its Subsidiaries’ activities. Items manufactured or under
investigation by the Company and its Subsidiaries comply with all applicable
manufacturing practices regulations and other requirements established by
government regulators in the jurisdictions in which the Company or its
Subsidiaries manufacture their products.  Except as disclosed in the SEC
Reports, the Company is not and its Subsidiaries are not the subject of any
investigation by any competent authority with respect to the development,
testing, manufacturing and distribution of their products, nor has any
investigation, prosecution, or other enforcement action been threatened by any
regulatory agency. Except as disclosed in the SEC Reports, neither the Company
nor any of its Subsidiaries has received from any regulatory agency any letter
or other document asserting that the Company or any Subsidiary has violated any
statute or regulation enforced by that agency with respect to the development,
testing, manufacturing and distribution of their products. To the Company’s
knowledge, research conducted by or for the Company and its Subsidiaries has
complied in all material respects with all applicable legal requirements. To the
Company’s knowledge, research involving human subjects conducted by or for the
Company and its Subsidiaries has been conducted in compliance in all respects
with all applicable statutes and regulations governing the protection of human
subjects and not involved any investigator who has been disqualified as a
clinical investigator by any regulatory agency or has been found by any agency
with jurisdiction to have engaged in scientific misconduct.
 
    (qq)           Other Covered Persons. Except for Newbridge Securities Corp.
and LifeTech Capital, the Company is not aware of any person that has been or
will be paid (directly or indirectly) remuneration for solicitation of
purchasers in connection with the sale of any Regulation D Securities.
 
      (rr)           No Outstanding Variable Priced Equity Linked
Instruments.  As of the Closing Date, the Company will not have outstanding nor
issuable any Variable Priced Equity Linked Instruments, nor any debt or equity
with anti-dilution, ratchet or reset rights, except as set forth and described
on Schedule 3.1(rr).
 
     (ss)           Survival.  The foregoing representations and warranties
shall survive each Closing.
 
3.2           Representations and Warranties of the Purchasers.    Each
Purchaser, for itself and for no other Purchaser, hereby represents and warrants
as of the date hereof and as of each Closing Date to the Company as follows
(unless as of a specific date therein):

 
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(a)           Organization; Authority.  Such Purchaser is either an individual
or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full
right, corporate, partnership, limited liability company or similar power and
authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of the Transaction Documents and
performance by such Purchaser of the transactions contemplated by the
Transaction Documents have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the
part of such Purchaser.  Each Transaction Document to which it is a party has
been duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
 
(b)           Understandings or Arrangements.  Such Purchaser understands that
the Securities are “restricted securities” and have not been registered under
the Securities Act or any applicable state securities law and is acquiring the
Securities as principal for its own account and not with a view to or for
distributing or reselling such Securities or any part thereof in violation of
the Securities Act or any applicable state securities law, has no present
intention of distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no direct or indirect
arrangement or understandings with any other persons to distribute or regarding
the distribution of such Securities in violation of the Securities Act or any
applicable state securities law (this representation and warranty not limiting
such Purchaser’s right to sell the Securities pursuant to any registration
statement or otherwise in compliance with applicable federal and state
securities laws).  Such Purchaser is acquiring the Securities hereunder in the
ordinary course of its business.
 
(c)           Purchaser Status.  At the time such Purchaser was offered the
Securities, it was, and as of the date hereof it is, and on each date on which
it exercises any Warrants or converts any Notes it will be either: (i) an
“accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or
(a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as
defined in Rule 144A(a) under the Securities Act.  Such Purchaser is not
required to be registered as a broker-dealer under Section 15 of the Exchange
Act. Such Purchaser has the authority and is duly and legally qualified to
purchase and own the Securities. Such Purchaser is able to bear the risk of such
investment for an indefinite period and to afford a complete loss thereof. Such
Purchaser has provided the information in the Accredited Investor Questionnaire
attached hereto as Exhibit G (the “Investor Questionnaire”). The information set
forth on the signature pages hereto and the Investor Questionnaire regarding
such Purchaser is true and complete in all respects. Except as disclosed in the
Investor Questionnaire, such Purchaser has had no position, office or other
material relationship within the past three years with the Company or Persons
(as defined below) known to such Purchaser to be affiliates of the Company, and
is not a member of the Financial Industry Regulatory Authority or an “associated
person” (as such term is defined under the FINRA Membership and Registration
Rules Section 1011).

 
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(d)           Experience of Such Purchaser.  Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment.  Such Purchaser is able to
bear the economic risk of an investment in the Securities and, at the present
time, is able to afford a complete loss of such investment.
 
(e)           Information on Company. Such Purchaser has been furnished with or
has had access to the EDGAR Website of the Commission to the Company’s filings
made with the Commission during the period from the date that is two years
preceding the date hereof through the tenth business day preceding the Closing
Date in which such Purchaser purchases Securities hereunder, including the
Company’s Annual Report on Form 10-K filed with the Commission on April 15, 2015
(hereinafter referred to collectively as the “Reports”).   Such Purchaser was
afforded (i) the opportunity to ask such questions as such Purchaser deemed
necessary of, and to receive answers from, representatives of the Company
concerning the merits and risks of acquiring the Securities; (ii) the right of
access to information about the Company and its financial condition, results of
operations, business, properties, management and prospects sufficient to enable
such Purchaser to evaluate the Securities; and (iii) the opportunity to obtain
such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to acquiring the Securities.
 
(f)            Compliance with Securities Act; Reliance on Exemptions. Such
Purchaser understands and agrees that the Securities have not been registered
under the 1933 Act or any applicable state securities laws, by reason of their
issuance in a transaction that does not require registration under the 1933 Act,
and that such Securities must be held indefinitely unless a subsequent
disposition is registered under the 1933 Act or any applicable state securities
laws or is exempt from such registration. Such Purchaser understands and agrees
that the Securities are being offered and sold to such Purchaser in reliance on
specific exemptions from the registration requirements of United States federal
and state securities laws and regulations and that the Company is relying in
part upon the truth and accuracy of, and such Purchaser’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
such Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of such Purchaser to acquire the Securities.
 
