EXHIBIT
10.50

     

    SECURITIES
PURCHASE AGREEMENT

     

    This
SECURITIES PURCHASE
AGREEMENT (the “Agreement”), dated as of
September 15, 2010, is by and among Medgenics, Inc., a Delaware corporation with
offices located at 8000 Towers Crescent Dr., Suite 1300, Vienna, VA 22182
(the ”Company”),
and the investors listed on the Schedule of Buyers attached hereto
(individually, a “Buyer”
and collectively, the “Buyers”).

    


    RECITALS

    


    A.         The
Company and each Buyer is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of the
Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of
Regulation D (“Regulation D”) as
promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933
Act.

     

    B.          The
Company has authorized the issuance of convertible notes in the aggregate amount
of $4,000,000, in the form attached hereto as Exhibit
A (the “Notes”),
which Notes shall be convertible into shares of the Company’s common stock,
$0.0001 par value per share (the “Common Stock”) (as converted,
collectively, the “Conversion
Shares”), in accordance with the terms of the Notes.

    


    C.          Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, (i) the aggregate original principal amount
of the Notes set forth opposite such Buyer’s name in column (3) on the Schedule
of Buyers and (ii) a warrant to acquire up to that number of additional shares
of Common Stock set forth opposite such Buyer’s name in column (4) on the
Schedule of Buyers, in the form attached hereto as Exhibit
B (the “Warrants”) (as exercised,
collectively, the “Warrant
Shares”).

    


    D.          The
Notes, the Conversion Shares, the Warrants and the Warrant Shares are
collectively referred to herein as the “Securities.”

    


     

    AGREEMENT

     

    NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each Buyer hereby
agree as follows:

     

    
      	
              1.  

            	
              PURCHASE
      AND SALE OF NOTES AND WARRANTS.

            


    

     

    
      (a)         Notes and
Warrants. Subject
to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the
Company shall issue and sell to each Buyer, and each Buyer severally, but not
jointly, shall purchase from the Company on the applicable Closing Date (as
defined below), a Note in the original principal amount as is set forth opposite
such Buyer’s name in column (3) on the Schedule of Buyers along with Warrants to
acquire up to that aggregate number of Warrant Shares as is set forth opposite
such Buyer’s name in column (4) on the Schedule of Buyers.

       

      
        
          
          

        

        
           

          
            

          

        

        
          
          

        

      

       

      (b)        
Closing. With
respect to each Buyer, the closing (each a “Closing”) of such Buyer’s
purchase of the Notes and the Warrants shall occur when the Company has received
and accepted executed subscription materials, in the form provided by the
Company, payment of the applicable Purchase Price from such Buyer, or such later
date as is mutually agreed to by the Company and such Buyer. The Company agrees
that the last Closing (the “Final Closing”) shall occur on
or before September 20, 2010, unless such date is extended with the approval of
the Board of Directors of the Company.

       

      (c)         Purchase
Price.  The
aggregate purchase price for the Notes and the Warrants to be purchased by each
Buyer (the “Purchase
Price”) shall be the amount set forth opposite such Buyer’s name in
column (5) on the Schedule of Buyers.

       

      (e)         Form of
Payment. On the
date that a Closing occurs (each a “Closing Date”), (i) the
applicable Buyer shall pay its respective Purchase Price to the Company for the
Note and the Warrants to be issued and sold to such Buyer at such Closing, by
wire transfer of immediately available funds in accordance with the Company’s
written wire instructions and (ii) the Company shall deliver to such Buyer
(A) a Note (in such amount as is set forth opposite such Buyer’s name in column
(3) of the Schedule of Buyers) and (B) a Warrant pursuant to which such Buyer
shall have the right to acquire up to such number of Warrant Shares as is set
forth opposite such Buyer’s name in column (4) of the Schedule of Buyers, in all
cases, duly executed on behalf of the Company and registered in the name of such
Buyer or its designee.

       

      (f)          Allocation to
Warrant.  The Company and each of the Buyers severally agree,
as between the Company and each Buyer, that the fair market value of the right
to buy one share of Common Stock under the terms as set forth in the Warrant is
equal to $0.0001.  The aggregate purchase price for the Warrants to be
purchased by each Purchaser is set forth opposite each such Purchaser’s name on
Exhibit A attached hereto.

    

     

    (g)         Warrants Not Issued as
Compensation.  The Company and each Buyer, having adverse
interests and as a result of arm’s length bargaining, agree that (i) neither the
Buyers nor any of their respective affiliates or associates have rendered or
agreed to render any services to the Company in connection with this Agreement
or the issuance of the Warrants and (ii) the Warrants are not being issued to
the Buyers as compensation for services.

    


    
      	
              2.  

            	
              BUYER’S
      REPRESENTATIONS AND WARRANTIES.

            


    

     

    Each
Buyer, severally and not jointly, represents and warrants to the Company with
respect to only itself that:

     

    (a)          Organization;
Authority. Such
Buyer is an entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization with the requisite power and
authority to enter into and to consummate the transactions contemplated by the
Transaction Documents to which it is a party and otherwise to carry out its
obligations hereunder and thereunder. “Transaction Documents” means,
collectively, this Agreement, the Notes, the Warrants and each of the other
agreements and instruments (if any) entered into or delivered by any of the
parties hereto in connection with the transactions contemplated hereby and
thereby, as may be amended from time to time.

     

    
      
        
        

      

      
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    (b)         No Public Sale or
Distribution. Such
Buyer (i) is acquiring its Note and Warrants, (ii) upon conversion of its Note
will acquire the Conversion Shares issuable upon conversion thereof, and
(iii) upon exercise of its Warrants will acquire the Warrant Shares
issuable upon exercise thereof, in each case, for its own account and not with a
view towards, or for resale in connection with, the public sale or distribution
thereof in violation of applicable securities laws.  Such Buyer does
not presently have any agreement or understanding, directly or indirectly, with
any Person to distribute any of the Securities in violation of applicable
securities laws.

     

    (c)         Accredited Investor
Status.  Such
Buyer is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D, including any amendments, modifications or interpretations
(whether retroactive or not) made to Regulation D, including, without
limitation, pursuant to the Dodd-Frank Wall Street Reform and Consumer
Protection Act.

     

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

     

    (e)         No General
Solicitation.  Such Buyer did not learn or become aware of the
transactions contemplated by the Transaction Documents through any
advertisement, press release, website or other general solicitation or general
advertising.

     

    (f)         
Information. Such
Buyer and its advisors, if any, have been furnished with all materials relating
to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities which have been requested by such Buyer.
Such Buyer and its advisors, if any, have been afforded the opportunity to ask
questions of the Company. Neither such inquiries nor any other due diligence
investigations conducted by such Buyer or its advisors, if any, or its
representatives shall modify, amend or affect such Buyer’s right to rely on the
Company’s representations and warranties contained herein or any representations
and warranties contained in any other Transaction Document or any other document
or instrument executed and/or delivered in connection with this Agreement or the
consummation of the transaction contemplated hereby. Such Buyer understands that
its investment in the Securities involves a high degree of risk. Such Buyer has
sought such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision with respect to its acquisition of the
Securities.

     

    (g)         No Governmental
Review.  Such
Buyer understands that no United States federal or state agency or any other
government or governmental agency has passed on or made any recommendation or
endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits
of the offering of the Securities or the terms of this Agreement or the other
Transaction Documents.

     

    
      
        
        

      

      
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    (h)         Transfer or
Resale. Such
Buyer understands that: (i) the Securities have not been and are not being
registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Buyer shall have delivered to the Company (if
requested by the Company) an opinion of counsel to such Buyer, in a form
reasonably acceptable to the Company, to the effect that such Securities to be
sold, assigned or transferred may be sold, assigned or transferred pursuant to
an exemption from such registration, or (C) such Buyer provides the Company with
reasonable assurance that such Securities can be sold, assigned or transferred
pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor
rule thereto) (collectively, “Rule 144”) which assurance may
include the delivery of an opinion of counsel to such Buyer, in a form
reasonably acceptable to the Company; (ii) any sale of the Securities made in
reliance on Rule 144 may be made only in accordance with the terms of Rule 144,
and further, if Rule 144 is not applicable, any resale of the Securities under
circumstances in which the seller (or the Person (as defined below) through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in
the 1933 Act) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC promulgated thereunder; and (iii)
neither the Company nor any other Person is under any obligation to register the
Securities under the 1933 Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder.

