SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this “Agreement”) is dated as of February
__, 2012, between Biozone Pharmaceuticals, Inc., a Nevada corporation (the
“Company”), and the purchasers signatory hereto (the each a “Purchaser” and
collectively, the “Purchasers”).
 
WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”), the Company desires to issue and sell to the Purchasers, and
the Purchasers desire to purchase from the Company, severally and not jointly
(i)  10% convertible promissory notes, in the aggregate principal face amount of
$2,300,000 (the “Purchase Price”) and in the form attached hereto as Exhibit A
(the “Notes”), which Notes shall be convertible into shares (the “Conversion
Shares”) of common stock of the Company, par value $0.001 per share (the “Common
Stock”), and (ii) warrants, in the form attached hereto as Exhibit B (the
“Warrants” and with the Notes, the “Securities”) to purchase shares of Common
Stock (the “Warrant Shares” and with the Conversion Shares, the “Shares”);
 
WHEREAS, the Notes shall be secured by a first perfected security interest in
all of the tangible and intangible assets of the Company and all of its
subsidiaries, whether now existing or hereafter acquired or created by the
Company (the “Subsidiaries”), whether such assets are now owned or hereafter
created or acquired by the Company and/or its Subsidiaries (collectively, the
“Assets”), all in accordance with the terms of a pledge and security agreement
in the form attached hereto as Exhibit C (the “Security Agreement”).
 
WHEREAS, in connection with the transactions contemplated hereby, the Company is
also entering into a License Agreement and a Distribution Agreement with OPKO
Health, Inc., each dated the date hereof (the “License Agreement” and the
“Distribution Agreement,” respectively, and together with this Agreement, the
Notes, the Warrants and any and all exhibits and schedules hereto or hereto, the
“Transaction Documents”).
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers agree
as follows:
 
1.           Purchase and Sale of the Securities.
 
(a)           Closing.  On the Closing Date (as defined below), upon the terms
and subject to the conditions set forth herein:
 
 
(i)
the Company hereby agrees to sell to the Purchasers, and the Purchasers hereby
agree to purchase from the Company, (i) the Notes and (ii) the Warrants, in
consideration of the Purchase Price, as set forth on each such Purchaser’s
signature page. For purposes of this Agreement, “Closing Date” means the date on
which all of the Transaction Documents (as defined herein) have been executed
and delivered by the parties thereto, and all conditions precedent to (i)
Purchasers’ obligations to pay the Purchase Price and (ii) the Company’s
obligation to deliver the Securities, in each case, have been satisfied or
waived.

 
 
(ii)
The Purchasers shall deliver the Purchase Price, via wire transfer of
immediately available funds, to the Company, using the wiring instructions
provided by the Company to the Purchasers.

 
The Company and the Purchasers shall each deliver to the other items set forth
in Section 1(b) deliverable at the closing (the “Closing”). In addition, at the
Closing, the Company shall deliver to OPKO an executed copy of the Distribution
Agreement and the License Agreement. Upon waiver or satisfaction of the
covenants and conditions set forth in Sections 1(b) and 1(c), the Closing shall
occur at such location within the United States as the parties shall mutually
agree.
 
 
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(b)           Deliverables.
 
 
(i)
On or prior to the Closing Date, the Company shall deliver or cause to be
delivered to each Purchaser the following:

 
 
A.
this Agreement, duly executed by the Company;

 
 
B.
a Note, duly executed by the Company, in the Purchase Price set forth on such
Purchaser’s signature page;

 
 
C.
a Warrant, duly executed by the Company, to purchase that number of shares equal
to (i) the aggregate purchase price of the Note divided by (ii) 0.20 (the
“Warrant Shares”);

 
 
D.
the Security Agreement, duly executed by the Company and evidence of filing UCC
Financing Statements with the State of Nevada in a form reasonably acceptable to
Purchasers;

 
 
(ii)
On or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company the following:

 
 
A.
this Agreement, duly executed by such Purchaser;

 
 
B.
the Security Agreement, duly executed by Purchaser;

 
 
C.
the Purchase Price by wire transfer to the Company; and

 
(c)           Closing Conditions.
 
 
(i)
The obligations of the Company hereunder in connection with the Closing are
subject to the waiver or satisfaction of the following conditions:

 
 
A.
the accuracy on the Closing Date of the representations and warranties of
Purchasers contained herein;

 
 
B.
all obligations, covenants and agreements of Purchasers required to be performed
at or prior to the Closing Date shall have been performed; and

 
 
C.
the delivery by Purchasers of the items set forth in Section 1(b)(ii) of this
Agreement.

 
 
(ii)
The obligations of Purchasers hereunder in connection with the Closing are
subject to the waiver or satisfaction of the following conditions:

 
 
A.
the accuracy in all material respects on the Closing Date of the representations
and warranties of Company contained herein

 
 
B.
all obligations and agreements of the Company required to be performed at or
prior to the Closing Date shall have been performed; and

 
 
C.
the delivery by the Company of the items set forth in Section 1(b)(i) of this
Agreement.

 
 
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2.           Security.  In accordance with the terms and the conditions of the
Security Agreement, the Company agrees to secure the repayment of the loan
amount under the Notes (the “Loan Amount”), all accrued and unpaid interest (as
defined below) thereon and all other payments due thereunder, as well as all of
the Company’s obligations thereunder by creating a UCC secured pledge of the
Assets for the benefit of all Purchasers (the “UCC Pledge”). From time to time,
Purchaser may demand, and the Company shall execute, such additional documents
as may be reasonably necessary to maintain the UCC Pledge.
 
