Exhibit 10.1
 
 
This agreement and the proposed private placement of the company's common stock
contemplated herein are highly confidential and represent material inside
information of the company, and should not be disclosed or disseminated by the
recipient other than to the recipient's advisors who are under an obligation of
confidentiality.  Recipients should refrain from trading in securities of the
company until such time as the company has publicly disclosed the offering
contemplated hereby.
 
 
 
COMMON STOCK PURCHASE AGREEMENT
 
DATED JANUARY 18, 2011
 

 
BETWEEN VISION-SCIENCES, INC.
 
AND
 
PURCHASER
 

 
 
 

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COMMON STOCK PURCHASE AGREEMENT
 
This Common Stock Purchase Agreement is dated as of January 18, 2011 (this
“Agreement”), between Vision-Sciences, Inc., a Delaware corporation (the
“Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser” and collectively the
“Purchasers”).
 
Subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act (as defined below), and Rule 506 promulgated
thereunder, the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase from the Company in
the aggregate, up to $11,250,000 of shares of Common Stock on the Closing
Date(s).
 
Accordingly, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:
 
ARTICLE I.
DEFINITIONS
 
1.1      Definitions.
 
In addition to the terms defined elsewhere in this Agreement, for all purposes
of this Agreement, the following terms have the meanings indicated in this
Section 1.1:
 
“Action” shall have the meaning ascribed to such term in Section 3.1(j).
 
“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 144.  With respect to
a Purchaser, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Purchaser will be
deemed to be an Affiliate of such Purchaser.
 
“Closing” means the closing of the purchase and sale of the Common Stock
pursuant to Section 2.1.
 
“Closing Date(s)” means the Trading Day when this Agreement has been executed
and delivered by the applicable parties thereto with respect to all or a portion
of the shares of Common Stock to be sold hereunder, and all conditions precedent
to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the
Company’s obligations to deliver such Shares have been satisfied or waived.
 
“Commission” or “SEC” means the Securities and Exchange Commission.
 
“Common Stock” means the common stock of the Company, par value $0.01 per share.
 
 
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“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including without limitation, any debt, preferred stock, 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.
 
 “Disclosure Schedules” means the Disclosure Schedules of the Company delivered
concurrently herewith.
 
“Effective Date” means the date that the initial registration statement filed by
the Company for the Registrable Securities is first declared effective by the
Commission.
 
“Evaluation Date” shall have the meaning ascribed to such term in Section
3.1(r).
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“FDA” shall have the meaning ascribed to such term in Section 3.1(l).
 
“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).
 
“Indemnified Person” shall have the meaning ascribed to such term in Section
4.6.
 
“Indemnified Liabilities” shall have the meaning ascribed to such term in
Section 4.6.
 
“Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.1(o).
 
“Legend Removal Date” shall have the meaning ascribed to such term in Section
4.1(c).
 
“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.
 
“Material Adverse Effect” shall have the meaning ascribed to such term in
Section 3.1(b).
 
“Material Contract” means any contract of the Company or any of its Subsidiaries
that has been filed or was required to have been filed as an Exhibit to the SEC
Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.
 
“Material Permits” shall have the meaning ascribed to such term in Section
3.1(m).
 
 “Per Share Purchase Price” equals $1.50, subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations and other similar
transactions relating to the Common Stock that occur after the date of this
Agreement.
 
 
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“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.
 
“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.
 
“Purchaser Party” shall have the meaning ascribed to such term in Section 4.6.
 
“Registrable Securities” means all of the Shares held by such Purchasers,
together with any shares of Common Stock issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar event with
respect to the foregoing.
 
 “Registration Statement” means a registration statement covering the resale of
the Registrable Securities.
 
“Required Approvals” shall have the meaning ascribed to such term in Section
3.1(e).
 
“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” shall have the meaning ascribed to such term in Section 3.1(h).
 
“Securities Act” means the Securities Act of 1933, as amended.
 
 “Shares” means the shares of Common Stock issued or issuable to each Purchaser
pursuant to this Agreement.
 
“Subscription Amount” means, as to each Purchaser, the amounts set forth below
such Purchaser’s signature block on the signature page hereto, in United States
dollars and in immediately available funds.
 
“Subsidiary” shall mean the subsidiaries of the Company, if any, set forth on
Schedule 3.1(a).
 
“Trading Day” means a day on which the Common Stock is traded on a Trading
Market.
 