     

    (i)         
Validity;
Enforcement. This
Agreement has been duly and validly authorized, executed and delivered on behalf
of such Buyer and constitutes the legal, valid and binding obligations of such
Buyer enforceable against such Buyer in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

     

    (j)         
No
Conflicts.  The
execution, delivery and performance by such Buyer of this Agreement and the
consummation by such Buyer of the transactions contemplated hereby and thereby
will not (i) result in a violation of the organizational documents of such Buyer
or (ii) require the consent or approval of any Person, (iii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Buyer is a party, or (iv) result in a violation of any
law, rule, regulation, order, judgment  or decree (including federal
and state securities laws) applicable to such Buyer, except in the case of
clauses (iii) and (iv) above, for such conflicts, defaults, rights or violations
which would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of such Buyer to perform its
obligations hereunder.

     

    (k)         No Additional
Agreements.  The
Buyer does not have any agreement or understanding with the Company with respect
to the transactions contemplated by the Transaction Documents other than as
specified in the Transaction Documents.

     

    (l)       
  Certain Trading
Activities. Such Buyer has not
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Buyer, engaged in any transactions in the securities
of the Company (including, without limitation, any Short Sales (as defined
below) involving the Company’s securities) during the period commencing as of
the time that such Buyer was first contacted by the Company or representatives
of the Company or agents for the Company regarding the specific investment in
the Company contemplated by this Agreement and ending immediately prior to the
execution of this Agreement by such Buyer. “Short Sales” means all “short
sales” as defined in Rule 200 promulgated under Regulation SHO under the 1934
Act (as defined below) (but shall
not be deemed to include the location and/or reservation of borrowable shares of
Common Stock).

     

    
      
        
        

      

      
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              3.  

            	
              REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.

            


    

     

    The Company makes no other
representations and warranties to the Buyers except as expressly set forth in
this Section 3 and the other Transaction Documents.  The Company
hereby makes the following representations and warranties to the
Buyers.  Such representations and warranties are modified in their
entirety by the information set forth on the Disclosure Schedule delivered
herewith (the “Disclosure
Schedule”).

    


    (a)           Organization, Good Standing
and Qualification.  Each of the Company and its Subsidiaries
(as defined below) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority to carry on its business as now
conducted and to own its properties.  Each of the Company and its
Subsidiaries is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property makes such qualification or leasing necessary
unless the failure to so qualify has not had and could not reasonably be
expected to have a Material Adverse Effect.  The Company’s
Subsidiaries are listed on Schedule 3(a)
hereto.  “Material
Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, condition (financial or otherwise),
business, or prospects of the Company and its Subsidiaries taken as a whole, or
(ii) the ability of the Company to perform its obligations under the Transaction
Documents.  “Subsidiaries” of any entity
means another entity, an amount of the voting securities, other voting ownership
or voting partnership interests of which is sufficient to elect at least a
majority of its board of directors or other governing body (or, if there are no
such voting interests, 50% or more of the equity interests of which) is owned
directly or indirectly by such first entity.

    


    (b)           Authorization.  The
Company has full power and authority and has taken all requisite action on the
part of the Company, its officers, directors and stockholders necessary for (i)
the authorization, execution and delivery of the Transaction Documents, (ii) the
authorization of the performance of all obligations of the Company hereunder or
thereunder, and (iii) the authorization, issuance (or reservation for issuance)
and delivery of the Securities.  The Transaction
Documents constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to (i)
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability, relating to or affecting creditors’
rights generally; (ii) equitable limitations on the availability of specific
remedies; (iii) principles of equity (regardless of whether such enforcement is
considered in a proceeding in law or in equity); and (iv) to the extent rights
to indemnification and contribution may be limited by federal securities laws or
the public policy underlying such laws.

     

    
      
        
        

      

      
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    (c)           Capitalization.  Schedule 3(c) sets
forth as of the date hereof (a) the authorized capital stock of the Company; (b)
the number of shares of capital stock issued and outstanding; (c) the number of
shares of capital stock issuable pursuant to the Company’s stock plans; and (d)
the number of shares of capital stock issuable and reserved for issuance
pursuant to securities (other than the Notes and the Warrants) exercisable for,
or convertible into or exchangeable for any shares of capital stock of the
Company.  All of the issued and outstanding shares of the Company’s
capital stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of pre-emptive rights and were issued in full compliance
with applicable state and federal securities law and any rights of third
parties.  All of the issued and outstanding shares of capital stock of
each Subsidiary have been duly authorized and validly issued and are fully paid,
nonassessable and free of pre-emptive rights, were issued in full compliance
with applicable state and federal securities law and any rights of third parties
and are owned by the Company, beneficially and of record, subject to no lien,
encumbrance or other adverse claim.  No Person is entitled to
pre-emptive or similar statutory or contractual rights with respect to any
securities of the Company.  Except as described on Schedule 3(c), there
are no outstanding warrants, options, convertible securities or other rights,
agreements or arrangements of any character under which the Company or any of
its Subsidiaries is or may be obligated to issue any equity securities of any
kind and, except as contemplated by this Agreement, neither the Company nor any
of its Subsidiaries is currently in negotiations for the issuance of any equity
securities of any kind.  Except as described on Schedule 3(c), there
are no voting agreements, buy-sell agreements, option or right of first purchase
agreements or other agreements of any kind among the Company and any of the
securityholders of the Company relating to the securities of the Company held by
them.  Except as described on Schedule 3(c), no
Person has the right to require the Company to register any securities of the
Company under the 1933 Act, whether on a demand basis or in connection with the
registration of securities of the Company for its own account or for the account
of any other Person. Except as described on Schedule 3(c), the
issuance and sale of the Securities hereunder will not obligate the Company to
issue shares of Common Stock or other securities to any other Person (other than
the Buyers) and will not result in the adjustment of the exercise, conversion,
exchange or reset price of any outstanding security. Except as provided in
Article XI of the Company’s Amended and Restated Certificate of Incorporation or
as described on Schedule 3(c), the
Company does not have outstanding stockholder purchase rights or “poison pill”
or any similar arrangement in effect giving any Person the right to purchase any
equity interest in the Company upon the occurrence of certain
events.

    


    (d)           Valid
Issuance.  The Notes have been duly and validly authorized and
will be free and clear of all encumbrances and restrictions (other than those
created by the Buyers), except for restrictions on transfer set forth in the
Transaction Documents or imposed by applicable securities laws.  The
Warrants have been duly and validly authorized.  Upon the conversion
of the Notes and the due exercise of the Warrants, the Conversion Shares or the
Warrant Shares, as the case may be, will be validly issued, fully paid and
non-assessable, free and clear of all encumbrances and restrictions, except for
restrictions on transfer set forth in the Transaction Documents or imposed by
applicable securities laws and except for those created by the
Buyers.  The Company has reserved a sufficient number of shares of
Common Stock for issuance upon the conversion of the Notes and the exercise of
the Warrants.

     

    
      
        
        

      

      
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    (e)           Consents.  The
execution, delivery and performance by the Company of the Transaction Documents
and the offer, issuance and sale of the Securities require no consent of, action
by or in respect of, or filing with, any Person, governmental body, agency, or
official other than filings that have been made pursuant to applicable state
securities laws and post-sale filings pursuant to applicable state and federal
securities laws which the Company undertakes to file within the applicable time
periods.

    


    (f)           Delivery of AIM Filings;
Compliance with AIM Rules.  The Company has made available to
the Buyers, through its website or otherwise, true and complete copies of the
Company’s most recent public filings required to be made by the Company pursuant
to the AIM Rules for Companies, governing admission to and the operation of AIM,
as published by the London Stock Exchange plc (the “AIM Rules”) (the “AIM Filings”).  For
so long as the Common Stock has been admitted to trading on the AIM Market
operated by London Stock Exchange plc (“AIM”), the Company has
complied in all material respects with all relevant laws and resolutions
including (i) the Companies Act 1985 (as amended) and the Companies Act 2006,
(ii) the AIM Rules, (iii) the Financial Services and Markets Act 2000, (iv) the
Code of Market Conduct published by the Financial Services Authority, (v) the
Criminal Justice Act 1993 and (vi) any other obligations imposed from time to
time by the London Stock Exchange on companies whose securities have been
admitted to trading on AIM.