(g)           Communication of Offer. Such Purchaser is not purchasing the
Securities as a result of any “general solicitation” or “general advertising,”
as such terms are defined in Regulation D, which includes, but is not limited
to, any advertisement, article, notice or other communication regarding the
Securities published in any newspaper, magazine or similar media or on the
internet or broadcast over television, radio or the internet or presented at any
seminar or any other general solicitation or general advertisement.
 
(h)           No Governmental Review. Such Purchaser understands that no United
States federal or state agency or any other governmental or state agency has
passed on or made recommendations or endorsement of the Securities or the
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the Offering.

 
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(i)           No Conflicts. The execution, delivery and performance of this
Agreement and performance under the other Transaction Documents and the
consummation by such Purchaser of the transactions contemplated hereby and
thereby or relating hereto or thereto do not and will not (i) result in a
violation of such Purchaser’s charter documents, bylaws or other organizational
documents, if applicable, (ii) conflict with nor constitute a default (or an
event which with notice or lapse of time or both would become a default) under
any agreement to which such Purchaser is a party, nor (iii) 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 Purchaser 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 Purchaser). Such
Purchaser 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 or perform under the other Transaction Documents nor to purchase the
Securities in accordance with the terms hereof, provided that for purposes of
the representation made in this sentence, such Purchaser is assuming and relying
upon the accuracy of the relevant representations and agreements of the Company
herein.
 
(j)           Certain Transactions and Confidentiality.  Other than consummating
the transactions contemplated hereunder, such  Purchaser has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with Purchaser, executed any purchases or sales, including Short
Sales, of the securities of the Company during the period commencing as of the
time that such Purchaser first received a term sheet (written or oral) from the
Company or any other Person representing the Company setting forth the material
terms of the transactions contemplated hereby and ending immediately prior to
the execution hereof. Other than to Persons party to this Agreement, such
Purchaser has maintained the confidentiality of all disclosures made to it in
connection with this transaction (including the existence and terms of this
Agreement).
 
(k)           Survival.  The foregoing representations and warranties shall
survive the Closings.
 
The Company acknowledges and agrees that the representations contained in
Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on
the Company’s representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction Document or
any other document or instrument executed and/or delivered in connection with
this Agreement or the consummation of the transaction contemplated hereby.
 
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
 
4.1           Transfer Restrictions.
 
(a)           The Securities may only be disposed of in compliance with state
and federal securities laws.  In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the
Company or to an Affiliate of a Purchaser or in connection with a pledge as
contemplated in Section 4.1(b), the Company may require the transferor thereof
to provide to the Company, at the Company’s expense, an opinion of counsel
selected by the transferor and reasonably acceptable to the Company, the form
and substance of which opinion shall be reasonably satisfactory to the Company,
to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act.  As a condition of transfer,
any such transferee shall agree in writing to be bound by the terms of this
Agreement and shall have the rights and obligations of a Purchaser under this
Agreement and the other Transaction Documents.
 
 
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(b)           The Purchasers agree to the imprinting, so long as is required by
this Section 4.1, of a legend on any of the Securities in the following form:
 
 [NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS
[EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON
[EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
 
The Company acknowledges and agrees that a Purchaser may from time to time
pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Agreement
and the Registration Rights Agreement and, if required under the terms of such
arrangement, such Purchaser may transfer pledge or secure Securities to the
pledgees or secured parties.  Such a pledge or transfer would not be subject to
approval of the Company and no legal opinion of legal counsel of the pledgee,
secured party or pledgor shall be required in connection therewith.  Further, no
notice shall be required of such pledge.  At the appropriate Purchaser’s
expense, the Company will execute and deliver such reasonable documentation as a
pledgee or secured party of Securities may reasonably request in connection with
a pledge or transfer of the Securities, including, if the Securities are subject
to registration pursuant to a Registration Rights Agreement, the preparation and
filing of any required prospectus supplement under Rule 424(b)(3) under the
Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of selling stockholders thereunder.

 
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(c)           Legend Removal.  Certificates evidencing the Underlying Shares
shall not contain any legend (“Unlegended Shares”) (including the legend set
forth in Section 4.1(b) hereof): (i) while a registration statement (including
the Registration Statement) covering the resale of such security is effective
under the Securities Act, (ii) following any sale of such Underlying Shares
pursuant to Rule 144, (iii) if such Underlying Shares are eligible for sale
under Rule 144, without the requirement for the Company to be in compliance with
the current public information required under Rule 144 as to such Underlying
Shares and without volume or manner-of-sale restrictions or (iv) if such legend
is not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the staff of the
Commission). The Company shall cause its counsel to issue a legal opinion to the
Transfer Agent promptly after the Effective Date if required by the Transfer
Agent to effect the removal of the legend hereunder. If all or any Notes are
converted or any portion of a Warrant is exercised at a time when there is an
effective registration statement to cover the resale of the Underlying Shares,
or if such Underlying Shares may be sold under Rule 144 or if such legend is not
otherwise required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of
the Commission) then such Underlying Shares shall be issued free of all
legends.  The Company agrees that following such time as such legend is no
longer required under this Section 4.1(c), it will, no later than fifteen
Trading Days following the delivery by a Purchaser to the Company or the
Transfer Agent of a certificate representing Underlying Shares, as applicable,
issued with a restrictive legend (such fifteenth Trading Day, the “Legend
Removal Date”), deliver or cause to be delivered to such Purchaser a certificate
representing such shares that is free from all restrictive and other
legends.  The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer set
forth in this Section 4.  To the extent that the Company is able to do so,
certificates for Underlying Shares subject to legend removal hereunder shall be
transmitted by the Transfer Agent to the Purchaser by crediting the account of
the Purchaser’s prime broker with the Depository Trust Company System as
directed by such Purchaser.
 