 “Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the NYSE Amex
(formerly the American Stock Exchange), the New York Stock Exchange, the Nasdaq
Global Market, the Nasdaq National Market, the Nasdaq Capital Market or the OTC
Bulletin Board.
 
 
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ARTICLE II.
PURCHASE AND SALE
 
2.1      Closing.  On a Closing Date, each Purchaser shall purchase from the
Company, severally and not jointly with the other Purchasers, and the Company
shall issue and sell to each Purchaser, a number of Shares equal to such
Purchaser’s Subscription Amount divided by the Per Share Purchase Price.  The
aggregate Subscription Amounts for the Shares sold hereunder shall be up to
$11,250,000.  Upon satisfaction of the conditions set forth in Sections 2.2 and
2.3, each Closing shall occur at the offices of Proskauer Rose LLP or such other
location as the parties shall mutually agree.
 
2.2      Deliveries.
 
(a)      On the Closing Date, the Company shall deliver or cause to be delivered
to each Purchaser the following:
 
(i)            this Agreement duly executed by the Company;
 
(ii)           a copy of the irrevocable instructions to the Company’s transfer
agent instructing the transfer agent to deliver, on an expedited basis, a
certificate evidencing a number of Shares equal to such Purchaser’s Subscription
Amount divided by the Per Share Purchase Price, registered in the name of such
Purchaser;
 
(iii)           a certificate, in form reasonably satisfactory to the Purchaser,
executed by an executive officer of the Company, dated as of the Closing Date,
certifying as to the fulfillment of the conditions specified in
Sections 2.3(b)(i) and (ii); and
 
(iv)           a legal opinion of Proskauer Rose LLP, or other legal counsel to
the Company, in the form of Exhibit A attached hereto.
 
(b)      On the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company the following:
 
(i)             this Agreement duly executed by such Purchaser; and
 
(ii)           such Purchaser’s Subscription Amount by wire transfer to the
account as specified by the Company on Annex A hereto.
 
2.3      Closing Conditions.
 
(a)      The obligations of the Company hereunder in connection with the Closing
are subject to the following conditions being met:
 
(i)            all representations and warranties of the Purchasers contained
herein shall be accurate in all material respects (except for those
representations and warranties which are qualified as to materiality, in which
case such representations and warranties shall be true and correct in all
respects) when made and on the Closing Date, as though made on and as of such
date, except for such representations that speak as of a specific date;
 
 
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(ii)           all obligations, covenants and agreements of the Purchasers
required to be performed at or prior to the Closing Date shall have been
performed; and
 
(iii)           the delivery by the Purchasers of the items set forth in Section
2.2(b) of this Agreement.
 
(b)           The respective obligations of the Purchasers hereunder in
connection with the Closing are subject to the following conditions being met:
 
(i)             all representations and warranties of the Company contained
herein shall be accurate in all material respects (except for those
representations and warranties which are qualified as to materiality, in which
case such representations and warranties shall be true and correct in all
respects) when made and on the Closing Date, as though made on and as of such
date, except for such representations that speak as of a specific date;
 
(ii)           all obligations, covenants and agreements of the Company required
to be performed at or prior to the Closing Date shall have been performed;
 
(iii)           the delivery by the Company of the items set forth in Section
2.2(a) of this Agreement;
 
(iv)           there shall have been no Material Adverse Effect nor any event or
series of events that could have or reasonably be expected to result in a
Material Adverse Effect since the date hereof;
 
(v)            from the date hereof to the Closing Date, trading in the Common
Stock shall not have been suspended by the Commission or the Trading Market
(except for any suspension of trading of limited duration agreed to by the
Company, which suspension shall be terminated prior to the Closing); and
 
(vi)          The Trading Market shall have approved the listing of additional
shares application for the Shares on or prior to the Closing Date.
 
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
 
3.1      Representations and Warranties of the Company.  Except as set forth
under the corresponding section of the Disclosure Schedules which Disclosure
Schedules shall be deemed a part hereof, the Company hereby makes, as of the
date hereof and the Closing Date, the representations and warranties set forth
below to each Purchaser:
 
 
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(a)      Subsidiaries.  All of the direct and indirect subsidiaries of the
Company are set forth on Schedule 3.1(a).  The Company owns, directly or
indirectly, all of the capital stock or other equity interests of each
Subsidiary free and clear of any Liens, and all the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to subscribe for
or purchase securities.  If the Company has no subsidiaries, then references in
this Agreement to the Subsidiaries will be disregarded.
 