    


    (g)           Use of
Proceeds.  The Company shall use the proceeds from the sale of
the Securities to conduct its clinical trials, develop aspects of its
proprietary technology, pursue partnering and other strategic agreements and for
general working capital purposes (including the payment of salaries and accounts
payable).

    


    (h)           No Material Adverse
Change.  Since December 31, 2009 except as identified and
described in the AIM Filings or the press releases released by the Company
through a regulatory information service approved by London Stock Exchange plc
for the distribution to the public of announcements by companies admitted to AIM
(the “Press Releases”)
or as described on Schedule 3(h), there
has not been:

    


    (i)      
     any change in the consolidated assets,
liabilities, financial condition or operating results of the Company from that
reflected in the financial statements for the fiscal year ended December 31,
2009, except for changes in the ordinary course of business which have not had
and could not reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate;

    


    (ii)           any
declaration or payment of any dividend, or any authorization or payment of any
distribution, on any of the capital stock of the Company, or any redemption or
repurchase of any securities of the Company;

    


    (iii)           any
material damage, destruction or loss, whether or not covered by insurance to any
assets or properties of the Company or its Subsidiaries;

     

    
      
        
        

      

      
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    (iv)           any
waiver, not in the ordinary course of business, by the Company or any Subsidiary
of a material right or of a material debt owed to it;

    


    (v)           any
satisfaction or discharge of any lien, claim or encumbrance or payment of any
obligation by the Company or a Subsidiary, except in the ordinary course of
business and which is not material to the assets, properties, financial
condition, operating results or business of the Company and its Subsidiaries
taken as a whole (as such business is presently conducted and as it is proposed
to be conducted);

    


    (vi)           any
change or amendment to the Company's Amended and Restated Certificate of
Incorporation or Amended and Restated Bylaws, or any material change to any
material contract or arrangement by which the Company or any Subsidiary is bound
or to which any of their respective assets or properties is
subject;

    


    (vii)         any
material labor difficulties or labor union organizing activities with respect to
employees of the Company or any Subsidiary;

    


    (viii)       
any material transaction entered into by the Company or a Subsidiary other than
in the ordinary course of business, other than the transactions contemplated by
the Transaction Documents;

    


    (ix)           the
loss of the services of any key employee, or material change in the composition
or duties of the senior management of the Company or any Subsidiary;
or

    


    (x)     
      any other event or condition of any
character that has had or could reasonably be expected to have a Material
Adverse Effect.

    


    (i)      
     No Conflict, Breach,
Violation or Default.  The execution, delivery and performance
of the Transaction Documents by the Company and the issuance and sale of the
Securities will not conflict with or result in a breach or violation of any of
the terms and provisions of, or constitute a default under (i) the Company’s
Amended and Restated Certificate of Incorporation or the Company’s Amended and
Restated Bylaws, both as in effect on the date hereof (copies of which have been
made available to the Buyers through the Company’s website), or (ii)(a) any
statute, rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over the Company, any Subsidiary
or any of their respective assets or properties, or (b) any agreement or
instrument to which the Company or any Subsidiary is a party or by which the
Company or a Subsidiary is bound or to which any of their respective assets or
properties is subject, except with respect to clause (ii) for any violations or
breaches as would not, individually or in the aggregate, have a Material Adverse
Effect.

    


    (j)           Tax
Matters.  Except as set forth on Schedule 3(j), the
Company and each Subsidiary has timely prepared and filed all tax returns
required to have been filed by the Company or such Subsidiary with all
appropriate governmental agencies and timely paid all taxes shown thereon or
otherwise owed by it.  The charges, accruals and reserves on the books
of the Company in respect of taxes for all fiscal periods are adequate in all
material respects, and there are no material unpaid assessments against the
Company or any Subsidiary nor, to the actual knowledge of the executive officers
(as defined in Rule 405 under the 1933 Act) of the Company after due inquiry
(the “Company’s
Knowledge”), any basis for the assessment of any additional taxes,
penalties or interest for any fiscal period or audits by any federal, state or
local taxing authority except for any assessment which is not material to the
Company and its Subsidiaries, taken as a whole.  All taxes and other
assessments and levies that the Company or any Subsidiary is required to
withhold or to collect for payment have been duly withheld and collected and
paid to the proper governmental entity or third party when due.  There
are no tax liens or claims pending or, to the Company’s Knowledge, threatened
against the Company or any Subsidiary or any of their respective assets or
property.  There are no outstanding tax sharing agreements or other
such arrangements between the Company and any Subsidiary or other corporation or
entity.

     

    
      
        
        

      

      
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    (k)           Title to
Properties.  Except as disclosed in the AIM Filings or the
Press Releases, the Company and each Subsidiary has good and marketable title to
all real properties and all other properties and assets owned by it, in each
case free from liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or currently planned to
be made thereof by them; and except as disclosed in the AIM Filings or the Press
Releases, the Company and each Subsidiary holds any leased real or personal
property under valid and enforceable leases with no exceptions that would
materially interfere with the use made or currently planned to be made thereof
by them.

    


    (l)      
     Certificates, Authorities
and Permits.  The Company and each Subsidiary possess adequate
certificates, authorities or permits issued by appropriate governmental agencies
or bodies necessary to conduct the business now operated by it, and neither the
Company nor any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company or such Subsidiary, could
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate.

     

    (m)           Labor
Matters. The Company is not a party to or bound
by any collective bargaining agreements or other agreements with labor
organizations.  There are no labor disputes
existing, or to the Company's Knowledge, threatened, involving strikes,
slow-downs, work stoppages, job actions, disputes, lockouts or any other
disruptions of or by the Company's employees. The Company is, and at all times has
been, in compliance with all applicable laws respecting employment (including
laws relating to classification of employees and independent contractors) and
employment practices, terms and conditions of employment, wages and hours, and
immigration and naturalization, except for violations that would not,
individually or in the aggregate, result in a Material Adverse
Effect.  Except
as described on Schedule
3(m) and except for severance obligations
imposed by applicable law, the Company is not a party to, or bound by, any
employment or other contract or agreement that contains any severance,
termination pay or change of control liability or obligation, including, without
limitation, any “excess parachute payment,” as defined in Section 280G(b) of the
Internal Revenue Code.

     

    
      
        
        

      

      
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    (n)           Intellectual
Property.

    


    (i)           All
Intellectual Property owned (and not licensed) by the Company or its Subsidiary
(the “Owned IP”) is
currently in compliance with all material respects with all applicable laws,
rules, regulations, orders and decrees of all governmental
authorities.  Except as set forth on Schedule 3(n)(i), to
the Company’s Knowledge, no Owned IP of the Company or its Subsidiary is now
involved in any cancellation, dispute or litigation, and, to the Company’s
Knowledge, no such notice of such action has been received.  No patent
owned by the Company or its Subsidiary has been or is now involved in any
interference, reissue, re-examination or opposition proceeding.  For
purposes of this Section 3(n), “Intellectual Property” shall
mean means all of the following: (i) patents, patent applications, patent
disclosures and inventions (whether or not patentable and whether or not reduced
to practice); (ii) trademarks, service marks, trade dress, trade names,
corporate names, logos, slogans and Internet domain names, together with all
goodwill associated with each of the foregoing; (iii) copyrights and
copyrightable works; (iv) registrations, applications and renewals for any of
the foregoing; and (v) proprietary computer software (including but not limited
to data, data bases and documentation).

