Exhibit 4.1



                          CELLEGY PHARMACEUTICALS, INC.
                         COMMON STOCK PURCHASE AGREEMENT



         THIS COMMON STOCK PURCHASE  AGREEMENT  (this  "Agreement")  is made and
entered into as of November 6, 2002, by and among Cellegy Pharmaceuticals, Inc.,
a California corporation (the "Company"), and the parties listed on the Schedule
of Investors separately delivered to the Investors (the "Schedule of Investors")
(each  hereinafter  individually  referred to as an "Investor" and  collectively
referred to as the "Investors").

         1. AGREEMENT TO PURCHASE AND SELL STOCK.

                  1.1  Authorization.  As of the Closing (as defined  below) the
Company will have authorized the issuance,  pursuant to the terms and conditions
of this Agreement,  of up to 2,200,000  shares of the Company's Common Stock, no
par value (the "Common Stock").

                  1.2 Agreement to Purchase and Sell. The Company agrees to sell
to each  Investor at the Closing,  and each Investor  agrees,  severally and not
jointly,  to purchase  from the Company at the Closing,  the number of shares of
Common Stock set forth beside such Investor's name on the Schedule of Investors,
at the price per share for such Investor set forth on the Schedule of Investors.
The shares of Common Stock purchased and sold pursuant to this Agreement will be
collectively hereinafter referred to as the "Purchased Shares."

         2. CLOSING.

                  2.1 The Closing. The purchase and sale of the Purchased Shares
will take place at the offices of Fenwick & West LLP,  815  Connecticut  Avenue,
Suite 200, Washington, D.C., at 4:30 p.m., Eastern Standard Time, on November 6,
2002,  or at such other time and place as the  Company  and  Investors  who have
agreed to purchase a majority of the Purchased  Shares listed on the Schedule of
Investors  mutually  agree upon  (which  time and place are  referred to in this
Agreement as the  "Closing"),  provided  that the closing may not be delayed for
more than five  business  days  without  the  consent of all  Investors.  At the
Closing,  the Investor will purchase the number of Purchased Shares shown on the
Schedule of  Investors  against  delivery  to the  Investor  (or its  designated
custodian) by the Company of a certificate  representing  such Purchased  Shares
and/or a copy of the Company's irrevocable instructions to its transfer agent to
prepare and issue such  certificate,  with delivery of such certificate to occur
within three (3) business  days  thereafter.  The full  purchase  price for such
Purchased  Shares  shall  be  paid at  Closing  by (i) a  check  payable  to the
Company's  order,  (ii)  wire  transfer  of funds to the  Company  or (iii)  any
combination  of  the  foregoing,  in  each  case  subject  to  reasonable  prior
notification.

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         3.  REPRESENTATIONS  AND WARRANTIES OF THE COMPANY.  The Company hereby
represents and warrants to Investor that,  except as set forth in the Disclosure
Schedule and  Schedule of  Exceptions  (the  "Disclosure  Schedule")  separately
delivered  by the Company to the  Investors,  the  statements  in the  following
paragraphs of this Section 3 are all true and correct:

                  3.1 Organization, Good Standing and Qualification. Each of the
Company and the Subsidiaries is a corporation  duly organized,  validly existing
and in good  standing  under  the  laws of the  jurisdiction  under  which it is
incorporated, and has all requisite corporate power and authority to conduct its
business as currently  conducted and to execute,  deliver and perform all of its
obligations under this Agreement and to consummate the transactions contemplated
hereby.  Each of the Company and the Subsidiaries is qualified to do business as
a foreign  corporation  in each  jurisdiction  where  failure to be so qualified
could,  individually  or in the  aggregate,  reasonably  be  expected  to have a
material adverse effect on the business, assets, financial condition, results of
operations, or assets of the Company and the Subsidiaries, taken as a whole (the
"Business")  (such  effect  referred to as a  "Material  Adverse  Effect").  For
purposes of this  Agreement,  "Material  Adverse  Effect"  shall not include any
effect  attributable  to changes in the trading prices for the Company's  Common
Stock.

                  3.2  Capitalization.   Immediately  before  the  Closing,  the
capitalization of the Company will consist of the following:

                           (a) Preferred Stock. A total of 5,000,000  authorized
shares of Preferred Stock, no par value per share (the "Preferred Stock"),  none
of which are issued and outstanding.

                           (b) Common Stock.  A total of  35,000,000  authorized
shares of Common Stock, of which approximately 17,304,976 shares were issued and
outstanding as of October 31, 2002.

                           (c) Options,  Warrants,  Reserved Shares. Except for:
(i) the approximately 4,173,750 shares of Common Stock issuable upon exercise of
options  outstanding  under the Company's 1995 Equity Incentive Plan and 284,500
shares of Common Stock issuable upon exercise of options  outstanding  under the
1995 Directors'  Stock Option Plan, as of October 31, 2002,  (ii)  approximately
44,822  additional  shares of  Common  Stock  reserved  for  issuance  under the
Company's  1995  Directors  Stock  Option  Plan,  (iii)  approximately   178,840
additional shares of Common Stock reserved for issuance under the Company's 1995
Equity   Incentive   Plan  and  (iv)   warrants  to  purchase  an  aggregate  of
approximately  394,100  shares of Common Stock,  there are not  outstanding  any
options, warrants, rights or agreements for the purchase or acquisition from the
Company of any shares of its capital stock or any securities convertible into or
ultimately  exchangeable or exercisable for any shares of the Company's  capital
stock. All of such outstanding shares of capital stock have been duly authorized
and validly issued and are fully paid and nonassessable and all of such options,
warrants and other rights to acquire  Common Stock have been duly  authorized by
the  Company.  None of the  outstanding  shares of  capital  stock and  options,
warrants and other  rights to acquire  Common Stock has been issued in violation
of the preemptive rights of any security holder of the Company.

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                  3.3 Subsidiaries.  Except for Cellisis Pharmaceuticals,  Inc.,
Cellegy  Australia Pty Ltd,  Cellegy  International  Holdings  Ltd.,  Cellegy UK
Limited, and Cellegy Canada, Inc.  (collectively,  the "Subsidiaries"),  each of
which is not a  "significant  subsidiary"  as defined in Rule 1-02 of Regulation
S-X, the Company does not presently own or control, directly or indirectly,  any
interest  in  any  other   corporation,   partnership,   trust,  joint  venture,
association, or other entity. All the outstanding shares of capital stock of, or
other equity  interests  in, each  Subsidiary  have been validly  issued and are
fully paid and nonassessable and are owned directly or indirectly by the Company
free and clear of all pledges, claims, liens, charges,  encumbrances or security
interests of any kind or nature  whatsoever,  and free of any restriction on the
right to vote,  sell or otherwise  dispose of such capital stock or other equity
interests.

                  3.4 Due Authorization;  No Violation.  All corporate action on
the part of the Company and its officers,  directors and shareholders  necessary
for the  authorization,  execution and delivery of, and the  performance  of all
obligations  of  the  Company  under,   this  Agreement  and  the   transactions
contemplated hereby, and the authorization,  issuance,  reservation for issuance
and delivery of all of the Purchased Shares being sold under this Agreement, has
been taken or will be taken prior to the Closing, and this Agreement constitutes
a valid and legally binding obligation of the Company,  enforceable  against the
Company in accordance with its terms, except as enforceability may be limited by
(i) applicable bankruptcy,  insolvency,  reorganization or other laws of general
application  relating to or  affecting  the  enforcement  of  creditors'  rights
generally  and (ii) the effect of rules of law  governing  the  availability  of
equitable  remedies.  Neither  the  execution,  delivery or  performance  by the
Company  of  this  Agreement  nor  the   consummation  by  the  Company  of  the
transactions contemplated hereby will (i) conflict with or result in a breach of
any  provision of the  Restated  Articles of  Incorporation  of the Company (the
"Restated  Articles") or the Company's  Bylaws or the comparable  organizational
documents of any of the Subsidiaries,  (ii) conflict with, result in a violation
or  breach  of, or cause a  default  (or give rise to any right of  termination,
cancellation  or  acceleration),  or result in the creation or imposition of any
lien,  security  interest,  charge or encumbrance  upon any of the properties or
assets  of the  Company  or any of the  Subsidiaries,  under  any of the  terms,
conditions or provisions of any agreement, instrument or obligation to which the
Company or any of the Subsidiaries is a party, which default could, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect or
(iii) violate any law,  statute,  rule or regulation or judgment,  order,  writ,
injunction  or decree of any  governmental  authority,  in each case  under this
clause  (iii)  applicable  to the Company or any of the  Subsidiaries  or any of
their  respective  properties  or  assets  and  which,  individually  or in  the
aggregate,  could,  individually or in the aggregate,  reasonably be expected to
have a Material  Adverse Effect.  The business and operations of the Company and
the  Subsidiaries  have been conducted in accordance  with all applicable  laws,
rules  and  regulations  of  all  governmental  authorities,   except  for  such
violations  which could not,  individually  or in the  aggregate,  reasonably be
expected to have a Material Adverse Effect.

                  3.5  Valid  Issuance  of Stock.  The  Purchased  Shares,  when
issued,  sold and delivered in accordance  with the terms of this  Agreement for
the consideration  provided for herein,  will be duly and validly issued,  fully
paid and  nonassessable and free and clear of all pledges,  liens,  encumbrances
and  restrictions  (other than those arising  under federal or state  securities
laws as a  result  of the  private  placement  of the  Purchased  Shares  to the
Investors)  and are not subject to  preemptive  or other  similar  rights of any
shareholder of the Company.

