Exhibit 10.1
 
EXECUTION COPY

PURCHASE AGREEMENT

PURCHASE AGREEMENT (the “Agreement”), dated as of December 22, 2010, by and
between PROVECTUS PHARMACEUTICALS, INC., a Nevada corporation, (the “Company”),
and LINCOLN PARK CAPITAL FUND, LLC, an Illinois limited liability company (the
“Investor”).

WHEREAS:
 
Subject to the terms and conditions set forth in this Agreement, the Company
wishes to sell to the Investor, and the Investor wishes to buy from the Company,
(i) initially 1,000,000 shares of the Company's common stock, par value $.001
per share (the "Common Stock"), together with warrants (the "Warrant") to
purchase 500,000 shares of Common Stock, and (ii) thereafter up to Thirty
Million Dollars ($30,000,000) of the Common Stock. The shares of Common Stock to
be purchased hereunder are referred to herein as the “Purchase Shares.”

 
NOW THEREFORE, the Company and the Investor hereby agree as follows:
 
1.            CERTAIN DEFINITIONS.

For purposes of this Agreement, the following terms shall have the following
meanings:

(a)          “Accelerated Purchase Notice” shall mean an irrevocable written
notice from the Company to the Investor directing the Investor to buy such
Accelerated Purchase Amount in Purchase Shares as specified by the Company
therein on the Purchase Date.

(b)          “Available Amount” means initially Thirty Million Dollars
($30,000,000) in the aggregate which amount shall be reduced by the Purchase
Amount each time the Investor purchases shares of Common Stock pursuant to
Section 2 hereof. The Available Amount shall not be reduced by the Investor's
purchase of the Initial Purchase Shares and Warrants or the amounts paid upon
the exercise, if any, of the Warrants.

(c)          “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal
or state law for the relief of debtors.

(d)          “Business Day” means any day on which the Principal Market is open
for trading including any day on which the Principal Market is open for trading
for a period of time less than the customary time.

(e)          “Closing Sale Price” means, for any security as of any date, the
last closing sale price for such security on the Principal Market as reported by
the Principal Market, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the last closing sale
price of such security on the principal securities exchange or trading market
where such security is listed or traded as reported by the Principal Market.

 
 

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(f)           “Confidential Information” means any information disclosed by
either party to the other party, either directly or indirectly, in writing,
orally or by inspection of tangible objects (including, without limitation,
documents, prototypes, samples, plant and equipment). Confidential Information
may also include information disclosed to a disclosing party by third parties.
Confidential Information shall not, however, include any information which (i)
was publicly known and made generally available in the public domain prior to
the time of disclosure by the disclosing party; (ii) becomes publicly known and
made generally available after disclosure by the disclosing party to the
receiving party through no action or inaction of the receiving party; (iii) is
already in the possession of the receiving party at the time of disclosure by
the disclosing party as shown by the receiving party’s files and records
immediately prior to the time of disclosure; (iv) is obtained by the receiving
party from a third party without a breach of such third party’s obligations of
confidentiality; (v) is independently developed by the receiving party without
use of or reference to the disclosing party’s Confidential Information, as shown
by documents and other competent evidence in the receiving party’s possession;
or (vi) is required by law to be disclosed by the receiving party, provided that
the receiving party gives the disclosing party prompt written notice of such
requirement prior to such disclosure and assistance in obtaining an order
protecting the information from public disclosure.

(g)         “Custodian” means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

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

(i)           “Maturity Date” means the date that is 600 Business Days (30
Monthly Periods) from the Commencement Date.

(j)           “Monthly Period” means each successive 20 Business Day period
commencing with the Commencement Date.

(k)          “Person” means an individual or entity including but not limited to
any limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof.

(l)           “Principal Market” means the OTC Bulletin Board; provided however,
that in the event the Company’s Common Stock is ever listed or traded on the
Nasdaq Global Market, the Nasdaq Global Select Market, the Nasdaq Capital
Market, the New York Stock Exchange, or the NYSE Amex, then the “Principal
Market” shall mean such other market or exchange on which the Company’s Common
Stock is then listed or traded.

(m)         “Purchase Amount” means, with respect to any particular purchase
made hereunder, the portion of the Available Amount to be purchased by the
Investor pursuant to Section 2 hereof.

(n)          “Purchase Date” means with respect to any particular purchase made
hereunder, the Business Day on which the Investor receives by 10:00 a.m. eastern
time of such Business Day a valid Regular Purchase Notice or a valid Accelerated
Purchase Notice that the Investor is to buy Purchase Shares pursuant to Section
2 hereof.

(o)          “Purchase Price” means the lower of the (A) the lowest Sale Price
of the Common Stock on the Purchase Date and (B) the arithmetic average of the
three (3) lowest Closing Sale Prices for the Common Stock during the twelve (12)
consecutive Business Days ending on the Business Day immediately preceding such
Purchase Date (to be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction).

 
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(p)         “Regular Purchase Notice” shall mean an irrevocable written notice
from the Company to the Investor directing the Investor to buy such Regular
Purchase Amount in Purchase Shares as specified by the Company therein on the
Purchase Date.
 
(q)         “Sale Price” means any sale price for the shares of Common Stock on
the Principal Market as reported by the Principal Market.

(r)          “SEC” means the United States Securities and Exchange Commission.

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

(t)           “Transfer Agent” means the transfer agent of the Company as set
forth in Section 11(f) hereof or such other person who is then serving as the
transfer agent for the Company in respect of the Common Stock.

2.  PURCHASE OF COMMON STOCK.
 
Subject to the terms and conditions set forth in this Agreement, the Company has
the right to sell to the Investor, and the Investor has the obligation to
purchase from the Company, Purchase Shares as follows:
 
(a)       Initial Purchase and Commencement of Regular Sales of Common
Stock.  Within one (1) Business Day following the satisfaction of the conditions
(the “Commencement”) as set forth in Sections 7 and 8 below (the date of
satisfaction of such conditions, (the “Commencement Date”), the Investor shall
purchase 1,000,000 Purchase Shares (such initial Purchase Shares, the “Initial
Purchase Shares”) together with warrants (the “Warrant”) to purchase 500,000
shares (“Warrant Shares”) of Common Stock, for aggregate consideration of
$1,000,000.  The Warrants shall have a term of five (5) years from the date they
are exercisable, an exercise price of $1.50 per share and shall be in the form
of Exhibit E hereto.  Thereafter, the Company shall have the right but not the
obligation to direct the Investor by its delivery to the Investor of a Regular
Purchase Notice from time to time to buy Purchase Shares (each such purchase a
“Regular Purchase”) in any amount up to 100,000 Purchase Shares per Regular
Purchase Notice (and the amount so purchased the “Regular Purchase Amount”) at
the Purchase Price on the Purchase Date.  The Company may deliver multiple
Regular Purchase Notices to the Investor no sooner than every Business Day.

(b)           Accelerated Purchases. At any time after the Commencement Date,
the Company shall also have the right to direct the Investor to buy up to
400,000 Purchase Shares (each such purchase an “Accelerated Purchase” and the
amount so purchased the “Accelerated Purchase Amount”) per Accelerated Purchase
Notice at the Accelerated Purchase Price on the Purchase Date by delivering to
the Investor Accelerated Purchase Notices provided that the Closing Sale Price
of the Common Stock must not be below $1.50 (subject to equitable adjustment for
any reorganization, recapitalization, non-cash dividend, stock split or other
similar transaction) on the Purchase Date (the “Accelerated Purchase Threshold
Price”). With respect to each such Accelerated Purchase, the Company must
deliver the Purchase Shares before 1:00 p.m. eastern time on the Business Day
following the Purchase Date.  As used herein, the term “Accelerated Purchase
Price” shall mean the lesser of (i) the lowest Sale Price of the Common Stock on
the Purchase Date or (ii) the lowest Purchase Price during the previous ten (10)
Business Days prior to the date that the valid Accelerated Purchase Notice was
received by the Investor.  However, if on any Purchase Date the Closing Sale
Price of the Common Stock is below the applicable Accelerated Purchase Threshold
Price, such Accelerated Purchase shall be void and the Investor’s obligations to
buy Purchase Shares in respect of that Accelerated Purchase Notice shall be
terminated. Thereafter, the Company shall again have the right to submit an
Accelerated Purchase Notice as set forth herein by delivery of a new Accelerated
Purchase Notice only if the Closing Sale Price of the Common Stock is at or
above the applicable Accelerated Purchase Threshold Price on the date of the
delivery of the Accelerated Purchase Notice.  The Company may deliver multiple
Accelerated Purchase Notices to the Investor no sooner than every Business
Day.  Notwithstanding anything herein to the contrary, the parties may otherwise
mutually agree on the purchase and sale of other amounts of Purchase Shares.

 
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(c)       Payment for Purchase Shares.   The Investor shall pay to the Company
an amount equal to the Purchase Amount with respect to such Purchase Shares as
full payment for such Purchase Shares via wire transfer of immediately available
funds on the same Business Day that the Investor receives such Purchase Shares
if they are received by the Investor before 1:00 p.m. eastern time or if
received by the Investor after 1:00 p.m. eastern time, the next Business Day.
The Company shall not issue any fraction of a share of Common Stock upon any
purchase. If the issuance would result in the issuance of a fraction of a share
of Common Stock, the Company shall round such fraction of a share of Common
Stock up or down to the nearest whole share. All payments made under this
Agreement shall be made in lawful money of the United States of America or wire
transfer of immediately available funds to such account as the Company may from
time to time designate by written notice in accordance with the provisions of
this Agreement. Whenever any amount expressed to be due by the terms of this
Agreement is due on any day that is not a Business Day, the same shall instead
be due on the next succeeding day that is a Business Day.
 