    


    (ii)          
Intellectual Property in-licensed by the Company or its Subsidiary shall be
referred to as "Non-Owned
IP" and is listed in Schedule
3(n)(ii).  The Company has entered into an exclusive license
agreement with respect to certain Intellectual Property with Yissum Research
Development Company of the Hebrew University of Jerusalem (“Yissum”), dated November 23,
2005 (the "Yissum License
Agreement").  The Yissum License Agreement (together with any
amendments thereto) is valid and has binding obligations on the Company or its
Subsidiary that are parties thereto, and, to the Company's Knowledge, is also
binding on the other parties thereto, and is enforceable against the Company in
accordance with its terms and, to the Company’s Knowledge, the other parties
thereto, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally, and
there exists no event or condition which will result in a violation or breach of
or constitute (with or without due notice or lapse of time or both) a default by
the Company or its Subsidiary and to the Company’s Knowledge by Yissum, under
the Yissum License Agreement.  In the future, the Company may license
additional Non-Owned IP which the Company might need in order to conduct its
business as currently contemplated, as set forth in Schedule 3(n)(ii). As
of the date of this Agreement, except as set forth in Schedule 3(n)(ii),
the Company and Subsidiary are not obligated based on any written agreement, nor
to the Company's Knowledge is it or any Subsidiary obligated based on any oral
agreement, to make any payments by way of royalties or fees to any (i) owner or
(ii) licensee of, or (iii) other claimant to, any Intellectual Property, in
connection with the conduct of its business as now conducted.

    


    (iii)        
  Except as set forth in Schedule 3(n)(iii),
the Company and its Subsidiary own or have the valid right to use, free and
clear of all liens, claims and restrictions, all of the Intellectual Property
that is necessary for the conduct of the Company’s and its Subsidiary’s
respective businesses as currently conducted or to the Company’s Knowledge as
currently proposed to be conducted.  To the Company’s Knowledge, the
Company and its Subsidiary have a valid and enforceable right to use all
Non-Owned IP and Confidential Information used or in the respective businesses
of the Company and its Subsidiary.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
 

    (iv)           The
consummation of the transactions contemplated hereby and by the other
Transaction Documents will not result in the alteration, loss, impairment of or
restriction on the Company’s or its Subsidiary’s ownership or right to use any
of the Owned IP or Confidential Information which is necessary for the conduct
of Company’s and of its Subsidiary’s respective businesses as currently
conducted or to the Company’s Knowledge as currently proposed to be conducted or
result in a default under the Yissum License Agreement or any other license
agreement.

    


    (v)           The
Company and the Subsidiary have taken security measures necessary to protect the
secrecy, confidentiality and value of all the Intellectual Property, which
measures are reasonable and customary in the industry in which the Company or
the Subsidiary operates.  Each of the Company's employees and
consultants have entered into written agreements with the Company assigning to
the Company or Subsidiary, as applicable, all rights in Intellectual Property
developed in the course of their service with the Company.  Except
under confidentiality obligations, there has been no material disclosure of any
of the Company’s or its Subsidiary’s Confidential Information to any third
party.

    


    (vi)           The
Company has not received any communications alleging that the Company or the
Subsidiary has violated or by conducting its business as proposed, would
violate, any of the patents, trademarks, service marks, trade names, copyrights
or trade secrets or other proprietary rights of any other person or
entity.

    


    (o)           Environmental
Matters.  Neither the Company nor any Subsidiary (i) is in
violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “Environmental Laws”), (ii)
owns or, to the Company’s Knowledge, operates any real property contaminated
with any substance that is subject to any Environmental Laws, (iii) is liable
for any off-site disposal or contamination pursuant to any Environmental Laws,
or (iv) is subject to any claim relating to any Environmental Laws, which
violation, contamination, liability or claim has had or could reasonably be
expected to have a Material Adverse Effect, individually or in the aggregate;
and there is no pending or, to the Company’s Knowledge, threatened investigation
that might lead to such a claim.

    


    (p)           Litigation.  Except
as described on Schedule 3(p), there
are no pending actions, suits or proceedings against the Company, its
Subsidiaries or any of its or their properties; and, to the Company’s Knowledge,
no such actions, suits or proceedings are threatened or
contemplated.  Neither the Company nor any Subsidiary, nor any
director or officer thereof, is or since January 1, 2007 has been the subject of
any action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty.  There has not
been, and to the Company’s Knowledge, there is not pending or contemplated, any
investigation by the SEC involving the Company or any director or officer of the
Company.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (q)           Financial
Statements.  The audited, consolidated US dollar denominated
financial statements as of and for the year ended December 31, 2009 (the “Financial Statements”) are
true and correct in all material respects, are in accordance with the books and
records of the Company and fairly and accurately present, in all material
respects, the consolidated financial position of the Company as of the dates
shown and its consolidated results of operations and cash flows for the periods
shown, and such financial statements have been prepared in conformity with
United States generally accepted accounting principles applied on a consistent
basis (except as may be disclosed therein or in the notes thereto or otherwise
disclosed on Schedule
3(q)).  The Company and its Subsidiary effectively ceased
operations on or about August 1, 2004 and restarted its operations on or about
March 31, 2006.

    


    (r)      
     Insurance
Coverage.  The Company and each Subsidiary maintains in full
force and effect insurance coverage that is customary for comparably situated
companies for the business being conducted and properties owned or leased by the
Company and each Subsidiary, there is no claim pending under any of such
policies. The Company and its Subsidiaries are current in all premiums or other
payments due under each insurance policy and have otherwise performed in all
material respects all of its respective obligations thereunder.

    


    (s)            Brokers and
Finders.  No Person will have, as a result of the transactions
contemplated by the Transaction Documents, any valid right, interest or claim
against or upon the Company, any Subsidiary or an Buyer for any commission, fee
or other compensation pursuant to any agreement, arrangement or understanding
entered into by or on behalf of the Company, other than as described in Schedule
3(s).

    


    (t)      
     No Directed Selling Efforts
or General Solicitation.  Neither the Company nor any Person
acting on its behalf has conducted any general solicitation or general
advertising (as those terms are used in Regulation D) in connection with the
offer or sale of any of the Securities.

    


    (u)           No Integrated
Offering.  Neither the Company nor any Person acting on its
behalf has, directly or indirectly, made any offers or sales of any Company
security or solicited any offers to buy any security, under circumstances that
would adversely affect reliance by the Company on Section 4(2) for the exemption
from registration for the transactions contemplated hereby or would require
registration of the Securities under the 1933 Act.

    


    (v)           Private
Placement.  Assuming the Buyers’ representations contained
herein are true, correct and complete, the offer and sale of the Securities by
the Company to the Buyers as contemplated hereby is exempt from the registration
requirements of the 1933 Act.

    


    (w)           Questionable
Payments.  Neither the Company nor
any of its Subsidiaries nor, to the Company’s Knowledge, any of their respective
current or former directors, officers, employees, agents or other Persons acting
on behalf of the Company or any Subsidiary, has on behalf of the Company or any
Subsidiary or in connection with their respective businesses: (a) used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company or any Subsidiary; or (e) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment of
any nature.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (x)           Transactions with
Affiliates.  Except as disclosed in the AIM Filings, the Press
Releases or as disclosed on Schedule 3(x), none
of the officers or directors of the Company and, to the Company’s Knowledge,
none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than as holders of stock options
and/or warrants, and 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 Company’s Knowledge, any entity in which
any officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

    


    (y)           Disclosures.  Neither
the Company nor any Person acting on its behalf has provided the Buyers or their
agents or counsel with any information that constitutes or might constitute
material, non-public information, other than the terms of the transactions
contemplated hereby.  The written materials delivered to the Buyers in
connection with the transactions contemplated by the Transaction Documents do
not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained therein, in light of
the circumstances under which they were made, not misleading.

    


     

    
      	
              4.  

            	
              COVENANTS.

            


    

     

    (a)         Best
Efforts. Each
Buyer shall use its best efforts to timely satisfy each of the conditions to be
satisfied by it as provided in Section 6 of this
Agreement. The Company shall use its best efforts to timely satisfy each of the
conditions to be satisfied by it as provided in Section 7 of this Agreement.

     

    (b)         Form D and Blue
Sky.  The
Company agrees to file a Form D with respect to the Securities as required under
Regulation D and to provide a copy thereof to each applicable Buyer promptly
after such filing. The Company shall, on or before the applicable Closing Date,
take such action as the Company shall reasonably determine is necessary in order
to obtain an exemption for, or to, qualify the Securities for sale to the Buyers
at such Closing pursuant to this Agreement 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 any such action so taken to
the applicable Buyer on or prior to such Closing Date.  The Company
shall make all filings and reports relating to the offer and sale of the
Securities required under applicable securities or “Blue Sky” laws of the states
of the United States following each Closing Date.