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                  3.6  Governmental  Consents.  No consent,  approval,  order or
authorization of, or registration,  qualification,  designation,  declaration or
filing with, any federal,  state or local governmental  authority on the part of
the Company or any of the  Subsidiaries is required in connection with the valid
execution and delivery of this  Agreement,  the offer,  sale and issuance of the
Purchased Shares,  or the consummation of the transactions  contemplated by this
Agreement,  except for  qualifications  or filings under the  Securities  Act of
1933,  as amended  (the "Act") and the  applicable  rules and  regulations  (the
"Rules  and  Regulations")  of  the  Securities  and  Exchange  Commission  (the
"Commission") under the Act, and all other applicable  securities laws as may be
required in connection with the transactions contemplated by this Agreement. All
such qualifications will be effective on the Closing,  and all such filings will
be made within the time prescribed by law.

                  3.7 Absence of Changes. After the respective dates as of which
information is given in the Company's  Proxy Statement for the annual meeting of
shareholders  held on June 5, 2002, the Company's Annual Report on Form 10-K for
the year ended  December 31, 2001, the Company's  Quarterly  Report on Form 10-Q
for the  quarters  ended March 31,  2002 and June 30,  2002,  and the  Company's
Reports  on Form 8-K filed on April 26,  2002 and April 29,  2002,  respectively
(such documents, together with the Disclosure Schedule, referred to collectively
as the  "Disclosure  Documents"),  there has not been (i) any  Material  Adverse
Effect on the Business,  (ii) any transaction that is material to the Company or
any of the  Subsidiaries,  (iii) any obligation,  direct or contingent,  that is
material to the Company or any of the  Subsidiaries,  incurred by the Company or
such Subsidiary,  (iv) any change in the outstanding indebtedness of the Company
or any of the  Subsidiaries  that is material to the Company or such Subsidiary,
(v) any  dividend  declared,  paid or made on the capital  stock of the Company,
(vi) any loss or damage  (whether or not insured) to the property of the Company
or any of the Subsidiaries which has been sustained which could, individually or
in the  aggregate,  reasonably be expected to have a Material  Adverse Effect or
(vii) any other event which could reasonably be expected to adversely affect the
validity or enforceability of, or the authority or the ability of the Company to
perform its obligations under, this Agreement.

                  3.8   Litigation.   Except  as  disclosed  in  the  Disclosure
Documents,  there  is  no  action,  suit,  proceeding,   claim,  arbitration  or
investigation  ("Action")  pending (or, to the  Company's  knowledge,  currently
threatened) against the Company or any of the Subsidiaries,  or their respective
activities,  properties or assets,  which (i) might prevent the  consummation of
the transactions  contemplated  hereby or (ii) if adversely resolved against the
Company or such Subsidiary could adversely affect the validity or enforceability
of, or the authority or ability of the Company to perform its obligations under,
this  Agreement,  or could,  individually  or in the  aggregate,  reasonably  be
expected to have a Material Adverse Effect.

                  3.9 NASDAQ Listing.  The Company's  Common Stock is registered
pursuant to Section  12(g) of the  Securities  Exchange Act of 1934,  as amended
(the  "Exchange  Act") and is listed on The Nasdaq Stock Market,  Inc.  National
Market (the "Nasdaq National Market").  The Company will use its best efforts to
comply with all requirements of the National  Association of Securities Dealers,
Inc.  with  respect to the  issuance  of the  Purchased  Shares and the  listing
thereof on the Nasdaq National Market; provided, however, that the Company makes
no  representations  that it will continue to meet all of the  requirements  for
listing of the Common Stock on the Nasdaq National Market. The Company shall use
its best efforts to take such

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actions as may be necessary,  and as soon as  practicable  and in no event later
than  30 days  after  the  Closing  Date,  to file  with  Nasdaq  any  necessary
application or other document  required by Nasdaq in order to list the Purchased
Shares on the market on which they are  traded and to pay any  required  listing
fees within the required time.

                  3.10  Commission  Filings.  The  Company has filed in a timely
manner all reports and other  information  required to be filed ("Filings") with
the Commission pursuant to the Exchange Act during the preceding twelve calendar
months.  On their  respective  dates of filing,  to the Company's  knowledge the
Filings complied in all material  respects with the requirements of the Exchange
Act, and the  published  rules and  regulations  of the  Commission  promulgated
thereunder. To the Company's knowledge, on their respective dates of filing, the
Filings did not include any untrue  statement of a material  fact required to be
stated  therein or necessary  to make the  statements  therein,  in light of the
circumstances  in which  they  were  made,  not  misleading,  and all  financial
statements contained in the Filings fairly present the financial position of the
Company on the dates of such  statements  and the results of operations  for the
periods  covered  thereby  in  accordance  with  generally  accepted  accounting
principles  consistently  applied  throughout  the  periods  involved  and prior
periods,   except  as  otherwise  indicated  in  the  notes  to  such  financial
statements.

                  3.11   Disclosure.    To   the   Company's   knowledge,    the
representations and warranties made by the Company in this Agreement  (including
the  Disclosure  Schedule) and the Filings when read together do not contain any
untrue  statement  of a material  fact and do not omit to state a material  fact
necessary to make the statements herein as a whole not misleading.

                  3.12   Governmental   Permits,   Etc.   The  Company  and  the
Subsidiaries possesses all licenses, franchises, governmental approvals, permits
or other governmental authorizations  (collectively,  "Authorizations") relating
to the operation of the Business, except for those Authorizations the failure of
which to possess  could not,  individually  or in the  aggregate,  reasonably be
expected to have a Material Adverse Effect. The Company and the Subsidiaries are
in compliance  with the terms of all  Authorizations  and all laws,  ordinances,
regulations  and decrees which are  applicable to the Business,  except for such
non-compliance which could not, individually or in the aggregate,  reasonably be
expected to have a Material Adverse Effect.

                  3.13 Insurance.  The Company and the  Subsidiaries are covered
by, and will  continue to be covered by,  insurance  with  companies the Company
believes to be  responsible  and in such amounts and  covering  such risks as it
believes to be adequate  for the  conduct of the  Business  and the value of the
Company's  and the  Subsidiaries'  properties  and as is customary for companies
engaged in similar businesses in similar  industries,  all of which insurance is
in full force and effect. The Company has no knowledge that any such carrier has
grounds or intends to cancel or fail to renew such policies on terms  acceptable
to the Company.

                  3.14  Intellectual   Property.  The  Company  or  one  of  the
Subsidiaries owns or possesses the patents, patent rights, licenses, inventions,
copyrights,  trademarks,  know-how (including trade secrets and other unpatented
and/or  unpatentable  proprietary  or  confidential   information,   systems  or
procedures) and other rights or interests in items of intellectual property that
are  material to the  Business as operated by the Company and the  Subsidiaries,
and as expected to be operated by the Company and the  Subsidiaries  in the next
12 months with respect

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to the Company's  Cellegesic and Tostrex product candidates  (collectively,  the
"Patent  and  Proprietary   Rights");   neither  the  Company  nor  any  of  the
Subsidiaries has received notice of any asserted material rights with respect to
any of the Patent and Proprietary Rights; and neither the Company nor any of the
infringement of or material conflict with asserted rights of others with respect
to any of the Patent and Proprietary Rights. To the Company's knowledge, neither
the Company nor any of the Subsidiaries infringes upon the proprietary rights of
others in any material respect.

                  3.15  Financial  Statements.  The financial  statements of the
Company and the related  notes  thereto  included  in the  Disclosure  Documents
present fairly, in accordance with generally accepted accounting principles, the
financial position of the Company as of the dates indicated,  and the results of
its operations and cash flows for the periods therein specified (except that the
unaudited  financial  statements do not contain all notes  required by generally
accepted  accounting  principles  and  are  subject  to  normal  year-end  audit
adjustments).  Such financial statements (including the related notes) have been
prepared in accordance with generally accepted accounting  principles applied on
a consistent basis throughout the periods therein specified ("GAAP"), subject in
the  case  of  unaudited   financial   statements,   to  normal  year-end  audit
adjustments.  Except as set forth in the  financial  statements  included in the
Disclosure  Documents,  neither the Company nor any of the  Subsidiaries has any
material  liabilities of any nature (whether  accrued,  absolute,  contingent or
otherwise) that are required by GAAP to be included in such financial statements
other than  liabilities  arising after the date of the most recent balance sheet
included in such financial statements which were incurred in the ordinary course
of business consistent with past practice.

                  3.16 Internal  Accounting  Controls.  The Company  maintains a
system of  internal  accounting  controls  sufficient,  in the  judgment  of the
Company's  board  of  directors,   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.

                  3.17 Title.  The Company or one of the  Subsidiaries  has good
and  marketable  title in fee simple to all real property and personal  property
owned  by  them  which  is  material  to the  business  of the  Company  and the
Subsidiaries,  taken as a whole,  in each  case  free and clear of all liens and
encumbrances,  except for liens that do not materially  affect the value of such
property and do not interfere  with the use made and proposed to be made of such
property by the Company or such Subsidiary or for equipment  leases or operating
leases  entered into in the ordinary  course of the Company's or a  Subsidiary's
business.  Any real property and facilities held under lease by the Company or a
Subsidiary are held by it under valid,  subsisting and enforceable  leases, with
such  exceptions as are not material and do not interfere  with the use made and
proposed  to be made of such  property  and  facilities  by the  Company or such
Subsidiary.