(d)           [Reserved]
 
(e)           DWAC. In lieu of delivering physical certificates representing the
Unlegended Shares, upon request of a Purchaser, so long as the certificates
therefor do not bear a legend and the Purchaser is not obligated to return such
certificate for the placement of a legend thereon, the Company shall cause its
transfer agent to electronically transmit the Unlegended Shares by crediting the
account of Purchaser’s prime broker with the Depository Trust Company through
its Deposit Withdrawal At Custodian system, provided that the Company’s Common
Stock is DTC eligible and the Company’s transfer agent participates in the
Deposit Withdrawal at Custodian system. Such delivery must be made on or before
the Legend Removal Date.
 
(f)            Injunction. In the event a Purchaser shall request delivery of
Unlegended Shares as described in this Section 4.1 and the Company is required
to deliver such Unlegended Shares, the Company may not refuse to deliver
Unlegended Shares based on any claim that such Purchaser or anyone associated or
affiliated with such Purchaser has not complied with Purchaser’s obligations
under the Transaction Documents, or for any other reason, unless, an injunction
or temporary restraining order from a court, on notice, restraining and or
enjoining delivery of such Unlegended Shares shall have been sought and obtained
by the Company and the Company has posted a surety bond for the benefit of such
Purchaser in the amount of the greater of (i) 120% of the amount of the
aggregate purchase price of the Underlying Shares to be subject to the
injunction or temporary restraining order, or (ii) the VWAP of the Common Stock
on the trading day before the issue date of the injunction multiplied by the
number of Unlegended Shares to be subject to the injunction, which bond shall
remain in effect until the completion of arbitration/litigation of the dispute
and the proceeds of which shall be payable to such Purchaser to the extent
Purchaser obtains judgment in Purchaser’s favor.
 

 
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(g)           [Reserved]
 
(i)           Plan of Distribution.  Each Purchaser, severally and not jointly
with the other Purchasers, agrees with the Company that such Purchaser will sell
any Securities pursuant to either the registration requirements of the
Securities Act, including any applicable prospectus delivery requirements, or an
exemption therefrom, and that if Securities are sold pursuant to a registration
statement, they will be sold in compliance with the plan of distribution set
forth therein, and acknowledges that the removal of the restrictive legend from
certificates representing Securities as set forth in this Section 4.1 is
predicated upon the Company’s reliance upon this understanding.
 
4.2           Acknowledgment of Dilution.  The Company acknowledges that the
issuance of the Securities may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market
conditions.  The Company further acknowledges that its obligations under the
Transaction Documents, including, without limitation, its obligation to issue
the Underlying Shares pursuant to the Transaction Documents, are unconditional
and absolute and not subject to any right of set off, counterclaim, delay or
reduction, regardless of the effect of any such dilution or any claim the
Company may have against any Purchaser and regardless of the dilutive effect
that such issuance may have on the ownership of the other stockholders of the
Company.
 
4.3           Furnishing of Information. Until the earliest of the time that (i)
no Purchaser owns Securities or (ii) the Warrants have expired, the Company
covenants to file all periodic reports with the Commission pursuant to Section
15(d) of the Exchange Act and under Section 12(b) or 12(g) of the 1934 Act,
maintain the registration of the Common Stock under Section 12(b) or 12(g) of
the Exchange Act and to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act and file such reports
even if the Company is not then subject to the reporting requirements of the
Exchange Act.
 
4.4           Integration.  The Company shall not sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities or that would be
integrated with the offer or sale of the Securities for purposes of the rules
and regulations of any Trading Market such that it would require shareholder
approval prior to the closing of such other transaction or to effectuate such
other transaction unless shareholder approval is obtained before the earlier of
the closing of such subsequent transaction or effectuation of such other
transaction.
 
4.5           Conversion and Exercise Procedures.  Each of the form of Notice of
Exercise included in the Warrants and the form of Notice of Conversion included
in the Notes set forth the totality of the procedures required of the Purchasers
in order to exercise the Warrants or convert the Notes.  No additional legal
opinion, other information or instructions shall be required of the Purchasers
to exercise their Warrants or convert their Notes.  The Company shall honor
exercises of the Warrants and conversions of the Notes and shall deliver
Underlying Shares in accordance with the terms, conditions and time periods set
forth in the Transaction Documents.
 
 
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4.6           Securities Laws Disclosure; Publicity.  The Company shall on or
before the fourth Trading Day following each Closing Date, file a Current Report
on Form 8-K including the Transaction Documents as exhibits thereto with the
Commission (“Form 8-K”).  The Company and each Purchaser shall consult with each
other in issuing any press releases with respect to the transactions
contemplated hereby, and neither the Company nor any Purchaser shall issue any
press release nor otherwise make any such public statement without the prior
consent of the Company, with respect to any press release of any Purchaser, or
without the prior consent of each Purchaser, with respect to any press release
of the Company, which consent shall not unreasonably be withheld or delayed,
except if such disclosure is required by law, in which case the disclosing party
shall promptly provide the other party with prior notice of such public
statement or communication.  Notwithstanding the foregoing, the Company shall
not publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or Trading
Market unless the name of such Purchaser is already included in the body of the
Transaction Documents, without the prior written consent of such Purchaser,
except: (a) as required by federal securities law in connection with the filing
of final Transaction Documents with the Commission and (b) to the extent such
disclosure is required by law or Trading Market regulations, in which case the
Company shall provide the Purchasers with prior notice of such disclosure
permitted under this clause (b).  The Company may file a Form 10-Q in lieu of
the Form 8-K provided such filing contains the content required to be included
in the Form 8-K and the Form 10-Q is filed not later than four (4) Trading Days
after the Form 8-K would otherwise have been filed.
 
4.7           Shareholder Rights Plan.  No claim will be made or enforced by the
Company or, with the consent of the Company, any other Person, that any
Purchaser is an “Acquiring Person” under any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or similar anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that any Purchaser could be deemed to trigger the provisions of
any such plan or arrangement, by virtue of receiving Securities under the
Transaction Documents or under any other agreement between the Company and the
Purchasers.
 
4.8           Non-Public Information.  Except with respect to the material terms
and conditions of the transactions contemplated by the Transaction Documents,
the Company covenants and agrees that neither it, nor any other Person acting on
its behalf, will provide any Purchaser or its agents or counsel with any
information that the Company believes constitutes material non-public
information, unless prior thereto such Purchaser shall have entered into a
written agreement with the Company regarding the confidentiality and use of such
information.  The Company understands and confirms that each Purchaser shall be
relying on the foregoing covenant in effecting transactions in securities of the
Company.
 