3.           Representations and Warranties of the Company. The Company
represents and warrants to each Purchaser as follows:
 
(a)           Subsidiaries. The Company’s Subsidiaries as of the date hereof are
set forth in Schedule 3(a).  Except as set forth in Schedule 3(a), the Company
owns, directly or indirectly, 100% of each Subsidiary and such ownership
interest is free and clear of any liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued, fully paid and
non-assessable and free of preemptive and similar rights to purchase securities.
Neither the Company nor the Subsidiaries are subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of the capital stock of any Subsidiary or any convertible securities,
rights, warrants or options of the type described in the preceding sentence.
Neither the Company nor any Subsidiary is party to, nor has any knowledge of,
any agreement restricting the voting or transfer of any shares of the capital
stock of any Subsidiary.
 
(b)           Organization and Qualification. Each of the Company and each
Subsidiary is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, and has
the requisite power and authority to own and use its properties and assets and
to carry on its business as currently conducted and contemplated to be
conducted. Each of the Company and each Subsidiary is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, would not have or
reasonably be expected to result in a material adverse effect on the business,
condition (financial or otherwise), operations, prospects or property of the
Company or a Subsidiary, taken as a whole (“Material Adverse Effect”), and no
proceeding has been initiated in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.
 
(c)           Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Company and no further action is required by
the Company, the board of directors or the Company’s stockholders in connection
therewith, other than in connection with the Required Approvals (as defined
herein). Each Transaction Document to which it is a party has been (or upon
delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except: (i) as may be limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
 
(d)           No Conflicts. The execution, delivery and performance by the
Company of the Transaction Documents, the issuance and sale of the Securities
and the consummation by it of the transactions contemplated hereby and thereby
to which it is a party do not and will not: (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any lien
upon any of the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or the Subsidiary is a
party or by which any property or asset of the Company or the Subsidiary is
bound or affected, or (iii) subject to the Required Approvals (as defined
below), conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except in
the case of each of clauses (ii) and (iii), such as could not have or reasonably
be expected to result in a Material Adverse Effect.
 
 
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(e)           Filings, Consents and Approvals. Neither the Company nor any
Subsidiary is required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority or other person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than the filing of Form D with the Securities and
Exchange Commission (the “Commission”) and such filings as are required to be
made under applicable state securities laws (the “Required Approvals”).
 
(f)           Issuance of the Securities. Each of the Note and the Warrant are
duly authorized and, when issued and paid for in accordance with the terms of
the applicable Transaction Documents, will be duly and validly issued, fully
paid and non-assessable, and free and clear of all liens other than restrictions
on transfer provided for in the Transaction Documents.  The shares of Common
Stock issuable upon conversion of the Note have been duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and non-assessable, free and clear
of all Liens other than restrictions on transfer provided for in the Transaction
Documents.  The shares of Common Stock issuable upon exercise of the Warrant
have been duly authorized and, when issued and paid for in accordance with the
applicable Transaction Documents, will be duly and validly issued, fully paid
and non-assessable, free and clear of all liens other than restrictions on
transfer provided for in the Transaction Documents. The Company has reserved
from its duly authorized capital stock such number of securities for issuance of
upon conversion or exercise of the Note and Warrant, as applicable.
 
(g)           Capitalization; Additional Issuances. All of the issued and
outstanding securities of the Company as of the date hereof are as set forth in
Schedule 3(g).  Except as set forth in Schedule 3(g), as of the date hereof,
there are no outstanding agreements or preemptive or similar rights affecting
the Common Stock and no outstanding rights, warrants or options to acquire, or
instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of, the Common Stock.
 
(h)           Litigation.  Except as set forth in Schedule 3(h), there are no
actions or proceedings pending or, to the knowledge of the Company, threatened
by or against Company or any of its Subsidiaries involving more than,
individually or in the aggregate, Ten Thousand Dollars ($10,000).  There is no
action, suit, inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against or affecting the Company
before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign) (collectively,
an “Action”) which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the UCC Pledge or the
issuance of the Securities or (ii) could, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any director or officer thereof, is or has been the subject of
any Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been, and
to the knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company
 
(i)           Regulatory Permits. Each of the Company and each Subsidiary
possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct
their respective businesses as currently conducted or as contemplated to be
conducted, except where the failure to possess such permits could not reasonably
be expected to result in a Material Adverse Effect (“Material Permits”), and
neither the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any Material Permit.
 
 
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(j)           SEC Reports; Financial Statements.  The Company has filed all
reports required to be filed by it under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months
preceding the date hereof (or such shorter period as the Company was required by
law to file such reports) (the foregoing materials being collectively referred
to herein as the “SEC Reports” ) on a timely basis or has timely filed a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension.  As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.  The financial
statements of the Company included in the SEC Reports comply in all material
respects with 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 U.S. 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 U.S. GAAP, and
fairly present in all material respects the financial position of the Company 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.
 
(k)           Private Placement. Assuming the accuracy of Purchaser’s
representations and warranties set forth herein, no registration under the
Securities Act is required for the offer and sale of the Securities by the
Company to Purchaser as contemplated hereby.
 
(l)           No General Solicitation. Neither the Company nor any person acting
on behalf of the Company has offered or sold any of the Securities by any form
of general solicitation or general advertising. The Company has offered the
Securities for sale only to Purchasers.
 
(m)           Acknowledgment Regarding Purchaser’s Purchase of Securities. The
Company acknowledges and agrees that each Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby. The Company further acknowledges that
no Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or any
of its representatives or agents in connection with the Transaction Documents
and the transactions contemplated thereby is merely incidental to such
Purchaser’s purchase of the Securities. The Company further represents to each
Purchaser that the Company’s decision to enter into this Agreement has been
based solely on the independent evaluation of the transactions contemplated
hereby by the Company and its representatives.
 