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                  3.18. Form S-3. The Company meets the requirements for the use
of Form S-3 for the  registration of the resale of the Purchased Shares and will
use its best  efforts to  maintain  S-3 status  with the  Commission  during the
Registration Period (as defined in Section 7.2(a)). The Company does not know of
any current facts or circumstances  that would prohibit or delay the preparation
and  filing  of a  registration  statement  on  Form  S-3  with  respect  to the
Registrable Securities (as defined in Section 7.1(d)).

                  3.19. Tax Matters. The Company and the Subsidiaries have filed
all federal, state and local income and franchise and other tax returns required
to be filed  and  have  paid  all  taxes  due,  and no tax  deficiency  has been
determined   adversely  to  the  Company  or  any  of  the  Subsidiaries  which,
individually  or in the  aggregate,  has had (nor does the Company or any of the
Subsidiaries  have any  knowledge of any tax  deficiency  which,  if  determined
adversely  to  the  Company  or a  Subsidiary,  could,  individually  or in  the
aggregate, reasonably be expected to have) a Material Adverse Effect.

                  3.20.  Investment  Company.  The Company is not an "investment
company"  within the  meaning of such term under the  Investment  Company Act of
1940 and the rules and regulations of the Commission thereunder.

                  3.21.  No General  Solicitation;  No  Integration.  No form of
general  solicitation or general  advertising was used by the Company or, to its
knowledge,  any other person acting on behalf of the Company,  in respect of the
Purchased  Shares or in  connection  with the  offer  and sale of the  Purchased
Shares.  The Company has not sold,  offered to sell,  solicited offers to buy or
otherwise  negotiated in respect of any  "security" (as defined in the Act) that
is or could be integrated with the sale of the Purchased Shares in a manner that
would require the registration of the Purchased Shares under the Act.

                  3.22.   No   Registration.   Assuming   the  accuracy  of  the
representations  and warranties  made by, and compliance  with the covenants of,
the Investors in Section 4 hereof, no registration of the Purchased Shares under
the Act is required in connection  with the sale of the Purchased  Shares to the
Investors as contemplated by this Agreement.

                  3.23. FDA Matters and Clinical Trials.

                           (a) Neither  the Company nor any of the  Subsidiaries
has received any notices or  correspondence  from any federal,  state,  local or
foreign  regulatory  body that  regulates  the types of  matters  subject to the
jurisdiction  of the U.S. Food and Drug  Administration  ("Health  Authorities")
which  have  not  been  resolved   requiring  or  threatening  the  termination,
suspension or modification of any animal studies,  preclinical tests or clinical
trials conducted by or on behalf of the Company or any of the Subsidiaries or in
which the Company or any of the Subsidiaries has participated that are described
in the  Disclosure  Documents  or the  results of which are  referred  to in the
Disclosure  Documents.  To the knowledge of the Company,  the currently  pending
clinical trials,  studies and other  preclinical tests conducted by or on behalf
of the Company or any of the  Subsidiaries or in which the Company or any of the
Subsidiaries has participated and that are described in the Disclosure Documents
or the results of which are referred to in the Disclosure  Documents,  are being
conducted in accordance  with  experimental

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protocols,  procedures and controls  generally used by qualified  experts in the
preclinical or clinical study of new drugs.

                           (b) The Company has no knowledge of any adverse event
that  has  resulted  from any of such  studies,  tests  or  trials  that was not
disclosed as required to any Health Authority.

                  3.24.  Material  Contracts.  All  material  contracts  of  the
Company  and  the  Subsidiaries  that  are  required  by  applicable  rules  and
regulations of the Commission to be filed as exhibits to the Filings  ("Material
Contracts") have been so filed and, except for the Material  Contracts that have
been terminated or are no longer in effect in accordance  with their terms,  are
valid, subsisting,  in full force and effect and binding upon the Company or one
of the Subsidiaries and the other parties thereto (subject to the exceptions set
forth in the first sentence of Section 3.4 above), and the Company or one of the
Subsidiaries  has paid in full or accrued all amounts  due  thereunder  and have
satisfied  in  full  or  provided  for all of its  liabilities  and  obligations
thereunder  in  all  material  respects.  Neither  the  Company  nor  any of the
Subsidiaries  has received  notice of a default and is not in default under,  or
with  respect to, any Material  Contract.  To the  knowledge of the Company,  no
other  party to any  Material  Contract is in default  thereunder,  nor does any
condition  exist that with  notice or lapse of time or both would  constitute  a
default by such other party thereunder.

                  3.25. State Takeover  Statutes.  The Board of Directors of the
Company has approved this Agreement and the  transactions  contemplated  hereby,
and such approval is sufficient to render inapplicable to this Agreement and the
transactions  contemplated  hereby  any state  takeover  or  similar  statute or
regulation  that  would  otherwise  be  applicable  to  this  Agreement  or  the
transactions contemplated hereby.

         4.  REPRESENTATIONS,  WARRANTIES  AND CERTAIN  AGREEMENTS OF INVESTORS.
Each Investor hereby  severally and not jointly  represents and warrants to, and
agrees with, the Company, that:

                  4.1 Authorization.  All action (corporate or otherwise) on the
part of the Investor and its officers,  directors and stockholders necessary for
the  authorization,  execution  and  delivery  of,  and the  performance  of all
obligations  of the Investor  under,  this  Agreement  has been taken or will be
taken prior to the Closing,  and this Agreement  constitutes a valid and legally
binding  obligation  of  the  Investor,  enforceable  against  the  Investor  in
accordance  with its  terms,  except as  enforceability  may be  limited  by (i)
applicable  bankruptcy,  insolvency,  reorganization  or other  laws of  general
application  relating to or  affecting  the  enforcement  of  creditors'  rights
generally  and (ii) the effect of rules of law  governing  the  availability  of
equitable remedies.

                  4.2  Purchase  for Own  Account.  The  Purchased  Shares to be
purchased by such Investor  hereunder  will be acquired for  investment for such
Investor's  own account,  not as a nominee or agent,  and not with a view to the
public resale or  distribution  thereof  within the meaning of the Act, and such
Investor has no present intention of selling,  granting any participation in, or
otherwise  distributing  the same in violation of the Act. If not an individual,

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such  Investor  also  represents  that such Investor has not been formed for the
specific purpose of acquiring Purchased Shares.

                  4.3  Disclosure  of  Information.  The  Investor  has received
and/or had full access to a copy of the Disclosure Documents and has received or
has had full access to all the information it considers necessary or appropriate
to make an informed  investment decision with respect to the Purchased Shares to
be purchased by the Investor under this Agreement.  Investor  further has had an
opportunity to ask questions and receive answers from the Company  regarding the
terms and  conditions  of the  offering  of the  Purchased  Shares and to obtain
additional  information (to the extent the Company possessed such information or
could acquire it without unreasonable effort or expense) necessary to verify any
information  furnished to the Investor or to which the Investor had access.  The
foregoing,  however, does not in any way limit or modify the representations and
warranties  made by the Company in Section 3. In connection with its decision to
purchase the Purchased Shares,  the Investor has relied solely on the Disclosure
Documents,  the  representations,  warranties  and agreements of the Company set
forth in this Agreement,  as well as any  investigation of the Company completed
by the  Investor or its  advisors;  and the  Investor has not relied on any oral
statement made by the Company.

                  4.4 Investment Experience.  Such Investor understands that the
purchase of the Purchased Shares involves  substantial risk. Such Investor:  (i)
has  experience  as an investor in  securities  of companies in the  development
stage and acknowledges  that such Investor is able to fend for itself,  can bear
the economic risk of such Investor's  investment in the Purchased Shares and has
such  knowledge  and  experience  in  financial  or business  matters  that such
Investor is capable of evaluating the merits and risks of this investment in the
Purchased  Shares and  protecting  its own  interests  in  connection  with this
investment, and/or (ii) has a preexisting personal or business relationship with
the Company or one or more of its officers or directors.

                  4.5   Accredited   Investor   Status.   Such  Investor  is  an
"accredited  investor" within the meaning of Regulation D promulgated  under the
Act.

                  4.6 Restricted Securities.  Such Investor understands that the
Purchased  Shares are  characterized  as "restricted  securities"  under the Act
inasmuch  as they are being  acquired  from the  Company  in a  transaction  not
involving a public offering and that under the Act and the Rules and Regulations
such securities may be resold without registration under the Act only in certain
limited  circumstances.  In this connection,  such Investor represents that such
Investor is familiar with Rule 144 of the Commission and  understands the resale
limitations  imposed  thereby  and by the Act and  understands  that  the  Shelf
Registration Statement (as defined in Section 7.2(a)) and any other registration
statement  contemplated  by this  Agreement  to effect the  registration  of the
Purchased  Shares for purposes of resale  thereunder may never become  effective
under the Act.

