Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this "Agreement") is dated as of May 4,
2006, between Tripos, Inc., a Utah corporation (the "Company"), and the
investors identified on the signature pages hereto (each an "Investor" and,
collectively, the "Investors").

WHEREAS, subject to the terms and conditions set forth in this Agreement, the
Company desires to issue and sell to the Investors and the Investors desire to
purchase from the Company securities of the Company as more fully described in
this Agreement, all pursuant to the terms set forth herein;

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 Investors agree
as follows:

ARTICLE I.
DEFINITIONS

1.1              DEFINITIONS.  IN ADDITION TO THE TERMS DEFINED ELSEWHERE IN
THIS AGREEMENT, FOR ALL PURPOSES OF THIS AGREEMENT, THE FOLLOWING TERMS SHALL
HAVE THE MEANINGS INDICATED IN THIS SECTION 1.1:

"Action" means any action, suit, notice of violation, proceeding (including any
partial proceeding such as a deposition) or investigation pending or threatened
in writing against or affecting the Company, any Subsidiary or any of their
properties before or by any court, arbitrator, governmental or administrative
agency, regulatory authority (federal, state, county, local or foreign), stock
market, stock exchange or trading facility.

"Affiliate" means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144.

"Articles of Amendment" has the meaning set forth in Section 2.2(a).

"Benefit Arrangement" means at any time an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or Multiemployer Plan and
which is maintained or otherwise contributed to by the Company.

"Benefit Plan" has the meaning set forth in Section 3.1(y)(ii).

"Business Day" means any day except Saturday, Sunday and any day that is a
federal legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other governmental action to close.

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"Closing" means the closing of the purchase and sale of the Securities pursuant
to Article II.

"Closing Date" means the Business Day immediately following the date on which
all of the conditions set forth in Sections 5.1 and 5.2 hereof are satisfied, or
such other date as the parties may agree.

"Code" means the Internal Revenue Code of 1986, as amended.

"Commission" means the Securities and Exchange Commission.

"Common Stock" means the common stock of the Company, par value $.01 per share,
and any securities into which such common stock may hereafter be reclassified.

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

"Company Counsel" means Snell & Willmer LLP and Hogan & Hartson LLP.

"Company Deliverables" has the meaning set forth in Section 2.2(a).

 "Contingent Liability" means, as to any Person, any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Debt or obligation of any other Person in any manner, whether
directly or indirectly, including without limitation any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt, (b)
to purchase property or services for the purpose of assuring the owner of such
Debt of its payment, or (c) to maintain the solvency, working capital, equity,
cash flow, fixed charge or other coverage ratio, or any other financial
condition of the primary obligor so as to enable the primary obligor to pay any
Debt or to comply with any agreement relating to any Debt or obligation.

  "Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes, or other similar instruments
issued by such Person, (iii) all obligations of such Person as lessee which (a)
are capitalized in accordance with GAAP or (b) arise pursuant to sale-leaseback
transactions, (iv) all reimbursement obligations of such Person in respect of
letters of credit or other similar instruments, (v) all Debt of others secured
by a Lien on any asset of such Person, whether or not such Debt is otherwise an
obligation of such Person and (vi) all Debt of others guaranteed by such Person.

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"Disclosure Materials" has the meaning set forth in Section 3.1(h).

"Effective Date" means the date that the Registration Statement required by
Section 2(a) of the Registration Rights Agreement is first declared effective by
the Commission.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
or any successor statute.

"ERISA Group" means the Company and each Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Company or any
Subsidiary, are treated as a single employer under the Code.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"GAAP" means U.S. generally accepted accounting principles.

"Intellectual Property Rights" has the meaning set forth in Section 3.1(p).

"Investor Deliverables" has the meaning set forth in Section 2.2(b).

"Investor Party" has the meaning set forth in Section 4.6.

"Lien" means any lien, charge, encumbrance, security interest, right of first
refusal or other restrictions of any kind.

"Losses" has the meaning set forth in Section 4.6.

"Material Adverse Effect" means any of (i) a material and adverse effect on the
legality, validity or enforceability of any Transaction Document, or (ii) a
material and adverse effect on the results of operations, assets, business or
financial condition of the Company and the Subsidiaries, taken as a whole.

"New York Courts" means the state and federal courts sitting in the City of New
York, Borough of Manhattan.

"PBGC" means the Pension Benefit Guarantee Corporation or any entity succeeding
to any or all of its functions under ERISA.

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"Permitted Liens" means:  (a) liens for taxes, assessments or governmental
charges not delinquent or being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with GAAP are
maintained on the books of the Company or the applicable Subsidiary; (b) liens
arising out of deposits in connection with workers' compensation, unemployment
insurance, old age pensions or other social security or retirement benefits
legislation; (c) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds, and other obligations of like nature arising in the ordinary
course of business of the Company or a Subsidiary; (d) liens imposed by law,
such as mechanics', workers', materialmens', carriers' or other like liens
arising in the ordinary course of business of the Company or a Subsidiary which
secure the payment of obligations which are not past due or which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP are maintained on the books of the
Company or the applicable Subsidiary; (e) liens existing on the Closing Date,
and described on Schedule 3.1(o); (f) purchase money security interests or liens
for the purchase of fixed assets to be used in the business of the Company or a
Subsidiary, securing solely the fixed assets so purchased and the proceeds
thereof; (g) capitalized leases which do not violate any provision of this
Agreement; (h) liens of commercial depository institutions, arising in the
ordinary course of business, constituting a statutory or common law right of
setoff against amounts on deposit with such institution; and (i) rights of way,
zoning restrictions, easements and similar encumbrances affecting the Company's
real property which do not materially interfere with the use of such property.

"Person" means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

"Plan" means at any time an employee pension plan benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards under the Code
and either (i) is maintained, or contributed to, by any member of the ERISA
group for employees of any member of the ERISA group or (ii) has at any time
within the preceding five years been maintained, or contributed to, by any
Person which was at such time a member of the ERISA Group for employees of any
Person which was at such time a member of the ERISA group.

"Preferred Shares" means shares of the Series C Preferred Stock of the Company,
par value $.01 per share

"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

"Registration Statement" means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale by the
Investors of the Underlying Shares and the Warrant Shares.

"Registration Rights Agreement" means the Registration Rights Agreement, dated
as of the date of this Agreement, among the Company and the Investors, in the
form of Exhibit C hereto.

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"Required Minimum" means, as of any date, the aggregate number of shares of
Common Stock then issuable pursuant to the Transaction Documents; provided,
however, that for so long as the Preferred Shares or Warrants remain
outstanding, the Required Minimum shall not be fewer than 2,502,500 less the
aggregate number of Underlying Shares and Warrant Shares issued from time to
time hereunder.

"Restricted Payment" means, with respect to any Person, (a) payments made in
redemption of the securities of such Person and (b) any management, consulting
or other similar fees, or any interest thereon, payable by such Person to any
affiliate of such Person (other than the Company) or to any other Person other
than an unrelated third party, other than pursuant to agreements in existence on
the date hereof; provided, however, that Restricted Payments shall not include
any management, consulting or other similar fees, or any interest thereon,
payable pursuant to consulting agreements with consultants of the Company
entered into after the date hereof which are approved by the Board of Directors
of the Company.

"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

"SEC Reports" has the meaning set forth in Section 3.1(h).

"Securities" means the Preferred Shares and the Warrants.

"Securities Act" means the Securities Act of 1933, as amended.

"Subsequent Placement" has the meaning set forth in the Section 4.3.

"Subsequent Placement Notice" has the meaning set forth in the Section 4.3.

"Subsidiary" means any subsidiary of the Company included in the SEC Reports.

"Trading Day" means (i) a day on which the Common Stock is traded on a Trading
Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not
listed on a Trading Market (other than the OTC Bulletin Board), a day on which
the Common Stock is traded in the over‑the‑counter market, as reported by the
OTC Bulletin Board, (iii) if the Common Stock is not quoted on any Trading
Market, a day on which the Common Stock is quoted in the over‑the‑counter market
as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding to its functions of reporting prices), or (iv)
in the event that the Common Stock is not listed or quoted as set forth in (i),
(ii) and (iii) hereof, then Trading Day shall mean a Business Day.

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"Trading Market" means whichever of the New York Stock Exchange, the American
Stock Exchange, the NASDAQ National Market, the NASDAQ SmallCap Market, OTC
Bulletin Board, or "pink sheets" on which the Common Stock is listed or quoted
for trading on the date in question.

"Transaction Documents" means this Agreement, the Registration Rights Agreement,
the Warrants and any other documents or agreements executed in connection with
the transactions contemplated hereunder.

"Underlying Shares" means the shares of Common Stock issuable upon conversion of
the Preferred Shares.

"Warrants" means the Common Stock purchase warrant in the form of Exhibit D
which is issuable to each Investor at the Closing.

"Warrant Shares" means the shares of Common Stock issuable upon exercise of the
Warrants.

ARTICLE II.
PURCHASE AND SALE

2.1              CLOSING.  SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THIS
AGREEMENT, AT THE CLOSING THE COMPANY SHALL ISSUE AND SELL TO EACH INVESTOR, AND
EACH INVESTOR SHALL, SEVERALLY AND NOT JOINTLY, PURCHASE FROM THE COMPANY, THE
NUMBER OF PREFERRED SHARES SET FORTH OPPOSITE EACH PURCHASER'S NAME ON EXHIBIT A
HERETO AT A PURCHASE PRICE OF $3.00 PER SHARE.  IN CONSIDERATION OF SUCH
PURCHASE, EACH PURCHASER SHALL ALSO RECEIVE A WARRANT TO PURCHASE THE NUMBER OF
SHARES SET FORTH OPPOSITE SUCH PURCHASER'S NAME ON EXHIBIT A HERETO.  THE
CLOSING SHALL TAKE PLACE AT THE OFFICES OF FOLEY HOAG LLP, COUNSEL FOR THE
INVESTOR, WORLD TRADE CENTER WEST, BOSTON, MA 02216 ON THE CLOSING DATE OR AT
SUCH OTHER LOCATION OR TIME AS THE PARTIES MAY AGREE.

2.2              CLOSING DELIVERIES.  (A)  AT THE CLOSING, THE COMPANY SHALL
DELIVER OR CAUSE TO BE DELIVERED TO EACH INVESTOR THE FOLLOWING (THE "COMPANY
DELIVERABLES"):

(I)                  A CERTIFIED COPY OF THE ARTICLES OF AMENDMENT AUTHORIZING
THE PREFERRED SHARES IN THE FORM OF EXHIBIT B HERETO (THE "ARTICLES OF
AMENDMENT") FILED WITH THE UTAH DEPARTMENT OF COMMERCE, DIVISION OF CORPORATIONS
AND COMMERCIAL CODE;

(II)                A CERTIFICATE FOR THE PREFERRED SHARES REGISTERED IN THE
NAME OF THE INVESTOR;

(III)               A WARRANT REGISTERED IN THE NAME OF THE INVESTOR;

(IV)              THE LEGAL OPINION OF COMPANY COUNSEL, IN AGREED FORM,
ADDRESSED TO THE INVESTORS;

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(V)                THE REGISTRATION RIGHTS AGREEMENT, DULY EXECUTED BY THE
COMPANY; AND

(VI)              ANY OTHER DOCUMENTS REASONABLY REQUESTED BY SUCH INVESTOR.

(B)               AT THE CLOSING, EACH INVESTOR SHALL DELIVER OR CAUSE TO BE
DELIVERED TO THE COMPANY THE FOLLOWING (THE "INVESTOR DELIVERABLES"):

(I)                  THE PURCHASE PRICE FOR ITS SECURITIES IN UNITED STATES
DOLLARS AND IN IMMEDIATELY AVAILABLE FUNDS, BY WIRE TRANSFER TO AN ACCOUNT
DESIGNATED IN WRITING BY THE COMPANY FOR SUCH PURPOSE; AND

(II)                THE REGISTRATION RIGHTS AGREEMENT, DULY EXECUTED BY THE
INVESTOR.

ARTICLE III.
REPRESENTATIONS AND WARRANTIES

3.1              REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  THE COMPANY
HEREBY MAKES THE FOLLOWING REPRESENTATIONS AND WARRANTIES TO EACH INVESTOR:

(A)                SUBSIDIARIES.  THE COMPANY HAS NO DIRECT OR INDIRECT
SUBSIDIARIES OTHER THAN AS SPECIFIED IN THE SEC REPORTS.  EXCEPT AS DISCLOSED IN
SCHEDULE 3.1(A), THE COMPANY OWNS, DIRECTLY OR INDIRECTLY, ALL OF THE CAPITAL
STOCK OF EACH SUBSIDIARY FREE AND CLEAR OF ANY AND ALL LIENS, AND ALL THE ISSUED
AND OUTSTANDING SHARES OF CAPITAL STOCK OF EACH SUBSIDIARY ARE VALIDLY ISSUED
AND ARE FULLY PAID, NON-ASSESSABLE AND FREE OF PREEMPTIVE AND SIMILAR RIGHTS. 