(d)       Purchase Price Floor.   The Company and the Investor shall not effect
any sales and purchases under this Agreement on any Purchase Date where the
Purchase Price for any purchases of Purchase Shares would be less than the Floor
Price. “Floor Price” means $0.75, which shall be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split or other
similar transaction.
 
(e)       Reservation of Shares.  The Company has or will have duly authorized
and reserved for issuance, and covenants to continue to so reserve once reserved
for issuance the requisite aggregate number of authorized but unissued shares of
its Common Stock to timely effect the issuance, sale and delivery in full to the
Investor of: (i) all Purchase Shares that the Company directs the Investor to
purchase in accordance with Section 2(a) and Section 2(b) and (ii) all
Additional Commitment Shares issuable in accordance with Section 5(e) upon the
Investor's purchase of such Purchase Shares.
 
 
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3.             INVESTOR'S REPRESENTATIONS AND WARRANTIES.

The Investor represents and warrants to the Company that as of the date hereof
and as of the Commencement Date:

(a)           Investment Purpose.   The Investor is acquiring the Purchase
Shares, the Warrant, Warrant Shares and Commitment Shares (“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 the Investor’s right to sell
the Securities at any time pursuant to the registration statement described
herein or otherwise in compliance with applicable federal and state securities
laws and with respect to the Additional Commitment Shares, subject to Section
5(e) hereof).  The Investor is acquiring the Securities hereunder in the
ordinary course of its business.

(b)           Accredited Investor Status.  The Investor is an "accredited
investor" as that term is defined in Rule 501(a)(3) of Regulation D.

(c)           Reliance on Exemptions.  The Investor understands that the
Securities may be offered and sold to it in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws
and that the Company is relying in part upon the truth and accuracy of, and the
Investor's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Investor set forth herein in order to
determine the availability of such exemptions and the eligibility of the
Investor to acquire the Securities.

(d)           Information.  The Investor understands that its investment in the
Securities involves a high degree of risk.  The Investor (i) is able to bear the
economic risk of an investment in the Securities including a total loss, (ii)
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the proposed investment in the
Securities and (iii) has had an opportunity to ask questions of and receive
answers from the officers of the Company concerning the financial condition and
business of the Company and others matters related to an investment in the
Securities.  Neither such inquiries nor any other due diligence investigations
conducted by the Investor or its representatives shall modify, amend or affect
the Investor's right to rely on the Company's representations and warranties
contained in Section 4 below.  The Investor has sought such accounting, legal
and tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Securities.

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

(f)            Transfer or Sale.  The Investor understands that(i) the
Securities may not be offered for sale, sold, assigned or transferred unless (A)
registered pursuant to the Securities Act or (B) an exemption exists permitting
such Securities to be sold, assigned or transferred without such registration;
(ii) any sale of the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the  Securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder.

 
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(g)           Validity; Enforcement.  This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Investor and is a valid and
binding agreement of the Investor enforceable against the Investor in accordance
with its terms, subject as to enforceability to general principles of equity and
to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
and other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.

(h)           Residency.  The Investor is a resident of the State of Illinois.

(i)            No Short Selling.  The Investor represents and warrants to the
Company that at no time has any of the Investor, its agents, representatives or
affiliates engaged in or effected, in any manner whatsoever, directly or
indirectly, any (i) "short sale" (as such term is defined in Section 242.200 of
Regulation SHO of the Exchange Act) of the Common Stock or (ii) hedging
transaction, which establishes a net short position with respect to the Common
Stock.

4.            REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to the Investor that as of the date hereof
and as of the Commencement Date:

(a)           Organization and Qualification. The Company and each of the
Subsidiaries (which for purposes of this Agreement means any entity in which the
Company, directly or indirectly, owns 50% or more of the voting stock or capital
stock or other similar equity interests) 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, could not have or 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, prospects 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.  The Company has no
Subsidiaries except as set forth on Schedule 4(a).

 
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(b)           Authorization; Enforcement; Validity.  (i) The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement, the Registration Rights Agreement  and each of
the other agreements entered into by the parties on the Commencement Date and
attached hereto as exhibits to this Agreement (collectively, the “Transaction
Documents”), and to issue the Securities in accordance with the terms hereof and
thereof, (ii) except for approvals of the Company's Board of Directors (or an
authorized committee thereof) as may be required in connection with the
reservation, issuance, and sale of any Additional Commitment Shares and Purchase
Shares (other than the Initial Purchase Shares, the Warrant, and the Warrant
Shares), which approvals shall have been obtained prior to delivery of any
Regular Purchase Notice or Accelerated Purchase Notice, the execution and
delivery of the Transaction Documents by the Company and the consummation by it
of the transactions contemplated hereby and thereby, including without
limitation, the reservation for issuance and issuance of the Initial Purchase
Shares and Initial Commitment Shares, the issuance of the Warrant, the
reservation for issuance and, assuming valid exercise of the Warrant, the
issuance of the Warrant Shares have been duly authorized by the Company's Board
of Directors and no further consent or authorization is required by the Company,
its Board of Directors or its shareholders, (iii) this Agreement has been, and
each other Transaction Document shall be on the Commencement Date, duly executed
and delivered by the Company and (iv) this Agreement constitutes, and each other
Transaction Document upon its execution on behalf of the Company, shall
constitute, the valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies.  The
Board of Directors of the Company has approved the resolutions (the “Signing
Resolutions”) substantially in the form as set forth as Exhibit C attached
hereto to authorize this Agreement and the transactions contemplated
hereby.  The Signing Resolutions are valid, in full force and effect and have
not been modified or supplemented in any respect.  The Company has delivered to
the Investor a true and correct copy of a unanimous written consent adopting the
Signing Resolutions executed by all of the members of the Board of Directors of
the Company.  Except for approvals of the Company's Board of Directors (or an
authorized committee thereof) as may be required in connection with the
reservation, issuance, and sale of any Purchase Shares and Commitment Shares
(other than the Initial Purchase Shares, the Warrant, the Warrant Shares, and
the Initial Commitment Shares), no other approvals or consents of the Company’s
Board of Directors and/or shareholders is necessary under applicable laws and
the Company’s Articles of Incorporation and/or Bylaws to authorize the execution
and delivery of this Agreement or any of the transactions contemplated hereby,
including, but not limited to, the issuance of the Commitment Shares, the
issuance of the Warrant, assuming valid exercise of the Warrant, the Warrant
Shares and the issuance of the Purchase Shares.

(c)           Capitalization.  As of the date hereof, the authorized capital
stock of the Company is set forth on Schedule 4(c).  Except as disclosed in
Schedule 4(c), (i) no shares of the Company's capital stock are subject to
preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company, (ii) there are no outstanding debt
securities, (iii) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, (iv) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the Securities Act (except the Registration Rights
Agreement), (v) there are no outstanding securities or instruments of the
Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries, (vi) there
are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities as described in this
Agreement and (vii) the Company does not have any stock appreciation rights or
"phantom stock" plans or agreements or any similar plan or agreement.  The
Company has furnished to the Investor true and correct copies of the Company's
Articles of Incorporation, as amended and as in effect on the date hereof (the
“Articles of Incorporation”), and the Company's By-laws, as amended and as in
effect on the date hereof (the "By-laws"), and summaries of the terms of all
securities convertible into or exercisable for Common Stock, if any, and copies
of any documents containing the material rights of the holders thereof in
respect thereto.

 
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(d)           Issuance of Securities.  Upon issuance and payment therefor in
accordance with the terms and conditions of this Agreement, the Purchase Shares,
shall be validly issued, fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof, with the holders being
entitled to all rights accorded to a holder of Common Stock.  The Initial
Purchase Shares have been duly authorized and, upon issuance in accordance with
the terms hereof, the Initial Purchase Shares shall be (i) validly issued, fully
paid and non-assessable and (ii) free from all taxes, liens and charges with
respect to the issue thereof.  The Initial Commitment Shares have been duly
authorized and, upon issuance in accordance with the terms hereof, the Initial
Commitment Shares shall be (i) validly issued, fully paid and non-assessable and
(ii) free from all taxes, liens and charges with respect to the issue
thereof.   The Warrant Shares have been duly authorized and reserved for
issuance upon exercise in accordance with the Warrants.  When issued in
accordance with the Warrants, the Warrant Shares shall be validly issued, fully
paid and non-assessable, to our knowledge, free of all taxes, liens, charges,
restrictions, rights of first refusal and preemptive rights. The Company has
duly authorized and reserved for issuance in accordance with this Agreement as
Purchase Shares (in addition to the Initial Purchase Shares) and as Additional
Commitment Shares (subject to equitable adjustment for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction)
10,000,000 shares of Common Stock.

(e)           No Conflicts.  Except as disclosed in Schedule 4(e), the
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the reservation for issuance and
issuance of the Purchase Shares, the Commitment Shares and the Warrant Shares)
will not (i) result in a violation of the Articles of Incorporation, any
Certificate of Designations, Preferences and Rights of any outstanding series of
preferred stock of the Company or the By-laws or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a party, or result
in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and the rules and
regulations of the Principal Market applicable to the Company or any of its
Subsidiaries) or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected, except in the case of conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations under
clause (ii), which could not reasonably be expected to result in a Material
Adverse Effect.  Except as disclosed in Schedule 4(e), neither the Company nor
its Subsidiaries is in violation of any term of or in default under its Articles
of Incorporation, any Certificate of Designation, Preferences and Rights of any
outstanding series of preferred stock of the Company or By-laws or their
organizational charter or by-laws, respectively.  Except as disclosed in
Schedule 4(e), neither the Company nor any of its Subsidiaries is in violation
of any term of or is in default under any material contract, agreement,
mortgage, indebtedness, indenture, instrument, judgment, decree or order or any
statute, rule or regulation applicable to the Company or its Subsidiaries,
except for possible conflicts, defaults, terminations or amendments which could
not reasonably be expected to have a Material Adverse Effect.  The business of
the Company and its Subsidiaries is not being conducted, and shall not be
conducted, in violation of any law, ordinance, regulation of any governmental
entity, except for possible violations, the sanctions for which either
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.  Except as specifically contemplated by this Agreement
and as required under the Securities Act or applicable state securities laws,
the Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental agency or any
regulatory or self-regulatory agency in order for it to execute, deliver or
perform any of its obligations under or contemplated by the Transaction
Documents in accordance with the terms hereof or thereof.  Except as disclosed
in Schedule 4(e), all consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence shall be obtained or effected on or prior to the Commencement
Date.  Except as listed in Schedule 4(e), since one year prior to the date
hereof, the Company has not received nor delivered any notices or correspondence
from or to the Principal Market.  The Principal Market has not commenced any
delisting proceedings against the Company.