4.9           Use of Proceeds.   The Company shall use the net proceeds from the
sale of the Offering hereunder substantially for working capital and general
corporate purposes and shall not use such proceeds: (a) for the satisfaction of
any portion of the Company’s Indebtedness, (b) for the redemption of any Common
Stock or Common Stock Equivalents, (c) for the settlement of any outstanding
litigation or (d) in violation of FCPA or OFAC regulations.

 
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4.10           Indemnification of Purchasers.  Subject to the provisions of this
Section 4.10, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against Purchaser
Parties in any capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such Purchaser Party, with
respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction Documents or any
agreements or understandings such Purchaser Party may have with any such
stockholder or any violations by such  Purchaser Party of state or federal
securities laws or any conduct by such Purchaser Party which constitutes fraud,
gross negligence, willful misconduct or malfeasance).  If any action shall be
brought against any Purchaser Party in respect of which indemnity may be sought
pursuant to this Agreement, such Purchaser Party shall promptly notify the
Company in writing, and the Company shall have the right to assume the defense
thereof with counsel of its own choosing reasonably acceptable to the Purchaser
Party.  Any Purchaser Party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Purchaser Party except
to the extent that (i) the employment thereof has been specifically authorized
by the Company in writing, (ii) the Company has failed after a reasonable period
of time to assume such defense and to employ counsel or (iii) in such action
there is, in the reasonable opinion of counsel, a material conflict on any
material issue between the position of the Company and the position of such
Purchaser Party, in which case the Company shall be responsible for the
reasonable fees and expenses of no more than one such separate counsel.  The
Company will not be liable to any Purchaser Party under this Agreement (y) for
any settlement by a Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or (z) to the
extent, but only to the extent that a loss, claim, damage or liability is
attributable to any Purchaser Party’s breach of its material representations,
warranties or covenants under the Transaction Documents.  The indemnification
required by this Section 4.10 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are
received or are incurred. The indemnity agreements contained herein shall be in
addition to any cause of action or similar right of any Purchaser Party against
the Company or others and any liabilities the Company may be subject to pursuant
to law.
 
4.11           Reservation and Listing of Securities.
 
(a)          The Company shall maintain a reserve from its duly authorized
shares of Common Stock for issuance pursuant to the Transaction Documents in
such amount as may then be required to fulfill its obligations in full under the
Transaction Documents, but not less than the Required Minimum.

 
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(b)          If, on any date, the number of authorized but unissued (and
otherwise unreserved) shares of Common Stock is less than the Required Minimum
on such date, then the Board of Directors shall amend the Company’s certificate
or articles of incorporation to increase the number of authorized but unissued
shares of Common Stock to at least the Required Minimum at such time, as soon as
possible and in any event not later than the 60th day after such date.
 
(c)          The Company shall prior to each Closing, if applicable: (i) in the
time and manner required by the principal Trading Market, prepare and file with
such Trading Market an additional shares listing application covering a number
of shares of Common Stock at least equal to the Required Minimum on the date of
such application, (ii) take all steps necessary to cause such shares of Common
Stock to be approved for listing or quotation on such Trading Market as soon as
possible thereafter, (iii) provide to the Purchasers evidence of such listing or
quotation and (iv) maintain the listing or quotation of such Common Stock on any
date at least equal to the Required Minimum on such date on such Trading Market
or another Trading Market.  The Company will take all action necessary to
continue the listing or quotation and trading of its Common Stock on a Trading
Market until the later of (i) at least five years after the Closing Date, and
(ii) for so long as the Notes or Warrants are outstanding, and will comply in
all respects with the Company’s reporting, filing and other obligations under
the bylaws or rules of the Trading Market at least until five years after the
Initial Closing Date and for so long as the Notes and Warrants are outstanding.
 
4.12           Form D; Blue Sky Filings.  The Company agrees to timely file a
Form D with respect to the Securities as required under Regulation D and to
provide a copy thereof, promptly upon request of any Purchaser. The Company
shall take such action as the Company shall reasonably determine is necessary in
order to obtain an exemption for, or to qualify the Securities for, sale to the
Purchasers at a Closing under applicable securities or “Blue Sky” laws of the
states of the United States, and shall provide evidence of such actions promptly
upon request of any Purchaser.
 
4.13           Subsequent Equity Sales.   From the date hereof until such time
as the Notes and the  Warrants are no longer outstanding, the Company will not,
without the consent of a Majority in Interest, enter into any Equity Line of
Credit, issue or agree to issue Variable Priced Equity Linked Instruments nor
any of the foregoing (collectively, a “Variable Rate Transaction”).   For
purposes hereof, “Equity Line of Credit” shall include any transaction involving
a written agreement between the Company and an investor or underwriter whereby
the Company has the right to “put” its securities to the investor or underwriter
over an agreed period of time and at an agreed price or price formula, and
“Variable Priced Equity Linked Instruments” shall include: (A) any debt or
equity securities which are convertible into, exercisable or exchangeable for,
or carry the right to receive additional shares of Common Stock or Common Stock
Equivalents or any of the foregoing at a price that can be reduced either (1) at
any conversion, exercise or exchange rate or other price that is based upon
and/or varies with the trading prices of or quotations for Common Stock at any
time after the initial issuance of such debt or equity security, or (2) with a
fixed conversion, exercise or exchange price that is subject to being reset at
some future date at any time after the initial issuance of such debt or equity
security due to a change in the market price of the Company’s Common Stock since
date of initial issuance, and (B) any amortizing convertible security which
amortizes prior to its maturity date, where the Company is required or has the
option to (or any investor in such transaction has the option to require the
Company to) make such amortization payments in shares of Common Stock which are
valued at a price that is based upon and/or varies with the trading prices of or
quotations for Common Stock at any time after the initial issuance of such debt
or equity security (whether or not such payments in stock are subject to certain
equity conditions).  For purposes of determining the total consideration for a
convertible instrument (including a right to purchase equity of the Company)
issued, subject to an original issue or similar discount or which principal
amount is directly or indirectly increased after issuance, the consideration
will be deemed to be the actual net cash amount received by the Company in
consideration of the original issuance of such convertible instrument.  For so
long as the Notes or Warrants are outstanding, the Company will not, without the
consent of a Majority in Interest, issue any Common Stock or Common Stock
Equivalents to officers, directors, and employees of the Company unless such
issuance is an Exempt Issuance or in the amounts and on the terms set forth on
Schedule 4.13.  For so long as the Notes are outstanding, the Company will not
amend the terms of any securities or Common Stock Equivalents or of any
agreement outstanding or in effect as of the date of this Agreement pursuant to
which same were or may be acquired without the consent of a Majority in
Interest, if the result of such amendment would be at an effective price per
share of Common Stock less than the Conversion Price in effect at the time of
such amendment.   The restrictions and limitations in this Section 4.13 shall
apply whether or not a Purchaser exercises its rights pursuant to Section 4.17.
 