(B)               ORGANIZATION AND QUALIFICATION.  THE COMPANY AND EACH
SUBSIDIARY ARE DULY INCORPORATED OR OTHERWISE ORGANIZED, VALIDLY EXISTING AND IN
GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS INCORPORATION OR
ORGANIZATION (AS APPLICABLE), WITH THE REQUISITE 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 IN ANY
MATERIAL RESPECT OF ANY OF THE PROVISIONS OF ITS CERTIFICATE OR ARTICLES OF
INCORPORATION, BYLAWS OR OTHER ORGANIZATIONAL OR CHARTER DOCUMENTS.  THE COMPANY
AND EACH SUBSIDIARY ARE EACH DULY QUALIFIED TO CONDUCT ITS BUSINESS AND ARE 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, INDIVIDUALLY OR IN THE AGGREGATE, HAVE
OR REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

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(C)                AUTHORIZATION; ENFORCEMENT.  THE COMPANY HAS THE REQUISITE
CORPORATE POWER AND AUTHORITY TO ENTER INTO AND TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY EACH OF THE TRANSACTION DOCUMENTS AND OTHERWISE TO CARRY OUT ITS
OBLIGATIONS THEREUNDER.  THE EXECUTION AND DELIVERY OF EACH OF THE TRANSACTION
DOCUMENTS BY THE COMPANY AND THE CONSUMMATION BY IT OF THE TRANSACTIONS
CONTEMPLATED THEREBY HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY ACTION ON THE
PART OF THE COMPANY AND NO FURTHER ACTION IS REQUIRED BY THE COMPANY IN
CONNECTION THEREWITH.  EACH TRANSACTION DOCUMENT HAS BEEN (OR UPON DELIVERY WILL
HAVE BEEN) DULY EXECUTED BY THE COMPANY AND, WHEN DELIVERED IN ACCORDANCE WITH
THE TERMS HEREOF, WILL CONSTITUTE THE VALID AND BINDING OBLIGATION OF THE
COMPANY ENFORCEABLE AGAINST THE COMPANY IN ACCORDANCE WITH ITS TERMS, EXCEPT AS
SUCH ENFORCEABILITY MAY BE LIMITED BY APPLICABLE BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM, LIQUIDATION OR SIMILAR LAWS RELATING TO, OR
AFFECTING GENERALLY THE ENFORCEMENT OF, CREDITORS' RIGHTS AND REMEDIES OR BY
OTHER EQUITABLE PRINCIPLES OF GENERAL APPLICATION.

(D)               NO CONFLICTS.  EXCEPT AS DISCLOSED IN SCHEDULE 3.1(D), THE
EXECUTION, DELIVERY AND PERFORMANCE OF THE TRANSACTION DOCUMENTS BY THE COMPANY
AND THE CONSUMMATION BY THE COMPANY OF THE TRANSACTIONS CONTEMPLATED THEREBY 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, OR (II) CONFLICT WITH, OR CONSTITUTE A
DEFAULT (OR AN EVENT THAT 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 (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
ANY SUBSIDIARY IS A PARTY OR BY WHICH ANY PROPERTY OR ASSET OF THE COMPANY OR
ANY SUBSIDIARY IS BOUND OR AFFECTED, OR (III) 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 CLAUSE (III), SUCH AS WOULD NOT, INDIVIDUALLY OR IN THE
AGGREGATE, HAVE OR REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
EFFECT. 

(E)                FILINGS, CONSENTS AND APPROVALS.  EXCEPT AS DISCLOSED IN
SCHEDULE 3.1(E), THE COMPANY IS NOT REQUIRED TO OBTAIN ANY CONSENT, WAIVER,
AUTHORIZATION OR ORDER OF, GIVE ANY NOTICE TO, OR MAKE ANY FILING OR
REGISTRATION WITH, ANY COURT OR OTHER FEDERAL, STATE, LOCAL OR OTHER
GOVERNMENTAL AUTHORITY OR OTHER PERSON IN CONNECTION WITH THE EXECUTION,
DELIVERY AND PERFORMANCE BY THE COMPANY OF THE TRANSACTION DOCUMENTS, OTHER THAN
(I) THE FILING WITH THE COMMISSION OF ONE OR MORE REGISTRATION STATEMENTS IN
ACCORDANCE WITH THE REQUIREMENTS OF THE REGISTRATION RIGHTS AGREEMENT, (II)
FILINGS REQUIRED BY STATE SECURITIES LAWS, (III) THE FILING OF A NOTICE OF SALE
OF SECURITIES ON FORM D WITH THE COMMISSION UNDER REGULATION D OF THE SECURITIES
ACT, (IV) THE FILINGS REQUIRED IN ACCORDANCE WITH SECTIONS 4.6 AND 4.9, AND (IV)
THOSE THAT HAVE BEEN MADE OR OBTAINED PRIOR TO THE DATE OF THIS AGREEMENT.

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(F)                 ISSUANCE OF THE SECURITIES.  THE SECURITIES HAVE BEEN DULY
AUTHORIZED AND, WHEN ISSUED AND PAID FOR IN ACCORDANCE WITH THE TRANSACTION
DOCUMENTS, WILL BE DULY AND VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE, FREE
AND CLEAR OF ALL LIENS.  THE COMPANY HAS RESERVED FROM ITS DULY AUTHORIZED
CAPITAL STOCK A NUMBER OF SHARES OF COMMON STOCK INITIALLY ISSUABLE UPON
CONVERSION OF THE PREFERRED SHARES AND UPON EXERCISE OF THE WARRANTS, WHICH
NUMBER OF RESERVED SHARES IS NOT LESS THAN THE REQUIRED MINIMUM CALCULATED AS OF
THE DATE HEREOF.

(G)                CAPITALIZATION.  THE NUMBER OF SHARES AND TYPE OF ALL
AUTHORIZED, ISSUED AND OUTSTANDING CAPITAL STOCK OF THE COMPANY, AND ALL SHARES
OF COMMON STOCK RESERVED FOR ISSUANCE UNDER THE COMPANY'S VARIOUS OPTION AND
INCENTIVE PLANS, IS SPECIFIED IN SCHEDULE 3.1(G).  EXCEPT AS SPECIFIED IN
SCHEDULE 3.1(G), NO SECURITIES OF THE COMPANY ARE ENTITLED TO PREEMPTIVE OR
SIMILAR RIGHTS, AND NO PERSON HAS ANY RIGHT OF FIRST REFUSAL, PREEMPTIVE RIGHT,
RIGHT OF PARTICIPATION, OR ANY SIMILAR RIGHT TO PARTICIPATE IN THE TRANSACTIONS
CONTEMPLATED BY THE TRANSACTION DOCUMENTS.  EXCEPT AS SPECIFIED IN SCHEDULE
3.1(G), THERE ARE NO OUTSTANDING OPTIONS, WARRANTS, SCRIP RIGHTS TO SUBSCRIBE
TO, CALLS OR COMMITMENTS OF ANY CHARACTER WHATSOEVER RELATING TO, OR SECURITIES,
RIGHTS OR OBLIGATIONS CONVERTIBLE INTO OR EXCHANGEABLE FOR, OR GIVING ANY PERSON
ANY RIGHT TO SUBSCRIBE FOR OR ACQUIRE, ANY SHARES OF COMMON STOCK, OR CONTRACTS,
COMMITMENTS, UNDERSTANDINGS OR ARRANGEMENTS BY WHICH THE COMPANY OR ANY
SUBSIDIARY IS OR MAY BECOME BOUND TO ISSUE ADDITIONAL SHARES OF COMMON STOCK, OR
SECURITIES OR RIGHTS CONVERTIBLE OR EXCHANGEABLE INTO SHARES OF COMMON STOCK. 
THE ISSUE AND SALE OF THE SECURITIES WILL NOT, IMMEDIATELY OR WITH THE PASSAGE
OF TIME, OBLIGATE THE COMPANY TO ISSUE SHARES OF COMMON STOCK OR OTHER
SECURITIES TO ANY PERSON (OTHER THAN THE INVESTORS) AND WILL NOT RESULT IN A
RIGHT OF ANY HOLDER OF COMPANY SECURITIES TO ADJUST THE EXERCISE, CONVERSION,
EXCHANGE OR RESET PRICE UNDER SUCH SECURITIES.

(H)                SEC REPORTS; FINANCIAL STATEMENTS.  EXCEPT AS DISCLOSED IN
SCHEDULE 3.1(H), 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"
AND, TOGETHER WITH THE SCHEDULES TO THIS AGREEMENT (IF ANY), THE "DISCLOSURE
MATERIALS") 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 DATES (AS AMENDED, WHERE APPLICABLE), 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 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 (AS AMENDED, WHERE
APPLICABLE) 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 GAAP APPLIED ON A CONSISTENT BASIS DURING THE
PERIODS INVOLVED, EXCEPT AS MAY BE OTHERWISE SPECIFIED IN SUCH FINANCIAL
STATEMENTS OR THE NOTES THERETO, AND 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. 

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(I)                  MATERIAL CHANGES.  SINCE THE DATE OF THE LATEST AUDITED
FINANCIAL STATEMENTS INCLUDED WITHIN THE SEC REPORTS, EXCEPT AS SPECIFICALLY
DISCLOSED IN THE SEC REPORTS, (I) THERE HAS BEEN NO EVENT, OCCURRENCE OR
DEVELOPMENT THAT HAS HAD OR THAT WOULD REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT, (II) THE COMPANY HAS NOT INCURRED ANY LIABILITIES
(CONTINGENT OR OTHERWISE) OTHER THAN (A) TRADE PAYABLES, ACCRUED EXPENSES AND
OTHER LIABILITIES INCURRED IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH
PAST PRACTICE AND (B) LIABILITIES NOT REQUIRED TO BE REFLECTED IN THE COMPANY'S
FINANCIAL STATEMENTS PURSUANT TO GAAP OR REQUIRED TO BE DISCLOSED IN FILINGS
MADE WITH THE COMMISSION, (III) THE COMPANY HAS NOT ALTERED ITS METHOD OF
ACCOUNTING OR THE IDENTITY OF ITS AUDITORS, (IV) THE COMPANY HAS NOT DECLARED OR
MADE ANY DIVIDEND OR DISTRIBUTION OF CASH OR OTHER PROPERTY TO ITS STOCKHOLDERS
OR PURCHASED, REDEEMED OR MADE ANY AGREEMENTS TO PURCHASE OR REDEEM ANY SHARES
OF ITS CAPITAL STOCK, AND (V) THE COMPANY HAS NOT ISSUED ANY EQUITY SECURITIES
TO ANY OFFICER, DIRECTOR OR AFFILIATE, EXCEPT PURSUANT TO EXISTING COMPANY STOCK
OPTION PLANS AND OTHER EQUITY COMPENSATION ARRANGEMENTS. THE COMPANY DOES NOT
HAVE PENDING BEFORE THE COMMISSION ANY REQUEST FOR CONFIDENTIAL TREATMENT OF
INFORMATION. 

(J)                 LITIGATION.  EXCEPT AS DISCLOSED IN SCHEDULE 3.1(J), TO THE
KNOWLEDGE OF THE COMPANY, THERE IS NO ACTION WHICH (I) ADVERSELY AFFECTS OR
CHALLENGES THE LEGALITY, VALIDITY OR ENFORCEABILITY OF ANY OF THE TRANSACTION
DOCUMENTS OR THE SECURITIES OR (II) EXCEPT AS SPECIFICALLY DISCLOSED IN THE SEC
REPORTS, WOULD, IF THERE WERE AN UNFAVORABLE DECISION, INDIVIDUALLY OR IN THE
AGGREGATE, HAVE OR REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
EFFECT.  THERE IS NO ACTION IN THE NAME OF OR ON BEHALF OF THE COMPANY'S
STOCKHOLDERS.  NEITHER THE COMPANY NOR ANY SUBSIDIARY, NOR, TO THE KNOWLEDGE OF
THE COMPANY, ANY DIRECTOR OR OFFICER THEREOF (IN HIS OR HER CAPACITY AS SUCH),
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, EXCEPT AS SPECIFICALLY DISCLOSED IN THE SEC REPORTS.  THE
COMMISSION HAS NOT ISSUED ANY STOP ORDER OR OTHER ORDER SUSPENDING THE
EFFECTIVENESS OF ANY REGISTRATION STATEMENT FILED BY THE COMPANY OR ANY
SUBSIDIARY UNDER THE EXCHANGE ACT OR THE SECURITIES ACT. 