(b)      Organization and Qualification.  The Company and each of the
Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (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
or default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents.  Each of the
Company and the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in (i) a material adverse effect on the legality, validity or enforceability of
this Agreement, (ii) a material adverse effect on the results of operations,
assets, business, or financial condition of the Company and the Subsidiaries,
taken as a whole, or (iii) a material adverse effect on the Company’s ability to
perform in any material respect on a timely basis its obligations under this
Agreement (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no
Proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.
 
(c)      Authorization; Enforcement.  The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations
thereunder.  The execution and delivery of this Agreement 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 other than in
connection with the Required Approvals.  This Agreement 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 (i) as limited by 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 of this
Agreement by the Company, the issuance and sale of the Shares and the
consummation by the Company of the other transactions contemplated hereby 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, 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 any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected,
including, without limitation, any Material Contract or Material Permit, or
(iii) subject to the Required Approvals, 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.  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 this Agreement, other than (i)
application(s) to each applicable Trading Market for the listing of the Shares
for trading thereon in the time and manner required thereby, (ii) the filing of
Form D with the Commission and such filings as are required to be made under
applicable state securities laws, and (iii) a Form 8-K disclosing the sale of
the Shares hereunder, (collectively, the “Required Approvals”).
 
(f)      Issuance of the Shares.  The Shares are duly authorized and, when
issued and paid for in accordance with this Agreement, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company other than restrictions on transfer provided for in this Agreement.
 
(g)      Capitalization.  The capitalization of the Company is as set forth on
Schedule 3.1(g).  All of the issued and outstanding capital shares of the
Company (i) have been duly authorized and validly issued and are fully paid and
nonassessable, (ii) are not in violation of any first refusal, preemptive right,
right of participation, or any similar right applicable to the company's capital
stock and (iii) have been offered, issued and sold by the Company in compliance
with all applicable federal and state securities laws.  The Company has not
issued any capital stock since its most recently filed periodic report under the
Exchange Act, other than pursuant to the exercise of employee stock options
under the Company’s stock incentive plans and the issuance of restricted shares
of Common Stock to employees pursuant to the Company’s stock incentive plan.  No
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by this
Agreement.  There are no outstanding options, warrants, script 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 Common Stock Equivalents other than pursuant to this Agreement
and as disclosed in the Company’s SEC filings.  No further approval or
authorization of any stockholder, the Board of Directors of the Company or other
Person is required for the issuance and sale of the Shares.  Except for this
Agreement, there are no stockholders agreements, voting agreements, registration
rights agreements or other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company’s stockholders.
 
 
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(h)      SEC Reports; Financial Statements.  The Company has filed all reports,
schedules, forms, statements and other documents 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 two years preceding the date hereof (or such
shorter period as the Company was required by law to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated
by reference therein, being collectively referred to herein as the “SEC
Reports”) on a timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange
Act 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 Company has never
been an issuer subject to Rule 144(i) under the Securities Act.  Each of the
Material Contracts to which the Company or any Subsidiary is a party or to which
the property or assets of the Company or any of its Subsidiaries are subject has
been filed (or incorporated by reference) as an exhibit to the SEC Reports. Each
of the Material Contacts is in full force and effect, and constitutes a legal,
valid and binding obligation enforceable in accordance with its terms against
the Company, except for those Material Contracts that have been terminated or
expired in accordance with their terms.  The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing.  Such financial statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved
(“GAAP”), except as may be otherwise specified in such financial statements or
the notes thereto and except that unaudited financial statements may not contain
all footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
 
(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 or on the Disclosure Schedules, (i) there has been no event,
occurrence or development that has had a Material Adverse Effect, (ii) the
Company has not incurred any liabilities (contingent or otherwise) other than
(A) trade payables and accrued expenses incurred in the ordinary course of
business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or required to
be disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock
incentive plans.  The Company does not have pending before the Commission any
request for confidential treatment of information.
 
 
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(j)      Litigation.  There is no action, suit, inquiry, notice of violation,
proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their
respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i) adversely affects or challenges
the legality, validity or enforceability of this Agreement or (ii) or could
reasonably be expected to result in a Material Adverse Effect.
 