 
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(f)            SEC Documents; Financial Statements. Except as disclosed in
Schedule 4(f) 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, being collectively referred to herein as the “SEC Documents”)
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Documents prior to the expiration of any such
extension.  As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Documents, 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 Documents 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.  Except
as listed in Schedule 4(f), the Company has received no notices or
correspondence from the SEC for the one year preceding the date hereof.  The SEC
has not commenced any enforcement proceedings against the Company or any of its
subsidiaries.

(g)           Absence of Certain Changes.  Except as disclosed in Schedule 4(g),
since September 30, 2010, there has been no material adverse change in the
business, properties, operations, financial condition or results of operations
of the Company or its Subsidiaries.  The Company has not taken any steps, and
does not currently expect to take any steps, to seek protection pursuant to any
Bankruptcy Law nor does the Company or any of its Subsidiaries have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy or insolvency proceedings.  The Company is financially solvent and is
generally able to pay its debts as they become due.

(h)           Absence of Litigation. There is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the knowledge of the
Company or any of its Subsidiaries, threatened against or affecting the Company,
the Common Stock or any of the Company's Subsidiaries or any of the Company's or
the Company's Subsidiaries' officers or directors in their capacities as such,
which could reasonably be expected to have a Material Adverse Effect.   A
description of each action, suit, proceeding, inquiry or investigation before or
by any court, public board, government agency, self-regulatory organization or
body which, as of the date of this Agreement, is pending or threatened in
writing against or affecting the Company, the Common Stock or any of the
Company's Subsidiaries or any of the Company's or the Company's Subsidiaries'
officers or directors in their capacities as such, is set forth in Schedule
4(h).

 
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(i)            Acknowledgment Regarding Investor's Status.  The Company
acknowledges and agrees that the Investor is acting solely in the capacity of
arm's length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby.  The Company further acknowledges
that the Investor is not acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated hereby and thereby and any advice given by the
Investor or any of its representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is
merely incidental to the Investor's purchase of the Securities.  The Company
further represents to the Investor that the Company's decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives and advisors.

(j)            Reserved.

(k)           Intellectual Property Rights.  The Company and its Subsidiaries
own or possess adequate rights or licenses to use all material trademarks, trade
names, service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted.  Except as set forth on Schedule 4(k), none of the
Company's material trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, government authorizations, trade secrets or other
intellectual property rights have expired or terminated, or, by the terms and
conditions thereof, could expire or terminate within two years from the date of
this Agreement.  The Company and its Subsidiaries do not have any knowledge of
any infringement by the Company or its Subsidiaries of any material trademark,
trade name rights, patents, patent rights, copyrights, inventions, licenses,
service names, service marks, service mark registrations, trade secret or other
similar rights of others, or of any such development of similar or identical
trade secrets or technical information by others and, except as set forth on
Schedule 4(k), there is no claim, action or proceeding being made or brought
against, or to the Company's knowledge, being threatened against, the Company or
its Subsidiaries regarding trademark, trade name, patents, patent rights,
invention, copyright, license, service names, service marks, service mark
registrations, trade secret or other infringement, which could reasonably be
expected to have a Material Adverse Effect.

(l)            Environmental Laws.  The Company and its Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where, in each of the
three foregoing clauses, the failure to so comply could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

(m)          Title.  The Company and the Subsidiaries have good and marketable
title in fee simple to all real property 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,
encumbrances and defects (“Liens”) and , except for Liens as do not materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and the
Subsidiaries and Liens for the payment of federal, state or other taxes, 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 with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its Subsidiaries. Any real property
and facilities held under lease by the Company and any of its Subsidiaries are
held by them under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its Subsidiaries.

 
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(n)           Insurance.  The Company and each of its Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged.  Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any such
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 at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company
and its Subsidiaries, taken as a whole.

(o)           Regulatory Permits.  The Company and its Subsidiaries possess all
material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.

(p)           Tax Status.  The Company and each of its Subsidiaries has made or
filed all federal and state income and all other material tax returns, reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply.  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 know of no basis for any such claim.

(q)           Transactions With Affiliates.   Except as set forth in the SEC
Documents, none of the officers or directors of the Company and, to the
knowledge of the Company, none of the employees of the Company is presently a
party to any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner, in each case in excess of $120,000 other than for (i) payment of salary
or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including
stock option agreements under any stock option plan of the Company.

(r)           Application of Takeover Protections.  The Company and its board of
directors have taken or will take prior to the Commencement 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 Articles of
Incorporation or the laws of the state of its incorporation which is or could
become applicable to the Investor as a result of the transactions contemplated
by this Agreement, including, without limitation, the Company's issuance of the
Securities and the Investor's ownership of the Securities.

 
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(s)           Disclosure.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company confirms that neither it nor any other Person acting on its behalf has
provided the Investor or its agents or counsel with any information that it
believes constitutes or might constitute material, non-public information which
is not otherwise disclosed in the Registration Statement (as defined below) or
prospectus supplements thereto.   The Company understands and confirms that the
Investor will rely on the foregoing representation in effecting purchases and
sales of securities of the Company.  All of the disclosure furnished by or on
behalf of the Company to the Investor regarding the Company, its business and
the transactions contemplated hereby, including the disclosure schedules to this
Agreement, 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 press releases disseminated by the Company during the
twelve months preceding the date of this Agreement taken as a whole do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made and when made,
not misleading.  The Company acknowledges and agrees that the Investor neither
makes nor has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 3 hereof.

(t)           Foreign Corrupt Practices.   Neither the Company, nor to the
knowledge of the Company, any agent or other person acting on behalf of the
Company, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to
disclose fully any contribution made by the Company (or made by any person
acting on its behalf of which the Company is aware) which is in violation of
law, or (iv) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended.

(u)           Registration Statements.  The Company’s shelf registration
statement on Form S-3 (no. 333-167906) (the “Registration Statement”) has been
declared effective by the SEC and no stop order has been issued or is pending or
threatened with respect thereto and the Company is eligible to register the sale
of the Purchase Shares, the Warrant, the Warrant Shares and the Commitment
Shares to the Investor on the Registration Statement.

(v)           DTC Eligible.  The Company through its transfer agent currently
participates in the Depository Trust Company Fast Automated Securities Transfer
Program (“DTC FAST System”) and the Company’s Common Stock can be transferred
electronically to third parties via the DTC FAST System.

5.            COVENANTS.

(a)           Filing of Form 8-K and Registration Statement.  The Company agrees
that it shall, within the time required under the Exchange Act file a Report on
Form 8-K disclosing this Agreement and the transaction contemplated hereby.  The
Company shall also file within ten (10) Business Days from the date hereof
prospectus supplements to the Registration Statement covering only the sale of
the Purchase Shares, the Warrant, the Warrant Shares and the Commitment Shares,
in accordance with the terms of the Registration Rights Agreement between the
Company and the Investor, dated as of the date hereof (“Registration Rights
Agreement”).  Any securities issuable under this Agreement that have not been
registered under the Securities Act shall bear the following restrictive legend
(the “Restrictive Legend”):

 
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL,
IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS.
  
(b)           Blue Sky. The Company shall take such action, if any, as is
reasonably necessary in order to obtain an exemption for or to qualify (i) the
initial sale of the Commitment Shares, the Warrant and any Purchase Shares to
the Investor under this Agreement and (ii) any subsequent resale of the
Commitment Shares, Warrant, Warrant Shares and any Purchase Shares by the
Investor, in each case, under applicable securities or “Blue Sky” laws of the
states of the United States in such states as is reasonably requested by the
Investor from time to time, and shall provide evidence of any such action so
taken to the Investor.

(c)           Listing/DTC.  The Company shall promptly secure the listing of all
of the Purchase Shares, Warrant Shares and Commitment Shares upon each national
securities exchange and automated quotation system, if any, upon which shares of
Common Stock are then listed (subject to official notice of issuance) and shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all such securities from time to time issuable under the terms of the
Transaction Documents.  The Company shall maintain the Common Stock's
authorization for quotation on the Principal Market.  Neither the Company nor
any of its Subsidiaries shall take any action that would be reasonably expected
to result in the delisting or suspension of the Common Stock on the Principal
Market.  The Company shall promptly, and in no event later than the following
Business Day, provide to the Investor copies of any notices it receives from the
Principal Market regarding the continued eligibility of the Common Stock for
listing on such automated quotation system or securities exchange.  The Company
shall pay all fees and expenses in connection with satisfying its obligations
under this Section.  The Company shall take all action necessary to ensure that
its Common Stock can be transferred electronically via the DTC FAST System.