 
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4.14           Equal Treatment of Purchasers.  No consideration (including any
modification of any Transaction Document) shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of this
Agreement unless the same consideration is also offered on a ratable basis to
all of the parties to this Agreement. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and
negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.
 
4.15           Capital Changes.  Until the one year anniversary of the latest
Closing Date, the Company shall not undertake a reverse or forward stock split
or reclassification of the Common Stock without 10 days prior written notice to
the Purchasers.
 
4.16           Certain Transactions and Confidentiality. Each Purchaser,
severally and not jointly with the other Purchasers, covenants that neither it,
nor any Affiliate or anyone acting on its behalf or pursuant to any
understanding with it will execute any purchases or sales, including Short
Sales, of any of the Company’s securities during the period commencing with the
execution of this Agreement and ending at such time that the transactions
contemplated by this Agreement are first publicly announced pursuant to a press
release or Form 8-K as described in Section 4.6.  Each Purchaser, severally and
not jointly with the other Purchasers, covenants that until such time as the
transactions contemplated by this Agreement are publicly disclosed by the
Company pursuant to a press release or Form 8-K as described in Section 4.6,
such Purchaser will maintain the confidentiality of the existence and terms of
this transaction and the information included in the Transaction Documents and
the Disclosure Schedules.  Further, each Purchaser represents, warrants,
covenants and agrees that neither it, nor any of its Affiliates or anyone on its
behalf will engage in any Short Sale transactions at any time while it
beneficially owns any Securities.
 
4.17           Participation in Future Financing. The provisions of this Section
4.17 shall not (i) be applicable unless and until Stockholder Approval thereof
has been obtained and (ii) not apply to a Defaulting Purchaser (or its successor
or transferee).
 
(a)          Until one year after the Effective Date of a Registration Statement
which registers all then outstanding or issuable Underlying Shares (including
Underlying Shares issuable in connection with a Subsequent Closing, if any),
upon any proposed issuance by the Company or any of its Subsidiaries of Common
Stock, Common Stock Equivalents for cash consideration, Indebtedness or a
combination thereof, other than (i) a rights offering to all holders of Common
Stock (which may include extending such rights offering to holders of Notes) or
(ii) an Exempt Issuance, (a “Subsequent Financing”), the Purchasers shall have
the right to participate in up to an amount of the Subsequent Financing equal to
100% of the Subsequent Financing (the “Participation Maximum”) pro rata to each
other in proportion to their Subscription Amounts on the same terms, conditions
and price provided for in the Subsequent Financing, unless the Subsequent
Financing is an underwritten public offering, in which case the Company shall
notify each Purchaser of such public offering when it is lawful for the Company
to do so, but no Purchaser shall be entitled to purchase any particular amount
of such public offering without the approval of the lead underwriter of such
underwritten public offering.
 
 
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(b)          At least ten (10) Trading Days prior to the closing of the
Subsequent Financing, the Company shall deliver to each Purchaser a written
notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which
Pre-Notice shall ask such Purchaser if it wants to review the details of such
financing (such additional notice, a “Subsequent Financing Notice”).  Upon the
request of a Purchaser, and only upon a request by such Purchaser, for a
Subsequent Financing Notice, the Company shall promptly, but no later than one
(1) Trading Day after such request, deliver a Subsequent Financing Notice to
such Purchaser.  The requesting Purchaser shall be deemed to have acknowledged
that the Subsequent Financing Notice may contain material non-public
information.  The Subsequent Financing Notice shall describe in reasonable
detail the proposed terms of such Subsequent Financing, the amount of proceeds
intended to be raised thereunder and the Person or Persons through or with whom
such Subsequent Financing is proposed to be effected and shall include a term
sheet or similar document relating thereto as an attachment.
 
(c)          Any Purchaser desiring to participate in such Subsequent Financing
must provide written notice to the Company by not later than 5:30 p.m. (New York
City time) on the tenth (10th) Trading Day after all of the Purchasers have
received the Pre-Notice that the Purchaser is willing to participate in the
Subsequent Financing, the amount of such Purchaser’s participation, and
representing and warranting that such Purchaser has such funds ready, willing,
and available for investment on the terms set forth in the Subsequent Financing
Notice.  If the Company receives no such notice from a Purchaser as of such
tenth (10th) Trading Day, such Purchaser shall be deemed to have notified the
Company that it does not elect to participate.
 
(d)          If by 5:30 p.m. (New York City time) on the tenth (10th ) Trading
Day after all of the Purchasers have received the Pre-Notice, notifications by
the Purchasers of their willingness to participate in the Subsequent Financing
(or to cause their designees to participate) is, in the aggregate, less than the
total amount of the Subsequent Financing, then the Company may affect the
remaining portion of such Subsequent Financing on the terms and with the Persons
set forth in the Subsequent Financing Notice and the Purchasers shall
simultaneously affect their portion of such Subsequent Financing as set forth in
their notifications to the Company.
 
(e)          [Reserved].
 