(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
which could reasonably be expected to result in a Material Adverse Effect.  No
officer, consultant or key employee of the Company or any Subsidiary whose
termination could reasonably be expected to result in a Material Adverse Effect
has terminated or, to the knowledge of the Company, has any present intention of
terminating his or her employment or engagement with the Company or any
Subsidiary.
 
(l)      Compliance.  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), including, without limitation,
the Material Contracts and the Material Permits, (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
applicable to its business, including, without limitation, all applicable rules,
regulations, guidelines and policies of the U.S. Food and Drug Administration
("FDA) and any governmental authority exercising authority comparable to that of
the FDA (including any non-governmental authority whose approval or
authorization is required under foreign law comparable to that administered by
the FDA) and all applicable foreign, federal, state and local statutes, rules
and regulations relating to taxes,  environmental safety and protection,
occupational health and safety, product quality and safety, and employment and
labor matters, except in each case as could not reasonably be expected to have a
Material Adverse Effect.
 
 
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(m)      Regulatory Permits.  The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, including, without
limitation, all such approvals, certificates authorizations and permits required
by the FDA and any governmental authority exercising authority comparable to
that of the FDA (including any non-governmental authority whose approval or
authorization is required under foreign law comparable to that administered by
the FDA), except where the failure to possess such permits could not have or
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.  All of the Material Permits are valid and in full force and effect,
except where the invalidity of such Material Permit or the failure of such
Material Permit to be in full force and effect, could not reasonably be expected
have a Material Adverse Effect.
 
(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 the business of the Company and the Subsidiaries and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries and Liens for the payment of
federal, state or other taxes, the payment of which is neither delinquent nor
subject to penalties.  Any real property and facilities held under lease by the
Company and the Subsidiaries are held by them under valid, subsisting and
enforceable leases of which the Company and the Subsidiaries are in compliance
in all material respects.
 
(o)      Patents and Trademarks.  To the knowledge of the Company, the Company
and the Subsidiaries own, possess, license or have other rights to use, all
patents, patent applications, trademarks, trademark applications and
registrations, service marks, trade names, trade secrets, inventions,
copyrights, licenses and other similar rights necessary or material for use in
connection with their respective businesses as described in the SEC Reports and
which the failure to so have could have a Material Adverse Effect (collectively,
the “Intellectual Property Rights”).  Neither the Company nor any Subsidiary has
received any notice (written or otherwise) 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.  The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their Intellectual Property Rights.
 
(p)      Insurance.  The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and
the Subsidiaries are engaged, including, but not limited to, directors and
officers insurance.  To the Company’s knowledge, such insurance contracts and
policies are accurate and complete.  Neither the Company nor any Subsidiary has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without a
significant increase in cost.
 
 
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(q)      Transactions With Affiliates and Employees.  Except as set forth in the
SEC Reports, 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 $60,000 other than (i) for payment of salary
or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) for other employee benefits,
including stock option agreements under any stock option plan of the Company.
 
(r)      Disclosure Controls and Procedures and Accounting Controls. The Company
has established and maintains disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) that are effective in all material
respects to ensure that material information relating to the Company is made
known to its chief executive officer and chief financial officer by others
within those entities.  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 quarterly or annual periodic report
under the Exchange Act (such date, the "Evaluation Date").  The Company
presented in its most recently filed quarterly or annual 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 307(b) of Regulation S-K under the Exchange Act) or, to the
Company's knowledge, in other factors that could significantly affect the
Company's internal controls.  The Company maintains a system of accounting
controls sufficient to provide reasonable assurances that (a) transactions are
executed in accordance with management's general or specific authorization;
(b) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets;
(c) access to assets is permitted only in accordance with management's general
or specific authorization; and (d) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
 
(s)      Private Placement. Assuming the accuracy of the Purchasers
representations and warranties set forth in Section 3.2, no registration under
the Securities Act is required for the offer and sale of the Shares by the
Company to the Purchasers as contemplated hereby.  The issuance and sale of the
Shares hereunder does not contravene the rules and regulations of the Trading
Market.
 
 
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(t)      Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Shares, will not be or be an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.  The Company shall conduct its business in a
manner so that it will not become subject to the Investment Company Act.
 