(d)           Limitation on Short Sales and Hedging Transactions.  The Investor
agrees that beginning on the date of this Agreement and ending on the date of
termination of this Agreement as provided in Section 11, the Investor and its
agents, representatives and affiliates shall not in any manner whatsoever enter
into or effect, directly or indirectly, any (i) “short sale” (as such term is
defined in Section 242.200 of Regulation SHO of the Exchange Act) of the Common
Stock or (ii) hedging transaction, which establishes a net short position with
respect to the Common Stock.

(e)           Issuance of Commitment Shares.  Within one (1) Business Day
following the Commencement Date, and concurrently with the Investor purchasing
the Initial Purchase Shares and Warrants in accordance with Section 2(a) hereof,
the Company shall issue to the Investor as consideration for the Investor
entering into this Agreement 300,000 shares of Common Stock (the “Initial
Commitment Shares”) and shall cause the Transfer Agent to deliver the Initial
Commitment Shares electronically via the DTC FAST System to Investor’s account
as specified by the Investor . In connection with each purchase of Purchase
Shares hereunder, the Company agrees to issue to the Investor a number of shares
of Common Stock (the “Additional Commitment Shares” and together with the
Initial Commitment Shares, the “Commitment Shares”) equal to the product of (x)
1,500,000 and (y) the Purchase Amount Fraction.  The “Purchase Amount Fraction”
shall mean a fraction, the numerator of which is the Purchase Amount purchased
by the Investor with respect to such purchase of Purchase Shares and the
denominator of which is Thirty Million Dollars ($30,000,000).  Notwithstanding
the foregoing, no Additional Commitment Shares shall be paid on the Investor's
purchase of the Initial Purchase Shares and the Warrant or the amounts paid upon
the exercise, if any, of the Warrant.  The Additional Commitment Shares shall be
equitably adjusted for any reorganization, recapitalization, non-cash dividend,
stock split or other similar transaction.  The Investor agrees that the Investor
shall not pledge, transfer or sell the Commitment Shares until the earlier of
(a) 600 Business Days (30 Monthly Periods) from the date hereof or (b) the date
on which this Agreement has been terminated, provided, however, that such
restrictions shall not apply: (i) in connection with any transfers to or among
affiliates (as defined in the Exchange Act), or (ii) if an Event of Default has
occurred, or any event which, after notice and/or lapse of time, would become an
Event of Default, including any failure by the Company to timely issue Purchase
Shares under this Agreement.  Notwithstanding the forgoing, the Investor may
transfer Commitment Shares to a third party in order to settle a sale made by
the Investor where the Investor reasonably expects the Company to deliver
additional Purchase Shares to the Investor under this Agreement so long as the
Investor maintains ownership of the amount of Commitment Shares received up to
that point by "replacing" such Commitment Shares so transferred with new
Purchase Shares when the new Purchase Shares are actually issued by the Company
to the Investor.

 
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(f)            Due Diligence.  The Investor shall have the right, from time to
time as the Investor may reasonably deem appropriate, to perform reasonable due
diligence on the Company during normal business hours.  The Company and its
officers and employees shall provide information and reasonably cooperate with
the Investor in connection with any reasonable request by the Investor related
to the Investor's due diligence of the Company.  Each party hereto agrees not to
disclose any Confidential Information of the other party to any third party and
shall not use the Confidential Information for any purpose other than in
connection with, or in furtherance of, the transactions contemplated
hereby.  Each party hereto acknowledges that the Confidential Information shall
remain the property of the disclosing party and agrees that it shall take all
reasonable measures to protect the secrecy of any Confidential Information
disclosed by the other party.  The Company confirms that neither it nor any
other Person acting on its behalf shall provide the Investor or its agents or
counsel with any information that it believes constitutes or might constitute
material, non-public information which is not otherwise disclosed in the
Registration Statement or prospectus supplements thereto.
 
(g)           Purchase Records. The Investor and the Company shall each maintain
records showing the remaining Available Amount at any given time and the dates
and Purchase Amounts for each purchase or shall use such other method,
reasonably satisfactory to the Investor and the Company.
 
(h)           Taxes.  The Company shall pay any and all transfer, stamp or
similar taxes that may be payable with respect to the issuance and delivery of
any shares of Common Stock to the Investor made under this Agreement.

 
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(i)            No Variable Rate Transactions.  From the date hereof until the
Maturity Date, the Company shall be prohibited from effecting or entering into
an agreement to effect any issuance by the Company or any of its Subsidiaries of
Common Stock or Common Stock Equivalents for cash consideration (or a
combination of units thereof) involving a Variable Rate Transaction other than
in connection with an Exempt Issuance.  “Variable Rate Transaction” means a
transaction in which the Company (i) issues or sells any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock either (A) at a
conversion price, exercise price or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for the shares of
Common Stock at any time after the initial issuance of such debt or equity
securities, or (B) with a conversion, exercise or exchange price that is subject
to being reset at some future date after the initial issuance of such debt or
equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for
the Common Stock or (ii) enters into any agreement, including, but not limited
to, an equity line of credit, whereby the Company may sell securities at a
future determined price. “Exempt Issuance” means the issuance of (a) shares of
Common Stock or options to employees, officers, directors or vendors of the
Company pursuant to any stock or option plan duly adopted for such purpose, by a
majority of the non-employee members of the Board of Directors or a majority of
the members of a committee of non-employee directors established for such
purpose, (b) securities upon the exercise or exchange of or conversion of any
Securities issued hereunder 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 have not been amended
since the date of this Agreement to increase the number of such securities or to
decrease the exercise price, exchange price or conversion price of such
securities, and (c) securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the
Company, which acquisitions or strategic transactions can have a Variable Rate
Transaction component,  provided that any such issuance shall only be to a
Person (or to the equity holders of a Person) which is, itself or through its
subsidiaries, an operating company or an asset in a business synergistic with
the business of the Company and shall provide to the Company 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.  “Common Stock Equivalents” means any securities of the Company or
its Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.

6.            TRANSFER AGENT INSTRUCTIONS.

On the Commencement Date and thereafter, the Company shall cause all of the
Purchase Shares and Commitment Shares, to be issued under this Agreement to be
issued electronically via the DTC FAST System to Investor’s account as
designated by Investor unless the Investor expressly consents otherwise.  The
Company shall issue irrevocable instructions to the Transfer Agent, and any
subsequent transfer agent, to issue Purchase Shares in the name of the Investor
for the Purchase Shares (the “Irrevocable Transfer Agent Instructions”).  The
Company warrants to the Investor that no instruction other than the Irrevocable
Transfer Agent Instructions referred to in this Section 6, will be given by the
Company to the Transfer Agent with respect to the Purchase Shares and that the
Commitment Shares and the Purchase Shares shall otherwise be freely transferable
on the books and records of the Company as and to the extent provided in this
Agreement.

  
7.
CONDITIONS TO THE COMPANY'S RIGHT TO COMMENCE SALES OF SHARES OF COMMON STOCK.

The right of the Company hereunder to commence sales of the Purchase Shares is
subject to the satisfaction of each of the following conditions:

(a)           The Investor shall have executed each of the Transaction Documents
and delivered the same to the Company; and

(b)           No stop order with respect to the Registration Statement shall be
pending or threatened by the SEC.

 
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8.
CONDITIONS TO THE INVESTOR'S OBLIGATION TO PURCHASE SHARES OF COMMON STOCK.

The obligation of the Investor to buy Purchase Shares under this Agreement is
subject to the satisfaction of each of the following conditions and once such
conditions have been initially satisfied, there shall not be any ongoing
obligation to satisfy such conditions after the Commencement has occurred:

(a)           The Company shall have executed each of the Transaction Documents
and delivered the same to the Investor;
      
(b)           The Common Stock shall be authorized for quotation on the
Principal Market, trading in the Common Stock shall not have been within the
last 365 days suspended by the SEC or the Principal Market and the Purchase
Shares, Warrant Shares and Commitment Shares shall be approved for listing upon
the Principal Market;

(c)           The Investor shall have received the opinions of the Company's
legal counsel dated as of the Commencement Date substantially in the form of
Exhibit A attached hereto;

(d)           The representations and warranties of the Company shall be true
and correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in Section
4 above, in which case, such representations and warranties shall be true and
correct without further qualification) as of the date when made and as of the
Commencement Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied with the covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by the Company at or prior to the Commencement Date.  The Investor shall
have received a certificate, executed by the CEO, President or CFO of the
Company, dated as of the Commencement Date, to the foregoing effect in the form
attached hereto as Exhibit B;

(e)           The Board of Directors of the Company shall have adopted
resolutions in the form attached hereto as Exhibit C which shall be in full
force and effect without any amendment or supplement thereto as of the
Commencement Date;

(f)            As of the Commencement Date, the Company shall have reserved out
of its authorized and unissued Common Stock, (A) solely for purposes of
effecting purchases of Purchase Shares (including the Initial Purchase Shares)
in accordance with Section 2(a) and Section 2(b) hereof and the issuance of
Additional Commitment Shares in accordance with Section 5(e), 11,000,000 shares
of Common Stock, (B) as Warrant Shares for issuance upon the exercise, if any,
of the Warrants issued in accordance with Section 2(a) hereof, 500,000 shares of
Common Stock, and (C) as Initial Commitment Shares for issuance after the
Commencement Date in accordance with Section 5(e) hereof, 300,000 shares of
Common Stock;

(g)           Irrevocable Transfer Agent instructions shall have been delivered
to and acknowledged in writing by the Company and the Company's Transfer Agent;

 
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(h)           The Company shall have delivered to the Investor a certificate
evidencing the incorporation and good standing of the Company in the State of
Nevada issued by the Secretary of State of the State of Nevada as of a date
within ten (10) Business Days of the Commencement Date;