(n)           Labor Relations. No labor dispute exists or, to the knowledge of
the Company, is imminent with respect to any of the employees of the Company
which could reasonably be expected to result in a Material Adverse Effect. None
of the Company’s or any Subsidiary’s employees is a member of a union that
relates to such employee’s relationship with the Company or such Subsidiary, and
neither the Company nor any Subsidiary is a party to a collective bargaining
agreement, and the Company and each Subsidiary believe that their relationships
with their employees are good. No executive officer, to the knowledge of the
Company, is, or is now expected to be, in violation of any material term of any
employment contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or agreement or
any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any
Subsidiary to any liability with respect to any of the foregoing matters. The
Company and each Subsidiary is in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and employment
practices, terms and conditions of employment and wages and hours, except where
the failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
 
(o)           Benefit Plans.  Copies of all documentation relating to any
Benefit Plans (including all plan documents, written descriptions of plans,
actuarial reports and governmental filings and determinations with respect to
such Benefit Plans) have been delivered or made available to each
Purchaser.  None of the Benefit Plans is a “Defined Benefit Plan” that would be
subject to Part 3 of Title 1 of the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder
(“ERISA”), Section 412 of the Internal Revenue Code of 1986, as amended, or
Title IV of ERISA.  None of the Benefit Plans is a “multiemployer plan” (as such
term is defined in Section 3(37) of ERISA) or a “single employer under multiple
controlled groups” as described in Section 4063 of ERISA, and neither the
Company nor any Affiliate has ever contributed to or had an obligation to
contribute, or incurred any liability in respect of a contribution to any
multiemployer plan.  Each Benefit Plan has been operated in compliance with its
terms in all respects, and each Benefit Plan complies, in all respects, with all
provisions of applicable Law except as would not have a Material Adverse
Effect.  “Benefit Plans” means any Plan ever maintained, established or to which
contributions have at any time been made by the Company or any of its Affiliates
existing at the Closing Date or prior thereto, to which the Company contributes
or has contributed, or under which any consultant, employee, former consultant,
former employee or director or former director of the Company or any beneficiary
thereof is covered, has ever been covered, is or has ever been eligible for
coverage or has any benefit rights.
 
 
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(p)           Compliance. Neither the Company nor any Subsidiary: (i) is in
violation of any order of any court, arbitrator or governmental body or (ii) is
or has been in violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and local
laws applicable to its business, except in each case as could not have or
reasonably be expected to result in a Material Adverse Effect.
 
(q)           Environmental Matters.  The Company has complied with and is in
compliance with all federal, state, local and foreign statutes (civil and
criminal), laws, ordinances, regulations, rules, permits, approvals, judgments,
orders and decrees applicable to it or any of its properties, leased real
property, assets, operations and businesses relating to environmental
protection, and health and safety (collectively “Environmental Laws”) including,
without limitation, Environmental Laws relating to air, surface water and
groundwater, land and the generation, storage, use, handling, transportation,
treatment, release, threatened release, remediation, exposure to or disposal of
Hazardous Wastes, Hazardous Materials and Hazardous Substances (as such terms
are defined in any applicable Environmental Law), as well as oil, petroleum,
petroleum products, asbestos or any substance containing asbestos, and
polychlorinated biphenyls (collectively “Hazardous Materials”), (ii)  the
Company has obtained and fully complied with and is currently in full compliance
with all environmental permits and other environmental approvals necessary for
the conduct of its business and the operation of its properties, and has
reported to the appropriate governmental or regulatory authorities, to the
extent required by all Environmental Laws, all past and present sites owned and
operated by the Company where Hazardous Materials have been treated, stored,
disposed of or otherwise handled, (iii) to the knowledge of the Company, there
is not nor has there been any condition, event, circumstance, practice,
activity, incident which could reasonably be expected to give rise to any common
law liability or liability pursuant to any Environmental Laws or otherwise form
the basis of any claim, demand or litigation against the Company; (iv) there are
no claims, demand, suits, judicial or administrative actions, governmental
investigators or legal proceedings pending or, to the knowledge of the Company,
threatened against the Company relating in any way to any Environmental laws,
nor has the Company received notice of any violation of, or any claim alleging
liability under, any Environmental Laws, (v) there have been no releases or
threats of releases (as these terms are defined in Environmental Laws) of any
Hazardous Materials at, from, in or on any property previously or currently
owned or operated by the Company, except as permitted by Environmental Laws, and
(vi) there is no on-site or off-site location to which the Company has
transported or disposed of Hazardous Materials or arranged for the
transportation of Hazardous Materials which is the subject of any federal,
state, local or foreign enforcement action or any other investigation which
could reasonably be expected to lead to any claim against the Company for any
clean-up cost, remedial work, damage to natural resources, property damage or
personal injury, including, but not limited to, any claim under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Resource Conservation and Recovery Act, the Hazardous Materials
Transportation Act or comparable state or local statutes or regulations, except
as would not have a Material Adverse Effect.
 
(r)           Title to Assets. The Company and each Subsidiary have good and
marketable title in all personal property owned by them that is material to the
business of the Company and each Subsidiary, in each case, free and clear of all
liens, except for liens that 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 each Subsidiary and liens for the payment of
federal, state, foreign or other taxes, the payment of which is neither
delinquent nor subject to penalties (“Permitted Liens”). Any real property and
facilities held under lease by the Company and each Subsidiary are held by them
under valid, subsisting and enforceable leases with which the Company and each
Subsidiary are in compliance.
 