(u)      Listing and Maintenance Requirements.  The Company’s Common Stock is
registered pursuant to Section 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act nor has the Company received any notification that the Commission is
contemplating terminating such registration.  The Company's Common Stock is
listed on The Nasdaq Capital Market, and there are no proceedings pending, or
the best of the Company's knowledge threatened to revoke or suspend such
listing.  The Company is in compliance with the requirements of the Nasdaq
Capital Market for continued listing of the Common Stock thereon.
 
(v)      Anti-takeover Protections.  The Company has taken all necessary action,
if any, in order to render inapplicable any control share acquisition, business
combination, poison pill, shareholder rights agreements or other similar
anti-takeover provision under the Company's articles of incorporation and bylaws
or any applicable state laws that is or could become applicable to each
Purchaser's purchase and ownership of the Shares.
 
(w)     No Integrated Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, neither the Company,
nor to the Company’s knowledge, any of its Affiliates, nor any Person acting on
its or their behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under circumstances that
would cause this offering of the Shares to be integrated with prior offerings by
the Company for purposes of the Securities Act or any applicable shareholder
approval provisions, including, without limitation, under the rules and
regulations of any Trading Market on which any of the securities of the Company
are listed or designated, other than successive offerings and sales of Shares
under this Agreement.
 
(x)      General Solicitation.  Neither the Company nor any person acting on
behalf of the Company has offered or sold any of the Shares by any form of
general solicitation or general advertising.  The Company has offered the Shares
for sale only to the Purchasers and certain other “accredited investors” within
the meaning of Rule 501 under the Securities Act.
 
(y)      Foreign Corrupt Practices Act.  Neither the Company nor any of its
Subsidiaries, nor any of their respective directors, officers, employees or
agents has (i) directly or indirectly, used any corporate funds for unlawful
contributions, gifts, entertainment or made any other unlawful expenses relating
to political activity to government officials, candidates or members of
political parties or organizations, (ii) paid, accepted or received any unlawful
contributions, payments, expenditures or gifts, (iii) failed to disclose fully
any contribution made by the Company or any Subsidiary (or made by any Person
authorized to act on its behalf) 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, any export restrictions, anti-boycott regulations, embargo
regulations or other similar applicable domestic or foreign laws and
regulations.
 
 
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(z)      No Broker Fees.  No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.  No Purchaser shall have any obligation with respect
to any such fees or any claims made by or on behalf of any such Persons that any
such fees are due.
 
(aa)     No Additional Agreements.  The Company does not have any agreements or
understanding with any Purchaser with respect to the transactions contemplated
by this Agreement other than as specified in this Agreement.
 
3.2      Representations and Warranties of the Purchasers.
 
Each Purchaser hereby, for itself and for no other Purchaser, represents and
warrants as of the date hereof and as of the Closing Date to the Company as
follows:
 
(a)      Organization; Authority.  Such Purchaser (other than a Purchaser that
is an individual) is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization with full right,
corporate or partnership power and authority to enter into and to consummate the
transactions contemplated by this Agreement and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by such
Purchaser of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or similar action on the part of such
Purchaser.  This Agreement has been duly executed by the Purchaser, and when
delivered by such Purchaser in accordance with the terms hereof, will constitute
the valid and legally binding obligation of such Purchaser, enforceable against
it in accordance with its terms, except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
 
(b)      Own Account.  Such Purchaser understands that the Shares are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and is acquiring the Shares as principal for
its own account and not with a view to or for distributing or reselling such
Shares or any part thereof, has no present intention of distributing any of such
Shares and has no arrangement or understanding with any other persons regarding
the distribution of such Shares.  Such Purchaser does not have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the
Shares.
 
 
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(c)      Purchaser Status.  At the time such Purchaser was offered the Shares,
it was, and at the date hereof it is, either: (i) an “accredited investor” as
defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities
Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under
the Securities Act.  Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.
 
(d)      Experience of Such Purchaser.  Such Purchaser, either alone or together
with its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Shares, and has so evaluated the
merits and risks of such investment.  Such Purchaser is able to bear the
economic risk of an investment in the Shares and, at the present time, is able
to afford a complete loss of such investment.
 
(e)      General Solicitation.  Such Purchaser is not purchasing the Shares as a
result of any advertisement, article, notice or other communication regarding
the Shares 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.
 