(i)            The Company shall have delivered to the Investor a certified copy
of the Articles of Incorporation as certified by the Secretary of State of the
State of Nevada within ten (10) Business Days of the Commencement Date;

(j)            The Company shall have delivered to the Investor a secretary's
certificate executed by the Secretary of the Company, dated as of the
Commencement Date, in the form attached hereto as Exhibit D;

(k)           The Registration Statement shall continue to be effective and a
prospectus supplement shall have been filed with the SEC covering the sale of
all of the Purchase Shares, Warrant Shares and  Commitment Shares, which shall
be effective under the Securities Act, and no stop order with respect to the
Registration Statement shall be pending or threatened by the SEC.  The Company
shall have prepared and delivered to the Investor a final and complete form of
prospectus supplement, dated and current as of the Commencement Date, to be used
by the Investor in connection with any sales of any Purchase Shares, Warrant
Shares or Commitment Shares. The Company shall have made all filings under all
applicable federal and state securities laws necessary to consummate the
issuance of the Commitment Shares, the Warrants, Warrant Shares and Purchase
Shares pursuant to this Agreement in compliance with such laws;

(l)            No Event of Default has occurred, or any event which, after
notice and/or lapse of time, would become an Event of Default has occurred; and

(m)          On or prior to the Commencement Date, the Company shall take all
necessary action, if any, and such actions as reasonably requested by the
Investor, in order to render inapplicable any control share acquisition,
business combination, shareholder rights plan or poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision
under the Articles of Incorporation or the laws of the state of its
incorporation which is or could become applicable to the Investor as a result of
the transactions contemplated by this Agreement, including, without limitation,
the Company's issuance of the Securities and the Commitment Shares and the
Investor's ownership of the Securities and the Commitment Shares.

 
9.
INDEMNIFICATION.

In consideration of the Investor's execution and delivery of the Transaction
Documents and acquiring the Securities hereunder and in addition to all of the
Company's other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless the Investor and all of its
affiliates, shareholders, officers, directors, employees and direct or indirect
investors and any of the foregoing person's agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the “Indemnified Liabilities”), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby, or
(c) any cause of action, suit or claim brought or made against such Indemnitee
and arising out of or resulting from the execution, delivery, performance or
enforcement of the Transaction Documents or any other certificate, instrument
or  document contemplated hereby or thereby, other than with respect to
Indemnified Liabilities which directly and primarily result from the gross
negligence or willful misconduct of the Indemnitee.  To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the
Company shall make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under applicable
law.  Payment under this indemnification shall be made within thirty (30) days
from the date Investor makes written request for it. A certificate containing
reasonable detail as to the amount of such indemnification submitted to the
Company by Investor shall be conclusive evidence, absent manifest error, of the
amount due from the Company to Investor.

 
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10.          EVENTS OF DEFAULT.

An “Event of Default” shall be deemed to have occurred at any time as any of the
following events occurs:

(a)           the effectiveness of a registration statement registering the
Purchase Shares, Warrant Shares or Commitment Shares lapses for any reason
(including, without limitation, the issuance of a stop order) or is unavailable
to the Investor for sale of any or all of the Purchase Shares, Warrant Shares or
Commitment Shares (“Registrable Securities”), and such lapse or unavailability
continues for a period of ten (10) consecutive Business Days or for more than an
aggregate of thirty (30) Business Days in any 365-day period;

(b)           the suspension from trading or failure of the Common Stock to be
listed on the Principal Market for a period of three (3) consecutive Business
Days;

(c)           the delisting of the Company’s Common Stock from the Principal
Market, provided, however, that the Common Stock is not immediately thereafter
trading on the New York Stock Exchange, the Nasdaq Global Market, the Nasdaq
Global Select Market, the Nasdaq Capital Market, the OTC Bulletin Board, or NYSE
Amex;

(d)           the failure for any reason by the Transfer Agent to issue Purchase
Shares to the Investor within five (5) Business Days after the applicable
Purchase Date which the Investor is entitled to receive;

(e)           the Company breaches any representation, warranty, covenant or
other term or condition under any Transaction Document if such breach could have
a Material Adverse Effect and except, in the case of a breach of a covenant
which is reasonably curable, only if such breach continues for a period of at
least five (5) Business Days;

(f)            if any Person commences a proceeding against the Company pursuant
to or within the meaning of any Bankruptcy Law ;

(g)           if the Company pursuant to or within the meaning of any Bankruptcy
Law; (A) commences a voluntary case, (B) consents to the entry of an order for
relief against it in an involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (D) makes a
general assignment for the benefit of its creditors or is generally unable to
pay its debts as the same become due;

 
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(h)           a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that (A) is for relief against the Company in an involuntary
case, (B) appoints a Custodian of the Company or for all or substantially all of
its property, or (C) orders the liquidation of the Company or any Subsidiary.

(i)            If at any time the Company is not eligible to transfer its Common
Stock electronically via the DTC FAST System; or

(j)            a material adverse change occurs in the Company, its business,
financial condition, operations or prospects.

In addition to any other rights and remedies under applicable law and this
Agreement, including the Investor termination rights under Section 11 hereof, so
long as an Event of Default has occurred and is continuing, or if any event
which, after notice and/or lapse of time, would become an Event of Default, has
occurred and is continuing, or so long as the Purchase Price is below the Floor
Price, the Investor shall not be permitted or obligated to purchase any shares
of Common Stock under this Agreement.  If pursuant to or within the meaning of
any Bankruptcy Law, the Company commences a voluntary case or any Person
commences a proceeding against the Company, a Custodian is appointed for the
Company or for all or substantially all of its property, or the Company makes a
general assignment for the benefit of its creditors, (any of which would be an
Event of Default as described in Sections 10(f), 10(g) and 10(h) hereof) this
Agreement shall automatically terminate without any liability or payment to the
Company without further action or notice by any Person.  No such termination of
this Agreement under Section 11(a) or 11(d) shall affect the Company's or the
Investor's obligations under this Agreement with respect to pending purchases
and the Company and the Investor shall complete their respective obligations
with respect to any pending purchases under this Agreement.

11.          TERMINATION

This Agreement may be terminated only as follows:

(a)           If pursuant to or within the meaning of any Bankruptcy Law, the
Company commences a voluntary case or any Person commences a proceeding against
the Company, a Custodian is appointed for the Company or for all or
substantially all of its property, or the Company makes a general assignment for
the benefit of its creditors, (any of which would be an Event of Default as
described in Sections 10(f), 10(g) and 10(h) hereof) this Agreement shall
automatically terminate without any liability or payment to the Company without
further action or notice by any Person.  No such termination of this Agreement
under this Section 11(a) shall affect the Company's or the Investor's
obligations under this Agreement with respect to pending purchases and the
Company and the Investor shall complete their respective obligations with
respect to any pending purchases under this Agreement.

(b)           In the event that the Commencement shall not have occurred, the
Company shall have the option to terminate this Agreement for any reason or for
no reason without any liability whatsoever of any party to any other party under
this Agreement.

(c)           In the event that the Commencement shall not have occurred on or
before February 15, 2011, due to the failure to satisfy the conditions set forth
in Sections 7 and 8 above with respect to the Commencement, the non-breaching
party shall have the option to terminate this Agreement at the close of business
on such date or thereafter without liability of any party to any other party.

 
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(d)           At any time after the Commencement Date, the Company shall have
the option to terminate this Agreement for any reason or for no reason by
delivering notice (a “Company Termination Notice”) to the Investor electing to
terminate this Agreement without any liability whatsoever of any party to any
other party under this Agreement.  The Company Termination Notice shall not be
effective until one (1) Business Day after it has been received by the Investor.
No such termination of this Agreement under this Section 11(d) shall affect the
Company's or the Investor's obligations under this Agreement with respect to
pending purchases and the Company and the Investor shall complete their
respective obligations with respect to any pending purchases under this
Agreement.

(e)           This Agreement shall automatically terminate on the date that the
Company sells and the Investor purchases the full Available Amount as provided
herein, without any action or notice on the part of any party and without any
liability whatsoever of any party to any other party under this Agreement.

(f)            If by the Maturity Date for any reason or for no reason the full
Available Amount under this Agreement has not been purchased as provided for in
Section 2 of this Agreement, this Agreement shall automatically terminate on the
Maturity Date, without any action or notice on the part of any party and without
any liability whatsoever of any party to any other party under this Agreement.

Except as set forth in Sections 11(a) (in respect of an Event of Default under
Sections 10(f), 10(g) and 10(h)) and 11(f), any termination of this Agreement
pursuant to this Section 11 shall be effected by written notice from the Company
to the Investor, or the Investor to the Company, as the case may be, setting
forth the basis for the termination hereof.  The representations and warranties
and covenants of the Company and the Investor contained in Sections 3, 4, 5, and
6 hereof, the indemnification provisions set forth in Section 9 hereof and the
agreements and covenants set forth in Sections 10, 11 and 12, shall survive the
Commencement and any termination of this Agreement.  No termination of this
Agreement shall affect the Company's or the Investor's rights or obligations (i)
under the Registration Rights Agreement which shall survive any such termination
or (ii) under this Agreement with respect to pending purchases and the Company
and the Investor shall complete their respective obligations with respect to any
pending purchases under this Agreement.

12.          MISCELLANEOUS.

(a)           Governing Law; Jurisdiction; Jury Trial.  The corporate laws of
the State of Nevada shall govern all issues concerning the relative rights of
the Company and its shareholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement and the
other Transaction Documents shall be governed by the internal laws of the State
of Illinois, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of Illinois.  Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Chicago, for
the adjudication of any dispute hereunder or under the other Transaction
Documents or in connection herewith or therewith, or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper.  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 to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 
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(b)           Counterparts.  This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature or
signature delivered by e-mail in a “.pdf” format data file shall be considered
due execution and shall be binding upon the signatory thereto with the same
force and effect as if the signature were an original, not a facsimile signature
or a signature in a “.pdf” format data file.