(K)               LABOR RELATIONS.  NO MATERIAL LABOR DISPUTE EXISTS OR, TO THE
KNOWLEDGE OF THE COMPANY, IS IMMINENT WITH RESPECT TO ANY OF THE EMPLOYEES OF
THE COMPANY.

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(L)                  COMPLIANCE.  EXCEPT AS DISCLOSED IN SCHEDULE 3.1(L) OR IN
THE SEC REPORTS, NEITHER THE COMPANY NOR ANY SUBSIDIARY (I) IS IN DEFAULT UNDER
OR IN VIOLATION OF (AND NO EVENT HAS OCCURRED THAT HAS NOT BEEN WAIVED THAT,
WITH NOTICE OR LAPSE OF TIME OR BOTH, WOULD RESULT IN A DEFAULT BY THE COMPANY
OR ANY SUBSIDIARY UNDER), NOR HAS THE COMPANY OR ANY SUBSIDIARY RECEIVED NOTICE
OF A CLAIM THAT IT IS IN DEFAULT UNDER OR THAT IT IS IN VIOLATION OF, ANY
INDENTURE, LOAN OR CREDIT AGREEMENT OR ANY OTHER AGREEMENT OR INSTRUMENT TO
WHICH IT IS A PARTY OR BY WHICH IT OR ANY OF ITS PROPERTIES IS BOUND (WHETHER OR
NOT SUCH DEFAULT OR VIOLATION HAS BEEN WAIVED), (II) IS IN VIOLATION OF ANY
ORDER OF ANY COURT, ARBITRATOR OR GOVERNMENTAL BODY, OR (III) 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 RELATING
TO TAXES, ENVIRONMENTAL PROTECTION, OCCUPATIONAL HEALTH AND SAFETY, PRODUCT
QUALITY AND SAFETY AND EMPLOYMENT AND LABOR MATTERS, EXCEPT IN EACH CASE AS
WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR REASONABLY BE EXPECTED TO
RESULT IN A MATERIAL ADVERSE EFFECT.  THE COMPANY IS IN COMPLIANCE WITH ALL
EFFECTIVE REQUIREMENTS OF THE SARBANES-OXLEY ACT OF 2002, AS AMENDED, AND THE
RULES AND REGULATIONS THEREUNDER, THAT ARE APPLICABLE TO IT, EXCEPT WHERE SUCH
NONCOMPLIANCE WOULD NOT HAVE OR REASONABLY BE EXPECTED TO RESULT IN A MATERIAL
ADVERSE EFFECT.

(M)              REGULATORY PERMITS.  THE COMPANY AND THE SUBSIDIARIES POSSESS
ALL CERTIFICATES, AUTHORIZATIONS AND PERMITS ISSUED BY THE APPROPRIATE FEDERAL,
STATE, LOCAL OR FOREIGN REGULATORY AUTHORITIES NECESSARY TO CONDUCT THEIR
BUSINESSES AS DESCRIBED IN THE SEC REPORTS, EXCEPT WHERE THE FAILURE TO POSSESS
SUCH PERMITS WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT, AND NEITHER THE COMPANY NOR ANY
SUBSIDIARY HAS RECEIVED ANY NOTICE OF PROCEEDINGS RELATING TO THE REVOCATION OR
MODIFICATION OF ANY SUCH PERMITS.

(N)                TITLE TO ASSETS.  THE COMPANY AND THE SUBSIDIARIES HAVE GOOD
AND MARKETABLE TITLE IN FEE SIMPLE TO ALL REAL PROPERTY OWNED BY THEM THAT IS
MATERIAL TO THEIR  BUSINESSES AND GOOD AND VALID TITLE IN ALL PERSONAL PROPERTY
OWNED BY THEM THAT IS MATERIAL TO THEIR BUSINESSES, IN EACH CASE FREE AND CLEAR
OF ALL LIENS, EXCEPT FOR PERMITTED LIENS AND 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 THE SUBSIDIARIES. 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, EXCEPT AS WOULD
NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR REASONABLY BE EXPECTED TO RESULT
IN A MATERIAL ADVERSE EFFECT.  A LIST OF EXISTING LIENS IS PROVIDED ON SCHEDULE
3.1(N) HERETO (WHICH SHALL CONSTITUTE "PERMITTED LIENS" UNDER CLAUSE (E) OF THE
DEFINITION OF SUCH TERM).

(O)               PATENTS AND TRADEMARKS.  THE COMPANY AND THE SUBSIDIARIES
HAVE, OR HAVE RIGHTS TO USE, ALL PATENTS, PATENT APPLICATIONS, TRADEMARKS,
TRADEMARK APPLICATIONS, SERVICE MARKS, TRADE NAMES, COPYRIGHTS, LICENSES AND
OTHER SIMILAR RIGHTS THAT ARE NECESSARY OR MATERIAL FOR USE IN CONNECTION WITH
THEIR BUSINESSES AS DESCRIBED IN THE SEC REPORTS AND WHICH THE FAILURE TO SO
HAVE WOULD, INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR REASONABLY BE EXPECTED TO
RESULT IN A MATERIAL ADVERSE EFFECT (COLLECTIVELY, THE "INTELLECTUAL PROPERTY
RIGHTS").  NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS RECEIVED A WRITTEN NOTICE
THAT THE INTELLECTUAL PROPERTY RIGHTS USED BY THE COMPANY OR ANY SUBSIDIARY
VIOLATES OR INFRINGES UPON THE RIGHTS OF ANY PERSON.  TO THE KNOWLEDGE OF THE
COMPANY, ALL SUCH INTELLECTUAL PROPERTY RIGHTS ARE ENFORCEABLE AND THERE IS NO
EXISTING INFRINGEMENT BY ANOTHER PERSON OF ANY OF THE INTELLECTUAL PROPERTY
RIGHTS.

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(P)               TRANSACTIONS WITH AFFILIATES AND EMPLOYEES.  EXCEPT AS SET
FORTH IN THE SEC REPORTS OR DISCLOSED IN SCHEDULE 3.1(P), NONE OF THE OFFICERS
OR DIRECTORS OF THE COMPANY AND, TO THE KNOWLEDGE OF THE COMPANY, NONE OF THE
EMPLOYEES OF THE COMPANY IS CURRENTLY 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.

(Q)               INTERNAL ACCOUNTING CONTROLS.  EXCEPT AS SET FORTH IN THE SEC
REPORTS OR DISCLOSED IN SCHEDULE 3.1(Q), THE COMPANY AND THE SUBSIDIARIES
MAINTAIN A SYSTEM OF INTERNAL ACCOUNTING CONTROLS SUFFICIENT TO PROVIDE
REASONABLE ASSURANCE THAT (I) TRANSACTIONS ARE EXECUTED IN ACCORDANCE WITH
MANAGEMENT'S GENERAL OR SPECIFIC AUTHORIZATIONS, (II) TRANSACTIONS ARE RECORDED
AS NECESSARY TO PERMIT PREPARATION OF FINANCIAL STATEMENTS IN CONFORMITY WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES 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 EXCHANGE ACT RULES 13A-14 AND
15D-14) FOR THE COMPANY AND DESIGNED SUCH DISCLOSURE CONTROLS AND PROCEDURES TO
ENSURE THAT MATERIAL INFORMATION RELATING TO THE COMPANY, INCLUDING ITS
SUBSIDIARIES, IS MADE KNOWN TO THE CERTIFYING OFFICERS BY OTHERS WITHIN THOSE
ENTITIES, PARTICULARLY DURING THE PERIOD IN WHICH THE COMPANY'S FORM 10-K OR
10-Q, AS THE CASE MAY BE, IS BEING PREPARED.  THE COMPANY'S CERTIFYING OFFICERS
HAVE EVALUATED THE EFFECTIVENESS OF THE COMPANY'S CONTROLS AND PROCEDURES IN
ACCORDANCE WITH ITEM 307 OF REGULATION S-K UNDER THE EXCHANGE ACT FOR THE
COMPANY'S MOST RECENTLY ENDED FISCAL QUARTER OR FISCAL YEAR-END (SUCH DATE, THE
"EVALUATION DATE").  THE COMPANY PRESENTED IN ITS MOST RECENTLY FILED FORM 10-K
OR FORM 10-Q THE CONCLUSIONS OF THE CERTIFYING OFFICERS ABOUT THE EFFECTIVENESS
OF THE DISCLOSURE CONTROLS AND PROCEDURES BASED ON THEIR EVALUATIONS AS OF THE
EVALUATION DATE.  SINCE THE EVALUATION DATE, THERE HAVE BEEN NO CHANGES IN THE
COMPANY'S INTERNAL CONTROLS THAT WOULD BE REQUIRED TO BE DISCLOSED PURSUANT TO
ITEM 308(C) OF REGULATION S-K UNDER THE EXCHANGE ACT OR, TO THE COMPANY'S
KNOWLEDGE, IN OTHER FACTORS THAT WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT ON THE COMPANY'S INTERNAL CONTROLS.

(R)                 CERTAIN FEES.  EXCEPT AS SPECIFIED IN SCHEDULE 3.1(R), 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 THIS AGREEMENT.  THE INVESTORS SHALL HAVE NO OBLIGATION WITH
RESPECT TO ANY FEES OR WITH RESPECT TO ANY CLAIMS (OTHER THAN SUCH FEES OR
COMMISSIONS OWED BY A INVESTOR PURSUANT TO WRITTEN AGREEMENTS EXECUTED BY SUCH
INVESTOR WHICH FEES OR COMMISSIONS SHALL BE THE SOLE RESPONSIBILITY OF SUCH
INVESTOR) 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 THIS AGREEMENT. 

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(S)                CERTAIN REGISTRATION MATTERS. ASSUMING THE ACCURACY OF THE
INVESTORS' REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 3.2(B)-(E), NO
REGISTRATION UNDER THE SECURITIES ACT IS REQUIRED FOR THE OFFER AND SALE OF THE
PREFERRED SHARES AND WARRANTS BY THE COMPANY TO THE INVESTORS UNDER THE
TRANSACTION DOCUMENTS.  EXCEPT AS DISCLOSED IN SCHEDULE 3.1(S), THE COMPANY HAS
NOT GRANTED OR AGREED TO GRANT TO ANY PERSON ANY RIGHTS (INCLUDING "PIGGY‑BACK"
REGISTRATION RIGHTS) TO HAVE ANY SECURITIES OF THE COMPANY REGISTERED WITH THE
COMMISSION OR ANY OTHER GOVERNMENTAL AUTHORITY THAT HAVE NOT BEEN SATISFIED.

(T)                 LISTING AND MAINTENANCE REQUIREMENTS.  EXCEPT AS SPECIFIED
IN THE SEC REPORTS, THE COMPANY HAS NOT, IN THE TWO YEARS PRECEDING THE DATE
HEREOF, RECEIVED NOTICE FROM ANY TRADING MARKET TO THE EFFECT THAT THE COMPANY
IS NOT IN COMPLIANCE WITH THE LISTING OR MAINTENANCE REQUIREMENTS THEREOF. 
EXCEPT AS SPECIFIED IN SCHEDULE 3.1(T), THE COMPANY IS, AND HAS NO REASON TO
BELIEVE THAT IT WILL NOT IN THE FORESEEABLE FUTURE CONTINUE TO BE, IN COMPLIANCE
WITH THE LISTING AND MAINTENANCE REQUIREMENTS FOR CONTINUED LISTING OF THE
COMMON STOCK ON THE TRADING MARKET ON WHICH THE COMMON STOCK IS CURRENTLY LISTED
OR QUOTED.  EXCEPT AS SPECIFIED IN SCHEDULE 3.1(T), THE ISSUANCE AND SALE OF THE
SECURITIES UNDER THE TRANSACTION DOCUMENTS DOES NOT CONTRAVENE THE RULES AND
REGULATIONS OF THE TRADING MARKET ON WHICH THE COMMON STOCK IS CURRENTLY LISTED
OR QUOTED, AND NO APPROVAL OF THE SHAREHOLDERS OF THE COMPANY THEREUNDER IS
REQUIRED FOR THE COMPANY TO ISSUE AND DELIVER TO THE INVESTORS THE SECURITIES
CONTEMPLATED BY TRANSACTION DOCUMENTS.