                  4.7 Further  Limitations  on  Disposition.  Without in any way
limiting the  representations  set forth above, such Investor further agrees not
to make any disposition of all or any portion of the Purchased Shares unless and
until:

                                       9
<PAGE>

                           (a) there is then in effect a registration  statement
under the Act covering such proposed disposition and such disposition is made in
accordance with such  registration  statement and the provisions of Section 7 of
this Agreement; or

                           (b) (i) such Investor shall have notified the Company
of the  proposed  disposition  and  shall  have  furnished  the  Company  with a
statement of the circumstances  surrounding the proposed  disposition,  and (ii)
such Investor shall have furnished the Company,  at the expense of such Investor
or its transferee,  with an opinion of counsel,  reasonably  satisfactory to the
Company,  that such disposition will not require registration of such securities
under the Act.

                Notwithstanding  the provisions of paragraphs (a) and (b) above,
no such registration  statement or opinion of counsel shall be required: (i) for
any routine transfer of any Purchased Shares in compliance with Rule 144 or Rule
144A  (except  that an opinion of counsel may be required for other than routine
Rule 144  transactions),  or (ii) for any  transfer  of  Purchased  Shares by an
Investor  that is a  partnership,  limited  liability  corporation  ("LLC") or a
corporation  to (A) a  partner  of  such  partnership,  member  of  such  LLC or
shareholder of such  corporation  on a basis  proportionate  to their  ownership
interests in such partnership, LLC or corporation, or (B) the estate of any such
partner,  member or  shareholder,  or (iii) for the  transfer  by gift,  will or
intestate  succession by any Investor to his or her spouse or lineal descendants
or ancestors or any trust for any of the  foregoing;  provided,  that in each of
the foregoing cases the transferee  agrees in writing to be subject to the terms
of this  Agreement  to the same  extent as if the  transferee  were an  original
Investor hereunder.

                  4.8 Legends. It is understood that the certificates evidencing
the Purchased Shares will bear the legends set forth below:

                           (a) THE SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN
REGISTERED  UNDER THE SECURITIES  ACT OF 1933, AS AMENDED (THE "ACT"),  OR UNDER
THE  SECURITIES  LAWS  OF  CERTAIN  STATES.  THESE  SECURITIES  ARE  SUBJECT  TO
RESTRICTIONS ON TRANSFERABILITY  AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED  UNDER THE ACT AND THE  APPLICABLE  STATE  SECURITIES  LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.  INVESTORS SHOULD BE AWARE THAT
THEY MAY BE  REQUIRED  TO BEAR THE  FINANCIAL  RISKS OF THIS  INVESTMENT  FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE  SATISFACTORY  TO THE ISSUER TO THE EFFECT THAT
ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

                           (b) THE  SHARES  EVIDENCED  BY THIS  CERTIFICATE  ARE
SUBJECT TO THE PROVISIONS OF, AND MAY HAVE CERTAIN  REGISTRATION RIGHTS PURSUANT
TO, THE PROVISIONS OF A PURCHASE  AGREEMENT  BETWEEN THE COMPANY AND THE HOLDER,
WHICH MAY RESTRICT THE TRANSFER OF SUCH SHARES IN CERTAIN CIRCUMSTANCES.  A COPY
OF SUCH AGREEMENT MAY BE OBTAINED,  WITHOUT CHARGE,  AT THE COMPANY'S  PRINCIPAL
OFFICE.

                                       10
<PAGE>

         The legends set forth in (a) and (b) above  shall,  upon the request of
an Investor, be promptly removed by the Company from any certificate  evidencing
Purchased  Shares  upon  delivery to the Company of an opinion of counsel to the
Investor, reasonably satisfactory to the Company, that the legended security can
be freely transferred in a public sale without a registration statement being in
effect  under  the Act  and in  compliance  with  exemption  requirements  under
applicable  state securities laws and that such transfer will not jeopardize the
exemption or exemptions from  registration  pursuant to which the Company issued
the Purchased Shares; provided,  however, that no such opinion shall be required
in  connection  with  routine  sales of Purchased  Shares  pursuant to the Shelf
Registration  Statement (as defined below)  (provided  that  customary  forms of
brokers' and sellers'  representation  letters are provided in  connection  with
such sales) or routine  requests for legend  removal where the Purchased  Shares
can be sold by an Investor pursuant to the provisions of Rule 144. In connection
with any such opinion,  the Investor shall provide such certifications as may be
reasonably be deemed necessary for the delivery of such opinion.

                  4.9 Resale  Restrictions.  Except as provided in Section  4.7,
the Investor  will not,  prior to the  effectiveness  of the Shelf  Registration
Statement (as defined below),  directly or indirectly offer,  sell,  contract or
grant an option to sell, pledge,  encumber, or otherwise dispose of or otherwise
transfer, or enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic  consequences  of ownership of (whether
any such  transaction  described  above is to be settled by  delivery  of Common
Stock or such other  securities,  in cash or otherwise) (a  "Disposition"),  any
Purchased Shares (other than to donees, shareholders or partners of the Investor
who agree to be  similarly  bound),  and after the  effective  date of the Shelf
Registration  Statement the Investor will not make any  Disposition of Purchased
Shares in violation of the Act.

         5.       CONDITIONS TO INVESTOR'S OBLIGATIONS AT CLOSING.

                  5.1 Closing.  The obligations of each Investor under Section 2
of this Agreement to purchase the Purchased Shares at the Closing are subject to
the  fulfillment or waiver,  on or before the Closing,  of each of the following
conditions,  and the Company shall use its best efforts to cause such conditions
to be satisfied on or before the Closing:

                           5.1.1  Representations  and Warranties  True. Each of
the  representations  and  warranties  of the  Company  contained  in  Section 3
qualified as to materiality shall be true and correct and those not so qualified
shall be true and correct in all material respects on and as of the Closing with
the same effect as though such  representations  and warranties had been made on
and as of the Closing.

                           5.1.2  Performance.  The Company shall have performed
and complied in all  material  respects  with all  agreements,  obligations  and
conditions  contained  in this  Agreement  that are  required to be performed or
complied  with by it on or before  the  Closing  and  shall  have  obtained  all
approvals,  consents and  qualifications  necessary to complete the purchase and
sale described herein.

                           5.1.3 Compliance Certificate.  The Company shall have
delivered to the Investors at the Closing a certificate  signed on its behalf by
its President,  Chief Executive

                                       11
<PAGE>

Officer, or Chief Financial Officer certifying that the conditions  specified in
Sections 5.1.1 and 5.1.2 have been fulfilled.

                           5.1.4 Registration;  Securities Exemptions. The offer
and sale of the  Purchased  Shares to the Investors  pursuant to this  Agreement
shall  be  exempt  from  the  registration  requirements  under  the Act and the
California  Corporate  Securities  Law  of  1968,  as  amended,  and  the  rules
thereunder (the "Law") and the registration and/or qualification requirements of
all other applicable state securities laws.

                           5.1.5 No  Material  Change.  There shall have been no
Material Adverse Effect on the Business from the date of this Agreement.

                           5.1.6 Opinion of Counsel.  The  Investors  shall have
received  an  opinion of counsel  to the  Company  substantially  in the form of
Exhibit A attached hereto.

         6.       CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING.

                  6.1.  Closing.  The  obligations  of the  Company  under  this
Agreement  to sell the  Purchased  Shares to the  Investors  at the  Closing are
subject to the fulfillment or waiver, on or before the Closing, of the following
condition by the Investor, and each Investor shall use its best efforts to cause
such conditions to be satisfied on or before the Closing:

                           6.1.1    Representations    and    Warranties.    The
representations  and warranties of the Investor contained in Section 4 qualified
as to materiality  shall be true and correct and those not so qualified shall be
true and correct in all material respects on and as of the Closing with the same
effect as though such  representations and warranties had been made on and as of
the Closing.

                           6.1.2 Payment of Purchase  Price.  The Investor shall
have  delivered  to the  Company the  purchase  price for the  Purchased  Shares
specified for such  Investor on the Schedule of Investors  attached  hereto,  in
accordance  with the provisions of Section 2, subject to the Company's  delivery
of certificates for such shares.

         7.       REGISTRATION RIGHTS.

                  7.1      Definitions.  For purposes of this Agreement:

                           (a) Form S-3.  The term  "Form  S-3"  means such form
under the Act as is in effect on the date hereof or any  successor  registration
form under the Act subsequently adopted by the Commission that permits inclusion
or  incorporation  of substantial  information  by reference to other  documents
filed by the Company with the Commission.

                           (b) Holder.  The term "Holders" shall mean holders of
Registrable Securities that have registration rights pursuant to this Agreement.

                           (c) Registration. The terms "register," "registered,"
and  "registration"  refer to a registration  effected by preparing and filing a
registration  statement  in  compliance  with the Act,  and the  declaration  or
ordering of effectiveness of such registration statement.

                                       12
<PAGE>

                           (d)  Registrable  Securities.  The term  "Registrable
Securities"  means: (1) all of the Purchased  Shares,  (2) any additional shares
issued  pursuant  to Section  7.2(a)  and (3) any shares of Common  Stock of the
Company issued or issuable, from time to time, upon any reclassification,  share
combination,   share  subdivision,  stock  split,  share  dividend,  or  similar
transaction or event, or otherwise as a distribution on, in exchange for or with
respect to any of the foregoing;  provided,  however, that the term "Registrable
Securities"  shall  exclude  in  all  events  (and  such  securities  shall  not
constitute  "Registrable  Securities")  (i) any  Registrable  Securities sold or
transferred  by a person  in a  transaction  in which  the  registration  rights
granted under this Agreement are not assigned in accordance  with the provisions
of this  Agreement,  (ii) any  Registrable  Securities sold in a public offering
pursuant to a registration  statement filed with the Commission or sold pursuant
to Rule 144  promulgated  under the Act ("Rule  144") or (iii) as to any Holder,
the  Registrable  Securities  held by  such  Holder  if all of such  Registrable
Securities  can  be  publicly  sold  without  restriction  (including,   without
limitation,  as to volume, but by complying with the manner of sale and Form 144
filing requirements, if applicable) within a three-month period pursuant to Rule
144.