(c)           Headings.  The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

(d)           Severability.  If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

(e)           Entire Agreement.  With the exception of the Mutual Nondisclosure
Agreement between the parties dated as of December 15, 2010, this Agreement, the
Warrant and the Registration Rights Agreement supersede all other prior oral or
written agreements between the Investor, the Company, their affiliates and
persons acting on their behalf with respect to the matters discussed herein, and
this Agreement, the other Transaction Documents and the instruments referenced
herein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor the Investor makes any representation,
warranty, covenant or undertaking with respect to such matters.

(f)            Notices.  Any notices, consents or other communications required
or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (i) upon receipt when delivered
personally; (ii) upon receipt when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:

If to the Company:
Provectus Pharmaceuticals, Inc.
7327 Oak Ridge Highway, Suite A
Knoxville, TN 37931
Telephone:        (866) 594-5999
Facsimile:         (866) 998-0005
Attention:          Peter R. Culpepper

With a copy to:
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
100 Med Tech Parkway, Suite 200
Johnson City, TN 37604
Telephone:        (423) 928-0181
Facsimile:         (423) 928-5694
Attention:          Linda Crouch

 
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If to the Investor:
Lincoln Park Capital Fund, LLC
440 North Wells, Suite 620
Chicago, IL 60654
Telephone:        (312) 822-9300
Facsimile:         (312) 822-9301
Attention:          Josh Scheinfeld/Jonathan Cope

If to the Transfer Agent:
StockTrans, a Broadridge Company
44 W Lancaster Avenue
Ardmore, Pennsylvania 19003
Telephone:  (610) 649-7300
Facsimile:  (610) 649-7302
Attention:  Laura Skorny

or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) Business Days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of such
notice, consent or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, and
recipient facsimile number or (C) provided by a nationally recognized overnight
delivery service, shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.

(g)           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
assigns.  The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Investor,
including by merger or consolidation.  The Investor may not assign its rights or
obligations under this Agreement.

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

(i)            Publicity.  The Investor shall have the right to approve before
issuance any press release, SEC filing or any other public disclosure made by or
on behalf of the Company whatsoever with respect to, in any manner, the
Investor, its purchases hereunder or any aspect of this Agreement or the
transactions contemplated hereby; provided, however, that the Company shall be
entitled, without the prior approval of the Investor, to make any press release
or other public disclosure (including any filings with the SEC) with respect to
such transactions as is required by applicable law and regulations so long as
the Company and its counsel consult with the Investor in connection with any
such press release or other public disclosure within one (1) Business Day prior
to its release.  The Investor must be provided with a copy thereof  one (1)
Business Day prior to any release or use by the Company thereof.  The Company
agrees and acknowledges that its failure to fully comply with this provision
constitutes a material adverse effect on its ability to perform its obligations
under this Agreement.

(j)            Further Assurances.  Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

 
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(k)           No Financial Advisor, Placement Agent, Broker or Finder.    The
Company represents and warrants to the Investor that it has not engaged any
financial advisor, placement agent, broker or finder in connection with the
transactions contemplated hereby.  The Investor represents and warrants to the
Company that it has not engaged any financial advisor, placement agent, broker
or finder in connection with the transactions contemplated hereby.  The Company
shall be responsible for the payment of any fees or commissions, if any, of any
financial advisor, placement agent, broker or finder relating to or arising out
of the transactions contemplated hereby.  The Company shall pay, and hold the
Investor harmless against, any liability, loss or expense (including, without
limitation, attorneys' fees and out of pocket expenses) arising in connection
with any such claim.

(l)            No Strict Construction.  The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.

(m)           Remedies, Other Obligations, Breaches and Injunctive Relief.  The
Investor’s remedies provided in this Agreement shall be cumulative and in
addition to all other remedies available to the Investor under this Agreement,
at law or in equity (including a decree of specific performance and/or other
injunctive relief), no remedy of the Investor contained herein shall be deemed a
waiver of compliance with the provisions giving rise to such remedy and nothing
herein shall limit the Investor's right to pursue actual damages for any failure
by the Company to comply with the terms of this Agreement.  Each of the parties
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the other party and that the remedy at law for any such
breach may be inadequate.  Each of the parties therefore agrees that, in the
event of any such breach or threatened breach, the other party shall be
entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.

(n)           Enforcement Costs.  If: (i) this Agreement is placed by the
Investor in the hands of an attorney for enforcement or is enforced by the
Investor through any legal proceeding; or (ii) an attorney is retained to
represent the Investor in any bankruptcy, reorganization, receivership or other
proceedings affecting creditors' rights and involving a claim under this
Agreement; or (iii) an attorney is retained to represent the Investor in any
other proceedings whatsoever in connection with this Agreement, then the Company
shall pay to the Investor, as incurred by the Investor, all reasonable costs and
expenses including attorneys' fees incurred in connection therewith, in addition
to all other amounts due hereunder.

(o)           Failure or Indulgence Not Waiver.  No failure or delay in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.

*     *     *     *     *

 
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IN WITNESS WHEREOF, the Investor and the Company have caused this Purchase
Agreement to be duly executed as of the date first written above.

 
THE COMPANY:
     
PROVECTUS PHARMACEUTICALS, INC.
     
By:
/s/ Peter R. Culpepper  
Name: Peter R. Culpepper
 
Title: Chief Financial Officer and Chief Operating Officer
     
INVESTOR:
     
LINCOLN PARK CAPITAL FUND, LLC
 
BY: LINCOLN PARK CAPITAL, LLC
 
BY: ROCKLEDGE CAPITAL CORPORATION
     
By:
/s/ Josh Schienfeld  
Name:  Josh Schienfeld
 
Title: President

 
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SCHEDULES

Schedule 4(a)
Subsidiaries
Schedule 4(c)
Capitalization
Schedule 4(e)
Conflicts
Schedule 4(f)
Exchange Act Filings
Schedule 4(g)
Material Changes
Schedule 4(h)
Litigation
Schedule 4(k)
Intellectual Property

EXHIBITS

Exhibit A
Form of Company Counsel Opinion
Exhibit B
Form of Officer’s Certificate
Exhibit C
Form of Resolutions of Board of Directors of the Company
Exhibit D
Form of Secretary’s Certificate
Exhibit E
Form of Warrant

 
 

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DISCLOSURE SCHEDULES

Schedule 4(a) – Subsidiaries

Each of the following subsidiaries are wholly-owned by the Company:

 
·
Xantech Pharmaceuticals, Inc., a Tennessee corporation

 
·
Pure-ific Corporation, a Nevada corporation

 
·
Provectus Biotech, Inc., a Tennessee corporation

 
·
Provectus Devicetech, Inc., a Tennessee corporation

 
·
Provectus Imaging, Inc., a Tennessee corporation

 
·
IP Tech, Inc., a Tennessee corporation

 
·
Provectus Pharmatech, Inc., a Tennessee corporation

Schedule 4(c) - Capitalization

As of December 22, 2010:

The Company is authorized to issue 150,000,000 shares of common stock, par value
$.001 per share, and 25,000,000 shares of preferred stock, par value $.001 per
share, of which one series of preferred stock consisting of 13,333,333 shares,
has been established and designated as 8% Convertible Preferred Stock, par value
$.001 per share. Subject to the terms of the Certificate of Designation for the
8% Convertible Preferred Stock, the 8% Convertible Preferred Stock is
convertible into shares of Common Stock at the option of the holder, and the
Company may force conversion or redeem the shares of 8% Convertible Preferred
Stock after such time that the volume-weighted average price of Common Stock on
the principal trading market for the Common Stock for the 30 trading days
immediately preceding such date exceeds 300% of the conversion price (which is
$2.25) and the average daily trading volume exceeds 150,000 shares for 30
consecutive trading days.

Common Stock

 
·
89,283,298 shares of common stock are issued and outstanding;

 
·
12,440,955 shares of common stock are reserved for issuance upon the exercise of
outstanding stock options

 
·
15,957,798 shares of common stock are reserved for issuance upon the exercise of
outstanding warrants to purchase common stock

 
·
5,439,996 shares of common stock are reserved for issuance upon the conversion
of the 8% Convertible Preferred Stock

 
·
850,000 shares of common stock are reserved for issuance for future awards under
the Company's  Amended and Restated 2002 Stock Plan, as amended.

 
·
1,000,000 shares of common stock are authorized and reserved for issuance upon
the initial investment of $1,000,000 under the Purchase Agreement.

 
·
A warrant to purchase 500,000 shares of common stock is authorized for issuance
upon the initial investment of $1,000,000 under the Purchase Agreement.

 
·
500,000 shares of common stock are authorized and reserved for issuance upon
exercise of the warrant to purchase 500,000 issued under the Purchase Agreement.

 
·
300,000 shares of common stock are authorized and reserved for issuance upon the
Commencement Date under the Purchase Agreement.

 
·
10,000,000 shares of common stock are authorized and reserved for issuance
pursuant to the Purchase Agreement upon the Company's direction to purchase
shares of common stock. The 10,000,000 shares of common stock may consist of
shares of common stock that the Company may direct Lincoln Park to purchase and
up to 1,500,000 shares of common stock which may be issued to Lincoln Park as an
additional commitment fee.

 
Preferred Stock

 
·
5,439,996 shares of 8% Convertible Preferred Stock are issued and outstanding

Schedule 4(e) - No Conflicts

None.