(U)                INVESTMENT COMPANY.  THE COMPANY IS NOT, AND IS NOT AN
AFFILIATE OF, AND IMMEDIATELY UPON RECEIPT AND APPLICATION OF THE PURCHASE PRICE
FOR THE SECURITIES AT CLOSING WILL NOT HAVE BECOME, AN "INVESTMENT COMPANY"
WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED.

(V)                APPLICATION OF TAKEOVER PROTECTIONS.  THE COMPANY HAS TAKEN
ALL NECESSARY ACTION, IF ANY, IN ORDER TO RENDER INAPPLICABLE ANY CONTROL SHARE
ACQUISITION, BUSINESS COMBINATION, POISON PILL (INCLUDING ANY DISTRIBUTION UNDER
A RIGHTS AGREEMENT) OR OTHER SIMILAR ANTI‑TAKEOVER PROVISION UNDER THE COMPANY'S
CERTIFICATE OF INCORPORATION (OR SIMILAR CHARTER DOCUMENTS) OR THE LAWS OF ITS
STATE OF INCORPORATION THAT IS OR COULD BECOME APPLICABLE TO THE INVESTORS AS A
RESULT OF ACTIONS BY THE INVESTORS AND THE COMPANY TO FULFILL THEIR OBLIGATIONS
OR EXERCISE THEIR RIGHTS UNDER THE TRANSACTION DOCUMENTS, INCLUDING WITHOUT
LIMITATION THE COMPANY'S ISSUANCE OF THE SECURITIES AND THE INVESTORS' OWNERSHIP
OF THE SECURITIES.

(W)              DISCLOSURE.  THE COMPANY HAS PROVIDED THE INVESTORS WITH ALL
APPLICABLE OR RELEVANT DOCUMENTS AND INFORMATION THAT THE INVESTORS HAVE
REQUESTED IN WRITING.  TRUE AND COMPLETE COPIES OF ALL DOCUMENTS LISTED IN THE
SCHEDULES TO THIS AGREEMENT HAVE BEEN MADE AVAILABLE OR PROVIDED TO THE
INVESTORS.  NO REPRESENTATION OR WARRANTY OF THE COMPANY IN THIS AGREEMENT
CONTAINS ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITS TO STATE A MATERIAL
FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED HEREIN OR THEREIN, IN
LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY ARE MADE, NOT MISLEADING.

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(X)                COMPLIANCE WITH ERISA.  (I)  EACH MEMBER OF THE ERISA GROUP
HAS FULFILLED ITS OBLIGATIONS UNDER THE MINIMUM FUNDING STANDARDS OF ERISA AND
THE CODE WITH RESPECT TO EACH PLAN AND IS IN COMPLIANCE IN ALL MATERIAL RESPECTS
WITH THE CURRENTLY APPLICABLE PROVISIONS OF ERISA AND THE CODE WITH RESPECT TO
EACH PLAN. NO MEMBER OF THE ERISA GROUP HAS (I) SOUGHT A WAIVER OF THE MINIMUM
FUNDING STANDARD UNDER SECTION 412 OF THE CODE IN RESPECT OF ANY PLAN, (II)
FAILED TO MAKE ANY REQUIRED CONTRIBUTION OR PAYMENT TO ANY PLAN OR MULTIEMPLOYER
PLAN OR IN RESPECT OF ANY BENEFIT ARRANGEMENT, OR MADE ANY AMENDMENT TO ANY PLAN
OR BENEFIT ARRANGEMENT, WHICH HAS RESULTED OR COULD RESULT IN THE IMPOSITION OF
A LIEN OR THE POSTING OF A BOND OR OTHER SECURITY UNDER ERISA OR THE CODE OR
(III) INCURRED ANY LIABILITY UNDER TITLE IV OF ERISA OTHER THAN A LIABILITY TO
THE PBGC FOR PREMIUMS UNDER SECTION 4007 OF ERISA.

                        (ii)        The benefit plans not covered under clause
(a) above (including profit sharing, deferred compensation, stock option,
employee stock purchase, bonus, retirement, health or insurance plans,
collectively the "Benefit Plans") relating to the employees of the Company are
duly registered where required by, and are in good standing in all material
respects under, all applicable laws.  All required employer and employee
contributions and premiums under the Benefit Plans to the date hereof have been
made, the fund or funds established under the Benefit Plans are funded in
accordance with applicable laws, and no past service funding liabilities exist
thereunder.

                        (iii)       No Benefit Plans have any unfunded
liabilities, either on a "going concern" or "winding up" basis and determined in
accordance with all applicable laws and actuarial practices and using actuarial
assumptions and methods that are reasonable in the circumstances. No event has
occurred and no condition exists with respect to any Benefit Plans that has
resulted or would reasonably be expected to result in any pension plan having
its registration revoked or wound up (in whole or in part) or refused for the
purposes of any applicable laws or being placed under the administration of any
relevant pension benefits regulatory authority or being required to pay any
taxes or penalties (in any material amounts) under any applicable laws.

(Y)                ABSENCE OF ANY UNDISCLOSED FINANCIAL LIABILITIES.  EXCEPT FOR
(I) THOSE LIABILITIES PROVIDED FOR IN THE COMPANY'S FINANCIAL STATEMENTS
(INCLUDING FOOTNOTES THERETO), (II) LIABILITIES DISCLOSED ON SCHEDULE 6.2(C) AND
(II) OTHER INDEBTEDNESS INCURRED IN THE ORDINARY COURSE OF BUSINESS SINCE THE
DATE OF ITS MOST RECENT SEC REPORT, THE COMPANY HAS NO INDEBTEDNESS OR OTHER
FINANCIAL LIABILITIES OF ANY KIND WHATSOEVER, WHETHER ACCRUED, CONTINGENT,
ABSOLUTE, DETERMINED, DETERMINABLE OR OTHERWISE, EXCEPT AS WOULD NOT,
INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT.

3.2              REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.  THE INVESTOR
HEREBY REPRESENTS AND WARRANTS TO THE COMPANY AS FOLLOWS:

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(A)                ORGANIZATION; AUTHORITY.  THE INVESTOR IS AN ENTITY DULY
ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE
JURISDICTION OF ITS ORGANIZATION WITH THE REQUISITE CORPORATE OR PARTNERSHIP
POWER AND AUTHORITY TO ENTER INTO AND TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY THE APPLICABLE TRANSACTION DOCUMENTS AND OTHERWISE TO CARRY OUT
ITS OBLIGATIONS THEREUNDER. THE PURCHASE OF THE SECURITIES BY SUCH INVESTOR HAS
BEEN DULY AUTHORIZED BY SUCH INVESTOR.  EACH OF THIS AGREEMENT AND THE
REGISTRATION RIGHTS AGREEMENT HAS BEEN DULY EXECUTED BY SUCH INVESTOR, AND WHEN
DELIVERED BY SUCH INVESTOR IN ACCORDANCE WITH TERMS HEREOF, WILL CONSTITUTE THE
VALID AND LEGALLY BINDING OBLIGATION OF SUCH INVESTOR, ENFORCEABLE AGAINST IT IN
ACCORDANCE WITH ITS TERMS, EXCEPT AS SUCH ENFORCEABILITY MAY BE LIMITED BY
APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM, LIQUIDATION OR
SIMILAR LAWS RELATING TO, OR AFFECTING GENERALLY THE ENFORCEMENT OF, CREDITORS'
RIGHTS AND REMEDIES OR BY OTHER EQUITABLE PRINCIPLES OF GENERAL APPLICATION.

(B)               INVESTMENT INTENT.  SUCH INVESTOR IS ACQUIRING THE SECURITIES
AS PRINCIPAL FOR ITS OWN ACCOUNT FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO OR FOR DISTRIBUTING OR RESELLING SUCH SECURITIES OR ANY PART THEREOF,
WITHOUT PREJUDICE, HOWEVER, TO SUCH INVESTOR'S RIGHT AT ALL TIMES TO SELL OR
OTHERWISE DISPOSE OF ALL OR ANY PART OF SUCH SECURITIES IN COMPLIANCE WITH
APPLICABLE FEDERAL AND STATE SECURITIES LAWS.  SUBJECT TO THE IMMEDIATELY
PRECEDING SENTENCE, NOTHING CONTAINED HEREIN SHALL BE DEEMED A REPRESENTATION OR
WARRANTY BY SUCH INVESTOR TO HOLD THE SECURITIES FOR ANY PERIOD OF TIME.  SUCH
INVESTOR IS ACQUIRING THE SECURITIES HEREUNDER IN THE ORDINARY COURSE OF ITS
BUSINESS.  SUCH INVESTOR DOES NOT HAVE ANY AGREEMENT OR UNDERSTANDING, DIRECTLY
OR INDIRECTLY, WITH ANY PERSON TO DISTRIBUTE ANY OF THE SECURITIES.

(C)                INVESTOR STATUS.  AT THE TIME SUCH INVESTOR WAS OFFERED THE
SECURITIES, IT WAS, AND AT THE DATE HEREOF IT IS, AND ON EACH DATE ON WHICH IT
EXERCISES THE WARRANT IT WILL BE, AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(A) UNDER THE SECURITIES ACT.  SUCH INVESTOR IS NOT A REGISTERED
BROKER-DEALER UNDER SECTION 15 OF THE EXCHANGE ACT.

(D)               GENERAL SOLICITATION.  SUCH INVESTOR IS NOT PURCHASING THE
SECURITIES AS A RESULT OF ANY ADVERTISEMENT, ARTICLE, NOTICE OR OTHER
COMMUNICATION REGARDING THE SECURITIES PUBLISHED IN ANY NEWSPAPER, MAGAZINE OR
SIMILAR MEDIA OR BROADCAST OVER TELEVISION OR RADIO OR PRESENTED AT ANY SEMINAR
OR ANY OTHER GENERAL SOLICITATION OR GENERAL ADVERTISEMENT.

(E)                ACCESS TO INFORMATION.  SUCH INVESTOR ACKNOWLEDGES THAT IT
HAS REVIEWED THE DISCLOSURE MATERIALS AND HAS BEEN AFFORDED (I) THE OPPORTUNITY
TO ASK SUCH QUESTIONS AS IT HAS DEEMED NECESSARY OF, AND TO RECEIVE ANSWERS
FROM, REPRESENTATIVES OF THE COMPANY CONCERNING THE TERMS AND CONDITIONS OF THE
OFFERING OF THE SECURITIES AND THE MERITS AND RISKS OF INVESTING IN THE
SECURITIES; (II) ACCESS TO INFORMATION ABOUT THE COMPANY AND THE SUBSIDIARIES
AND THEIR FINANCIAL CONDITION, RESULTS OF OPERATIONS, BUSINESS, PROPERTIES,
MANAGEMENT AND PROSPECTS SUFFICIENT TO ENABLE IT TO EVALUATE ITS INVESTMENT; AND
(III) THE OPPORTUNITY TO OBTAIN SUCH ADDITIONAL INFORMATION THAT THE COMPANY
POSSESSES OR CAN ACQUIRE WITHOUT UNREASONABLE EFFORT OR EXPENSE THAT IS
NECESSARY TO MAKE AN INFORMED INVESTMENT DECISION WITH RESPECT TO THE
INVESTMENT.  NEITHER SUCH INQUIRIES NOR ANY OTHER INVESTIGATION CONDUCTED BY OR
ON BEHALF OF SUCH INVESTOR OR ITS REPRESENTATIVES OR COUNSEL SHALL MODIFY, AMEND
OR AFFECT SUCH INVESTOR'S RIGHT TO RELY ON THE TRUTH, ACCURACY AND COMPLETENESS
OF THE DISCLOSURE MATERIALS AND THE COMPANY'S REPRESENTATIONS AND WARRANTIES
CONTAINED IN THE TRANSACTION DOCUMENTS.

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            THE COMPANY ACKNOWLEDGES AND AGREES THAT NO INVESTOR HAS MADE OR
MAKES ANY REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREBY OTHER THAN THOSE SPECIFICALLY SET FORTH IN THIS SECTION 3.2.

ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

4.1              TRANSFER RESTRICTIONS.

                        (A)        THE SECURITIES MAY ONLY BE DISPOSED OF IN
COMPLIANCE WITH STATE AND FEDERAL SECURITIES LAWS.  IN CONNECTION WITH ANY
TRANSFER OF THE SECURITIES OTHER THAN PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT, TO THE COMPANY, TO AN AFFILIATE OF AN INVESTOR OR IN CONNECTION WITH
A PLEDGE AS CONTEMPLATED IN SECTION 4.1(B), THE COMPANY MAY REQUIRE THE
TRANSFEROR THEREOF TO PROVIDE TO THE COMPANY AN OPINION OF COUNSEL SELECTED BY
THE TRANSFEROR, THE FORM AND SUBSTANCE OF WHICH OPINION SHALL BE REASONABLY
SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH TRANSFER DOES NOT REQUIRE
REGISTRATION OF SUCH TRANSFERRED SECURITIES UNDER THE SECURITIES ACT.

                        (B)        CERTIFICATES EVIDENCING THE SECURITIES WILL
CONTAIN THE FOLLOWING LEGEND, UNTIL SUCH TIME AS THEY ARE NOT REQUIRED UNDER
SECTION 4.1(C):

[NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON CONVERSION OR
EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT
BEEN REGISTERED] WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

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                        THE COMPANY ACKNOWLEDGES AND AGREES THAT AN INVESTOR MAY
FROM TIME TO TIME PLEDGE, AND/OR GRANT A SECURITY INTEREST IN SOME OR ALL OF THE
SECURITIES PURSUANT TO A BONA FIDE MARGIN AGREEMENT IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT AND, IF REQUIRED UNDER THE TERMS OF SUCH AGREEMENT OR
ACCOUNT, SUCH INVESTOR MAY TRANSFER PLEDGED OR SECURED SECURITIES TO THE
PLEDGEES OR SECURED PARTIES.  SUCH A PLEDGE OR TRANSFER WOULD NOT BE SUBJECT TO
APPROVAL OR CONSENT OF THE COMPANY AND NO LEGAL OPINION OF LEGAL COUNSEL TO THE
PLEDGEE, SECURED PARTY OR PLEDGOR SHALL BE REQUIRED IN CONNECTION WITH THE
PLEDGE, BUT SUCH LEGAL OPINION MAY BE REQUIRED IN CONNECTION WITH A SUBSEQUENT
TRANSFER FOLLOWING DEFAULT BY THE INVESTOR TRANSFEREE OF THE PLEDGE.  NO NOTICE
SHALL BE REQUIRED OF SUCH PLEDGE.  AT THE APPROPRIATE INVESTOR'S EXPENSE, THE
COMPANY WILL EXECUTE AND DELIVER SUCH REASONABLE DOCUMENTATION AS A PLEDGEE OR
SECURED PARTY OF SECURITIES MAY REASONABLY REQUEST IN CONNECTION WITH A PLEDGE
OR TRANSFER OF THE SECURITIES INCLUDING THE PREPARATION AND FILING OF ANY
REQUIRED PROSPECTUS SUPPLEMENT UNDER RULE 424(B)(3) OF THE SECURITIES ACT OR
OTHER APPLICABLE PROVISION OF THE SECURITIES ACT TO APPROPRIATELY AMEND THE LIST
OF SELLING STOCKHOLDERS THEREUNDER.

                        (C)        AT THE REQUEST OF AN INVESTOR, THE COMPANY
SHALL USE ITS REASONABLE BEST EFFORTS TO CAUSE CERTIFICATES EVIDENCING
UNDERLYING SHARES AND WARRANT SHARES NOT TO CONTAIN ANY LEGEND (INCLUDING THE
LEGEND SET FORTH IN SECTION 4.1(B)): (I) WHILE A REGISTRATION STATEMENT
(INCLUDING THE REGISTRATION STATEMENT) COVERING SUCH UNDERLYING SHARES OR
WARRANT SHARES IS THEN EFFECTIVE, OR (II) FOLLOWING A SALE OR TRANSFER OF SUCH
SECURITIES PURSUANT TO RULE 144 (ASSUMING THE TRANSFEROR IS NOT AN AFFILIATE OF
THE COMPANY), OR (III) WHILE SUCH SECURITIES ARE ELIGIBLE FOR SALE UNDER RULE
144(K). 

4.2              FURNISHING OF INFORMATION.  AS LONG AS ANY INVESTOR OWNS
SECURITIES, THE COMPANY COVENANTS TO TIMELY FILE (OR OBTAIN EXTENSIONS IN
RESPECT THEREOF AND FILE WITHIN THE APPLICABLE GRACE PERIOD) ALL REPORTS
REQUIRED TO BE FILED BY THE COMPANY AFTER THE DATE HEREOF PURSUANT TO THE
EXCHANGE ACT.  AS LONG AS ANY INVESTOR OWNS SECURITIES, IF THE COMPANY IS NOT
REQUIRED TO FILE REPORTS PURSUANT TO SUCH LAWS, IT WILL PREPARE AND FURNISH TO
THE INVESTORS AND MAKE PUBLICLY AVAILABLE IN ACCORDANCE WITH RULE 144(C) SUCH
INFORMATION AS IS REQUIRED FOR THE INVESTORS TO SELL THE UNDERLYING SHARES AND
WARRANT SHARES UNDER RULE 144. THE COMPANY FURTHER COVENANTS THAT IT WILL TAKE
SUCH FURTHER ACTION AS ANY HOLDER OF SECURITIES MAY REASONABLY REQUEST, ALL TO
THE EXTENT REQUIRED FROM TIME TO TIME TO ENABLE SUCH PERSON TO SELL THE
UNDERLYING SHARES AND WARRANT SHARES WITHOUT REGISTRATION UNDER THE SECURITIES
ACT WITHIN THE LIMITATION OF THE EXEMPTIONS PROVIDED BY RULE 144.

4.3              SUBSEQUENT SECURITIES OFFERINGS.

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(A)    PRIOR TO (I) THE FIRST YEAR ANNIVERSARY OF THE EFFECTIVE DATE, (II) THE
DATE THAT THE PREFERRED SHARES HAVE BEEN CONVERTED ENTIRELY INTO COMMON STOCK,
OR (III) CONSUMMATION OF AN EVENT, AS DEFINED IN SECTION 3(C) OF THE ARTICLES OF
AMENDMENT, WHICHEVER IS FIRST TO OCCUR, IN THE EVENT THE COMPANY, DIRECTLY OR
INDIRECTLY, OFFERS, SELLS, GRANTS ANY OPTION TO PURCHASE, OR OTHERWISE DISPOSES
OF (OR ANNOUNCES ANY OFFER, SALE, GRANT OR ANY OPTION TO PURCHASE OR OTHER
DISPOSITION OF) ANY COMMON STOCK OR COMMON STOCK EQUIVALENTS OR ANY OF ITS
SUBSIDIARIES' EQUITY OR COMMON STOCK EQUIVALENTS IN EXCHANGE FOR CASH OR CASH
EQUIVALENTS IN A CAPITAL-RAISING TRANSACTION (SUCH OFFER, SALE, GRANT,
DISPOSITION OR ANNOUNCEMENT BEING REFERRED TO AS "SUBSEQUENT PLACEMENT"), THE
COMPANY SHALL DELIVER TO EACH INVESTOR A WRITTEN NOTICE (EACH, A "SUBSEQUENT
PLACEMENT NOTICE") OF ITS INTENTION TO EFFECT SUCH SUBSEQUENT PLACEMENT, WHICH
SPECIFIES IN REASONABLE DETAIL ALL OF THE MATERIAL TERMS OF SUCH SUBSEQUENT
PLACEMENT, THE AMOUNT OF PROCEEDS INTENDED TO BE RAISED THEREUNDER, THE NAMES OF
THE INVESTORS (INCLUDING THE INVESTMENT MANAGER OF SUCH INVESTORS, IF ANY) AND
THE INVESTMENT BANKERS, IF ANY, WITH WHOM SUCH SUBSEQUENT PLACEMENT IS PROPOSED
TO BE EFFECTED, AND ATTACHED TO WHICH SHALL BE A TERM SHEET OR SIMILAR
DOCUMENT.  EACH INVESTOR SHALL HAVE UNTIL 6:30 P.M. (NEW YORK CITY TIME) ON THE
FIFTH TRADING DAY AFTER ITS RECEIPT OF THE SUBSEQUENT PLACEMENT NOTICE TO NOTIFY
COMPANY OF ITS INTENTION TO PROVIDE, SUBJECT TO COMPLETION OF MUTUALLY
ACCEPTABLE DOCUMENTATION, ALL OF SUCH FINANCING ON THE SAME TERMS AS SET FORTH
IN THE SUBSEQUENT PLACEMENT NOTICE.  IN THE EVENT THAT THE INVESTORS DO NOT
TIMELY ELECT TO PROVIDE THE ENTIRE FINANCING SUBJECT TO THE SUBSEQUENT PLACEMENT
NOTICE AND THE COMPANY SHALL NOT HAVE CONSUMMATED THE PORTION OF THE SUBSEQUENT
PLACEMENT FOR WHICH SUCH ELECTIONS SHALL NOT HAVE BEEN SO MADE ON THE TERMS AND
TO THE PERSONS SPECIFIED IN THE SUBSEQUENT PLACEMENT NOTICE WITHIN 90 DAYS
FOLLOWING THE EXPIRATION OF THE TIME TO SO ELECT, THE COMPANY SHALL PROVIDE EACH
INVESTOR WITH A SECOND SUBSEQUENT PLACEMENT NOTICE AND EACH INVESTOR WILL AGAIN
HAVE THE RIGHT OF FIRST REFUSAL SET FORTH IN THIS SECTION.  IF THE INVESTORS
INDICATE IN THE AGGREGATE A WILLINGNESS TO PROVIDE FINANCING IN EXCESS OF THE
AMOUNT SET FORTH IN THE SUBSEQUENT PLACEMENT NOTICE, THEN EACH INVESTOR WILL BE
ENTITLED TO PROVIDE FINANCING PURSUANT TO SUCH SUBSEQUENT PLACEMENT NOTICE UP TO
AN AMOUNT OF ALL SUCH PROCEEDS EQUAL TO SUCH INVESTOR'S PRO RATA PORTION OF ALL
PREFERRED SHARES PURCHASED HEREUNDER.

(B)   THE COMPANY'S OBLIGATIONS UNDER THIS SECTION 4.3 SHALL NOT APPLY TO ANY
GRANT OR ISSUANCE BY THE COMPANY OF ANY OF THE FOLLOWING: (I) THE ISSUANCE OF
SECURITIES UPON THE EXERCISE OR CONVERSION OF ANY COMMON STOCK EQUIVALENTS
ISSUED BY THE COMPANY PRIOR TO THE DATE OF THIS AGREEMENT, (II) THE ISSUANCE OF
COMMON STOCK OR THE GRANT OF OPTIONS OR WARRANTS FOR COMMON STOCK UNDER ANY DULY
AUTHORIZED COMPANY STOCK OPTION, RESTRICTED STOCK PLAN OR STOCK PURCHASE PLAN
WHETHER NOW EXISTING OR APPROVED BY THE COMPANY AND ITS STOCKHOLDERS IN THE
FUTURE, (III) THE ISSUANCE OF COMMON STOCK EQUIVALENTS IN CONNECTION WITH A
MERGER, ACQUISITION OR OTHER BUSINESS COMBINATION OR STRATEGIC PARTNERING OR
JOINT VENTURE TRANSACTION OR THE EXERCISE OR CONVERSION OF SUCH SECURITIES, (IV)
THE ISSUANCE OF COMMON STOCK EQUIVALENTS IN CONNECTION WITH THE SETTLEMENT OF
CLAIMS WHICH ARE THE SUBJECT OF LAW SUITS, ARBITRATIONS AND SIMILAR PROCEEDINGS
OR THE CONVERSION OR EXERCISE OF SUCH SECURITIES, OR (V) THE ISSUANCE OF
WARRANTS FOR COMMON STOCK TO EQUIPMENT LESSORS IN CONNECTION WITH CAPITAL LEASE
TRANSACTIONS OR THE EXERCISE OF SUCH WARRANTS.

4.4              INTEGRATION.  THE COMPANY SHALL NOT, AND SHALL USE ITS BEST
EFFORTS TO ENSURE THAT NO AFFILIATE OF THE COMPANY SHALL, SELL, OFFER FOR SALE
OR SOLICIT OFFERS TO BUY OR OTHERWISE NEGOTIATE IN RESPECT OF ANY SECURITY (AS
DEFINED IN SECTION 2 OF THE SECURITIES ACT) THAT WOULD BE INTEGRATED WITH THE
OFFER OR SALE OF THE SECURITIES IN A MANNER THAT WOULD REQUIRE THE REGISTRATION
UNDER THE SECURITIES ACT OF THE SALE OF THE SECURITIES TO THE INVESTORS, OR THAT
WOULD BE INTEGRATED WITH THE OFFER OR SALE OF THE SECURITIES FOR PURPOSES OF THE
RULES AND REGULATIONS OF ANY TRADING MARKET IN A MANNER THAT WOULD REQUIRE
STOCKHOLDER APPROVAL OF THE SALE OF THE SECURITIES TO THE INVESTORS.