     

    (c)         Reporting
Status. Until
the earlier to occur of (i) the date on which the Buyers shall have sold all of
the Conversion Shares and Warrant Shares (the “Reporting Period End Date”,
and such period commencing on the first Closing Date and ending on the Reporting
Period End Date, the “Reporting
Period”) and (ii) the U.S. Public Company Date (as defined in the Notes),
the Company shall timely file all reports and financial information required to
be filed pursuant to the AIM Rules and the Company shall not cease to file such
reports at such time that the AIM Rules would no longer require or otherwise
permit such termination.  During the Reporting Period occurring after
the U.S. Public Company Date, the Company shall timely file all reports required
to be filed with the SEC pursuant to the 1934 Act, and the Company shall not
terminate its status as an issuer required to file reports under the 1934 Act
even if the 1934 Act or the rules and regulations thereunder would no longer
require or otherwise permit such termination.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (d)         Listing.  The
Company shall promptly secure the admission, listing or designation for
quotation (as the case may be) of all of the Conversion Shares and the Warrant
Shares upon AIM or, after the U.S. Public Company Date, such national securities
exchange and automated quotation system, if any, upon which the Common Stock is
then listed or designated for quotation (as the case may be) (subject to
official notice of issuance).  The Company shall pay all fees and
expenses in connection with satisfying its obligations under this Section
4(d).

     

    (e)         Fees.  The
Company shall reimburse each Buyer who purchases a Note having an original
principal amount of at least $250,000 for all reasonable out-of-pocket costs and
expenses incurred by it or its affiliates in connection with the transactions
contemplated by the Transaction Documents (including, without limitation, all
legal fees and disbursements in connection therewith, documentation and
implementation of the transactions contemplated by the Transaction Documents and
due diligence and regulatory filings in connection therewith) in an amount not
to exceed $15,000. The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or broker’s commissions (other
than for Persons engaged by any Buyer) relating to or arising out of the
transactions contemplated hereby. The Company shall pay, and hold each Buyer
harmless against, any liability, loss or expense (including, without limitation,
reasonable attorneys’ fees and out-of-pocket expenses) arising in connection
with any claim relating to any such payment. Except as otherwise set forth in
the Transaction Documents, each party to this Agreement shall bear its own
expenses in connection with the sale of the Securities to the
Buyers.

     

    (f)         
Pledge of
Securities. Subject
to Section 2(h),
the Company acknowledges and agrees that the Securities may be pledged by a
Buyer in connection with a bona fide margin agreement or other loan or financing
arrangement that is secured by the Securities. The pledge of Securities shall
not be deemed to be a transfer, sale or assignment of the Securities hereunder,
and no Buyer affecting a pledge of Securities shall be required to provide the
Company with any notice thereof or otherwise make any delivery to the Company
pursuant to this Agreement or any other Transaction Document. The Company hereby
agrees to execute and deliver such documentation as a pledgee of the Securities
may reasonably request in connection with a pledge of the Securities to such
pledgee by a Buyer.

     

    (g)         Press
Releases. The
Company shall be entitled to issue public releases or announcements concerning
the transactions contemplated hereby, including, if required by the AIM Rules,
identifying the Buyers.  No Buyer shall make any public release or
announcement concerning the transaction contemplated hereby without the prior
consent of the Company (which consent shall not be unreasonably withheld or
delayed), except as such release or announcement may be required by applicable
law, rule or regulation of any governmental authority or the applicable rules or
regulations of any securities exchange or securities market, in which case the
such Buyer shall allow the Company to the extent reasonably practicable in the
circumstances, reasonable time to comment on such release or announcement in
advance of such issuance.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (h)         Reservation of
Shares. So long
as any Notes or Warrants remain outstanding, the Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance, no less than 133% of the sum of (i) the maximum number of shares of
Common Stock issuable upon conversion of all the Notes and (ii) the maximum
number of shares of Common Stock issuable upon exercise of all the
Warrants.

     

    (i)         
Conduct of
Business.  So
long as any Notes or Warrants remain outstanding, the business of the Company
and its Subsidiaries shall not be conducted in violation of any law, ordinance
or regulation of any governmental entity, except where such violations would not
result, either individually or in the aggregate, in a Material Adverse
Effect.

     

    (j)     
    Restriction on Redemption
and Cash Dividends. So long as any Notes are outstanding, the Company
shall not, directly or indirectly, redeem, or declare or pay any cash dividend
or distribution on, any securities of the Company without the prior express
written consent of the Required Buyers.

     

    (k)         Corporate Existence.
So long as any Notes or Warrants are outstanding, the Company shall not be party
to any Fundamental Transaction (as defined in the Notes) unless the Company is
in compliance with the applicable provisions governing Fundamental Transactions
set forth in the Notes and the Warrants.

     

    (l)           Lock Up.

     

    (i)      Each
Buyer hereby severally, and not jointly, agrees, that, without the prior written
consent of the Company, it will not (and will cause any spouse or immediate
family member of the spouse or such Buyer living in such Buyer’s household, any
partnership, corporation or other entity within such Buyer’s control, and any
trustee of any trust that holds Common Stock or other securities of the Company
for the benefit of such Buyer or such spouse or family member not to), during
the period commencing on the date a registration statement filed by the Company
in connection with a Qualified Public Offering (as defined in the Notes) is
declared effective by the Securities and Exchange Commission and ending on the
date that is six (6) months after the date of the consummation of the Qualified
Public Offering, (1) offer, sell, contract to sell (including any short sale),
pledge, hypothecate, establish an open “put equivalent position” within the
meaning of Rule 16a-1(h) under the 1934 Act, grant any option, right or warrant
for the sale of, purchase any option or contract to sell, sell any option or
contract to purchase, or otherwise encumber, dispose of or transfer, or grant
any rights with respect to, directly or indirectly, any shares of Common Stock
issued upon conversion of the Notes or issued or issuable upon the exercise of
the Warrants, or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
shares of Common Stock.  Notwithstanding the foregoing, such Buyer
shall not be restricted from distributing any of the Company’s securities to
such Buyer’s equity holders provided that prior to and as a condition to the
effectiveness of any such distribution such equity holders execute a lock-up
agreement substantially in the form hereof in favor of the Company.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (ii)   
Notwithstanding the provisions of Section 4(l)(i) above, such Buyer may transfer
Common Stock (i) as a bona
fide gift or gifts, provided that prior to such transfer the donee or
donees thereof agree in writing to be bound by the restrictions set forth
herein, (ii) to any trust, partnership, corporation or other entity formed for
the direct or indirect benefit of the undersigned or the immediate family of the
undersigned, provided that prior to such transfer a duly authorized officer,
representative or trustee of such transferee agrees in writing to be bound by
the restrictions set forth herein; and provided further that any such transfer
shall not involve a disposition for value, or (iii) if such transfer occurs by
operation of law, such as rules of descent and distribution, statutes governing
the effects of a merger or a qualified domestic order; provided that prior to
such transfer the transferee executes an agreement stating that the transferee
is receiving and holding the shares subject to the provisions of this
Agreement.  For purposes hereof, “immediate family” shall mean any
relationship by blood, marriage or adoption, not more remote than first
cousin.

     

    (iii)   
The Company and its transfer agent and registrar are hereby authorized to (a)
decline to make any transfer of shares of Common Stock if such transfer would
constitute a violation or breach of this Section 4(l) and (b) place legends and
stop transfer instructions on any such shares of Common Stock owned or
beneficially owned by such Buyer.

     

    (m)        Registration
Rights.  As of the Closing, the Company and the Buyers shall
enter into a registration rights agreement in the form attached hereto as Exhibit
C

    


    
      	
              5.  

            	
              REGISTER;
      LEGEND.

            


    

     

    (a)         Register. The
Company shall maintain at its principal executive offices (or such other office
or agency of the Company as it may designate by notice to each holder of
Securities), a register for the Notes and the Warrants in which the Company
shall record the name and address of the Person in whose name the Notes and the Warrants have been
issued (including the name and address of each transferee), the principal amount
of the Notes held by such Person, the number of Conversion Shares issuable upon
conversion of the Notes and the number of Warrant Shares issuable upon exercise
of the Warrants held by such Person.