                           (e) Prospectus:  The term "Prospectus" shall mean the
prospectus  included in any Shelf  Registration  Statement  (including,  without
limitation,  a prospectus that discloses  information  previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule  430A  promulgated  under the  Act),  as  amended  or  supplemented  by any
prospectus supplement (including,  without limitation, any prospectus supplement
with  respect to the terms of the  offering  of any  portion of the  Registrable
Securities  covered  by  such  Shelf  Registration  Statement),  and  all  other
amendments  and   supplements  to  the  Prospectus,   including   post-effective
amendments,  and  all  material  incorporated  by  reference  or  deemed  to  be
incorporated by reference in such Prospectus.

                           (f) Shelf Registration Statement. See Section 7.2(a).

                  7.2      Form S-3 Shelf Registration.

                           (a) Registration.  The Company shall prepare and file
with the  Commission  within  45 days  following  the  Closing  and use its best
efforts (i) to have declared effective as soon as practicable thereafter (but in
any event within 90 days after  filing),  a  registration  statement on Form S-3
(or,  if the  Company  is not  then  eligible  to use  Form  S-3,  then  another
appropriate  form)  providing  for  the  resale  by  the  Holders  of all of the
Registrable Securities (the "Shelf Registration Statement"), and (ii) to provide
a transfer  agent and registrar for all  securities  registered  pursuant to the
Shelf  Registration  Statement.  The Shelf  Registration  Statement  may include
securities  other than those held by  Holders.  The  Company  shall use its best
efforts to keep the Shelf Registration Statement continuously effective (subject
to  Section  7.2(b)),  pursuant  to  the  Act  and  the  Rules  and  Regulations
promulgated  thereunder,   until  the  earliest  to  occur  of  (i)  the  second
anniversary  of the Closing Date,  (ii) as to a particular  Holder,  the date on
which the Holder  may sell all  Registrable  Securities  then held by the Holder
without  restriction  (including,  without  limitation,  as to  volume,  but  by
complying  with  the  manner  of sale  and  Form  144  filing  requirements,  if
applicable)  within a three-month  period pursuant to Rule 144 and (iii) as to a
particular Holder,  such time as all Registrable  Securities held by such Holder
have  been sold (A)  pursuant  to the Shelf  Registration  Statement,  (B) to or
through a broker or dealer or underwriter in a public  distribution  or a public
securities transaction, and/or (C) in a

                                       13
<PAGE>

transaction exempt from the registration and prospectus delivery requirements of
the Securities Act under Section 4(1) thereof so that all transfer  restrictions
and  restrictive  legends  with  respect  thereto,  if any, are removed upon the
consummation of such sale (such period, the "Registration Period"). In the event
that the Shelf  Registration  Statement  shall cease to be effective  during the
Registration  Period,  the  Company  shall  promptly  prepare  and  file  a  new
registration  statement  covering all  Registrable  Securities and shall use its
best efforts to have such registration  statement  declared effective as soon as
possible.   Any  such  registration  statement  shall  be  considered  a  "Shelf
Registration Statement" hereunder.

                           (b) Liquidated  Damages.  In the event that the Shelf
Registration  Statement (i) is not reviewed by the Commission or, if it has been
selected for review,  that the Company is not using all commercially  reasonable
efforts to have the Shelf Registration  Statement declared  effective,  and (ii)
has not been  declared  effective  prior  to the  six-month  anniversary  of the
Closing,  then the Company (i) shall immediately pay to the Investor $100,000 in
cash (such payment, the "Liquidated Damages"), by wire transfer to an account or
accounts  and in such  respective  percentages  as the  Investor  instructs  the
Company in writing.  The Company and the Investor  agree that, in the event that
under the circumstances  described above the Shelf Registration Statement is not
declared  effective within six months of the Closing,  it would be impracticable
or extremely  difficult  to fix or  determine  the  Investor's  actual  damages.
Therefore,  the  Company  and the  Investor  each  agree  that the amount of the
Liquidated  Damages has been agreed upon as liquidated damages after negotiation
as to the parties' reasonable  estimate of the Investor's  damages.  The Company
and the Investor  agree that the amount of  Liquidated  Damages is reasonable in
light of the  circumstances  existing at the  execution of this  Agreement.  The
Company and the Investor each  acknowledge  that the payment of such  Liquidated
Damages is not  intended as a  forfeiture  or penalty.  If the Company  fails to
immediately pay to the Investor any amounts due under this Section 7.2(b),  then
in addition to any amounts paid or payable pursuant to this Section, the Company
shall also pay all costs and  expenses  (including  legal fees and  expenses) in
connection  with any action,  including the filing of any lawsuit or other legal
action,  taken to enforce or collect  payment,  together  with  interest on such
payment at the maximum rate  permitted  by  applicable  law,  from the date such
payment was required to be paid.

      Initialed by _____ for the InvestorInitialed by _____ for the Company


                           (c) Permitted Window. (i) The Holders agree that they
will sell the Registrable Securities pursuant to such registration only during a
"Permitted  Window" (as defined below).  For the purposes of this  Agreement,  a
"Permitted  Window"  with  respect  to a Holder  is a period  of 30  consecutive
calendar days  commencing  upon delivery to the Holder of the Company's  written
notification to the Holder in response to a Notice of Resale that the Prospectus
contained in the Shelf Registration  Statement is available for resale. In order
to cause a Permitted Window to commence, a Holder must first give written notice
to the  Company of its bona fide  present  intention  to sell part or all of the
Registrable  Securities  pursuant to such  registration  (a "Notice of Resale").
Upon delivery of such Notice of Resale,  the Company will give written notice to
the  Holders  as soon as  practicable,  but in no event  not  more  than two (2)
business days after such delivery,  that (A) the Permitted  Window will commence
on the date such notice is delivered to the Holder,  (B) the Company believes it
is  appropriate  for  the

                                       14
<PAGE>

Company to supplement  the  Prospectus or make an  appropriate  filing under the
Exchange  Act  so as to  cause  the  Prospectus  to  become  current  (unless  a
certificate of the President or Chief Executive Officer is delivered as provided
in subparagraph  (ii) below),  or (C) the Company  believes it is required under
the Act and the Rules and Regulations thereunder to amend the Shelf Registration
Statement in order to cause the  Prospectus to be current  (unless a certificate
of the  President  or Chief  Executive  Officer  is  delivered  as  provided  in
subparagraph  (ii) below).  If the Company  determines  that a supplement to the
Prospectus,  the filing of a report pursuant to the Exchange Act or an amendment
to the Shelf  Registration  Statement required under the Act, as provided above,
is  necessary,  it will  take such  actions  as soon as  reasonably  practicable
(subject to  subparagraph  (ii) below and paragraph (d) below),  and the Company
will notify the Holder of the filing of such  supplement,  report or  amendment,
and, in the case of an amendment,  the effectiveness  thereof, and the Permitted
Window will then commence.

                           (ii)  If  the  Company  furnishes  to the  Holders  a
certificate  signed by the President or Chief  Executive  Officer of the Company
stating that, in the good faith  judgment of the Company,  it would be seriously
detrimental to the Company and its  shareholders  for sales to be made from such
Shelf  Registration  Statement  at such time (or, in the case a Notice of Resale
has been  given,  that would be  seriously  detrimental  to the  Company and its
shareholders  for the Permitted  Window to commence at such time), or that there
exists (A) a material  development or potential material  development  involving
the Company which the Company  would be obligated to disclose in the  Prospectus
contained in the Shelf  Registration  Statement,  which disclosure would, in the
good faith judgment of the President or Chief Executive  Officer or the Board of
Directors of the Company, be premature or otherwise  inadvisable at such time or
(B) a  concurrent  public  filing  by  the  Company  with  the  Commission  of a
registration  statement  (other than on Form S-8) registering the offer and sale
of shares by the Company,  then the Company  will have the right (the  "Deferral
Right") to defer the commencement of a Permitted Window for a period of not more
than 60 days  after the date of  delivery  of the  Notice of  Resale;  provided,
however, that the Company will not utilize the Deferral Right more than four (4)
times in any  twelve  month  period,  that the total  number of days  covered by
exercise of the Deferral  Rights in any twelve month period shall not exceed 180
days,  and that the Company will exercise all good faith efforts to minimize the
period  of such  delays,  consistent  with the  Company's  good  faith  business
judgment, including without limitation concerning premature public disclosure of
confidential or sensitive information;  and provided further,  however, that the
Company may defer the  commencement of the Permitted Window for up to 60 days if
so requested by an underwriter in connection  with an  underwritten  offering of
the  Company's   securities  so  long  as  any  selling   shareholders  in  such
underwritten  offering are subject to a lock-up  agreement of the same  duration
(other than with  respect to the Company  securities  to be sold by such selling
shareholders  in such  underwritten  offering).  In  connection  with  any  such
underwritten  offering described in the preceding sentence where commencement of
a Permitted  Window is deferred,  the Holders shall be given the  opportunity to
participate  in the first three such  offerings that may occur after the Closing
Date by including  all or any of their  Registrable  Securities  for sale in any
such offering,  provided that the right to include any Registrable Securities in
any such offering  shall be subject to (i) the rights of other  shareholders  of
the Company who also have rights to include  shares in such  offering,  (ii) the
ability of the  underwriter  for such  offering  to  exclude  some or all of the
shares  requested to be  registered  on the basis of a good faith  determination
that  inclusion of such  securities  might  adversely  affect the success of the
offering or otherwise  adversely  affect the Company (with any

                                       15
<PAGE>

such  exclusion  to be pro rata  among all  Holders  who are  requested  to sell
Registrable  Securities  in such  registration),  and (iii) the execution by the
Holders of the underwriting agreement and other customary documents requested by
the managing  underwriter that are executed by other holders selling  securities
in such offering,  and the furnishing of such  information  and documents as the
Company or the managing  underwriter  may reasonably  request in connection with
such  offering.  The Holders  shall be  responsible  for their pro rata share of
registration  fees and  underwriters'  and brokers'  discounts  and  commissions
relating to any Registrable Securities included in such registration.