(f)          The Company must provide the Purchasers with a second Subsequent
Financing Notice, and the Purchasers will again have the right of participation
set forth above in this Section 4.17, if the Subsequent Financing subject to the
initial Subsequent Financing Notice is not consummated for any reason on the
terms set forth in such Subsequent Financing Notice within sixty (60) Trading
Days after the date of the initial Subsequent Financing Notice.
 
(g)          The Company and each Purchaser agree that if any Purchaser elects
to participate in the Subsequent Financing, the transaction documents related to
the Subsequent Financing shall not include any term or provision whereby such
Purchaser shall be required to agree to any restrictions on trading as to any of
the Securities purchased hereunder (for avoidance of doubt, the securities
purchased in the Subsequent  Financing shall not be considered securities
purchased hereunder) or be required to consent to any amendment to or
termination of, or grant any waiver, release or the like under or in connection
with, this Agreement, without the prior written consent of such Purchaser.
 
4.18           Purchaser’s Exercise Limitations.  The Company shall not effect
any exercise of the rights granted in Sections 4.17 and 4.23 of this Agreement,
and a Purchaser shall not have the right to exercise any portion of such rights
granted in Sections 4.17 and 4.23 to the extent that after giving effect to such
exercise, the Purchaser (together with the Purchaser’s Affiliates, and any other
Persons acting as a group together with the Purchaser or any of the Purchaser’s
Affiliates), would beneficially own in excess of the Beneficial Ownership
Limitation (as defined in the Note), applied in the manner set forth in the
Note.
 

 
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4.19           Maintenance of Property.  The Company shall keep all of its
property, which is necessary or useful to the conduct of its business, in good
working order and condition, ordinary wear and tear excepted.
 
4.20           Preservation of Corporate Existence.  The Company shall preserve
and maintain its corporate existence, rights, privileges and franchises in the
jurisdiction of its incorporation, and qualify and remain qualified, as a
foreign corporation in each jurisdiction in which such qualification is
necessary in view of its business or operations and where the failure to qualify
or remain qualified might reasonably have a Material Adverse Effect upon the
financial condition, business or operations of the Company taken as a whole.
 
4.21           DTC Program.  The Company shall use its commercially reasonable
efforts to, at all times that Notes or Warrants are outstanding, employ as the
transfer agent for its Common Stock and Underlying Shares a participant in the
Depository Trust Company Automated Securities Transfer Program and cause the
Common Stock and Underlying Shares to be transferable pursuant to such program.

4.22           Reimbursement.  If any Purchaser becomes involved in any capacity
in any Proceeding by or against any Person who is a stockholder of the Company
(except as a result of sales, pledges, margin sales and similar transactions by
such Purchaser to or with any current stockholder), solely as a result of such
Purchaser’s acquisition of the Securities under this Agreement, the Company will
reimburse such Purchaser for its reasonable legal and other expenses (including
the cost of any investigation preparation and travel in connection therewith)
incurred in connection therewith, as such expenses are incurred.  The
reimbursement obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have, shall extend
upon the same terms and conditions to any Affiliates of the Purchasers who are
actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may
be, of the Purchasers and any such Affiliate, and shall be binding upon and
inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, the Purchasers and any such Affiliate and any
such Person.  The Company also agrees that neither the Purchasers nor any such
Affiliates, partners, directors, agents, employees or controlling persons shall
have any liability to the Company or any Person asserting claims on behalf of or
in right of the Company solely as a result of acquiring the Securities under
this Agreement.

4.23           Most Favored Nation Provision.  From the date hereof and for so
long as a Purchaser holds any Securities, in the event that the Company issues
or sells any Common Stock or Common Stock Equivalents, if a Purchaser then
holding outstanding Securities reasonably believes that any of the terms and
conditions appurtenant to such issuance or sale are more favorable to such
investors than are the terms and conditions granted to the Purchasers hereunder,
upon notice to the Company by such Purchaser within five (5) Trading Days after
disclosure of such issuance or sale, the Company shall amend the terms of this
transaction as to such Purchaser only so as to give such Purchaser the benefit
of such more favorable terms or conditions.  This Section 4.23 shall not apply
with respect to an Exempt Issuance. The Company shall provide each Purchaser
with notice of any such issuance or sale not later than ten (10) Trading Days
before such issuance or sale.  This Section 4.23 shall not be applicable unless
and until Stockholder Approval thereof has been obtained and shall not apply to
a Defaulting Purchaser (or its successor or transferee).

 
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4.24           Indebtedness.  For so long as a majority in original principal
amount of the Notes is outstanding, the Company will not incur any Indebtedness
other than Permitted Indebtedness, without the consent of the Majority in
Interest.

4.25           Notice of Disqualification Events. The Company will notify the
Purchasers in writing, prior to each Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with
the passage of time, become a Disqualification Event relating to any Issuer
Covered Person not otherwise disclosed herein or in the SEC Reports.

4.26           Proxy Statement.

(a)           As promptly as reasonably practicable following the date of this
Agreement but not later than thirty (30) calendar days after the Initial Closing
Date, the Company shall prepare and file with the Commission a proxy statement
to be sent to the stockholders of the Company relating to a stockholders’
meeting in connection with the issuance of shares of Common Stock (such proxy
statement, the “Proxy Statement”) pursuant to the Transaction Documents and the
approval of all terms and conditions of the Transaction Documents necessary for
the effectuation of the Offering, including, without limitation, the amendment
to the Company’s Certificate of Designations governing the Series F Convertible
Preferred Stock required pursuant to the Consent, Waiver and Amendment
Agreement, and any such other matters requiring shareholder approval under the
rules and regulations of the NASDAQ Capital Market (collectively, the
“Stockholder Approval”).  The Company shall use its commercially reasonable
efforts to have the Proxy Statement approved by the Commission for transmission
to Company shareholders as promptly as practicable after such filing, and the
Company shall thereafter use its commercially reasonable efforts to promptly
thereafter mail the Proxy Statement to the holders of each of the Company’s
stockholders.  The Company shall as promptly as reasonably practicable notify
the Purchasers of the receipt of any oral or written comments from the staff of
the Commission on the Proxy Statement.