     

    (b)         Legends. Each
Buyer understands that the Securities have been issued (or will be issued in the
case of the Conversion Shares and the Warrant Shares) pursuant to an exemption
from registration or qualification under the 1933 Act and applicable state
securities laws, and except as set forth below, the Securities shall bear any
legend as required by the “blue sky” laws of any state and a restrictive legend
in substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificates):

     

    [NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE
BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER
SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      (c)         Removal
of Legends.
Certificates evidencing Securities shall not be required to contain the legend
set forth in Section 5(b)
above or any other legend (i) while a registration statement covering the resale
of such Securities is effective under the 1933 Act, (ii) following any sale of
such Securities pursuant to Rule 144 (assuming the transferor is not an
affiliate of the Company), (iii) if such Securities are eligible to be sold,
assigned or transferred under Rule 144 (provided that a Buyer provides the
Company with reasonable assurances that such Securities are eligible for sale,
assignment or transfer under Rule 144 which may include an opinion of counsel if
necessary in the reasonable opinion of counsel to the Company and shall provide
a representation letter in the form required by the Company’s transfer agent),
(iv) in connection with a sale, assignment or other transfer (other than under
Rule 144), provided that such Buyer provides the Company with an opinion of
counsel to such Buyer, in a generally acceptable form, to the effect that such
sale, assignment or transfer of the Securities may be made without registration
under the applicable requirements of the 1933 Act or (v) if such legend is not
required under applicable requirements of the 1933 Act (including, without
limitation, controlling judicial interpretations and pronouncements issued by
the SEC). If a legend is not required pursuant to the foregoing, the Company
shall promptly following the delivery by a Buyer to the Company or the transfer
agent (with written notice to the Company) of a legended certificate
representing such Securities (endorsed or with stock powers attached, signatures
guaranteed, and otherwise in form necessary to effect the reissuance and/or
transfer, if applicable), together with any other deliveries from such Buyer as
may be required above in this Section 5(c),
as directed by such Buyer, either: (A) provided that the Company’s transfer
agent is participating in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program and such Securities are Conversion
Shares or Warrant Shares and are eligible to participate in the DTC Fast
Automated Securities Transfer Program, credit the aggregate number of shares of
Common Stock to which such Buyer shall be entitled to such Buyer’s or its
designee’s balance account with DTC through its Deposit/Withdrawal at Custodian
system or (B) if the Company’s transfer agent is not participating in the DTC
Fast Automated Securities Transfer Program or the securities are not eligible to
participate in the DTC Fast Automated Securities Transfer Program, issue and
deliver (via reputable overnight courier) to such Buyer, a certificate
representing such Securities that is free from all restrictive and other
legends, registered in the name of such Buyer or its
designee.

    

     

    
      	
              6.  

            	
              CONDITIONS
      TO THE COMPANY’S OBLIGATION TO
SELL.

            


    

     

    (a)         The
obligation of the Company hereunder to issue and sell the Notes and the related Warrants
to each Buyer at the applicable Closing is subject to the satisfaction, at or
before such Closing Date, of each of the following conditions, provided that
these conditions are for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion by providing the applicable Buyer
with prior written notice thereof:

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (i)          
Such
Buyer shall have executed each of the other Transaction Documents to which it is
a party and delivered the same to the Company.

     

    (ii)         
Such
Buyer and each other Buyer shall have delivered to the Company the Purchase
Price for the Note and the related Warrants being purchased by such Buyer at the
Closing by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Company.

     

    (iii)        
Each and
every representation and warranty of such Buyer shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
originally made at that time (except for representations and warranties that
speak as of a specific date, which shall be true and correct in all material
respects as of such date), and such Buyer shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by such
Buyer at or prior to the Closing Date.

     

    (iv)   
   No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of
the transactions contemplated by the Transaction Documents.

     

    
      	
              7.  

            	
              CONDITIONS
      TO EACH BUYER’S OBLIGATION TO
PURCHASE.

            


    

     

    (a)        The
obligation of each Buyer hereunder to purchase its Note and its related Warrants
at the Closing is subject to the satisfaction, at or before the applicable
Closing Date, of each of the following conditions, provided that these
conditions are for each Buyer’s sole benefit and may be waived by such Buyer at
any time in its sole discretion by providing the Company with prior written
notice thereof:

     

    (i)         
 The
Company shall have duly executed and delivered to such Buyer each of the
Transaction Documents to which it is a party and the Company shall have duly
executed and delivered to such Buyer a Note (in such original principal amount
as is set forth across from such Buyer’s name in column (3) of the Schedule of
Buyers) and the
related Warrants (for such aggregate number of Warrant Shares as is set forth
across from such Buyer’s name in column (4) of the Schedule of Buyers) being
purchased by such Buyer at the Closing pursuant to this Agreement.

     

    (ii)       
  Each and
every representation and warranty of the Company shall be true and correct in
all material respects as of the date when made and as of the Closing Date as
though originally made at that time (except for representations and warranties
that speak as of a specific date, which shall be true and correct in all
material respects as of such date) and the Company shall have performed,
satisfied and complied in all material respects with the covenants, agreements
and conditions required to be performed, satisfied or complied with by the
Company at or prior to the Closing Date.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (iii)         Trading
in the Common Stock shall not have been suspended on AIM by the London Stock
Exchange and admission of the shares of Common Stock to trading on AIM shall not
have been withdrawn, and, at any time in the 30 days prior to the Closing Date,
trading in securities generally as reported on AIM shall not have been suspended
by the London Stock Exchange, nor shall a banking moratorium have been declared
either by the United Kingdom, nor shall there have occurred any material
outbreak or escalation of hostilities which, in each case, in the reasonable
judgment of such Buyer, makes it impracticable or inadvisable to purchase the
Notes and the Warrants.

     

    (iv)    
     The
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, necessary for the sale of the Securities, including
without limitation, those required by AIM, if any.

     

    (v)       
  No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of
the transactions contemplated by the Transaction Documents.

     

    (vi)         If
requested by such Buyer in writing prior to such Closing Date, the Company shall
have delivered to such Buyer a certificate evidencing the formation and good
standing of the Company in Delaware issued by the Delaware  Secretary
of State as of a date within ten (10) days of the Closing Date.

     

    (vii)         If
requested by such Buyer in writing prior to such Closing Date, the Company shall
have delivered to such Buyer a certificate evidencing the Company’s
qualification as a foreign corporation and good standing issued by the Secretary
of State (or comparable office) of each jurisdiction in which the Company
conducts business and is required to so qualify, as of a date within ten (10)
days of such Closing Date.

     

    (viii)        If
requested by such Buyer in writing prior to such Closing Date, the Company shall
have delivered to such Buyer a certified copy of the Amended and Restated
Articles of Incorporation as certified by the Delaware Secretary of State within
ten (10) days of such Closing Date.

     

    (ix)         If
requested by such Buyer in writing prior to such Closing Date, the Company shall
have delivered to such Buyer a certificate, in the form reasonably acceptable to
such Buyer, executed by the Secretary of the Company and dated as of the Closing
Date, as to (i) the resolutions approving the execution and delivery of the
Transaction Documents, the sale and issuance of the Securities in accordance
with the Transaction Documents and the transactions contemplated by the
Transaction Documents, as adopted by the Company’s board of directors, (ii) the
Amended and Restated Articles of Incorporation of the Company and (iii) the
Amended and Restated Bylaws of the Company, each as in effect at the
Closing.

     

    
      	
              8.  

            	
              TERMINATION.

            


    

     

    This
Agreement may be terminated by the Company at any time prior to the first
Closing Date.  After the first Closing Date, this Agreement may be
terminated only with the mutual consent of the Company and any Buyer for whom a
Closing has occurred; provided, however, that no such termination shall affect
any obligation of the Company under this Agreement to reimburse such Buyer for
the expenses described in Section 4(e) above. Nothing contained in this Section
8 shall be deemed to release any party from any
liability for any breach by such party of the terms and provisions of this
Agreement or the other Transaction Documents or to impair the right of any party
to compel specific performance by any other party of its obligations under this
Agreement or the other Transaction Documents.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    
 

    
      	
              9.  

            	
              MISCELLANEOUS.