(s)           Intellectual Property. The Company and each Subsidiary own all
right, title and interest in, or possesses adequate and enforceable rights to
use, all patents, patent applications, trademarks, trade names, service marks,
copyrights, rights, licenses, franchises, trade secrets, confidential
information, processes, formulations, software and source and object codes
necessary for the conduct of their businesses (collectively, the “Intangibles”).
Neither the Company nor any Subsidiary has infringed upon the rights of others
with respect to the Intangibles and neither the Company nor any Subsidiary have
received notice that they have or may have infringed or are infringing upon the
rights of others with respect to the Intangibles, or any notice of conflict with
the asserted rights of others with respect to the Intangibles that could,
individually or in the aggregate, or could reasonably be expected to have, have
a Material Adverse Effect.
 
 
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(t)           Insurance. The Company and each Subsidiary is 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 each Subsidiary are engaged. Neither the
Company nor any Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.
 
(u)           Transactions With Affiliates and Employees. Except as may be
described in Schedule 3(u), 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 $20,000, other than for: (i) payment of
salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred in the ordinary course of business on behalf of the Company and (iii)
other employee benefits, including stock option agreements, under any stock
option plan of the Company.
 
(v)           Certain Fees. No brokerage or finder’s fees or commissions are or
will be payable by the Company to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other person with respect to
the transactions contemplated by the Transaction Documents. Purchaser shall have
no obligation with respect to any fees or with respect to any claims made by or
on behalf of other persons for fees of a type contemplated in this Section that
may be due in connection with the transactions contemplated by the Transaction
Documents.
 
(w)           Investment Company.  The Company is not, and is not an Affiliate
of, and immediately after receipt of payment for the Securities, will not be or
be an affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.
 
(x)           Tax Returns. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and each Subsidiary have filed all necessary federal, state
and foreign income and franchise tax returns and has paid or accrued all taxes
shown as due thereon, and the Company has no knowledge of a tax deficiency which
has been asserted or threatened against the Company or any Subsidiary.
 
(y)           Foreign Corrupt Practices. None of the Company, any Subsidiary or,
to the knowledge of the Company, any agent or other person acting on behalf of
the Company or any Subsidiary, has: (i) directly or indirectly, used any funds
for unlawful contributions, gifts, entertainment or other unlawful expenses
related to foreign or domestic political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to any
foreign or domestic political parties or campaigns from corporate funds, (iii)
failed to disclose fully any contribution made by the Company (or 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.
 
(z)           No Disagreements with Accountants or Lawyers. There are no
disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the Company and the accountants and lawyers formerly
or presently employed by the Company which could affect the Company’s ability to
perform any of its obligations under any of the Transaction Documents.
 
 
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(aa)           Indebtedness. Except as disclosed on schedule 3(aa), neither the
Company nor any Subsidiary is in default with respect to, or liable under (x)
any liabilities for borrowed money or amounts owed in excess of $25,000 (other
than trade accounts payable incurred in the ordinary course of business), or (y)
any guaranties, endorsements and other contingent obligations in respect of
indebtedness of others, whether or not the same are or should be reflected in
the Company’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business.
 
(bb)           Internal Controls. Except as disclosed in Schedule 3(bb), the
Company is in compliance with the provisions of the Sarbanes-Oxley Act of 2002
currently applicable to the Company. The Company and each Subsidiary maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with U.S. GAAP and
to maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures (as
defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosure controls and procedures to ensure that material
information relating to the Company, including the Subsidiaries, is made known
to the certifying officers by others within those entities, particularly during
the period in which the Company’s most recently filed periodic report under the
Exchange Act, as the case may be, is being prepared. The Company's certifying
officers have evaluated the effectiveness of the Company's controls and
procedures as of the end of the period covered by the most recently filed
periodic report under the Exchange Act (such date, the “Evaluation Date”). The
Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no significant
changes in the Company's internal controls (as such term is defined in Item 308
of Regulation S-K) or, to the Company's knowledge, in other factors that could
significantly affect the Company's internal controls. The Company maintains and
will continue to maintain a standard system of accounting established and
administered in accordance with U.S. GAAP and the applicable requirements of the
Exchange Act.
 
(cc)           OFAC. None of the Company, any Subsidiary or, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the Company
is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will
not, directly or indirectly, use the proceeds of the offering, or lend,
contribute or otherwise make available such proceeds to any Subsidiary, joint
venture partner or other person, for the purpose of financing the activities of
any person currently subject to any U.S. sanctions administered by OFAC.
 
(dd)           Full Disclosure. All of the disclosure furnished by or on behalf
of the Company to Purchaser regarding the Company, its business and the
transactions contemplated hereby 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.
 
4.           Representations and Warranties of Purchaser. Each Purchaser,
severally and not jointly, represents and warrants to the Company, only with
respect to itself, as follows:
 
(a)           Purchaser is an “accredited investor” as defined by Rule 501 under
the Securities Act. Purchaser is capable of evaluating the merits and risks of
its investment in the Securities and has the ability and capacity to protect its
interests.
 
(b)           Purchaser understands that the Securities have not been
registered. Purchaser understands that the Securities will not be registered
under the Securities Act in reliance upon an exemption in reliance on Section
4(2) of the Securities Act.
 
(c)           Purchaser acknowledges that Purchaser has such knowledge and
experience in financial and business matters that Purchaser is capable of
evaluating the merits and risks of an investment in the Securities and of making
an informed investment decision with respect thereto.
 
 
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(d)           Purchaser is purchasing the Securities for investment purposes and
not with a view to distribution or resale, nor with the intention of selling,
transferring or otherwise disposing of all or any part thereof for any
particular price, or at any particular time, or upon the happening of any
particular event or circumstance, except selling, transferring, or disposing the
Securities in compliance with all applicable provisions of the Securities Act,
the rules and regulations promulgated by the Commission thereunder, and
applicable state securities laws; and that an investment in the Securities is
not a liquid investment.
 