The Company acknowledges and agrees that each Purchaser does not make or has not
made 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 Shares may only be disposed of in compliance with state and federal
securities laws.  In connection with any transfer of Shares other than pursuant
to an effective Registration Statement or Rule 144, to the Company or to an
affiliate of a Purchaser or in connection with a pledge as contemplated in
Section 4.1(b), the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred Shares under the Securities
Act.  As a condition of transfer, any such transferee shall agree in writing to
be bound by the terms of this Agreement and shall have the rights of a Purchaser
under this Agreement.
 
(b)      The Purchasers agree to the imprinting, so long as is required by this
Section 4.1(b), of a legend on any of the Shares in the following or its
equivalent form:
 
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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(c)      Certificates evidencing the Shares shall not contain any legend
(including the legend set forth in Section 4.1(b)), (i) while a registration
statement covering the resale of such security is effective under the Securities
Act, or (ii) following any sale of such Shares pursuant to Rule 144, or (iii) if
such Shares are eligible for sale under Rule 144, without the requirement for
the Company to be in compliance with the current public information required
under Rule 144 as to such securities and without volume or manner-of-sale
restrictions, or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the Staff of the Commission) and such lack of
requirement is confirmed by a legal opinion satisfactory to the Company.  The
Company shall cause its counsel to issue a legal opinion to the Company’s
transfer agent promptly after the Effective Date if required by the Company’s
transfer agent to effect the removal of the legend hereunder.  The Company
agrees that following the Effective Date or at such other time as a legend is no
longer required under this Section 4.1(c), it will, no later than three Trading
Days following the delivery by a Purchaser to the Company or the Company’s
transfer agent of a certificate representing Shares issued with a restrictive
legend (such date, the “Legend Removal Date”), deliver or cause to be delivered
to such Purchaser a certificate representing such Shares that is free from all
restrictive and other legends.  The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section.  Certificates for Shares
subject to legend removal hereunder may be transmitted by the transfer agent of
the Company to the Purchasers by crediting the account of the Purchaser’s prime
broker with the Depository Trust Company System.

(d)      Each Purchaser, severally and not jointly with the other Purchasers,
agrees that the removal of the restrictive legend from certificates representing
Shares as set forth in this Section 4.1 is predicated upon the Company’s
reliance that the Purchaser will sell any Shares pursuant to either the
registration requirements of the Securities Act, including any applicable
prospectus delivery requirements, or an exemption therefrom.
 
(e)      In order to enable the Purchasers to sell the Shares under Rule 144,
the Company shall use its reasonable best efforts 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.  If the Company is not required to file reports pursuant to
the Exchange Act, it will prepare and furnish to the Purchasers and make
publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Shares under Rule 144.
 
 
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4.2      Publicity.  The Company shall not publicly disclose the name of any
Purchaser or an Affiliate of any Purchaser, or include the name of any Purchaser
or an Affiliate of any Purchaser in any press release or filing with the
Commission (other than the Registration Statement) or any regulatory agency or
Trading Market without the prior written consent of the Purchaser, except to the
extent that such disclosure is required by law, request of the Staff of the
Commission or Trading Market regulations, in which case the Company shall
provide such Purchaser with prior notice of such disclosure.
 
4.3      Integration.  The Company shall not, and shall use its commercially
reasonable 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 Shares in a manner that would require
the registration under the Securities Act of the sale of the Shares to the
Purchasers or that would be integrated with the offer or sale of the Shares for
purposes of the rules and regulations of any Trading Market such that it would
require shareholder approval prior to the closing of such other transaction
unless shareholder approval is obtained before the closing of such subsequent
transaction.
 
4.4      Non-Public Information.  The Company covenants and agrees that neither
it nor any other Person acting on its behalf will provide any Purchaser or its
agents or counsel, with any information that the Company believes constitutes
material non-public information without the express written consent of such
Purchaser, unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information.  The
Company understands and confirms that each Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the Company. The
foregoing shall not apply to Purchasers who are directors or employees of the
Company or who are on the date of this Agreement shareholders of the Company
holding 5% or more of its capital stock.
 
4.5      Use of Proceeds.  The Company shall use the net proceeds from the sale
of the Shares hereunder for working capital purposes, to purchase fixed assets
used in the development or production of the Company’s products or for
investment in new technologies related to the Company’s business and not for the
satisfaction of any portion of the Company’s debt (other than payment of trade
payables in the ordinary course of the Company’s business and prior practices),
to redeem any Common Stock or Common Stock Equivalents or to settle any
outstanding litigation.
 