                           (d) Closing of Permitted  Window.  During a Permitted
Window and in the event (i) of the happening of any event of the kind  described
in Section  7.2(c)(ii)  hereof or (ii) that,  in the judgment of the  President,
Chief Executive Officer or the Company's Board of Directors,  it is advisable to
suspend use of the Prospectus  for a discrete  period of time due to undisclosed
pending  corporate  developments  or pending  public filings with the Commission
(which need not be described in detail), the Company shall deliver a certificate
in writing to the Holder to the effect of the  foregoing  and,  upon delivery of
such  certificate,  the Permitted Window shall  terminate.  The Permitted Window
shall resume upon the Holder's  receipt of copies of the supplemented or amended
Prospectus,  or at such time as the Holder is advised in writing by the  Company
that the  Prospectus  may be used,  and at such time as the Holder has  received
copies of any additional or supplemental filings that are incorporated or deemed
incorporated  by  reference  in such  Prospectus  and which are  required  to be
delivered as part of the Prospectus.  In any event,  the Permitted  Window shall
resume  no later  than 60 days  after it has been  terminated  pursuant  to this
Section. If the Company has previously terminated a Permitted Window pursuant to
this  subsection  within 90 days of the date  that it  delivers  another  notice
pursuant this subsection  terminating  another Permitted  Window,  then the time
period  set  forth in the  preceding  sentence  shall be  shortened  so that the
Permitted Window shall resume no later than 30 days after it has been terminated
pursuant to such second notice.

                           (e)  Expenses.  The  registration  fees and  expenses
incurred by the Company in connection with the Shelf Registration  Statement and
actions taken by the Company in connection with any Blackout Notice,  including,
without  limitation,  all registration,  qualification and filing fees, printing
expenses,  escrow fees, fees and disbursements of counsel for the Company,  blue
sky fees and  expenses,  and the  expense of any special  audits  incident to or
required by any such  registration,  shall be borne by the Company.  Each Holder
shall be responsible for any fees and expenses of its counsel or other advisers.

                  7.3  Obligations of the Company.  The Company shall furnish to
the  Holder  such  number of copies of a  Prospectus,  including  a  preliminary
Prospectus,  in  conformity  with the  requirements  of the Act,  and such other
documents  (including  supplements  or prospectus  amendments) as the Holder may
reasonably  request in order to facilitate the public sale or other  disposition
of  the  Registrable   Securities   owned  by  it  that  are  included  in  such
registration.  In addition,  whenever required to effect the registration of any
Registrable Securities under this Agreement, the Company shall, as expeditiously
as reasonably possible:

                           (a) Use its best  efforts to (i) register and qualify
the  securities  covered  by  such  registration   statement  under  such  other
securities  or Blue  Sky  laws of such  jurisdictions  as  shall  be  reasonably
requested  by the Holder,  provided  that the  Company  shall not be required

                                       16
<PAGE>

in connection  therewith or as a condition  thereto to qualify to do business or
to  file a  general  consent  to  service  of  process  in any  such  states  or
jurisdictions,  (ii) to keep such registration or qualification in effect for so
long as the Shelf  Registration  Statement remains in effect,  and (iii) to take
any other  action which may be  reasonably  necessary or advisable to enable the
Holders to consummate the disposition in such jurisdictions of the securities to
be sold by the Holders,  consistent with the plan of  distribution  described in
the prospectus  included in the Shelf  Registration  Statement,  except that the
Company  shall not for any such  purpose be required to qualify  generally to do
business  as a  foreign  corporation  in  any  jurisdiction  where  it is not so
qualified,  or to subject  itself to  taxation in any such  jurisdiction,  or to
execute a general consent to service of process in effecting such  registration,
qualification or compliance, unless the Company is already subject to service in
such  jurisdiction  and except as may be required by the Act or applicable rules
or regulations thereunder.

                           (b)  Notify  the  Holder  promptly  (and in any event
within one business day, by email,  fax or other type of  communication)  (i) of
any  request  by the  Commission  or any  other  federal  or state  governmental
authority  during the period of  effectiveness  of a registration  statement for
amendments or supplements to such registration  statement or related  prospectus
or for  additional  information,  (ii) of the issuance by the  Commission or any
other  federal  or state  governmental  authority  of any stop  order or similar
action  suspending  the  effectiveness  of  a  registration   statement  or  the
initiation of any  proceedings  for that purpose and (iii) of the receipt by the
Company from the Commission or any other federal or state governmental authority
of any  notification  with respect to the  suspension  of the  qualification  or
exemption from  qualification  of any of the Registrable  Securities for sale in
any  jurisdiction  or the  initiation or  threatening of any proceeding for such
purpose.

                           (c) Use its best efforts to obtain the  withdrawal of
any order suspending the  effectiveness of the Shelf  Registration  Statement at
the earliest possible time.

                           (d)  Subject  to  the  limitations  described  in the
second  sentence  of  Section  3.9,  use all  its  best  efforts  to  cause  all
Registrable  Securities to be listed  continuously  throughout the  Registration
Period on each securities exchange or market, if any, on which equity securities
issued by the company are then listed.

                           (e)  Subject to the  provisions  of  Section  7.2(b),
promptly  file such  amendments  to the  Shelf  Registration  Statement  and the
Prospectus,  file  such  documents  as may be  required  to be  incorporated  by
reference  in any of such  documents,  and  take  all  other  actions  as may be
necessary  to ensure to the  holders of  Registrable  Securities  the ability to
effect the public resale of their  Registrable  Securities  (including,  without
limitation,  taking  any  actions  necessary  to ensure  the  availability  of a
Prospectus  meeting the  requirements of Section 10(a) of the Act)  continuously
throughout  the  Registration  Period;  and provide  each holder of  Registrable
Securities copies of any documents  prepared pursuant to the foregoing  promptly
after such preparation.

                  7.4 Furnish Information.  It shall be a condition precedent to
the  obligations of the Company to take any action  pursuant to Section 7.2 that
the Holder  shall  furnish to the Company  such  information  regarding  it, the
Registrable  Securities  held by it, and the intended

                                       17
<PAGE>

method of disposition  of such  securities as shall be required to timely effect
the registration of its Registrable Securities.

                  7.5 Indemnification. For the purposes of this Section 7.5, the
term  "registration  statement"  shall  include any final  Prospectus,  exhibit,
supplement, amendment or other document included in, filed as part of, deemed to
be a part of,  incorporated by reference in, or otherwise  relating to the Shelf
Registration Statement referred to in this Section 7.

                           (a) By the Company.  To the extent  permitted by law,
the Company will  indemnify  and hold harmless the  Investor,  each Holder,  the
officers and directors,  trustees,  each person, if any, who controls any Holder
and any  underwriter for each (as defined in the Act) (such persons and entities
collectively referred to as "Holder Indemnified  Parties"),  against any losses,
expenses  (including,  without limitation,  reasonable legal fees and expenses),
damages or liabilities  (including in settlement of any claim) to which they may
become  subject under the Act, the Exchange Act or other federal or state law (a
"Loss"), insofar as such Losses (or actions in respect thereof) arise out of any
claim,  action or  proceeding  brought by a third party  arising out of or based
upon any of the following (collectively, a "Violation"):

                           (i) any untrue  statement or alleged untrue statement
                  of a material fact contained in a registration statement filed
                  pursuant to this Section 7;

                           (ii) the  omission or alleged  omission to state in a
                  registration  statement  filed  pursuant  to this  Section 7 a
                  material fact required to be stated  therein,  or necessary to
                  make the statements therein not misleading;

                           (iii)  any  violation  or  alleged  violation  by the
                  Company of the Act,  the  Exchange  Act,  any federal or state
                  securities law or any rule or regulation promulgated under the
                  Act, the Exchange Act or any federal or state  securities law,
                  in each case in connection  with the offering  covered by such
                  registration statement;

                           (iv)  any  failure  by the  Company  to  fulfill  any
                  undertaking included in a registration statement; or

                           (v)  any  material  breach  of  any   representation,
                  warranty or covenant made by the Company in this Agreement;

and the Company will  reimburse each Holder  Indemnified  Party for any legal or
other  expenses  reasonably  incurred by them, as incurred,  in connection  with
investigating or defending or settling,  compromising or paying an award granted
in any proceeding relating to any such Violation;  provided,  however,  that the
indemnity agreement contained in this subsection shall not apply to amounts paid
in  settlement  of any such Loss,  if such  settlement  is effected  without the
consent of the Company, nor shall the Company be liable in any such case for any
such Loss to the  extent  that it  arises  out of or is based  upon a  Violation
caused by reliance upon and in  conformity  with written  information  furnished
expressly for use in connection with such  registration  statement by the Holder
Indemnified Party; and provided further, that the Company

                                       18
<PAGE>

will not be liable for the  reasonable  legal fees and expenses of more than one
counsel to the Holder Indemnified Parties.