(e)           Purchaser has all requisite legal and other power and authority to
execute and deliver this Agreement and to carry out and perform its obligations
under the terms of this Agreement. This Agreement constitutes a valid and
legally binding obligation of Purchaser, enforceable in accordance with its
terms, except: (i) as may be limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
 
(f)           There are no actions, suits, proceedings or investigations pending
against Purchaser or Purchaser’s assets before any court or governmental agency
(nor, to Purchaser’s knowledge, is there any threat thereof) which would impair
in any way Purchaser’s ability to enter into and fully perform Purchaser’s
commitments and obligations under this Agreement or the transactions
contemplated hereby.
 
(g)           The execution, delivery and performance of and compliance with
this Agreement and the issuance of the Securities to Purchaser will not result
in any violation of, or conflict with, or constitute a default under, any of
Purchaser’s articles of incorporation or by-laws, or equivalent limited
liability company, trust or partnership documents, if applicable, or any
agreement to which Purchaser is a party or by which it is bound, nor result in
the creation of any mortgage, pledge, lien, encumbrance or charge against any of
the assets or properties of Purchaser or the Securities purchased by Purchaser.
 
(h)           Purchaser is aware that the Securities will be (unless registered
by the Company), when issued, “restricted securities” as that term is defined in
Rule 144 of the general rules and regulations under the Securities Act, and may
not be offered, sold or transferred except pursuant to an effective registration
statement or an exemption from registration under the Securities Act.
 
(i)           Purchaser understands that the Securities shall bear the following
legend or one substantially similar thereto, which Purchaser has read and
understands:
 
NEITHER THIS SECURITY NOR ANY SECURITY INTO WHICH IT MAY BE CONVERTED HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR APPLICABLE STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY SECURITY INTO
WHICH IT MAY BE CONVERTED MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF AT ANY TIME IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.
 
(j)           Any sales, transfers, or other dispositions of the Securities by
Purchaser, if any, will be made in compliance with the Securities Act and all
applicable rules and regulations promulgated thereunder.
 
(k)           Purchaser further represents that the address of Purchaser set
forth on the signature page is its principal place of business; that Purchaser
is purchasing the Securities for Purchaser’s own account and not, in whole or in
part, for the account of any other person; and that Purchaser has not formed any
entity, and is not an entity formed, for the purpose of purchasing the
Securities.
 
(l)           Purchaser represents and warrants that no finder, broker, agent,
financial advisor or other intermediary, nor any purchaser representative or any
broker-dealer acting as a broker, is entitled to any compensation in connection
with the transactions contemplated by this Agreement.
 
 
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5.           Other Agreements.
 
(a)           Certain Covenants of the Company.  Until such time as the Loan
Amount or any accrued fees or interest remain unpaid or outstanding, the Company
shall comply and operate in accordance with all of the following covenants and
agreements:
 
 
(i)
Payment of Obligations.  The Company will timely pay and discharge all of its
material obligations and liabilities, including, without limitation, tax
liabilities, except where the same may be contested in good faith by appropriate
proceedings.

 
 
(ii)
Conduct of Business and Maintenance.  The Company will continue to engage in
business of the same general type as now conducted by it and to preserve, renew
and keep in full force and effect, its corporate existence and its assets,
rights, privileges and franchises to the extent necessary or desirable in the
normal conduct of business or to preserve the Collateral.  The Company shall
conduct its business in a manner so that it will not become subject to the
Investment Company Act of 1940, as amended.

 
 
(iii)
Compliance with Laws.  The Company will comply in all material respects with all
applicable laws, ordinances, rules, regulations, decisions, orders and
requirements of governmental authorities.

 
 
(iv)
Use of Proceeds.  None of the Loan Amount shall be used for any purpose other
than the repayment of certain outstanding notes issued by the Company and for
general working capital purposes.

 
 
(v)
Notice of Legal Matters.  The Company shall notify Purchaser promptly after the
Company shall obtain knowledge of any written notice of any legal or arbitral
proceedings, and of all proceedings by or before any governmental authority, and
each material development in respect of such legal or other proceeding affecting
the Company, except proceedings which, if adversely determined, would not
reasonably be likely to have a Material Adverse Effect.

 
 
(vi)
Books and Records; Inspection and Audit Rights.  The Company will keep proper
books of record and account in which full, true and correct entries are made of
all dealings and transactions in relation to its business and activities.  The
Company will permit any representatives designated by Purchaser, upon reasonable
prior notice, to visit and inspect its properties, to examine and make extracts
from its books and records, and to discuss its business, assets, affairs,
finances, prospects, and condition with its officers and independent
accountants, all at such reasonable times during normal business hours and as
often as reasonably requested.  Promptly upon Purchaser’s written request
therefor, the Company shall deliver to Purchaser such documents and other
evidence of the existence, good standing, foreign qualification and financial
condition of the Company as Purchaser shall request from time to time.

 
 
(vii)
Change of Control, etc.  The Company shall not (i) merge or consolidate with or
into any person, (ii) sell, assign, lease, license or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to any person, or
(iii) issue or sell securities of the Company (whether in one transaction or in
a series of transactions) such that the shareholders of the Company as of the
date of this Agreement hold or will hold less than a majority of the outstanding
(on a fully-diluted basis) equity securities or voting power of the Company
(“Change of Control”).

 
 
(viii)
Indebtedness and Liens.   The Company shall not create or suffer to exist any
debt or liens other than (i) debt incurred by the Company in the ordinary course
of business, not to exceed $25,000 in the aggregate, (ii) debt which is
subordinated in the right of payment to amounts payable to Purchaser pursuant to
this Agreement on terms reasonably satisfactory to Purchaser; and (iii)
Permitted Liens.