(b)           The Company agrees, as to itself and its Subsidiaries, that none
of the information supplied or to be supplied by it or its Subsidiaries for
inclusion or incorporation by reference in the Proxy Statement and any amendment
or supplement thereto will, at the date of mailing to its stockholders and at
the time of the stockholder meeting, or any adjournment or postponement thereof,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company will cause the Proxy Statement to comply as to form in
all material respects with the applicable provisions of the Securities Act.

(c)           Purchasers and their respective counsels shall be given a
reasonable opportunity to review and comment upon the Proxy Statement prior to
the filing thereof with the Commission, and shall provide any comments thereon
as soon as reasonably practicable.  The Company will promptly notify Purchasers
upon communication from the Commission that the Commission has cleared the Proxy
Statement for distribution to the Company’s shareholders.

(d)           Subject to Section 4.26(e), the Company shall take all action
necessary in accordance with the DGCL and the Company’s articles of
incorporation and bylaws to set the record date for determining the Company’s
stockholders entitled to attend a meeting of the Company’s stockholders, and
duly call, give notice of, convene and hold a meeting of its stockholders as
promptly as reasonably practicable after the Proxy Statement is cleared by the
Commission for the purpose of obtaining the Stockholder Approval (such meeting
or any adjournment or postponement thereof, the “Stockholder Meeting”) and use
commercially reasonable efforts to solicit from its stockholders proxies in
favor of the adoption and approval of this Agreement, the other Transaction
Documents and the transactions contemplated hereby and thereby and include its
recommendation in favor of approval in the Proxy Statement.  The Company will
not withdraw or modify the positive recommendation without good cause.

 
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(e)           Notwithstanding Section 4.26 (a), (b), (c) or (d), if on a date
for which the Stockholder Meeting is scheduled, the Company has not received
proxies representing a sufficient number of shares of the Common Stock to obtain
the Stockholder Approval, whether or not a quorum is present, the Company shall
have the right to postpone or adjourn the Stockholders Meeting to a date which
shall not be more than forty-five (45) days after the original date of the
Stockholder Meeting.  If the Company continues not to receive proxies
representing a sufficient number of shares of Common Stock to obtain the
Stockholder Approval vote, whether or not a quorum is present, the Company may
make one or more successive postponements or adjournments of the Stockholder
Meeting as long as the date of the Stockholder Meeting is not postponed or
adjourned without the consent of the Majority in Interest no later than one
hundred and eighty (180) days after the Initial Closing Date.  The Stockholder
Approval will not be deemed to have been obtained unless it is obtained not
later than one hundred and eighty (180) calendar days after the Initial Closing
Date.

4.27           Duration of Undertakings.  Unless otherwise stated in this
Article IV, all of the Company’s undertakings, obligations and responsibilities
set forth in Article IV of this Agreement shall remain in effect for so long as
any Securities remain outstanding.

 
ARTICLE V.
MISCELLANEOUS
 
5.1            Termination.  This Agreement may be terminated by any Purchaser,
as to such Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchasers, by
written notice to the other parties, if the Initial Closing has not been
consummated on or before January 31, 2016; provided, however, that such
termination will not affect the right of any party to sue for any breach by any
other party (or parties).
 
5.2            Fees and Expenses.  Except as expressly set forth in the
Transaction Documents and on Schedule 3.1(s), each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement; provided,
that the Company shall, on the Initial Closing and any Subsequent Closing, pay
the reasonable fees and expenses of the Escrow Agent and counsel to
Platinum.  The Company shall pay all Transfer Agent fees (including, without
limitation, any fees required for same-day processing of any instruction letter
delivered by the Company and any conversion or exercise notice delivered by a
Purchaser), stamp taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Purchasers. Each Purchaser acknowledges and
agrees that neither of Company Counsel nor counsel to Platinum has or is
representing such Purchaser in connection with the transaction contemplated
hereby and such Purchaser has had the opportunity to consult its own counsel or
declined to do so.
 
5.3            Entire Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules.
 
 
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5.4           Notices.  All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: (i) if to the Company, to: Echo Therapeutics,
Inc., 99 Wood Avenue South, Suite 302, Iselin, New Jersey 08830, Attn: Scott W.
Hollander, President and CEO, fax: (201) 575-4565 with a copy by fax only to:
Moomjian, Waite & Coleman, LLP, 100 Jericho Quadrangle, Suite 208, Jericho, New
York 11753, Attn: Kevin W. Waite, Esq., fax: (516) 937-5050, and (ii) if to the
Purchasers, to: the addresses and fax numbers indicated on the signature pages
hereto.
 
5.5           Amendments; Waivers.  No provision of this Agreement may be
waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Purchasers (other than
Defaulting Purchases, if any) holding at least a majority in interest of the
Securities then outstanding (the “Majority in Interest”), or, in the case of a
waiver, by the party against whom enforcement of any such waived provision is
sought. For so long as Platinum and its assigns own Notes pursuant to which at
least $100,000 is outstanding, a Majority in Interest must include
Platinum.  Whenever the term “consent of the Purchasers” or a similar term is
employed herein, it shall mean the consent of a Majority in Interest.  No waiver
of any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right.
 
5.6           Headings.  The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
 
5.7           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of each Purchaser (other than by
merger).  Following a Closing, any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers
any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction
Documents that apply to the “Purchasers.”
 
5.8           No Third-Party Beneficiaries.  This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.10.

 
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5.9           Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of the Transaction Documents shall be
governed by and construed and enforced in accordance with the internal laws of
the State of New York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the State of New York.  Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the State of New York, City of New York, for the adjudication
of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), and hereby irrevocably waives,
and agrees not to assert in any action, suit or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is improper or is an inconvenient venue for such
proceeding.  Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof.  Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.   If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then, in
addition to the obligations of the Company under Section 4.10, the prevailing
party in such action, suit or proceeding shall be reimbursed by the other party
for its reasonable attorneys’ fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such action or proceeding.
 
5.10           Survival.  The representations and warranties contained herein
shall survive the Closings and the delivery of the Securities.
 
5.11           Execution.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to each other party, it being understood that the
parties need not sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.
 