                           (b) By the Holder.  To the extent  permitted  by law,
each Holder (severally and not jointly with any other Holder) will indemnify and
hold harmless the Company, each of its directors,  each of its officers who have
signed the Shelf Registration  Statement,  and each person, if any, who controls
the  Company   within  the  meaning  of  the  Act  (such  persons  and  entities
collectively referred to as "Company Indemnified Parties") against any Losses to
which such Company  Indemnified  Parties may become  subject  under the Act, the
Exchange Act or other  federal or state law,  insofar as such Losses (or actions
in respect  thereto) arise out of or are based upon any Violation,  in each case
to the extent (and only to the extent) that such Violation is caused by reliance
upon  and in  conformity  with  written  information  furnished  by  the  Holder
expressly for use in connection with such registration statement; and the Holder
will reimburse any legal or other expenses  reasonably  incurred by such Company
Indemnified  Parties in  connection  with  investigating  or defending  any such
Violation;  provided,  however,  that the indemnity  agreement contained in this
subsection  shall not apply to amounts  paid in  settlement  of any such Loss if
such settlement is effected without the consent of the Holder; provided further,
that the Holder shall not be liable for the  reasonable  legal fees and expenses
of more than one  counsel  to the  Company  Indemnified  Parties;  and  provided
further,  that in no event shall the total  amounts  payable in indemnity by the
Holder under this subsection in respect of any Violation exceed the net proceeds
(i.e., proceeds net of underwriting  discounts,  fees and commissions payable by
such Holder) received by the Holder in the registered offering out of which such
Violation arises.

                           (c) Notice.  Promptly after receipt by an indemnified
party under this Section of notice of the commencement of any action  (including
any  governmental   action),  such  indemnified  party  will,  if  a  claim  for
indemnification  in respect thereof is to be made against any indemnifying party
under this Section,  deliver to the  indemnifying  party a written notice of the
commencement of such an action and the  indemnifying  party shall have the right
to participate in, and, to the extent the indemnifying party so desires, jointly
with any other  indemnifying  party  similarly  noticed,  to assume the  defense
thereof  with  counsel  selected  by  the  indemnifying   party  and  reasonably
acceptable  to a majority  in  interest of the  indemnified  parties;  provided,
however,  that an  indemnified  party  shall  have the right to  retain  its own
counsel,  with the reasonable  fees and expenses to be paid by the  indemnifying
party,  if the  indemnified  party has been  advised in writing by counsel  that
representation  of  such  indemnified  party  by  the  counsel  retained  by the
indemnifying  party would be  inappropriate  due to actual conflict of interests
between such indemnified  party and any other party  represented by such counsel
in such  proceeding.  The failure to deliver written notice to the  indemnifying
party  within a  reasonable  time of the  commencement  of any such action shall
relieve such indemnifying party of liability to the indemnified party under this
Section to the extent,  and only to the extent that,  such delay caused material
prejudice  to the  indemnified  party,  but the  omission so to deliver  written
notice to the  indemnifying  party will not relieve it of any liability  that it
may have to any indemnified party otherwise than under this Section.

                           (d)  Defect  Eliminated  in  Final  Prospectus.   The
foregoing indemnity  agreements of the Company and the Holder are subject to the
condition  that,  insofar as they relate to any Violation  made in a preliminary
prospectus but eliminated or remedied in the

                                       19
<PAGE>

amended  prospectus  on file with the  Commission  at the time the  registration
statement in question becomes effective or in the amended  prospectus filed with
the  Commission   pursuant  to  Rule  424(b)  of  the  Commission   (the  "Final
Prospectus"),  such indemnity  agreements  shall not inure to the benefit of any
person if a copy of the Final Prospectus was furnished in a timely manner to the
indemnified  party  and was not  furnished  to the  person  asserting  the loss,
liability,  claim or damage at or prior to the time such  action is  required by
the Act.

                           (e) Contribution. If the indemnification provided for
in this  Section  7.5 is  unavailable  to or  insufficient  to hold  harmless an
indemnified  party under  subsection  (a) or (b) above in respect of any losses,
claims,  damages,  liabilities or expenses (or actions or proceedings in respect
thereof) referred to therein,  then each indemnifying  party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the Company on the
one hand and the  Holder  on the  other in  connection  with the  statements  or
omissions  or other  matters  which  resulted in such losses,  claims,  damages,
liabilities  or expenses (or actions in respect  thereof),  as well as any other
relevant  equitable  considerations.  The relative  fault shall be determined by
reference to, among other things,  in the case of an untrue  statement,  whether
the untrue statement  relates to information  supplied by the Company on the one
hand or a Holder on the  other  and the  parties'  relative  intent,  knowledge,
access to  information  and  opportunity  to  correct  or  prevent  such  untrue
statement.  The  Company and the  Investors  agree that it would not be just and
equitable if contribution pursuant to this subsection (e) were determined by pro
rata  allocation  (even if all  Holders  were  treated  as one  entity  for such
purpose) or by any other method of  allocation  which does not take into account
the  equitable  considerations  referred to above in this  subsection  (e).  The
amount  paid or  payable  by an  indemnified  party as a result  of the  losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this  subsection  (e) shall be deemed to include any legal or other  expenses
reasonably  incurred by such indemnified party in connection with  investigating
or defending any such action or claim.  Notwithstanding  the  provisions of this
subsection  (e), no Holder shall be required to contribute  any amount in excess
of the net amount of proceeds  (i.e.,  proceeds net of  underwriting  discounts,
fees and  commissions  payable by such  Holder)  received by the Holder from the
sale  of  the   Registrable   Securities.   No  person   guilty  of   fraudulent
misrepresentation  (within the meaning of Section 11(f) of the  Securities  Act)
shall be  entitled  to  contribution  from any person who was not guilty of such
fraudulent misrepresentation. Contribution (together with any indemnification or
other obligations under this Agreement) by any Holder (including any Indemnified
Person associated with such Holder) shall be limited in amount to the net amount
of proceeds (i.e., proceeds net of underwriting discounts,  fees and commissions
payable by such Holder) received by such Holder from the sale of the Registrable
Securities

                           (f) Survival.  The obligations of the Company and the
Holder  under this  Section  shall  survive the  completion  of any  offering of
Registrable Securities in a registration statement, and otherwise.

                  7.6 Rule 144  Reporting.  With a view to making  available the
benefits of certain rules and  regulations of the  Commission,  which may at any
time  permit  the  sale of the  Registrable  Securities  to the  public  without
registration, the Company agrees to:

                                       20
<PAGE>

                           (a)   Make   and  keep   adequate,   current   public
information  available,  as those terms are  understood  and defined in Rule 144
under the Act, at all times;

                           (b) File with the  Commission  in a timely manner all
reports and other documents required of the Company under the Exchange Act; and

                           (c)  So  long  as the  Holder  owns  any  Registrable
Securities,  to furnish to the Holder forthwith upon request a written statement
by the Company as to its compliance with the reporting requirements of said Rule
144, a copy of the most recent  annual or quarterly  report of the Company,  and
such other  reports and  documents  of the Company as the Holder may  reasonably
request in availing itself of any rule or regulation of the Commission  allowing
a Holder to sell any such securities without registration.

                  7.7  Termination of Company's  Obligations.  The Company shall
have no obligation to register, or maintain, a registration  statement governing
Registrable  Securities and the restrictive legend described in Section 4.8 will
be removed from any certificate  representing the Purchased  Shares,  (i) if all
Registrable  Securities have been registered and sold pursuant to  registrations
effected  pursuant to this  Agreement,  or (ii) with  respect to any  particular
Holder,  at such time as all  Registrable  Securities held by such Holder may be
sold without restriction  (including,  without limitation,  as to volume, but by
complying  with  the  manner  of sale  and  Form  144  filing  requirements,  if
applicable)  within a  three-month  period  pursuant  to Rule 144,  as it may be
amended from time to time,  including but not limited to amendments  that reduce
that period of time that  securities  must be held before such securities may be
sold pursuant to such rule.