 
 

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Schedule 4(f) - Exchange Act Filings

As of December 22, 2010, the Company has received the following correspondence
from the SEC during the preceding year:

 
·
Order of the SEC granting confidential treatment dated January 15, 2010

 
·
Letter dated July 2, 2010, of the SEC to the Company commenting upon the
Company's Registration Statement on Form S-3 (File No. 333-167906)

 
·
Order of the SEC granting effectiveness to the Company's Registration Statement
on Form S-3 (File No. 333-167906) dated July 14, 2010

 
·
Order of the SEC granting effectiveness to the Company's Post Effective
Amendment to Registration Statement on Form S-3 (File No. 333-147783) dated
August 5, 2010

Schedule 4(g) - Absence of Certain Changes

None.

Schedule 4(h) - Litigation

None.

Schedule 4(k) - Intellectual Property Rights

None.

 
 

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EXHIBIT A

FORM OF COMPANY COUNSEL OPINION

SUBJECT TO CUSTOMARY ASSUMPTIONS AND QUALIFICATIONS

Capitalized terms used herein but not defined herein, have the meaning set forth
in the Purchase Agreement.  Based on the foregoing, and subject to the
assumptions and qualifications set forth herein, we are of the opinion that:

1.           The Company is a corporation existing and in good standing under
the laws of the State of Nevada.
 
2.           The Company has the corporate power to execute and deliver, and
perform its obligations under, each Transaction Document to which it is a
party.  The Company has the corporate power to conduct its business as, to the
best of our knowledge, it is now conducted, and to own and use the properties
owned and used by it.
 
3.           The execution, delivery and performance by the Company of the
Transaction Documents to which it is a party have been duly authorized by all
necessary corporate action on the part of the Company. The execution and
delivery of the Transaction Documents by the Company, the performance of the
obligations of the Company thereunder and the consummation by it of the
transactions contemplated therein have been duly authorized and approved by the
Company's Board of Directors and no further consent, approval or authorization
of the Company, its Board of Directors or its stockholders is required.  The
Transaction Documents to which the Company is a party have been duly executed
and delivered by the Company and are the valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting creditor’s rights and remedies.
 
4.           The execution, delivery and performance by the Company of the
Transaction Documents, the consummation by the Company of the transactions
contemplated thereby including the offering, sale and issuance of the Warrant,
the Warrant Shares, Commitment Shares, and the Purchase Shares in accordance
with the terms and conditions of the Purchase Agreement, and fulfillment and
compliance with terms of the Transaction Documents, does not and shall not:
(i) conflict with, constitute a breach of or default (or an event which, with
the giving of notice or lapse of time or both, constitutes or could constitute a
breach or a default), under (a) the Articles of Incorporation or the Bylaws of
the Company, (b) any material agreement, note, lease, mortgage, deed or other
material instrument to which to our knowledge the Company is a party or by which
the Company or any of its assets are bound, (ii) result in any violation of any
statute, law, rule or regulation applicable to the Company, or (iii) to our
knowledge, violate any order, writ, injunction or decree applicable to the
Company or any of its subsidiaries.
 
5.           The issuance of the Purchase Shares, Warrant Shares and Commitment
Shares pursuant to the terms and conditions of the Transaction Documents has
been duly authorized and the Initial Commitment Shares and Initial Purchase
Shares are validly issued, fully paid and non-assessable, to our knowledge, free
of all taxes, liens, charges, restrictions, rights of first refusal and
preemptive rights. An aggregate of 11,800,000 shares of Common Stock have been
properly reserved for issuance under the Purchase Agreement. 1,000,000 shares of
Common Stock have been properly reserved for issuance under the Purchase
Agreement as Initial Purchase Shares.  500,000 shares of Common Stock have been
duly authorized and reserved for issuance upon exercise of the Warrant in
accordance with the Warrant as Warrant Shares. 300,000 shares of Common Stock
have been properly reserved for issuance under the Purchase Agreement as Initial
Commitment Shares.  10,000,000 shares of Common Stock have been properly
reserved for issuance under the Purchase Agreement as Purchase Shares (other
than the Initial Purchase Shares) and Additional Commitment Shares. When issued
and paid for in accordance with the Purchase Agreement, the Purchase Shares
shall be validly issued, fully paid and non-assessable, to our knowledge, free
of all taxes, liens, charges, restrictions, rights of first refusal and
preemptive rights. When issued in accordance with the Purchase Agreement, the
Additional Commitment Shares shall be validly issued, fully paid and
non-assessable, to our knowledge, free of all taxes, liens, charges,
restrictions, rights of first refusal and preemptive rights. To our knowledge,
the execution and delivery of the Registration Rights Agreement do not, and the
performance by the Company of its obligations thereunder shall not, give rise to
any rights of any other person for the registration under the  Securities Act of
any shares of Common Stock or other securities of the Company which have not
been waived.

 
 

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6.           As of December 22, 2010, the authorized capital stock of the
Company consists of 150,000,000 shares of common stock, par value $.001 per
share, of which to our knowledge 89,283,298 shares are issued and outstanding,
and 25,000,000 shares of preferred stock, par value $.001 per share, of which
5,439,996  shares of 8% convertible preferred stock are issued and outstanding.
Except as set forth on Schedule 4(c) of the Purchase Agreement, to our
knowledge, there are no outstanding shares of capital stock or other securities
convertible into or exchangeable or exercisable for shares of the capital stock
of the Company.
 
7.           Other than that which has been obtained and completed prior to the
date hereof, no authorization, approval, consent, filing or other order of any
federal or state governmental body, regulatory agency, or stock exchange or
market, or any court, or, to our knowledge, any third party is required to be
obtained by the Company to enter into and perform its obligations under the
Transaction Documents or for the Company to issue and sell the Purchase Shares
as contemplated by the Transaction Documents.
 
8.           The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act.  To our knowledge, since one year preceding the date of the
Purchase Agreement, the Company has been in compliance with the reporting
requirements of the Exchange Act applicable to it.  To our knowledge, since one
year preceding the date of the Purchase Agreement, the Company has not received
any written notice from the Principal Market stating that the Company has not
been in compliance with any of the rules and regulations (including the
requirements for continued listing) of the Principal Market.
 
We further advise you that to our knowledge, there is no action, suit,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body, pending or, to our
knowledge, threatened against or affecting the Company, the Common Stock or any
of the Company's Subsidiaries or any of the Company's or the Company's
Subsidiaries' officers or directors in their capacities as such.
 
In addition, we have participated in the preparation of the Registration
Statement (SEC File #333-167906), including the prospectus contained therein,
and the prospectus supplement dated December 22, 2010 and filed with the SEC on
_________ covering the sale of the Purchase Shares, the Warrant, the Warrant
Shares, and the Commitment Shares and in conferences with officers and other
representatives of the Company (including the Company’s independent auditors)
during which the contents of the Registration Statement and related matters were
discussed and reviewed and, although we are not passing upon and do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, on the basis of the information that
was developed in the course of the performance of the services referred to
above, considered in the light of our understanding of the applicable law,
nothing came to our attention that caused us to believe that the Registration
Statement (other than the financial statements and schedules and the other
financial and statistical data included therein, as to which we express no
belief), as of their dates, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

 
 

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EXHIBIT B

FORM OF OFFICER’S CERTIFICATE

This Officer’s Certificate (“Certificate”) is being delivered pursuant to
Section 8(d) of that certain Purchase Agreement dated as of December 22, 2010,
(“Purchase Agreement”), by and between PROVECTUS PHARMACEUTICALS, INC., a Nevada
corporation (the “Company”), and LINCOLN PARK CAPITAL FUND, LLC (the
“Investor”).  Terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Purchase Agreement.

The undersigned, ___________, ______________ of the Company, hereby certifies as
follows:

1.           I am the _____________ of the Company and make the statements
contained in this Certificate;

2.           The representations and warranties of the Company are true and
correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in Section
4 of the Purchase Agreement, in which case, such representations and warranties
are true and correct without further qualification) as of the date when made and
as of the Commencement Date as though made at that time (except for
representations and warranties that speak as of a specific date);

3.           The Company has performed, satisfied and complied in all material
respects with covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Company at or prior
to the Commencement Date.

4.           The Company has not taken any steps, and does not currently expect
to take any steps, to seek protection pursuant to any Bankruptcy Law nor does
the Company or any of its Subsidiaries have any knowledge or reason to believe
that its creditors intend to initiate involuntary bankruptcy or insolvency
proceedings. The Company is financially solvent and is generally able to pay its
debts as they become due.

IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of
___________.

     
Name:
 
Title:

The undersigned as Secretary of PROVECTUS PHARMACEUTICALS, INC., a Nevada
corporation, hereby certifies that ___________ is the duly elected, appointed,
qualified and acting ________ of _________ and that the signature appearing
above is his genuine signature.

     
Secretary

 
 

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EXHIBIT C

FORM OF COMPANY RESOLUTIONS
FOR SIGNING PURCHASE AGREEMENT

ACTION BY UNANIMOUS WRITTEN CONSENT
OF THE BOARD OF DIRECTORS OF
PROVECTUS PHARMACEUTICALS, INC.
_________

In accordance with the corporate laws of the state of Nevada, the undersigned,
being all of the directors of PROVECTUS PHARMACEUTICALS, INC., a Nevada
corporation (the “Corporation”), acting by written consent as permitted by
Section 78.315 of the Nevada Revised Statutes do hereby consent to and adopt the
following resolutions as the action of the Board of Directors for and on behalf
of the Corporation and hereby direct that this Consent be filed with the minutes
of the proceedings of the Board of Directors:

WHEREAS, there has been presented to the Board of Directors of the Corporation a
draft of the Purchase Agreement (the “Purchase Agreement”) by and between the
Corporation and Lincoln Park Capital Fund, LLC (“Lincoln Park”), providing for
the purchase of: (i) initially 1,000,000 shares (the "Initial Purchase Shares")
of the Corporation's common stock, par value $.001 per share (the "Common
Stock"), together with warrants (the "Warrant") to purchase 500,000 shares of
Common Stock, and (ii) thereafter up to Thirty Million Dollars ($30,000,000) of
the Corporation's Common Stock; and

WHEREAS, after careful consideration of the Purchase Agreement, the documents
incident thereto and other factors deemed relevant by the Board of Directors,
the Board of Directors has determined that it is advisable and in the best
interests of the Corporation to engage in the transactions contemplated by the
Purchase Agreement, including, but not limited to: (i) the sale of 1,000,000
shares of Common Stock together with the Warrant, and (ii) the sale of shares of
Common Stock to Lincoln Park up to the available amount under the Purchase
Agreement (the "Purchase Shares").