            


    

     

    (a)         Governing Law; Jurisdiction;
Jury Trial. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State 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, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

    


    (b)         Counterparts. This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party. In
the event that any signature is delivered by facsimile transmission or by an
e-mail which contains a portable document format (.pdf) file of an executed
signature page, such signature page 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 signature page were an original
thereof.

     

    (c)         Headings;
Gender. The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement. Unless the context
clearly indicates otherwise, each pronoun herein shall be deemed to include the
masculine, feminine, neuter, singular and plural forms thereof. The terms
“including,” “includes,” “include” and words of like import shall be construed
broadly as if followed by the words “without limitation.”  The terms
“herein,” “hereunder,” “hereof” and words of like import refer to this entire
Agreement instead of just the provision in which they are found.

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    (d)         Severability. If any
provision of this Agreement is prohibited by law or otherwise determined to be
invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or
unenforceable provision(s) with a valid provision(s), the effect of which comes
as close as possible to that of the prohibited, invalid or unenforceable
provision(s). Notwithstanding anything to the contrary contained in this
Agreement or any other Transaction Document (and without implication that the
following is required or applicable), it is the intention of the parties that in
no event shall amounts and value paid by the Company and/or its Subsidiaries (as
the case may be), or payable to or received by any of the Buyers, under the
Transaction Documents (including without limitation, any amounts that would be
characterized as “interest” under applicable law) exceed amounts permitted under
any applicable law. Accordingly, if any obligation to pay, payment made to any
Buyer, or collection by any Buyer pursuant the Transaction Documents is finally
judicially determined to be contrary to any such applicable law, such obligation
to pay, payment or collection shall be deemed to have been made by mutual
mistake of such Buyer and the Company and such amount shall be deemed to have
been adjusted with retroactive effect to the maximum amount or rate of interest,
as the case may be, as would not be so prohibited by the applicable law. Such
adjustment shall be effected, to the extent necessary, by reducing or refunding,
at the option of such Buyer, the amount of interest or any other amounts which
would constitute unlawful amounts required to be paid or actually paid to such
Buyer under the Transaction Documents. For greater certainty, to the extent that
any interest, charges, fees, expenses or other amounts required to be paid to or
received by such Buyer under any of the Transaction Documents or related thereto
are held to be within the meaning of “interest” or another applicable term to
otherwise be violative of applicable law, such amounts shall be pro-rated over
the period of time to which they relate.

     

    (e)         Entire Agreement;
Amendments. This
Agreement, the other Transaction Documents and the schedules and exhibits
attached hereto and thereto and the instruments referenced herein and therein
supersede all other prior oral or written agreements between the Buyers, the
Company, its Subsidiaries, their affiliates and Persons acting on their behalf
solely with respect to the matters contained herein and therein, and this
Agreement, the other Transaction Documents, the schedules and exhibits attached
hereto and thereto and the instruments referenced herein and therein contain the
entire understanding of the parties solely with respect to the matters covered
herein and therein; provided, however, nothing contained in this Agreement or
any other Transaction Document shall (or shall be deemed to) (i) have any effect
on any agreements any Buyer has entered into with the Company or any of its
Subsidiaries prior to the date hereof with respect to any prior investment made
by such Buyer in the Company or (ii) waive, alter, modify or amend in any
respect any obligations of the Company or any of its Subsidiaries, or any rights
of or benefits to any Buyer or any other Person, in any agreement entered into
prior to the date hereof between or among the Company and/or any of its
Subsidiaries and any Buyer and all such agreements shall continue in full force
and effect. Except as specifically set forth herein or therein, neither the
Company nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. For clarification purposes, the
Recitals are part of this Agreement. No provision of this Agreement, the Notes
or the Warrants may be amended other than by an instrument in writing signed by
the Company and the Required Buyers (as defined below), and any amendment to any
provision of this Agreement, the Notes or the Warrants made in conformity with
the provisions of this Section 9(e) shall be binding on all Buyers and holders
of Securities, as applicable, provided that no such amendment shall be effective
to the extent that it (1) applies to less than all of the holders of the
Securities then outstanding or (2) imposes any obligation or liability on any
Buyer without such Buyer’s prior written consent (which may be granted or
withheld in such Buyer’s sole discretion).  No waiver shall be
effective unless it is in writing and signed by an authorized representative of
the waiving party, provided that the Required Buyers may waive any provision of
this Agreement, the Notes or the Warrants, and any waiver of any provision of
this Agreement, the Notes or the Warrants made in conformity with the provisions
of this Section 9(e) shall be binding on all Buyers and holders
of Securities, as applicable, provided that no such waiver shall be effective to
the extent that it (1) applies to less than all of the holders of the Securities
then outstanding (unless a party gives a waiver as to itself only) or (2)
imposes any obligation or liability on any Buyer without such Buyer’s prior
written consent (which may be granted or withheld in such Buyer’s sole
discretion). No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration also is offered to all of the parties to
the Transaction Documents, all holders of the Notes or all holders of the
Warrants (as the case may be). The Company has not, directly or indirectly, made
any agreements with any Buyers relating to the terms or conditions of the
transactions contemplated by the Transaction Documents except as set forth in
the Transaction Documents. Without limiting the foregoing, the Company confirms
that, except as set forth in this Agreement, no Buyer has made any commitment or
promise or has any other obligation to provide any financing to the Company, any
Subsidiary or otherwise. As a material inducement for each Buyer to enter into
this Agreement, the Company expressly acknowledges and agrees that no due
diligence or other investigation conducted by a Buyer, any of its advisors or
any of its representatives shall affect such Buyer’s right to rely on, or shall
modify or qualify in any manner or be an exception to any of, the Company’s
representations and warranties contained in this Agreement or any other
Transaction Document.  “Required Buyers” means Buyers
holding at least 51% of the aggregate principal amount of the Notes sold under
this Agreement.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    
 

    (f)         
Notices. Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one (1) Business Day after deposit with an overnight courier service
with next day delivery specified, in each case, properly addressed to the party
to receive the same. The addresses and facsimile numbers for such communications
shall be:

     

    If to the
Company:

     

    Medgenics,
Inc

    8000
Towers Crescent Dr.

    Suite
1300

    Vienna,
Va. 22182

    Telephone:+972-4-902-8900

    Facsimile:+972-4-999-0114

    Attention:  Chief
Executive Officer

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    
 

    With a
copy (for informational purposes only) to:

     

    Barack
Ferrazzano Kirschbaum & Nagelberg LLP

    200 W.
Madison Street, Suite 3900

    Chicago,
Illinois 60606

    Telephone:  (312)
984-3100

    Facsimile:  (312)
984-3150

    Attention:  Gretchen
Anne Trofa, Esq.

    


    If to a
Buyer, to its address and facsimile number set forth on the Schedule of Buyers,
with copies to such Buyer’s representatives (if any) as set forth on the
Schedule of Buyers, or to such other address and/or facsimile number and/or to
the attention of such other Person as the recipient party has specified by
written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from
an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.  As used herein “Business Day” means any day
other than a Saturday, Sunday or other day on which commercial banks in New
York, New York or Israel are authorized or required by law to remain
closed.

     

    (g)         Successors and
Assigns. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns, including any purchasers of any of the
Securities. The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Required Buyers,
including, without limitation, by way of a Fundamental Transaction (as defined
in the Warrants) (unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Warrants) or a
Fundamental Transaction (as defined in the Notes) (unless the Company is in
compliance with the applicable provisions governing Fundamental Transactions set
forth in the Notes). A Buyer may assign some or all of its rights hereunder in
connection with any permitted transfer of any of its Securities without the
consent of the Company but upon prior written notice to the Company, in which
event such assignee shall be deemed to be a Buyer hereunder with respect to such
assigned rights.

     

    (h)         No Third Party
Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person, other than the Indemnitees referred to
in Section 9(k).

     

    (i)         
Survival. Any
covenant or agreement in this Agreement required to be performed following the
Closing Date shall survive such Closing Date. Without limitation of the
foregoing, the respective representations and warranties given by the parties
hereto shall survive each Closing Date and the consummation of the transactions
contemplated herein, but only for a period of the earlier of (i) twenty-four
(24) months following the Closing Date and (ii) the applicable statute of
limitations with respect to each representation and warranty, and thereafter
shall expire and have no further force and effect (including with respect to the
indemnification obligations contained herein).