         8.  ASSIGNMENT.  Notwithstanding  anything herein to the contrary,  the
registration  rights of the Holder under Section 7 hereof shall be automatically
assigned  by such  Investor  to any  transferee  of all or any  portion  of such
Investor's  Registrable  Securities  who is a Permitted  Transferee  (as defined
below);  provided,  however,  that  (w)  no  party  may be  assigned  any of the
foregoing  rights  until the Company is given  written  notice by the  assigning
party at the  time of such  assignment  stating  the  name  and  address  of the
assignee and identifying the securities of the Company as to which the rights in
question  are being  assigned;  (x) that any such  assignee  shall  receive such
assigned rights subject to all the terms and conditions of this  Agreement;  and
(y) no such  assignment or  assignments  shall  increase the  obligations of the
Company  hereunder.  For purposes of this  Agreement,  a "Permitted  Transferee"
shall mean any person who (a) is (i) an  "accredited  investor"  as that term is
defined in Rule  501(a) of  Regulation  D under the Act;  (ii) a partner of such
Holder,  an  affiliate  of such  Holder  or a  partner  of an  affiliate  or any
corporation,  partnership,  limited  liability company or other entity or person
controlling,  controlled by, or under common control with, such Holder; or (iii)
any other direct  transferee from such Holder of at least 25% of the Registrable
Securities  held  by such  Holder  and (b) is a  transferee  of the  Registrable
Securities as permitted under the securities laws of the United States.

         9.       MISCELLANEOUS.

                                       21
<PAGE>

                  9.1 Survival of Warranties.  The  representations,  warranties
and covenants of the Company and the Investors  contained in or made pursuant to
this  Agreement  shall survive the execution and delivery of this  Agreement and
the Closing and shall in no way be affected by any  investigation of the subject
matter  thereof  made by or on behalf of the  Investors,  their  counsel  or the
Company, as the case may be.

                  9.2 Successors  and Assigns.  The terms and conditions of this
Agreement  shall  inure to the  benefit  of and be binding  upon the  respective
successors and assigns of the parties.

                  9.3 Governing  Law;  Consent to  Jurisdiction.  This Agreement
shall be  governed  by and  construed  under the  internal  laws of the State of
California as applied to agreements among California  residents entered into and
to be performed entirely within  California,  without reference to principles of
conflict of laws or choice of laws.

                  9.4  Counterparts.  This  Agreement  may be executed in two or
more counterparts,  each of which shall be deemed an original,  but all of which
together shall constitute one and the same instrument.

                  9.5 Headings. The headings and captions used in this Agreement
are used for  convenience  only and are not to be  considered  in  construing or
interpreting  this  Agreement.  All  references  in this  Agreement to sections,
paragraphs,  exhibits, and schedules shall, unless otherwise provided,  refer to
sections and paragraphs hereof and exhibits and schedules  attached hereto,  all
of which exhibits and schedules are incorporated herein by this reference.

                  9.6 Notices. Unless otherwise provided, any notice required or
permitted  under this  Agreement  shall be given in writing  and shall be deemed
effectively  given  upon  personal  delivery  to the  party to be  notified,  by
telecopier or upon deposit with the United States Post Office,  by registered or
certified mail, postage prepaid and addressed to the party to be notified in the
case of the Company,  at 349 Oyster Point  Boulevard,  South San  Francisco,  CA
94080, Attention:  President, with a copy to C. Kevin Kelso, Fenwick & West LLP,
815 Connecticut Avenue N.W., Suite 200,  Washington,  D.C. 20006, or in the case
of Investor,  at the record  address for such Investor as reflected on the books
of the Company,  with copies to Mark Manno, Esq., General Counsel,  SJ Strategic
Investments LLC, 340 Edgemont Avenue,  Suite 500, Bristol,  TN 37620, or at such
other address as any party may designate by giving ten (10) days advance written
notice to the other party.  Notices shall be deemed  delivered  upon delivery if
personally  delivered,  one business day after transmission with confirmation of
receipt  if sent by  telecopier,  or three  days  after  deposit in the mails if
mailed.

                  9.7 No  Finder's  Fees.  Except  as may  be  disclosed  by the
Company in the Disclosure Schedule: each party represents that it neither is nor
will be obligated  for any finder's or broker's fee or  commission in connection
with this  transaction;  each Investor  agrees to indemnify and to hold harmless
the Company from any liability for any commission or  compensation in the nature
of a  finder's  or  broker's  fee (and any  asserted  liability)  for which such
Investor or any of its officers,  partners,  employees,  or  representatives  is
responsible;  and the Company  agrees to  indemnify  and to hold  harmless  each
Investor from any liability for any commission or  compensation in the nature of
a finder's or broker's fee (and any asserted

                                       22
<PAGE>

liability)  for  which  the  Company  or  any  of  its  officers,  employees  or
representatives is responsible.

                  9.8 Costs, Expenses. Each party's costs in connection with the
preparation,  execution  delivery and  performance of this Agreement  (including
without limitation legal fees) shall be borne by that party.

                  9.9 Amendments and Waivers.  Any term of this Agreement may be
amended and the  observance of any term of this  Agreement may be waived (either
generally   or  in  a   particular   instance   and  either   retroactively   or
prospectively),  only with the  written  consent of the  Company  and  Investors
holding a  majority  of the  Purchased  Shares  purchased  hereunder;  provided,
however,  that no amendment or waiver of the Company's obligations under Section
7 of this Agreement that materially and adversely affects the rights of a holder
of Purchased  Shares  shall be binding  upon that holder  unless that holder has
consented in writing to such amendment or waiver. Subject to the limitations set
forth in the preceding sentence,  any amendment or waiver effected in accordance
with this Section shall be binding upon each holder of any  Purchased  Shares at
the time  outstanding  (even if such  Investor or other holder did not vote with
respect to, or voted against,  such amendment or waiver),  each future holder of
such securities,  and the Company.  The Investors  acknowledge that by virtue of
this  provision,  holders of a majority of the  Purchased  Shares may bind other
holders to  amendment  or  waivers  that such  other  holders  may have voted to
oppose.

                  9.10 Severability. If one or more provisions of this Agreement
are held to be invalid,  illegal or  unenforceable  under  applicable  law, such
provision(s)  shall be  excluded  from this  Agreement  and the  balance  of the
Agreement  shall be  interpreted  as if such  provision(s)  were so excluded and
shall be enforceable in accordance with its terms.

                  9.11  Entire  Agreement.  This  Agreement,  together  with any
exhibits or schedules hereto, constitutes the entire agreement and understanding
of the parties with respect to the subject  matter hereof and supersedes any and
all prior negotiations,  correspondence,  agreements,  understandings, duties or
obligations between the parties with respect to the subject matter hereof.

                  9.12  Further  Assurances.  From  and  after  the date of this
Agreement,  upon the request of an Investor or the Company,  the Company and the
Investors  shall  execute  and  deliver  such  instruments,  documents  or other
writings as may be  reasonably  necessary  or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.

                  9.13     Termination.

                           (a) By the Investor:  The Investor may terminate this
Agreement  immediately  if, at any time prior to the  Closing,  (i) the  Company
shall cease conducting business in the normal course; become insolvent or become
unable to meet its obligations as they become due; make a general assignment for
the benefit of creditors;  petition, apply for, suffer or permit with or without
its consent the appointment of a custodian,  receiver,  trustee in bankruptcy or
similar officer for all or any substantial part of its business or assets; avail
itself or become subject to any proceeding under the Federal  Bankruptcy Code or
any similar state, federal or

                                       23
<PAGE>

foreign   statute   relating   to   bankruptcy,   insolvency,    reorganization,
receivership,  arrangement,  adjustment of debts, dissolutions or liquidation or
(ii)  the  Company  shall  have  breached  or  failed  to  perform  any  of  its
representations,   warranties,   covenants  or  agreements  set  forth  in  this
Agreement, which breach or failure to perform (A) would give rise to the failure
of a condition  set forth in Section 5.1.1 or Section 5.1.2 and (B) is incapable
of being  cured or has not been cured by the  Company  within 10  calendar  days
following  receipt of written  notice of such breach or failure to perform  from
the Investor.

                           (b) By the  Company or the  Investor:  The Company or
the Investor may terminate this Agreement at any time after November 30, 2002 if
the  Closing  has not  occurred  prior to such  date,  or such later date as the
Company and the Investor shall have agreed to extend the offering.

                           (c) By the Company:  The Company may  terminate  this
Agreement  if the Investor  shall have  breached or failed to perform any of its
representations,   warranties,   covenants  or  agreements  set  forth  in  this
Agreement, which breach or failure to perform (i) would give rise to the failure
of a condition  set forth in Section  6.1.1 and (ii) is incapable of being cured
or has not been cured by the Investor within 10 calendar days following  receipt
of written notice of such breach or failure to perform from the Company.

                  9.14. Public Announcements. The parties agree that the initial
press release to be issued with respect to the transactions contemplated by this
Agreement shall be in the form heretofore agreed to by the parties. The Investor
and the Company  shall  consult  with each other before  issuing,  and give each
other the  opportunity to review and comment upon, any subsequent  press release
primarily relating to the transactions contemplated by this Agreement, and shall
not issue any such press  release prior to such  consultation,  except as may be
required by  applicable  law,  court process or by  obligations  pursuant to any
listing agreement with any national  securities  exchange or national securities
quotation system.



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                                       24

<PAGE>



         IN WITNESS WHEREOF,  the parties hereto have executed this Common Stock
Purchase Agreement as of the date first above written.

THE COMPANY:                                       INVESTOR:
-----------                                        --------

Cellegy Pharmaceuticals, Inc.,
  a California corporation                         John Gregory
                                                   Name of Investor




By:  /s/ K. Michael Forrest                        By: /s/ John M. Gregory
     ----------------------                            -------------------


Title:  Chairman of the Board, CEO & President
        --------------------------------------







                           [COUNTERPART SIGNATURE PAGE
                        COMMON STOCK PURCHASE AGREEMENT]



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