 
 
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(ix)
Investments, Loans, Acquisitions and Hedge Agreements. The Company shall not:
(i) purchase or acquire or make any investment in any other person, (ii)
purchase or acquire all or substantially all of the assets of any person or any
division of any person; (iii) make any loan, advance or extension of credit to,
or contribution to the capital of, any other person other than reimbursement of
reasonable, bona fide and properly documented business expenses incurred on
behalf of the Company; (iv) sell, whether at face value or at a discount, any
account receivable of the Company; or (v) make any commitment or acquire any
option or enter into any other arrangements for the purpose of making any of the
foregoing investments, loans or acquisitions.

 
 
(x)
Restricted Payments.  The Company shall not declare, order, pay or make any
dividend or distribution of assets or payment of cash, or both, directly or
indirectly to any person.

 
 
(xi)
Transactions with Affiliates.  The Company shall not enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate, except in the ordinary course
of and pursuant to the reasonable requirements of the Company's business and
upon fair and reasonable terms no less favorable to the Company than it would
obtain in a comparable arm's-length transaction with a person not an
Affiliate.  “Affiliate” means, as applied to any person, (a) any other person
directly or indirectly controlling, controlled by or under common control with,
that person, (b) any other person that owns or controls (i) 10% or more of any
class of equity securities of that person or any of its Affiliates or (ii) 10%
or more of any class of equity securities (including any equity securities
issuable upon the exercise of any option or convertible security) of that person
or any of its Affiliates, or (c) any director, partner, officer, manager, agent,
employee or relative of such person.  For the purposes of this definition,
“control” (including with correlative meanings, the terms “controlling,”
“controlled by,” and “under common control with”), as applied to any person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that person, whether through
ownership of voting securities or by contract or otherwise.

 
(b)           Notice of Other Material Events.  Until such time as the Loan
Amount or any accrued fees or interest remain unpaid or outstanding, the Company
shall provide notice of the following:
 
 
(i)
The Company shall furnish to each Purchaser prompt (but in no event more than
two (2) business days after the relevant occurrence) written notice of the
occurrence of any Event of Default or any other event or circumstance that
results in, or could reasonably be expected to result in, a Material Adverse
Effect.

 
 
(ii)
The Company shall furnish to Purchaser written notice of the following not less
than thirty (30) days prior to the occurrence thereof:  (A) any change of the
Company’s corporate name or of any trade name used to identify it in the conduct
of its business or in the ownership of its properties, (B) any change of the
state in which the Company is organized or conducts business, (C) any change of
the Company’s principal place of business, or (D) any change of the Company’s
identity or corporate structure.

 
 
(iii)
Each notice delivered under this Section shall be accompanied by a statement of
the Company setting forth the details of the event or development requiring such
notice and any action taken or proposed to be taken with respect thereto.

 
(c)           Further Assurances.  At any time or from time to time after the
execution hereof, the Company will promptly execute, deliver, verify,
acknowledge, record and/or file any and all further documents and instruments
(including financing statements and continuation statements), and promptly take
any and all such other and further actions, as Purchaser may request in order to
evidence or more fully effectuate the transactions and security arrangements
contemplated hereby and to otherwise carry out the terms hereof.
 
 
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           (d)           Reservation of Shares. The Company shall at all times
reserve and keep available out of its authorized and unissued capital stock,
solely for the purpose of providing for the exercise of the conversion rights
provided for under the Note and Warrant, such number of shares of Common as
shall, from time to time, be sufficient for issuance upon conversion of such
Note and Warrant in full.
 
6.           Events of Default.
 
(a)           Each of the following events, individually, shall constitute an
“Event of Default”:
 
 
(i)
the Company shall fail to pay any Loan Amount when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;

 
 
(ii)
the Company shall fail to pay any accrued but unpaid interest when and as the
same shall become due and payable;

 
 
(iii)
the Company shall fail to perform any obligation or pay any fee or any other
amount payable under any of the Transaction Documents, when and as the same
shall become due and payable;

 
 
(iv)
any representation or warranty made by or on behalf of the Company in or in
connection with any Transaction Document, or in any report, certificate or other
document furnished pursuant to or in connection with any Transaction Document,
shall prove to have been incorrect in any material respect when made or deemed
made or shall be breached;

 
 
(v)
the Company shall fail to observe or perform any covenant, condition or
agreement contained in any Transaction Document (other than those specified in
clause (i), (ii), and (iii) of this Section 6 and such failure shall continue
unremedied for a period of ten (10) days after notice thereof from Purchaser to
the Company;

 
 
(vi)
an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the
Company or its debts, or of a substantial part of its assets, under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for ninety (90) days or an order or decree
approving or ordering any of the foregoing shall be entered;

 
 
(vii)
the Company shall (i) voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (vi) of this
Section 6, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Company or for
a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

 
 
(viii)
the Company shall be unable, admit in writing its inability, or fail generally,
to pay its debts as they become due;

 
 
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(ix)
one or more final judgments for the payment of money in an aggregate amount in
excess of $25,000 shall be rendered against the Company and the same shall
remain undischarged for a period of twenty (20) consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to attach or levy upon any assets of the Company to
enforce any such judgment;

 
 
(x)
any default by the Company under, or the occurrence of any event of default as
defined in, any other indebtedness owed by the Company;

 
 
(xi)
any event causing or resulting in the UCC Pledge not to be a first priority
perfected lien on the Assets;

 
 
 (xii)
any event, transaction, action or omission of or involving the Company shall
occur which Purchaser reasonably believes will result in a Material Adverse
Effect;

 
 