 
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4.6      Indemnification of Purchasers.   Subject to the provisions of this
Section 4.6, the Company will defend, protect, indemnify and hold the Purchasers
and their directors, officers, shareholders, members, partners, employees and
agents (each, a “Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation ("Indemnified Liabilities") that any
such Purchaser Party may suffer or incur as a result of or relating to (a) any
breach of any of the representations, warranties, covenants or agreements made
by the Company in this Agreement or (b) any action, suit, proceeding or claim
(including for these purposes a derivative action brought on behalf of the
Company) instituted against the Company, any Purchaser Party, or any other
Purchaser in any capacity, or any of them or their respective Affiliates, by any
Person who is not an Affiliate of such Purchaser seeking indemnification, with
respect to or arising out of the execution, delivery, performance or enforcement
of any of the transactions contemplated by this Agreement (unless such action is
based upon a breach of such Purchaser’s representations, warranties or covenants
under this Agreement or any agreements or understandings such Purchaser may have
with any such stockholder or any violations by the Purchaser of state or federal
securities laws or any conduct by such Purchaser which constitutes fraud, gross
negligence, willful misconduct or malfeasance).  To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the
Company shall make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under applicable
law.  Promptly  after receipt by any such Person (the "Indemnified Person") of
notice of any demand, claim or circumstance which would or might give rise to a
claim or the commencement of any action, proceeding or investigation in respect
of which indemnity may be sought pursuant to this Section 4.6, such Indemnified
Person shall promptly notify the Company in writing and the Company shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such Indemnified Person, and shall assume the payment of all such Indemnified
Liabilities and any and all other fees and expenses related to the proceeding;
provided, however, that the failure of any Indemnified Person so to notify the
Company shall not relieve the Company of its obligations hereunder except to the
extent that the Company is actually and materially prejudiced by such failure to
notify.  In such proceeding, any Indemnified Person shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless (i) the Company and the
Indemnified Person have mutually agreed to retention of such counsel; (ii) the
Company shall have failed promptly to assume the defense of such proceeding and
to employ counsel reasonably satisfactory to the Indemnified Person in such
proceeding; or (iii) in the reasonable judgment of counsel to such Indemnified
Person, representation of both parties by the same counsel may be inappropriate
due to actual or potential differing interests between them.  The Company shall
keep the Indemnified Person reasonably apprised at all times as to the status of
the defense or any settlement negotiations with respect thereto.  The Company
shall not be liable for any settlement of any proceeding effected without the
Company's written consent, which consent shall not be unreasonably withheld,
delayed or conditioned.  Without the prior written consent of the Indemnified
Person, which consent shall not be unreasonably withheld, delayed or
conditioned, the Company shall not effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability arising out of such proceeding and in
no event shall such settlement include any non-monetary limitation on the
actions of the Indemnified Person or any of its Affiliates or any admission
fault or liability on behalf of such Indemnified Person.
 
4.7      Trading Market Listing.  In the time and manner required by the Trading
Market, the Company shall (a) prepare and file with such Trading Market an
additional shares listing application covering all of the Shares and a
notification form regarding the change in the number of shares outstanding
pertaining thereto; (b) use its reasonable best efforts to take all steps
necessary to cause all of the Shares to be approved for listing on the Trading
Market as promptly as possible thereafter; (c) if requested by any Purchaser,
provide such Purchaser with evidence of such listing and (d) use its reasonable
best efforts to maintain the listing of such Shares on the Trading Market.
 
 
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4.8      Form D; Blue Sky.  The Company agrees to timely file a Form D with
respect to the Shares as required under Regulation D and to provide a copy there
of upon written request of any Purchaser.  The Company, on or before the Closing
Date, shall take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for or to qualify the Shares for sale
to the Purchasers under applicable securities or "Blue Sky" laws of the states
of the United States (or to obtain an exemption from such qualification) and
shall provide evidence of such actions promptly upon the written request of any
Purchaser.
 
4.9      Delivery of Shares After Closing.  The Company shall deliver, or cause
to be delivered, the Shares purchased by each Purchaser to such Purchaser within
3 Trading Days of the applicable Closing Date.
 