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

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

     

    (k)         Indemnification.

     

    (i)         In
consideration of each Buyer’s execution and delivery of the Transaction
Documents and acquiring the Securities thereunder and in addition to all of the
Company’s other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless each Buyer and each holder of any
Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing
Persons’ agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Indemnitees”) from and against
any and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys’ fees
and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company or any Subsidiary in any of the Transaction Documents, or (b) any breach
of any covenant, agreement or obligation of the Company contained in any of the
Transaction Documents. 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.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    (ii)         Promptly
after receipt by an Indemnitee under this Section 9(k) of notice of the
commencement of any action or proceeding (including any governmental action or
proceeding) involving an Indemnified Liability, such Indemnitee shall, if a
claim in respect thereof is to be made against the Company under this Section
9(k), deliver to the Company a written notice of the commencement thereof, and
the Company shall have the right to participate in, and, to the extent the
Company so desires, to assume control of the defense thereof with counsel
selected by the Company; provided, however, that an Indemnitee shall have the
right to retain its own counsel with the reasonable fees and expenses of such
counsel to be paid by the Company if: (i) the Company has agreed in writing to
pay such fees and expenses; (ii) the Company shall have failed promptly to
assume the defense of such Indemnified Liability within twenty (20) days after
the  Company’s receipt of the Indemnitee’s notice; or (iii) the named
parties to any such Indemnified Liability (including any impleaded parties)
include both such Indemnitee and the Company, and such Indemnitee shall have
been advised by counsel that a conflict of interest is likely to exist if the
same counsel were to represent such Indemnitee and the Company (in which case,
if such Indemnitee notifies the Company in writing that it elects to employ
separate counsel at the expense of the Company, then the Company shall not have
the right to assume the defense thereof and the reasonable fees and expenses of
such counsel shall be the responsibility of the Company), provided further, that
in the case of clause (iii) above the Company shall not be responsible for the
reasonable fees and expenses of more than one (1) separate legal counsel for
such Indemnitee. The Indemnitee shall reasonably cooperate with the Company in
connection with any negotiation or defense of any such action or Indemnified
Liability by the Company and shall furnish to the Company all information
reasonably available to the Indemnitee which relates to such action or
Indemnified Liability. The Company shall keep the Indemnitee 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
action, claim or proceeding affected without its prior written consent in its
sole discretion. The Company shall not, without the prior written consent of the
Indemnitee, consent to entry of any judgment or enter into any settlement or
other compromise which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnitee of a release from all
liability in respect to such Indemnified Liability or litigation, and such
settlement shall not include any admission as to fault on the part of the
Indemnitee. Following indemnification as provided for hereunder, the Company
shall be subrogated to all rights of the Indemnitee with respect to all third
Persons relating to the matter for which indemnification has been made. The
failure to deliver written notice to the Company within a reasonable time of the
commencement of any such action shall not relieve the Company of any liability
to the Indemnitee under this Section 9(k), except to the extent that the Company
is materially and adversely prejudiced in its ability to defend such
action.

     

    (iii)        Notwithstanding
anything to the contrary contained herein, the Company shall not be liable, in
aggregate, to the Indemnitees in excess of the original principal amount of the
Notes sold under this Agreement.  The indemnification required by this
Section 9(k) shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
Indemnified Liabilities are incurred.

     

    (iv)       The
indemnity agreement contained herein shall be in addition to (A) any cause of
action or similar right of the Indemnitee against the Company or others, and (B)
any liabilities the Company may be subject to pursuant to the law.

     

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

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    (m)        Remedies.  Each
Buyer and each holder of any Securities shall have all rights and remedies set
forth in the Transaction Documents and all rights and remedies which such
holders have been granted at any time under any other agreement or contract and
all of the rights which such holders have under any law. Any Person having any
rights under any provision of this Agreement shall be entitled to enforce such
rights specifically (without posting a bond or other security), to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all of
its obligations under the Transaction Documents, any remedy at law may prove to
be inadequate relief to the Buyers. The Company therefore agrees that the Buyers
shall be entitled to seek specific performance and/or temporary, preliminary and
permanent injunctive or other equitable relief from any court of competent
jurisdiction in any such case without the necessity of proving actual damages
and without posting a bond or other security.  Notwithstanding
anything to the contrary contained in this Agreement or the Transaction
Documents, the Company shall not be liable for any consequential, incidental,
special or punitive damages in connection with any of the Transaction
Documents.

     

    (n)         Withdrawal
Right.
Notwithstanding anything to the contrary contained in (and without limiting any
similar provisions of) the Transaction Documents, whenever any Buyer exercises a
right, election, demand or option under a Transaction Document and the Company
does not timely perform its related obligations within the periods therein
provided, then such Buyer may rescind or withdraw, in its sole discretion from
time to time upon written notice to the Company any relevant notice, demand or
election in whole or in part without prejudice to its future actions and
rights

     

    (o)         Payment Set Aside;
Currency. To the
extent that the Company makes a payment or payments to any Buyer hereunder or
pursuant to any of the other Transaction Documents or any of the Buyers enforce
or exercise their rights hereunder or thereunder, and such payment or payments
or the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or setoff had not occurred. Unless otherwise
expressly indicated, all dollar amounts referred to in this Agreement and the
other Transaction Documents are in United States Dollars (“U.S. Dollars”), and all
amounts owing under this Agreement and all other Transaction Documents shall be
paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall
be converted into the U.S. Dollar equivalent amount in accordance with the
Exchange Rate on the date of calculation. “Exchange Rate” means, in relation to
any amount of currency to be converted into U.S. Dollars pursuant to this
Agreement, the U.S. Dollar exchange rate as published in the Wall Street Journal
on the relevant date of calculation.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (q)         Independent Nature of
Buyers’ Obligations and Rights.  The
obligations of each Buyer under the Transaction Documents are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under any
Transaction Document.  Nothing contained herein or in any other
Transaction Document, and no action taken by any Buyer pursuant hereto or
thereto, shall be deemed to constitute the Buyers as, and the Company
acknowledges that the Buyers do not so constitute, a partnership, an
association, a joint venture or any other kind of group or entity, or create a
presumption that the Buyers are in any way acting in concert or as a group or
entity with respect to such obligations or the transactions contemplated by the
Transaction Documents or any matters, and the Company acknowledges that the
Buyers are not acting in concert or as a group, and the Company shall not assert
any such claim, with respect to such obligations or the transactions
contemplated by the Transaction Documents. The decision of each Buyer to
purchase Securities pursuant to the Transaction Documents has been made by such
Buyer independently of any other Buyer. Each Buyer acknowledges that no other
Buyer has acted as agent for such Buyer in connection with such Buyer making its
investment hereunder and that no other Buyer will be acting as agent of such
Buyer in connection with monitoring such Buyer’s investment in the Securities or
enforcing its rights under the Transaction Documents. The Company and each Buyer
confirms that each Buyer has independently participated with the Company and its
Subsidiaries in the negotiation of the transaction contemplated hereby with the
advice of its own counsel and advisors. Each Buyer shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Buyer to be joined as an additional
party in any proceeding for such purpose. The use of a single agreement to
effectuate the purchase and sale of the Securities contemplated hereby was
solely in the control of the Company, not the action or decision of any Buyer,
and was done solely for the convenience of the Company and not because it was
required or requested to do so by any Buyer.  It is expressly
understood and agreed that each provision contained in this Agreement and in
each other Transaction Document is between the Company and a Buyer, solely, and
not between the Company and the Buyers collectively and not between and among
the Buyers.

     

     [signature pages
follow]

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, the
Company has caused its signature page to this Agreement to be duly executed as
of the date first written above.

     

    
      
        
          
            
              
                
                  
                    	 	
                            COMPANY:

                          	 
	 	 	 
	 	
                            MEDGENICS,
      INC

                          	 
	 	 	 
	 	 	 
	 	
                            By:

                          	
                            /s/ Andrew L. Pearlman

                          	 
	 	 
      	
                            Name:
      Andrew L. Pearlman

                          	 
	 	 
      	
                            Title:
      President