Transaction Documents
 
NOW, THEREFORE, BE IT RESOLVED, that the transactions described in the Purchase
Agreement are hereby approved and Craig Dees, the Corporation's Chief Executive
Officer, Timothy Scott, the Corporation's President, and Peter R. Culpepper, the
Corporation's Chief Financial Officer, Chief Operating Officer, and Secretary
(the “Authorized Officers”) are severally authorized to execute and deliver the
Purchase Agreement, and any other agreements or documents contemplated thereby
including, without limitation, a registration rights agreement (the
“Registration Rights Agreement”) providing for the registration of the shares of
the Company’s Common Stock issuable in respect of the Purchase Agreement on
behalf of the Corporation, with such amendments, changes, additions and
deletions as the Authorized Officers may deem to be appropriate and approve on
behalf of, the Corporation, such approval to be conclusively evidenced by the
signature of an Authorized Officer thereon; and
 
FURTHER RESOLVED, that the terms and provisions of the Registration Rights
Agreement by and among the Corporation and Lincoln Park are hereby approved and
the Authorized Officers are authorized to execute and deliver the Registration
Rights Agreement (pursuant to the terms of the Purchase Agreement), with such
amendments, changes, additions and deletions as the Authorized Officer may deem
appropriate and approve on behalf of, the Corporation, such approval to be
conclusively evidenced by the signature of an Authorized Officer thereon; and

 
 

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FURTHER RESOLVED, that the terms and provisions of the Form of Transfer Agent
Instructions (the “Instructions”) are hereby approved and the Authorized
Officers are authorized to execute and deliver the Instructions (pursuant to the
terms of the Purchase Agreement), with such amendments, changes, additions and
deletions as the Authorized Officers may deem appropriate and approve on behalf
of, the Corporation, such approval to be conclusively evidenced by the signature
of an Authorized Officer thereon; and
 
Execution of Purchase Agreement
 
FURTHER RESOLVED, that the Corporation be and it hereby is authorized to execute
the Purchase Agreement providing for the purchase of: (i) initially, of the
Initial Purchase Shares together with the Warrant, and (ii) thereafter up to
Thirty Million Dollars ($30,000,000) of the Corporation’s Common Stock; and
 
Issuance of Common Stock
 
FURTHER RESOLVED, that the Corporation shall initially reserve 11,800,000 shares
of Common Stock for issuance, which shall consist of 1,000,000 Initial Purchase
Shares, 500,000 Warrant Shares (as defined in the Purchase Agreement and subject
to equitable adjustment for any reorganization, recapitalization, non-cash
dividend, stock split or other similar transaction), 300,000 Initial Commitment
Shares (as defined in the Purchase Agreement), and 10,000,000 remaining shares
of Common Stock to be issued as Purchase Shares (as defined in the Purchase
Agreement) and Additional Commitment Shares (as defined in the Purchase
Agreement and subject to equitable adjustment for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction)
in accordance with the terms of the Purchase Agreement;
 
FURTHER RESOLVED, that upon the Commencement Date (as defined in the Purchase
Agreement) and in consideration of $1,000,000, the Corporation is hereby
authorized to issue to Lincoln Park 1,000,000 shares of Common Stock as Initial
Purchase Shares and the Warrant to purchase 500,000 shares of Common Stock
(subject to equitable adjustment for any reorganization, recapitalization,
non-cash dividend, stock split or other similar transaction), and that upon
issuance of the Initial Purchase Shares pursuant to the Purchase Agreement, the
Initial Purchase Shares shall be duly authorized, validly issued, fully paid and
nonassessable with no personal liability attaching to the ownership thereof;
 
FURTHER RESOLVED, that upon the Commencement Date and in consideration of
Lincoln Park entering into the Purchase Agreement, the Corporation is hereby
authorized to issue to Lincoln Park 300,000 shares of Common Stock as Initial
Commitment Shares, and that upon issuance of the Initial Commitment Shares
pursuant to the Purchase Agreement, the Initial Commitment Shares shall be duly
authorized, validly issued, fully paid and nonassessable with no personal
liability attaching to the ownership thereof;
 
FURTHER RESOLVED, that the Corporation is hereby authorized to issue 500,000
shares of Common Stock (subject to equitable adjustment for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction)
as Warrant Shares in connection with the exercise of the Warrant in accordance
with the terms of the Warrant and that, upon issuance of the Warrant Shares
pursuant to the Warrant, the Warrant Shares will be duly authorized, validly
issued, fully paid and nonassessable with no personal liability attaching to the
ownership thereof; and
 
FURTHER RESOLVED, that the Corporation is hereby authorized to issue up to
10,000,000 shares of Common Stock upon the purchase of Purchase Shares and the
issuance of Additional Commitment Shares (subject to equitable adjustment for
any reorganization, recapitalization, non-cash dividend, stock split or other
similar transaction) in accordance with the terms of the Purchase Agreement and
that, upon issuance of the Purchase Shares and Additional Commitment Shares
pursuant to the Purchase Agreement, the Purchase Shares and Additional
Commitment Shares will be duly authorized, validly issued, fully paid and
nonassessable with no personal liability attaching to the ownership thereof.

 
 

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Approval of Actions
 
FURTHER RESOLVED, that, without limiting the foregoing, the Authorized Officers
are, and each of them hereby is, authorized and directed to proceed on behalf of
the Corporation and to take all such steps as deemed necessary or appropriate,
with the advice and assistance of counsel, to cause the Corporation to
consummate the agreements referred to herein and to perform its obligations
under such agreements; and
 
FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is,
authorized, empowered and directed on behalf of and in the name of the
Corporation, to take or cause to be taken all such further actions and to
execute and deliver or cause to be executed and delivered all such further
agreements, amendments, documents, certificates, reports, schedules,
applications, notices, letters and undertakings and to incur and pay all such
fees and expenses as in their judgment shall be necessary, proper or desirable
to carry into effect the purpose and intent of any and all of the foregoing
resolutions, and that all actions heretofore taken by any officer or director of
the Corporation in connection with the transactions contemplated by the
agreements described herein are hereby approved, ratified and confirmed in all
respects.

IN WITNESS WHEREOF, the undersigned, to evidence their consent to taking the
foregoing actions by written consent in lieu of a meeting and their approval of
the above stated resolutions have hereunto set their hands on December __, 2010.

     
H. Craig Dees, Ph.D.
         
Timothy C. Scott, Ph.D.
         
Eric A. Wachter, Ph.D.
         
Stuart Fuchs
         
Kelly M. McMasters, M.D., Ph.D.

 
 

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EXHIBIT D

FORM OF SECRETARY’S CERTIFICATE

This Secretary’s Certificate (“Certificate”) is being delivered pursuant to
Section 8(j) of that certain Purchase Agreement dated as of December 22, 2010,
(“Purchase Agreement”), by and between PROVECTUS PHARMACEUTICALS, INC., a Nevada
corporation (the “Company”) and LINCOLN PARK CAPITAL FUND, LLC (the “Investor”),
pursuant to which the Company may sell to the Investor: (i) initially 1,000,000
shares of the Company's common stock, par value $.001 per share (the "Common
Stock"), together with warrants (the "Warrant") to purchase 500,000 shares of
Common Stock, and (ii) thereafter up to Thirty Million Dollars ($30,000,000) of
the Common Stock.  Terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Purchase Agreement.

The undersigned, ____________, Secretary of the Company, hereby certifies as
follows:

1.           I am the Secretary of the Company and make the statements contained
in this Secretary’s Certificate.

2.           Attached hereto as Exhibit A and Exhibit B are true, correct and
complete copies of the Company’s bylaws (“Bylaws”) and Articles of Incorporation
(“Articles”), in each case, as amended through the date hereof, and no action
has been taken by the Company, its directors, officers or shareholders, in
contemplation of the filing of any further amendment relating to or affecting
the Bylaws or Articles.

3.           Attached hereto as Exhibit C are true, correct and complete copies
of the resolutions duly adopted by the Board of Directors of the Company on
_____________, by action by unanimous written consent of the Board of Directors
in lieu of a meeting. Such resolutions have not been amended, modified or
rescinded and remain in full force and effect and such resolutions are the only
resolutions adopted by the Company’s Board of Directors, or any committee
thereof, or the shareholders of the Company relating to or affecting (i) the
entering into and performance of the Purchase Agreement, or the issuance,
offering and sale of the Purchase Shares and the Commitment Shares and (ii) and
the performance of the Company of its obligation under the Transaction Documents
as contemplated therein.

4.           As of the date hereof, the authorized, issued and reserved capital
stock of the Company is as set forth on Exhibit D hereto.

IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of
____________.

       
Secretary
 

The undersigned as ___________ of _______, a _______ corporation, hereby
certifies that ____________ is the duly elected, appointed, qualified and acting
Secretary of _________, and that the signature appearing above is his genuine
signature.

  
  
 

 
 

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EXHIBIT E

FORM OF WARRANT

 
 

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