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4.5              RESERVATION OF SHARES.  THE COMPANY SHALL MAINTAIN A RESERVE
FROM ITS DULY AUTHORIZED SHARES OF COMMON STOCK TO COMPLY WITH ITS CONVERSION
OBLIGATIONS UNDER THE PREFERRED SHARES AND ITS EXERCISE OBLIGATIONS UNDER THE
WARRANTS.  IF ON ANY DATE THE COMPANY WOULD BE, IF NOTICE OF CONVERSION WERE TO
BE DELIVERED ON SUCH DATE, PRECLUDED FROM ISSUING THE NUMBER OF (I) UNDERLYING
SHARES, AS THE CASE MAY BE, ISSUABLE UPON CONVERSION IN FULL OF THE PREFERRED
SHARES OR (II) WARRANT SHARES, AS THE CASE MAY BE, ISSUABLE UPON EXERCISE IN
FULL OF THE WARRANTS, DUE TO THE UNAVAILABILITY OF A SUFFICIENT NUMBER OF
AUTHORIZED BUT UNISSUED OR RESERVED SHARES OF COMMON STOCK, THEN THE BOARD OF
DIRECTORS OF THE COMPANY SHALL PROMPTLY PREPARE AND MAIL TO THE STOCKHOLDERS OF
THE COMPANY PROXY MATERIALS OR OTHER APPLICABLE MATERIALS REQUESTING
AUTHORIZATION TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION OR OTHER
ORGANIZATIONAL DOCUMENT TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK WHICH
THE COMPANY IS AUTHORIZED TO ISSUE SO AS TO PROVIDE ENOUGH SHARES FOR ISSUANCE
OF THE UNDERLYING SHARES AND WARRANT SHARES.  IN CONNECTION THEREWITH, THE BOARD
OF DIRECTORS SHALL (A) ADOPT PROPER RESOLUTIONS AUTHORIZING SUCH INCREASE, (B)
RECOMMEND TO AND OTHERWISE USE ITS BEST EFFORTS TO PROMPTLY AND DULY OBTAIN
STOCKHOLDER APPROVAL TO CARRY OUT SUCH RESOLUTIONS (AND HOLD A SPECIAL MEETING
OF THE STOCKHOLDERS AS SOON AS PRACTICABLE, BUT IN ANY EVENT NOT LATER THAN THE
60TH DAY AFTER DELIVERY OF THE PROXY OR OTHER APPLICABLE MATERIALS RELATING TO
SUCH MEETING) AND (C) WITHIN FIVE BUSINESS DAYS OF OBTAINING SUCH STOCKHOLDER
AUTHORIZATION, FILE AN APPROPRIATE AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION OR OTHER ORGANIZATIONAL DOCUMENT TO EVIDENCE SUCH INCREASE.

4.6              INDEMNIFICATION OF INVESTORS.  IN ADDITION TO THE INDEMNITY
PROVIDED IN THE REGISTRATION RIGHTS AGREEMENT, THE COMPANY WILL INDEMNIFY AND
HOLD THE INVESTORS AND THEIR DIRECTORS, OFFICERS, SHAREHOLDERS, PARTNERS,
EMPLOYEES AND AGENTS (EACH, AN "INVESTOR PARTY") HARMLESS FROM ANY AND ALL
LOSSES, LIABILITIES, OBLIGATIONS, CLAIMS, CONTINGENCIES, DAMAGES, COSTS AND
EXPENSES, INCLUDING ALL JUDGMENTS, AMOUNTS PAID IN SETTLEMENTS, COURT COSTS AND
REASONABLE ATTORNEYS' FEES AND COSTS OF INVESTIGATION (COLLECTIVELY, "LOSSES")
THAT ANY SUCH INVESTOR PARTY MAY SUFFER OR INCUR AS A RESULT OF OR RELATING TO
ANY MISREPRESENTATION, BREACH OR INACCURACY OF ANY REPRESENTATION, WARRANTY,
COVENANT OR AGREEMENT MADE BY THE COMPANY IN ANY TRANSACTION DOCUMENT.  IN
ADDITION TO THE INDEMNITY CONTAINED HEREIN, THE COMPANY WILL REIMBURSE EACH
INVESTOR PARTY FOR ITS REASONABLE LEGAL AND OTHER EXPENSES (INCLUDING THE COST
OF ANY INVESTIGATION, PREPARATION AND TRAVEL IN CONNECTION THEREWITH) INCURRED
IN CONNECTION THEREWITH, AS SUCH EXPENSES ARE INCURRED.  NOTWITHSTANDING THE
FOREGOING, THE COMPANY'S AGGREGATE OBLIGATIONS UNDER THIS SECTION 4.6 SHALL NOT
EXCEED THE SUM OF $5,500,000.

4.7              NON-PUBLIC INFORMATION.  THE COMPANY AGREES TO MAKE MANAGEMENT
AVAILABLE TO THE INVESTORS FOR PERIODIC UPDATES ON PROGRESS WITH RESPECT TO
MATERIAL TRANSACTIONS PROVIDED THE INVESTORS SHALL HAVE EXECUTED A WRITTEN
AGREEMENT REGARDING THE CONFIDENTIALITY AND USE OF SUCH INFORMATION, AND,
PROVIDED FURTHER, THAT THE INVESTORS MAY AT ANY TIME WAIVE THE RIGHT TO RECEIVE
SUCH PERIODIC UPDATES.

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4.8              LISTING OF SECURITIES.  THE COMPANY AGREES, (I) IF THE COMPANY
APPLIES TO HAVE THE COMMON STOCK TRADED ON ANY OTHER TRADING MARKET, IT WILL
INCLUDE IN SUCH APPLICATION THE UNDERLYING SHARES AND WARRANT SHARES, AND WILL
TAKE SUCH OTHER ACTION AS IS NECESSARY TO CAUSE THE UNDERLYING SHARES AND
WARRANT SHARES TO BE LISTED ON SUCH OTHER TRADING MARKET AS PROMPTLY AS
POSSIBLE, AND (II) IT WILL TAKE ALL ACTION REASONABLY NECESSARY TO CONTINUE THE
LISTING AND TRADING OF ITS COMMON STOCK ON A TRADING MARKET AND WILL COMPLY IN
ALL MATERIAL RESPECTS WITH THE COMPANY'S REPORTING, FILING AND OTHER OBLIGATIONS
UNDER THE BYLAWS OR RULES OF THE TRADING MARKET.

4.9              USE OF PROCEEDS.  THE COMPANY WILL USE THE NET PROCEEDS FROM
THE SALE OF THE SECURITIES HEREUNDER FOR WORKING CAPITAL PURPOSES AND NOT TO
REDEEM ANY COMMON STOCK OR COMMON STOCK EQUIVALENTS.

4.10          BOARD OBSERVER RIGHTS.  IF A "DEEMED LIQUIDATION" AS DEFINED IN
THE ARTICLES OF AMENDMENT SHALL NOT HAVE OCCURRED BY THE FIRST ANNIVERSARY OF
THE CLOSING DATE, THE INVESTORS SHALL COLLECTIVELY BE ENTITLED TO DESIGNATE ONE
PERSON TO ATTEND ALL MEETINGS OF THE COMPANY'S BOARD OF DIRECTORS, THE AUDIT
COMMITTEE (EXCLUDING, HOWEVER, EXECUTIVE SESSIONS OF THE AUDIT COMMITTEE) OF THE
BOARD OF DIRECTORS AND ANY EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS THAT
MAY HEREAFTER BE CREATED IN A NONVOTING OBSERVER CAPACITY AND, IN THIS RESPECT,
THE COMPANY SHALL GIVE SUCH DESIGNEE COPIES OF ALL NOTICES, MINUTES, CONSENTS,
AND OTHER MATERIALS THAT IT PROVIDES TO ITS DIRECTORS AT THE SAME TIME AND IN
THE SAME MANNER AS PROVIDED TO SUCH DIRECTORS; PROVIDED, HOWEVER, THAT SUCH
DESIGNEE SHALL ENTER INTO A WRITTEN CONFIDENTIALITY AGREEMENT AND AGREE TO HOLD
IN CONFIDENCE AND TRUST AND TO ACT IN A FIDUCIARY MANNER WITH RESPECT TO ALL
INFORMATION SO PROVIDED; AND PROVIDED FURTHER, THAT THE COMPANY RESERVES THE
RIGHT TO WITHHOLD ANY INFORMATION AND TO EXCLUDE SUCH DESIGNEE FROM ANY MEETING
OR PORTION THEREOF IF ACCESS TO SUCH INFORMATION OR ATTENDANCE AT SUCH MEETING
COULD, IN THE REASONABLE DETERMINATION OF THE CHAIRMAN OR THE APPLICABLE
COMMITTEE CHAIR, ADVERSELY AFFECT THE AVAILABILITY OF ANY ATTORNEY-CLIENT
PRIVILEGE, RESULT IN DISCLOSURE OF TRADE SECRETS OR RESULT IN A CONFLICT OF
INTEREST WITH THE INVESTORS.  THE DESIGNEE MAY AT ANY TIME WAIVE THE RIGHT TO
ATTEND THE MEETINGS AND RECEIVE THE MATERIALS SPECIFIED IN THIS SECTION 4.10.  

ARTICLE V. 

CONDITIONS PRECEDENT TO CLOSING

 

5.1              CONDITIONS PRECEDENT TO THE OBLIGATIONS OF AN INVESTOR TO
PURCHASE SECURITIES.  THE OBLIGATION OF EACH INVESTOR TO ACQUIRE SECURITIES AT
THE CLOSING IS SUBJECT TO THE SATISFACTION OR WAIVER BY SUCH INVESTOR, AT OR
BEFORE THE CLOSING, OF EACH OF THE FOLLOWING CONDITIONS:

(A)                REPRESENTATIONS AND WARRANTIES.  THE REPRESENTATIONS AND
WARRANTIES OF THE COMPANY CONTAINED HEREIN SHALL BE TRUE AND CORRECT AS OF THE
DATE WHEN MADE AND AS OF THE CLOSING AS THOUGH MADE ON AND AS OF SUCH DATE;

(B)               PERFORMANCE.  THE COMPANY SHALL HAVE PERFORMED, SATISFIED AND
COMPLIED WITH ALL COVENANTS, AGREEMENTS AND CONDITIONS REQUIRED BY THE
TRANSACTION DOCUMENTS TO BE PERFORMED, SATISFIED OR COMPLIED WITH BY IT AT OR
PRIOR TO THE CLOSING;

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(C)                OFFICER'S CERTIFICATE.  A CERTIFICATE EXECUTED BY A DULY
AUTHORIZED OFFICER OF THE COMPANY CERTIFYING THAT ALL REPRESENTATIONS AND
WARRANTIES MADE BY THE COMPANY AND INFORMATION FURNISHED BY THE COMPANY IN ANY
SCHEDULES TO THIS AGREEMENT, ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF
THE CLOSING DATE, AND ALL COVENANTS, AGREEMENTS AND OBLIGATIONS REQUIRED BY THIS
AGREEMENT TO BE PERFORMED OR COMPLIED WITH BY THE COMPANY, PRIOR TO OR AT THE
CLOSING, HAVE BEEN PERFORMED OR COMPLIED WITH IN ALL MATERIAL RESPECTS;

(D)               NO INJUNCTION.  NO STATUTE, RULE, REGULATION, EXECUTIVE ORDER,
DECREE, RULING OR INJUNCTION SHALL HAVE BEEN ENACTED, ENTERED, PROMULGATED OR
ENDORSED BY ANY COURT OR GOVERNMENTAL AUTHORITY OF COMPETENT JURISDICTION THAT
PROHIBITS THE CONSUMMATION OF ANY OF THE TRANSACTIONS CONTEMPLATED BY THE
TRANSACTION DOCUMENTS;

(E)                ADVERSE CHANGES.  SINCE THE DATE OF EXECUTION OF THIS
AGREEMENT, NO EVENT OR SERIES OF EVENTS SHALL HAVE OCCURRED THAT HAS HAD OR
WOULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT;

(F)                 NO SUSPENSIONS OF TRADING IN COMMON STOCK; LISTING.  TRADING
IN THE COMMON STOCK SHALL NOT HAVE BEEN SUSPENDED BY THE COMMISSION OR ANY
TRADING MARKET (EXCEPT FOR ANY SUSPENSIONS OF TRADING OF NOT MORE THAN ONE
TRADING DAY SOLELY TO PERMIT DISSEMINATION OF MATERIAL INFORMATION REGARDING THE
COMPANY) AT ANY TIME SINCE THE DATE OF EXECUTION OF THIS AGREEMENT, AND THE
COMMON STOCK SHALL HAVE BEEN AT ALL TIMES SINCE SUCH DATE LISTED FOR TRADING ON
A TRADING MARKET; AND

(G)                COMPANY DELIVERABLES.  THE COMPANY SHALL HAVE DELIVERED THE
COMPANY DELIVERABLES IN ACCORDANCE WITH SECTION 2.2(A).