(xiii)
any of this Agreement or the Note shall cease to be, or shall be asserted by the
Company or other obligor thereunder not to be, in full force and effect; or

 
 
(iiv)
a Change of Control shall occur

 
(b)           Remedies.  Notwithstanding anything to the contrary in any
Transaction Document, upon the occurrence of an Event of Default, and in every
such event (other than an event with respect to the Company described in clauses
(vi), (vii) or (viii) of Section 6, at any time during the continuance of such
event, Purchaser may, at its sole election, by notice to the Company, declare
the Loan Amount then outstanding to be due and payable in whole (or in part, in
which case any Loan Amount not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the outstanding Loan Amount so
declared to be due and payable, together with all fees and other payment
obligations of the Company accrued but unpaid under the Transaction Documents,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Company, and
in case of any event with respect to the Company described in clauses (vi),
(vii) or (viii) of Section 6, the Loan Amount then outstanding, together with
all fees and other payment obligations of the Company accrued but unpaid under
the Transaction Documents, shall automatically become due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Company.
 
7.           Intentionally Omitted.
 
8.           Piggy-Back Registration Rights.
 
(a)           For a period of twelve (12) months following the Closing Date, if
the Company shall decide to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities, other than (i) in
connection with the Registration Statement on Form S-1 and any existing or
future amendments thereto (File No. 333-176951, as originally filed with the SEC
on September 21, 2011 and amended on December 19, 2011 or (ii) on Form S-4 or
Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable in
connection with the stock option or other employee benefit plans, then the
Company shall send to each Purchaser a written notice of such determination and,
if within fifteen days after the date of such notice, any such Purchaser shall
so request in writing, the Company shall include in such registration statement,
all or any part of Purchaser’s shares of Common Stock underlying the Notes or
the Warrants (collectively, the “Registrable Securities”) such Purchaser
requests to be registered; provided, however, that, the Company shall not be
required to register any Registrable Securities pursuant to this Section that
are eligible for resale without restriction pursuant to Rule 144 promulgated
under the Securities Act or that are the subject of a then effective
registration statement; provided, further, however,
 
 
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                (i)            if the registration statement is an offering to
be made on a continuous basis pursuant to Rule 415 and is not on a Form S-3, and
the Commission advises the Company that all of the Registrable Securities which
such Holders have requested to be registered may not be included under Rule
415(a)(i), then the number of Registrable Securities to be registered for each
Purchaser shall be reduced pro-rata among all the Purchasers to an amount to
which is permitted by the Commission for resale under Rule 415(a)(i) and each
Purchaser shall have the right to designate which of its Registrable Securities
shall be omitted from the registration statement; provided, further, however,
the Registrable Securities hereunder shall have first priority over shares being
registered by any other third parties other than the Company; and
 
                (ii)           if the registration so proposed by the Company
involves an underwritten offering of the securities so being registered for the
account of the Company, to be distributed by or through one or more underwriters
of recognized standing, and the managing underwriter of such underwritten
offering shall advise the Company in writing that, in its opinion, the
distribution of all or a specified portion of the Registrable Securities which
the Purchasers have requested the Company to register and otherwise concurrently
with the securities being distributed by such underwriters will materially and
adversely affect the distribution of such securities by such underwriters (such
opinion to state the reasons therefor), then the Company will promptly furnish
each such Purchaser of Registrable Securities with a copy of such opinion, and
by providing such written notice to each such Purchaser, such Purchaser may be
denied the registration of all or a specified portion of such Registrable
Securities (in case of such a denial as to a portion of such Registrable
Securities, such portion to be allocated pro rata among the Purchasers);
provided, however, shares to be registered by the Company for issuance by the
Company shall have first priority, each holder of Registrable Securities
hereunder shall have second priority, and any other shares being registered on
account of other third parties shall have third priority.
 
9.           Indemnification by the Company. The Company shall indemnify each of
Purchaser and its officers, directors, shareholders, members, partners,
employees, agents and Affiliates in respect of, and hold each of them harmless
from and against, any and all Losses (as defined below, and whether or not
involving any person not a party to this Agreement) suffered, incurred or
sustained by any of them or to which any of them becomes subject resulting from,
arising out of or relating to (a) any material misrepresentation on the part of
the Company, (b) a breach by the Company of any of the representations and
warranties contained herein, or (c) any non-fulfillment of or failure to perform
any covenant or agreement on the part of the Company contained in this Agreement
or in any of the Transaction Documents (including any certificates delivered in
connection herewith or therewith). If and to the extent that the indemnification
hereunder is finally determined by a court of competent jurisdiction to be
unenforceable, the Company shall make the maximum contribution to the payment
and satisfaction of the indemnified Losses as shall be permissible under
applicable laws. “Losses” means any and all damages, fines, fees, taxes,
penalties, deficiencies, diminution in value of investment, losses and expenses,
including interest, reasonable expenses of investigation, court costs,
reasonable fees and expenses of attorneys, accountants and other experts or
other expenses of litigation or other proceedings or of any claim, default or
assessment (including, without limitation, fees and expenses of attorneys,
incurred in connection with (i) the investigation or defense of any claim made
by a person not a party hereto and (ii) asserting or disputing any rights under
this Agreement against any party hereto or otherwise).
 
10.           Appointment of Collateral Agent; Indemnification of Collateral
Agent.
 
(a)           Appointment of Collateral Agent. Each Purchaser hereby appoints,
authorizes and empowers OPKO Health, Inc. to act as the collateral agent and as
representative, attorney-in-fact and agent, with full power of substitution, to
act in the name, place and stead of each of Purchaser, to take all actions
necessary or appropriate in its judgment for the accomplishment of the terms of
any of the Transaction Documents, and to act on behalf of each Purchaser and to
do or refrain from doing all such further acts and things, to make all decisions
and determinations, and to execute, deliver and receive all such documents, as
it shall deem necessary or appropriate in conjunction with any of the
transactions contemplated by the Transaction Documents. This appointment may be
terminated, and such termination shall be effective, upon the earlier of OPKO’s
resignation as collateral agent and the written consent of the holders of a
majority-in-interest of the Notes.
 