5.12           Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

 
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5.13           Rescission and Withdrawal Right.  Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Purchaser exercises a right,
election, demand or option under a Transaction Document and the Company does not
timely perform its related obligations within the periods therein provided, then
such Purchaser may, at any time prior to the Company’s performance of such
obligations, rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights; provided,
however, that in the case of a rescission of a conversion of a Note or exercise
of a Warrant, the applicable Purchaser shall be required to return any shares of
Common Stock subject to any such rescinded conversion or exercise notice
concurrently with the return to such Purchaser of the aggregate exercise price
paid to the Company for such shares and the restoration of such Purchaser’s
right to acquire such shares pursuant to such Purchaser’s Warrant (including,
issuance of a replacement warrant certificate evidencing such restored right).
 
5.14           Replacement of Securities.  If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof (in the case of mutilation), or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction.  The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.
 
5.15           Remedies.  In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agree to waive and
not to assert in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate.
 
5.16           Payment Set Aside. To the extent that the Company makes a payment
or payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

 
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5.17           Usury.  To the extent it may lawfully do so, the Company hereby
agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of,
usury laws wherever enacted, now or at any time hereafter in force, in
connection with any claim, action or proceeding that may be brought by any
Purchaser in order to enforce any right or remedy under any Transaction
Document.  Notwithstanding any provision to the contrary contained in any
Transaction Document, it is expressly agreed and provided that the total
liability of the Company under the Transaction Documents for payments in the
nature of interest shall not exceed the maximum lawful rate authorized under
applicable law (the “Maximum Rate”), and, without limiting the foregoing, in no
event shall any rate of interest or default interest, or both of them, when
aggregated with any other sums in the nature of interest that the Company may be
obligated to pay under the Transaction Documents exceed such Maximum Rate.  It
is agreed that if the maximum contract rate of interest allowed by law and
applicable to the Transaction Documents is increased or decreased by statute or
any official governmental action subsequent to the date hereof, the new maximum
contract rate of interest allowed by law will be the Maximum Rate applicable to
the Transaction Documents from the Closing Date thereof forward, unless such
application is precluded by applicable law.  If under any circumstances
whatsoever, interest in excess of the Maximum Rate is paid by the Company to any
Purchaser with respect to indebtedness evidenced by the Transaction Documents,
such excess shall be applied by such Purchaser to the unpaid principal balance
of any such indebtedness or be refunded to the Company, the manner of handling
such excess to be at such Purchaser’s election.
 
5.18           Independent Nature of Purchasers’ Obligations and Rights.  The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance or non-performance of the obligations
of any other Purchaser under any Transaction Document.  Nothing contained herein
or in any other Transaction Document, and no action taken by any Purchaser
pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights
arising out of this Agreement or out of the other Transaction Documents, and it
shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose.  Each Purchaser has been represented
by its own separate legal counsel in its review and negotiation of the
Transaction Documents (or has elected not to retain counsel). The Company has
elected to provide all Purchasers with the same terms and Transaction Documents
for the convenience of the Company and not because it was required or requested
to do so by any of the Purchasers.  It is expressly understood and agreed that
each provision contained in this Agreement and in each other Transaction
Document is between the Company and a Purchaser, solely, and not between the
Company and the Purchasers collectively and not between and among the
Purchasers.  In the event circumstances do not enable or allow the Company to
fulfill its obligation in full to all Purchasers, then the Company shall fulfill
its obligations to multiple Purchasers having the same rights, pro rata to each
such affected Purchaser’s Subscription Amount actually delivered to the Company.
 
5.19           Liquidated Damages.  The Company’s obligations to pay any partial
liquidated damages or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until all unpaid
partial liquidated damages and other amounts have been paid notwithstanding the
fact that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been canceled.
 
5.20           Saturdays, Sundays, Holidays, etc.  If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right
may be exercised on the next succeeding Business Day.
 
 
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5.21           Construction. The parties agree that each of them and/or their
respective counsel have reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any
amendments thereto. In addition, each and every reference to share prices and
shares of Common Stock in any Transaction Document shall be subject to
adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.
 
5.22           WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.
 
5.23           Equitable Adjustment.  Trading volume amounts, price/volume
amounts, the amount of Warrants, the amount of Shares of Common Stock identified
in this Agreement, conversion and exercise prices, and similar figures in the
Transaction Documents shall be equitably adjusted (but without duplication) to
offset the effect of stock splits, similar events and as otherwise described in
this Agreement, Notes and Warrants.
 

 
(Signature Pages Follow)
 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
ECHO THERAPEUTICS, INC.
 
 
Address for Notice:
 
99 Wood Avenue South, Suite 302
Iselin, New Jersey 08830
 
By: /s/ Scott W. Hollander                       
     Name: SCOTT W. HOLLANDER
     Title: President and Chief Executive Officer
 
 
With a copy to (which shall not constitute notice):
 
Moomjian, Waite & Coleman, LLP
100 Jericho Quadrangle, Suite 208
Jericho, New York 11753
Attn: Kevin W. Waite, Esq.
Fax: (516) 937-5050
 
 

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

 
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[PURCHASER SIGNATURE PAGE TO ECHO THERAPEUTICS, INC.
SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser: ________________________________________________________
Signature of Authorized Signatory of Purchaser:
__________________________________
Name of Authorized Signatory:
____________________________________________________
Title of Authorized Signatory:
_____________________________________________________
Email Address of Authorized Signatory:
_____________________________________________
Facsimile Number of Authorized Signatory:
__________________________________________
State of Residence of Purchaser:
_________________________________________________

Address for Notice to Purchaser:

Address for Delivery of Securities to Purchaser (if not same as address for
notice):

Initial Closing Subscription Amount: US$________________

Initial Closing Note principal amount: ___________________

Initial Closing Class A Warrants: ___________________

Subsequent Closing Subscription Amount: US$ _______________________________

Subsequent Closing Additional Note principal: _______________________________

Subsequent Closing Class B Warrants Exercisable: ________________________

EIN Number, if applicable, will be provided under separate cover:
________________________

Date: ___________________________

[SIGNATURE PAGES CONTINUE]

 
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