5.2              CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY TO SELL
SECURITIES.  THE OBLIGATION OF THE COMPANY TO SELL SECURITIES AT THE CLOSING IS
SUBJECT TO THE SATISFACTION OR WAIVER BY THE COMPANY, AT OR BEFORE THE CLOSING,
OF EACH OF THE FOLLOWING CONDITIONS:

(A)                REPRESENTATIONS AND WARRANTIES.  THE REPRESENTATIONS AND
WARRANTIES OF EACH INVESTOR CONTAINED HEREIN SHALL BE TRUE AND CORRECT AS OF THE
DATE WHEN MADE AND AS OF THE CLOSING DATE AS THOUGH MADE ON AND AS OF SUCH DATE;

(B)               PERFORMANCE.  EACH INVESTOR SHALL HAVE PERFORMED, SATISFIED
AND COMPLIED IN ALL MATERIAL RESPECTS WITH ALL COVENANTS, AGREEMENTS AND
CONDITIONS REQUIRED BY THE TRANSACTION DOCUMENTS TO BE PERFORMED, SATISFIED OR
COMPLIED WITH BY SUCH INVESTOR AT OR PRIOR TO THE CLOSING;

(C)                NO INJUNCTION.  NO STATUTE, RULE, REGULATION, EXECUTIVE
ORDER, DECREE, RULING OR INJUNCTION SHALL HAVE BEEN ENACTED, ENTERED,
PROMULGATED OR ENDORSED BY ANY COURT OR GOVERNMENTAL AUTHORITY OF COMPETENT
JURISDICTION THAT PROHIBITS THE CONSUMMATION OF ANY OF THE TRANSACTIONS
CONTEMPLATED BY THE TRANSACTION DOCUMENTS; AND

(D)               INVESTORS DELIVERABLES.  EACH INVESTOR SHALL HAVE DELIVERED
ITS INVESTOR DELIVERABLES IN ACCORDANCE WITH SECTION 2.2(B).

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ARTICLE VI.
NEGATIVE COVENANTS OF THE COMPANY

The Company hereby agrees that, from and after the date hereof until the date
that the Securities shall no longer be outstanding, the Company shall be bound
according to the restrictions set forth in each of following negative covenants
unless any such restriction shall have been expressly waived in writing by the
Investors:

6.1              RESTRICTED PAYMENTS AND DIVIDENDS.  THE COMPANY SHALL NOT MAKE
ANY RESTRICTED PAYMENT.  SO LONG AS ANY OF THE SECURITIES ARE OUTSTANDING, THE
COMPANY SHALL NOT DECLARE, PAY OR MAKE ANY PROVISION FOR ANY CASH DIVIDEND OR
CASH DISTRIBUTION WITH RESPECT TO THE COMMON STOCK OR PREFERRED STOCK OF THE
COMPANY, WITHOUT FIRST OBTAINING THE APPROVAL OF THE INVESTORS.

6.2              DEBT.  NEITHER THE COMPANY NOR ANY SUBSIDIARY SHALL CREATE,
INCUR, ASSUME, BECOME OR BE LIABLE IN ANY MANNER IN RESPECT OF, OR SUFFER TO
EXIST, ANY DEBT AGGREGATING IN EXCESS OF $1,500.000 EXCEPT (A) DEBT IN AN
AGGREGATE AMOUNT EQUAL TO THE SUM OF THE AMOUNT OUTSTANDING AND THE AMOUNT
AVAILABLE TO THE COMPANY UNDER ITS EXISTING CREDIT FACILITIES, AS SHOWN ON
SCHEDULE 6.2(A), (B) TRADE PAYABLES INCURRED AND PAID IN THE ORDINARY COURSE OF
BUSINESS, (C) CONTINGENT LIABILITIES IN EXISTENCE ON THE DATE HEREOF, AS SHOWN
ON SCHEDULE 6.2(C), (D) CONTINGENT LIABILITIES RESULTING FROM THE ENDORSEMENT OF
NEGOTIABLE INSTRUMENTS FOR COLLECTION IN THE ORDINARY COURSE OF BUSINESS, AND
(E) DEBT INCURRED TO FINANCE THE ACQUISITION OF FIXED OR CAPITAL ASSETS (WHETHER
PURSUANT TO A LOAN, CAPITAL LEASE OBLIGATION OR OTHERWISE), PROVIDED THAT SUCH
DEBT IS INCURRED SIMULTANEOUSLY WITH SUCH ACQUISITION.

6.3              AMENDMENT OF ORGANIZATIONAL DOCUMENTS.  THE COMPANY SHALL NOT
PERMIT ANY AMENDMENT TO ITS ARTICLES OF INCORPORATION SO AS TO ADVERSELY AFFECT
THE RIGHTS OR PRIVILEGES GRANTED UNDER THE PREFERRED SHARES.

6.4              TRANSACTIONS WITH AFFILIATES.  THE COMPANY SHALL NOT, DIRECTLY
OR INDIRECTLY, PAY ANY FUNDS TO OR FOR THE ACCOUNT OF, MAKE ANY INVESTMENT
(WHETHER BY ACQUISITION OF STOCK OR INDEBTEDNESS, BY LOAN, ADVANCE, TRANSFER OF
PROPERTY, GUARANTEE OR OTHER AGREEMENT TO PAY, PURCHASE OR SERVICE, DIRECTLY OR
INDIRECTLY, ANY DEBT, OR OTHERWISE) IN, LEASE, SELL, TRANSFER OR OTHERWISE
DISPOSE OF ANY ASSETS, TANGIBLE OR INTANGIBLE, TO, OR PARTICIPATE IN, OR EFFECT
ANY TRANSACTION IN CONNECTION WITH ANY JOINT ENTERPRISE OR OTHER JOINT
ARRANGEMENT WITH, ANY AFFILIATE, EXCEPT ON TERMS NO LESS FAVORABLE THAN TERMS
THAT COULD BE OBTAINED BY THE COMPANY FROM A PERSON THAT IS NOT AN AFFILIATE OF
THE COMPANY UPON NEGOTIATION AT ARMS' LENGTH, AS DETERMINED IN GOOD FAITH BY THE
BOARD; PROVIDED THAT NO DETERMINATION OF THE BOARD OF DIRECTORS SHALL BE
REQUIRED WITH RESPECT TO ANY SUCH TRANSACTIONS ENTERED INTO IN THE ORDINARY
COURSE OF BUSINESS.

ARTICLE VII.
MISCELLANEOUS

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7.1              FEES AND EXPENSES.  AT THE CLOSING, THE COMPANY SHALL PAY TO
THE INVESTORS AN AMOUNT EQUAL TO ITS AGGREGATE EXPENSES FOR LEGAL SERVICES,
TRAVEL AND THIRD PARTY RESEARCH SERVICES INCURRED IN CONNECTION WITH THE
TRANSACTION DOCUMENTS, NOT TO EXCEED $50,000 IN THE AGGREGATE WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMPANY.  EXCEPT AS SPECIFIED IN THE IMMEDIATELY
PRECEDING SENTENCE, EACH PARTY SHALL PAY THE FEES AND EXPENSES OF ITS ADVISERS,
COUNSEL, ACCOUNTANTS AND OTHER EXPERTS, IF ANY, AND ALL OTHER EXPENSES INCURRED
BY SUCH PARTY INCIDENT TO THE NEGOTIATION, PREPARATION, EXECUTION, DELIVERY AND
PERFORMANCE OF THE TRANSACTION DOCUMENTS.  THE COMPANY SHALL PAY ALL STAMP AND
OTHER TAXES AND DUTIES LEVIED IN CONNECTION WITH THE SALE OF THE PREFERRED
SHARES AND WARRANTS.

7.2              ENTIRE AGREEMENT.  THE TRANSACTION DOCUMENTS, TOGETHER WITH THE
EXHIBITS AND SCHEDULES THERETO, CONTAIN THE ENTIRE UNDERSTANDING OF THE PARTIES
WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ALL PRIOR AGREEMENTS,
UNDERSTANDINGS, DISCUSSIONS AND REPRESENTATIONS, ORAL OR WRITTEN, WITH RESPECT
TO SUCH MATTERS, WHICH THE PARTIES ACKNOWLEDGE HAVE BEEN MERGED INTO SUCH
DOCUMENTS, EXHIBITS AND SCHEDULES.

7.3              NOTICES.  ANY AND ALL NOTICES OR OTHER COMMUNICATIONS OR
DELIVERIES REQUIRED OR PERMITTED TO BE PROVIDED HEREUNDER SHALL BE IN WRITING
AND SHALL BE DEEMED GIVEN AND EFFECTIVE ON THE EARLIEST OF (A) THE DATE OF
TRANSMISSION, IF SUCH NOTICE OR COMMUNICATION IS DELIVERED VIA FACSIMILE
(PROVIDED THE SENDER RECEIVES A MACHINE-GENERATED CONFIRMATION OF SUCCESSFUL
TRANSMISSION) AT THE FACSIMILE NUMBER SPECIFIED IN THIS SECTION PRIOR TO 6:30
P.M. (NEW YORK CITY TIME) ON A TRADING DAY, (B) THE NEXT TRADING DAY AFTER THE
DATE OF TRANSMISSION, IF SUCH NOTICE OR COMMUNICATION IS DELIVERED VIA FACSIMILE
AT THE FACSIMILE NUMBER SPECIFIED IN THIS SECTION ON A DAY THAT IS NOT A TRADING
DAY OR LATER THAN 6:30 P.M. (NEW YORK CITY TIME) ON ANY TRADING DAY, (C) THE
TRADING DAY FOLLOWING THE DATE OF MAILING, IF SENT BY U.S. NATIONALLY RECOGNIZED
OVERNIGHT COURIER SERVICE, OR (D) UPON ACTUAL RECEIPT BY THE PARTY TO WHOM SUCH
NOTICE IS REQUIRED TO BE GIVEN.  THE ADDRESS FOR SUCH NOTICES AND COMMUNICATIONS
SHALL BE AS FOLLOWS:

If to the Company:                  Tripos, Inc.

                                               1699 South Hanley Road

                                               St. Louis, Missouri  63144-2319

                                               Facsimile:  (314) 647-8108

                                               Attention:  Chief Financial
Officer

With a copy to:                       Hogan & Hartson LLP

                                               111 South Calvert Street

                                               Baltimore, Maryland  21202

                                               Facsimile: (410) 539-6981

                                               Attention:  Henry D. Kahn, Esq.

If to an Investor:                      Midwood Capital Management, LLC
575 Boylston Street, 4th Floor

                                               Boston, Massachusetts  02116

With a copy to:                       Foley Hoag LLP

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                                               155 Seaport Boulevard

                                               Boston, Massachusetts  02210

                                               Facsimile: (617) 832-7000

                                                           Attention:  Peter M.
Rosenblum, Esq.

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

7.4              AMENDMENTS; WAIVERS; NO ADDITIONAL CONSIDERATION.  NO PROVISION
OF THIS AGREEMENT MAY BE WAIVED OR AMENDED EXCEPT IN A WRITTEN INSTRUMENT SIGNED
BY THE COMPANY AND ALL INVESTORS.  NO WAIVER OF ANY DEFAULT WITH RESPECT TO ANY
PROVISION, CONDITION OR REQUIREMENT OF THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTINUING WAIVER IN THE FUTURE OR A WAIVER OF ANY SUBSEQUENT DEFAULT OR A
WAIVER OF ANY OTHER PROVISION, CONDITION OR REQUIREMENT HEREOF, NOR SHALL ANY
DELAY OR OMISSION OF EITHER PARTY TO EXERCISE ANY RIGHT HEREUNDER IN ANY MANNER
IMPAIR THE EXERCISE OF ANY SUCH RIGHT.