 
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(b)           Limitation of Liability; Indemnification. In addition to any and
all protections and rights that may be granted hereunder to OPKO as collateral
agent, to the maximum extent permissible by law, OPKO will incur no liability
with respect to any action or inaction taken or failed to be taken in connection
with its services as the collateral agent, except its own willful misconduct or
gross negligence. In all questions arising under any of the Loan Documents, OPKO
may rely on the advice of counsel of its choosing, and OPKO will not be liable
to any party to any of the Loan Documents or any other person or party for
anything done, omitted or suffered in good faith by it in its capacity as the
collateral agent based on such advice. Each of the Purchasers (a) agrees,
jointly and severally, to indemnify, defend and save harmless OPKO from and
against any and all loss, liability or expense (including the reasonable fees
and expenses of outside counsel and experts and their staffs and all expense of
document location, duplication and shipment) arising out of or in connection
with OPKO’s execution and performance of its duties as collateral agent under
any of the Loan Documents (a “Collateral Agent Expense”), except to the extent
that such Collateral Agent Expense is finally adjudicated to have been primarily
caused by the gross negligence or willful misconduct of OPKO, in its capacity as
collateral agent, and (b) acknowledges and agrees that the foregoing indemnities
shall survive OPKO’s resignation as the collateral agent or the termination of
any of the Transaction Documents. In no event shall OPKO, in its capacity as the
collateral agent, be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if OPKO has been advised of the likelihood of such loss or damage and regardless
of the form of action.
 
9.           Miscellaneous.
 
(a)           The Company agrees not to transfer or assign this Agreement or any
of the Company’s rights or obligations herein and each Purchaser agrees that the
transfer or assignment of the Securities acquired pursuant hereto shall be made
only in accordance with all applicable laws.
 
(b)           This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns. The
Transaction Documents constitute the entire agreement between the parties hereto
with respect to the subject matter hereof and may be amended or waived only by a
written instrument signed by all parties.
 
(c)           Any notice or other document required or permitted to be given or
delivered to the parties hereto shall be in writing and sent: (i) by fax, if the
sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or certified
mail, with return receipt requested (postage prepaid), or (c) by a recognized
overnight delivery service (with charges prepaid), to the following addresses:
 
 
(i)
If to the Company, at:

 
Biozone Pharmaceuticals, Inc.
550 Sylvan Avenue
Suite 101
Engelwood Cliffs, NJ 07632
 
With a copy (which shall not constitute notice) to:
 
Sichenzia Ross Friedman Ference LLP
61 Broadway, 32 nd Floor
New York, New York 10006
Attention of Harvey Kesner, Esq.
Tel:  (212) 930-9700
Fax:  (212) 930-9725
 
(ii)   If to a Purchaser, to the address set forth on its signature page hereto.
 
and:
 
 
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(d)           No provision of this Agreement may be waived, modified,
supplemented or amended except in a written instrument signed by all parties
hereto. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such
right.
 
(e)           This Agreement shall be enforced, governed and construed in all
respects in accordance with the laws of the State of Florida as such laws are
applied by the Florida courts to contracts solely performed within its borders,
except with respect to the conflicts of law provisions thereof.
 
(f)           Any legal suit, action or proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby shall be instituted
exclusively in Miami-Dade County, Florida. The parties hereto hereby: (i) waive
any objection which they may now have or hereafter have to the venue of any such
suit, action or proceeding, and (ii) irrevocably consent to the jurisdiction of
the federal and state courts located in Miami-Dade County, Florida in any such
suit, action or proceeding. The parties further agree to accept and acknowledge
service of any and all process which may be served in any such suit, action or
proceeding in the federal and state courts located in Miami-Dade County,
Florida. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.
 
(g)           If any provision of this Agreement is held to be invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed modified to conform with such statute or rule of law. Any
provision hereof that may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provisions hereof.
 
(h)           The Company understands and agrees that money damages may not be a
sufficient remedy for any breach of this Agreement by the Company, and that
Purchaser shall be entitled to equitable relief, including an injunction and
specific performance, as a remedy for any such breach, without the necessity of
establishing irreparable harm or posting a bond therefor. Such remedies shall
not be deemed to be the exclusive remedies for a breach by the Company of this
Agreement, but shall be in addition to all other remedies available at law or
equity to Purchaser.
 
(i)           All pronouns and any variations thereof used herein shall be
deemed to refer to the masculine, feminine, singular or plural, as identity of
the person or persons may require.
 
(j)           This Agreement may be executed in counterparts and by facsimile,
each of which shall be deemed an original, but all of which, taken together,
shall constitute one and the same instrument.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
 
 
16

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Company Signature Page
 
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
 
BIOZONE PHARMACEUTICALS, INC.
     
By: 
     
Name: Elliot Maza
Title: Chief Executive Officer and Chief Financial Officer
     

 
 
 

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Purchaser Signature Page
 
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
 
[PURCHASER]
 
By:
      Name:
      Title:
 
 
Purchase Price : ________________________
 
Address for Notice :
 
______________________________________
______________________________________
Attention of: ____________________________
Telephone: _____________________________
Facsimile:_______________________________
 
 
 

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Exhibit A
 
Form of Convertible Note
 
 
 

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Exhibit B
 
Form of Warrant
 
 
 

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Exhibit C
 
Form of Pledge and Security Agreement