4.10    Piggy-Back Registrations.  If the Company shall determine 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 on Form S-4 or Form S-8 (each as promulgated under
the Securities Act), then the Company shall send to each Purchaser a written
notice of such determination and, if within 15 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 such Registrable
Securities  such Purchaser requests to be registered and sold in such
offering.  All fees and expenses incident to the Company's performance of or
compliance with its obligations under this Section 4.10 (excluding any
underwriting discounts and selling commissions and all legal fees and expenses
of legal counsel for any Purchaser) shall be borne by the Company whether or not
any Registrable Securities are sold pursuant to a Registration Statement.
 
 
ARTICLE V.
MISCELLANEOUS
 
5.1      Termination.  This Agreement may be terminated by any Purchaser, as to
such Purchaser’s obligations hereunder only and without any effect whatsoever on
the obligations between the Company and the other Purchasers, by written notice
to the Company, if the Closing has not been consummated on or before February
28, 2011.  In the event of a termination pursuant to this Section 5.1, the
Company shall promptly notify all non-terminating Purchasers.  Upon termination
in accordance with this Section 5.1, the Company and the terminating
Purchaser(s) shall not have any further obligation or liability (including
arising from such termination) to the other, and no Purchaser will have any
liability to any other Purchaser under this Agreement as a result thereof.
 
5.2      Fees and Expenses.  Except as otherwise set forth in this Agreement,
each party shall pay the fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of
this Agreement.  The Company shall pay all stamp and other taxes and duties
levied in connection with the delivery of the Shares.
 
 
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5.3      Entire Agreement.  This Agreement, together with the exhibits and
schedules hereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.  At
the Closing, and without further consideration, the Company and the Purchasers
will execute and deliver to the other such further documents as may be
reasonably requested in order to giver practical effect to the intentions of the
parties under this Agreement.
 
5.4      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 second Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (b) 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 set forth on the signature pages attached hereto.
 
5.5      Amendments; Waivers.  No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and each Purchaser or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought.  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.
 
5.6      Headings.  The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
 
5.7       Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of each Purchaser.  Any Purchaser
may assign its rights hereunder in whole or in part to any Person to whom such
Purchaser assigns or transfers the Shares, provided such transferee shall agree
in writing to be bound, with respect to the transferred Shares, by the terms and
conditions of this Agreement that apply to the "Purchasers."
 
5.8      No Third-Party Beneficiaries.  This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except each Purchaser Party is an intended third party
beneficiary of Section 4.6.
 
 
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5.9      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 legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of this Agreement), and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is improper or inconvenient venue for such proceeding.  Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by
law.  The parties hereby waive all rights to a trial by jury.
 
5.10    Survival.  Subject to applicable statute of limitations, the
representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery of the Shares.
 
5.11    Execution.  This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to 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.  Additional Purchasers may be added to this Agreement
for each Closing by attaching the Purchaser’s signature page hereto, whereupon
this Agreement shall constitute a single agreement executed and delivered
between the Company and each of the Purchasers party hereto.
 
5.12    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.
 
5.13    Replacement of Shares.  If any certificate or instrument evidencing any
Shares 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 Shares.
 
5.14    Remedies.  In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under this
Agreement.  The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
described in the foregoing sentence and hereby agrees to waive in any action for
specific performance of any such obligation the defense that a remedy at law
would be adequate.
 
 
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5.15    Independent Nature of Purchasers’ Obligations and Rights.  The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance or non-performance of the obligations
of any other Purchaser under this Agreement.  Nothing contained herein, and no
action taken by any Purchaser pursuant hereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Purchasers are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation, the
rights arising out of this Agreement, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose.  Each Purchaser has been represented by its own separate legal counsel
in their review and negotiation of this Agreement.
 
(Signature Page Follows)
 
 
 
 
 
 
21

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

VISION-SCIENCES, INC.
 
 
Address for Notice:
 
Vision-Sciences, Inc.
40 Ramland Rd. South, Suite 1
Orangeburg, NY 10962
By: _________________
       Name: Warren Bielke
       Title:    Interim CEO
 
 
With a copy to (which shall not constitute notice):
 
Proskauer Rose LLP
Attn: Paul Rachlin, Esq.
11 Times Square
New York, NY 10036
 

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOR PURCHASERS FOLLOW]
 
 
 
 
 
 
22

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[PURCHASER SIGNATURE PAGES TO COMMON STOCK PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Common Stock Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:

Signature: _____________

Email Address of Purchaser:

Address for Notice to Purchaser:

Address for Delivery of Shares for Purchaser (if not same as above):

Subscription Amount: $
Shares:
EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]