7.5              CONSTRUCTION.  THE HEADINGS HEREIN ARE FOR CONVENIENCE ONLY, DO
NOT CONSTITUTE A PART OF THIS AGREEMENT AND SHALL NOT BE DEEMED TO LIMIT OR
AFFECT ANY OF THE PROVISIONS HEREOF.  THE LANGUAGE USED IN THIS AGREEMENT WILL
BE DEEMED TO BE THE LANGUAGE CHOSEN BY THE PARTIES TO EXPRESS THEIR MUTUAL
INTENT, AND NO RULES OF STRICT CONSTRUCTION WILL BE APPLIED AGAINST ANY PARTY. 
THIS AGREEMENT SHALL BE CONSTRUED AS IF DRAFTED JOINTLY BY THE PARTIES, AND NO
PRESUMPTION OR BURDEN OF PROOF SHALL ARISE FAVORING OR DISFAVORING ANY PARTY BY
VIRTUE OF THE AUTHORSHIP OF ANY PROVISIONS OF THIS AGREEMENT OR ANY OF THE
TRANSACTION DOCUMENTS.

7.6              SUCCESSORS AND ASSIGNS.  THIS AGREEMENT SHALL BE BINDING UPON
AND INURE TO THE BENEFIT OF THE PARTIES AND THEIR SUCCESSORS AND PERMITTED
ASSIGNS.  ANY INVESTOR MAY ASSIGN ANY OR ALL OF ITS RIGHTS UNDER THIS AGREEMENT
TO ANY PERSON TO WHOM SUCH INVESTOR ASSIGNS OR TRANSFERS ANY SECURITIES,
PROVIDED SUCH TRANSFEREE AGREES IN WRITING TO BE BOUND, WITH RESPECT TO THE
TRANSFERRED SECURITIES, BY THE PROVISIONS HEREOF THAT APPLY TO THE "INVESTORS."

7.7              NO THIRD-PARTY BENEFICIARIES.  THIS AGREEMENT IS INTENDED FOR
THE BENEFIT OF THE PARTIES HERETO AND THEIR SUCCESSORS AND PERMITTED ASSIGNS AND
IS NOT FOR THE BENEFIT OF, NOR MAY ANY PROVISION HEREOF BE ENFORCED BY, ANY
OTHER PERSON, EXCEPT AS OTHERWISE SET FORTH IN SECTION 4.6 (AS TO EACH INVESTOR
PARTY).

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7.8              GOVERNING LAW.  ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.  EACH
PARTY AGREES THAT ALL PROCEEDINGS CONCERNING THE INTERPRETATIONS, ENFORCEMENT
AND DEFENSE OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND ANY OTHER
TRANSACTION DOCUMENTS (WHETHER BROUGHT AGAINST A PARTY HERETO OR ITS AFFILIATES,
EMPLOYEES OR AGENTS) SHALL BE COMMENCED EXCLUSIVELY IN THE NEW YORK COURTS. 
EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE NEW YORK COURTS FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED
HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF THE ANY OF THE TRANSACTION
DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF
ANY SUCH NEW YORK COURT, OR THAT SUCH PROCEEDING HAS BEEN COMMENCED IN AN
IMPROPER OR INCONVENIENT FORUM.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES
PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH
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 MANNER PERMITTED BY LAW.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.  IF EITHER PARTY SHALL COMMENCE A PROCEEDING
TO ENFORCE ANY PROVISIONS OF A TRANSACTION DOCUMENT, THEN THE PREVAILING PARTY
IN SUCH PROCEEDING SHALL BE REIMBURSED BY THE OTHER PARTY FOR ITS REASONABLE
ATTORNEYS' FEES AND OTHER COSTS AND EXPENSES INCURRED WITH THE INVESTIGATION,
PREPARATION AND PROSECUTION OF SUCH PROCEEDING. 

7.9              SURVIVAL.  THE REPRESENTATIONS, WARRANTIES, AGREEMENTS AND
COVENANTS CONTAINED HEREIN SHALL SURVIVE THE CLOSING AND THE DELIVERY OF THE
SECURITIES FOR A PERIOD OF TWO YEARS.

7.10          EXECUTION.  THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE
COUNTERPARTS, ALL OF WHICH WHEN TAKEN TOGETHER SHALL BE CONSIDERED ONE AND THE
SAME AGREEMENT AND SHALL BECOME EFFECTIVE WHEN COUNTERPARTS HAVE BEEN SIGNED BY
EACH PARTY AND DELIVERED TO THE OTHER PARTY, IT BEING UNDERSTOOD THAT BOTH
PARTIES NEED NOT SIGN THE SAME COUNTERPART.  IN THE EVENT THAT ANY SIGNATURE IS
DELIVERED BY FACSIMILE TRANSMISSION, SUCH SIGNATURE SHALL CREATE A VALID AND
BINDING OBLIGATION OF THE PARTY EXECUTING (OR ON WHOSE BEHALF SUCH SIGNATURE IS
EXECUTED) WITH THE SAME FORCE AND EFFECT AS IF SUCH FACSIMILE SIGNATURE PAGE
WERE AN ORIGINAL THEREOF.

7.11          SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT IS HELD TO BE
INVALID OR UNENFORCEABLE IN ANY RESPECT, THE VALIDITY AND ENFORCEABILITY OF THE
REMAINING TERMS AND PROVISIONS OF THIS AGREEMENT SHALL NOT IN ANY WAY BE
AFFECTED OR IMPAIRED THEREBY AND THE PARTIES WILL ATTEMPT TO AGREE UPON A VALID
AND ENFORCEABLE PROVISION THAT IS A REASONABLE SUBSTITUTE THEREFOR, AND UPON SO
AGREEING, SHALL INCORPORATE SUCH SUBSTITUTE PROVISION IN THIS AGREEMENT.

7.12          RESCISSION AND WITHDRAWAL RIGHT.  NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN (AND WITHOUT LIMITING ANY SIMILAR PROVISIONS OF) THE
TRANSACTION DOCUMENTS, WHENEVER ANY INVESTOR EXERCISES A RIGHT, ELECTION, DEMAND
OR OPTION UNDER A TRANSACTION DOCUMENT AND THE COMPANY DOES NOT TIMELY PERFORM
ITS RELATED OBLIGATIONS WITHIN THE PERIODS THEREIN PROVIDED, THEN SUCH INVESTOR
MAY RESCIND OR WITHDRAW, IN ITS SOLE DISCRETION FROM TIME TO TIME UPON WRITTEN
NOTICE TO THE COMPANY, ANY RELEVANT NOTICE, DEMAND OR ELECTION IN WHOLE OR IN
PART WITHOUT PREJUDICE TO ITS FUTURE ACTIONS AND RIGHTS.

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7.13          REPLACEMENT OF SECURITIES.  IF ANY CERTIFICATE OR INSTRUMENT
EVIDENCING ANY SECURITIES IS MUTILATED, LOST, STOLEN OR DESTROYED, THE COMPANY
SHALL ISSUE OR CAUSE TO BE ISSUED IN EXCHANGE AND SUBSTITUTION FOR AND UPON
CANCELLATION THEREOF, OR IN LIEU OF AND SUBSTITUTION THEREFOR, A NEW CERTIFICATE
OR INSTRUMENT, BUT ONLY UPON RECEIPT OF EVIDENCE REASONABLY SATISFACTORY TO THE
COMPANY OF SUCH LOSS, THEFT OR DESTRUCTION AND CUSTOMARY AND REASONABLE
INDEMNITY, IF REQUESTED.  THE APPLICANTS FOR A NEW CERTIFICATE OR INSTRUMENT
UNDER SUCH CIRCUMSTANCES SHALL ALSO PAY ANY REASONABLE THIRD-PARTY COSTS
ASSOCIATED WITH THE ISSUANCE OF SUCH REPLACEMENT SECURITIES.  IF A REPLACEMENT
CERTIFICATE OR INSTRUMENT EVIDENCING ANY SECURITIES IS REQUESTED DUE TO A
MUTILATION THEREOF, THE COMPANY MAY REQUIRE DELIVERY OF SUCH MUTILATED
CERTIFICATE OR INSTRUMENT AS A CONDITION PRECEDENT TO ANY ISSUANCE OF A
REPLACEMENT.

7.14          REMEDIES.  IN ADDITION TO BEING ENTITLED TO EXERCISE ALL RIGHTS
PROVIDED HEREIN OR GRANTED BY LAW, INCLUDING RECOVERY OF DAMAGES, EACH OF THE
INVESTORS AND THE COMPANY WILL BE ENTITLED TO SPECIFIC PERFORMANCE UNDER THE
TRANSACTION DOCUMENTS.  THE PARTIES AGREE THAT MONETARY DAMAGES MAY NOT BE
ADEQUATE COMPENSATION FOR ANY LOSS INCURRED BY REASON OF ANY BREACH OF
OBLIGATIONS DESCRIBED IN THE FOREGOING SENTENCE.

7.15          PAYMENT SET ASIDE.  TO THE EXTENT THAT THE COMPANY MAKES A PAYMENT
OR PAYMENTS TO ANY INVESTOR PURSUANT TO ANY TRANSACTION DOCUMENT OR AN INVESTOR
ENFORCES OR EXERCISES ITS RIGHTS THEREUNDER, AND SUCH PAYMENT OR PAYMENTS OR THE
PROCEEDS OF SUCH ENFORCEMENT OR EXERCISE OR ANY PART THEREOF ARE SUBSEQUENTLY
INVALIDATED, DECLARED TO BE FRAUDULENT OR PREFERENTIAL, SET ASIDE, RECOVERED
FROM, DISGORGED BY OR ARE REQUIRED TO BE REFUNDED, REPAID OR OTHERWISE RESTORED
TO THE COMPANY, A TRUSTEE, RECEIVER OR ANY OTHER PERSON UNDER ANY LAW
(INCLUDING, WITHOUT LIMITATION, ANY BANKRUPTCY LAW, STATE OR FEDERAL LAW, COMMON
LAW OR EQUITABLE CAUSE OF ACTION), THEN TO THE EXTENT OF ANY SUCH RESTORATION
THE OBLIGATION OR PART THEREOF ORIGINALLY INTENDED TO BE SATISFIED SHALL BE
REVIVED AND CONTINUED IN FULL FORCE AND EFFECT AS IF SUCH PAYMENT HAD NOT BEEN
MADE OR SUCH ENFORCEMENT OR SETOFF HAD NOT OCCURRED.

7.16          LIMITATION OF LIABILITY.  NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, THE COMPANY ACKNOWLEDGES AND AGREES THAT THE LIABILITY OF AN INVESTOR
ARISING DIRECTLY OR INDIRECTLY, UNDER ANY TRANSACTION DOCUMENT OF ANY AND EVERY
NATURE WHATSOEVER SHALL BE SATISFIED SOLELY OUT OF THE ASSETS OF SUCH INVESTOR,
AND THAT NO TRUSTEE, OFFICER, OTHER INVESTMENT VEHICLE OR ANY OTHER AFFILIATE OF
SUCH INVESTOR OR ANY INVESTOR, SHAREHOLDER OR HOLDER OF SHARES OF BENEFICIAL
INTEREST OF SUCH A INVESTOR SHALL BE PERSONALLY LIABLE FOR ANY LIABILITIES OF
SUCH INVESTOR.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOW]

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

TRIPOS, INC.

By:/s/ John D. Yingling
     Name: John D. Yingling                                          
     Title: Vice President, Chief Accounting Officer        

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOR Investors FOLLOW]

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

                                                                        MIDWOOD
CAPITAL PARTNERS, L.P.

                                                                        By
Midwood Capital LLC, its general partner

                                                                        By: /s/
Ross DeMont                                                   

                                                                        Name: 
Ross DeMont

                                                                        Title: 
Manager

                                                                                   

                                                                        MIDWOOD
CAPITAL PARTNERS QP, L.P.

                                                                        By
Midwood Capital LLC, its general partner

                                                                        By: /s/
Ross DeMont                                                   

                                                                        Name: 
Ross DeMont

                                                                        Title: 
Manager

                                                                       

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EXHIBIT A

Schedule of Investors

Investor                                                                       
Preferred Shares

 

MIDWOOD CAPITAL PARTNERS, L.P.                 
815,742                                                          

MIDWOOD CAPITAL PARTNERS QP, L.P.           1,017,591

Warrant Holder                                                            Shares
Underlying Warrant

 

MIDWOOD CAPITAL PARTNERS, L.P.                  244,723

MIDWOOD CAPITAL PARTNERS QP, L.P.           305,277

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