Exhibit
10.1


SECURITIES PURCHASE
AGREEMENT


This Securities Purchase Agreement (this “Agreement”)
is made as of ____, 2006 between Xenomics, Inc., a Florida corporation (the “Company”),
and the investors listed on Exhibit A hereto, each of which is herein referred
to as an “Investor” and collectively, the “Investors”.


RECITALS:


WHEREAS, the Investors desire to purchase from the
Company, and the Company desires to sell to the Investors, up to approximately
9,600,000 shares of the Company’s common stock, par value $0.0001 per share
(the “Common Stock”) and up to approximately 4,800,000 warrants to purchase
shares of the Common Stock (the “Warrants”), upon the terms and subject to the
conditions set forth herein;


NOW, THEREFORE, in
consideration of the premises and mutual covenants contained herein, the
parties hereto agree as follows:


1.             PURCHASE AND SALE OF SECURITIES.


1.1           Purchase and Sale of Securities.  Upon the terms and subject to the conditions
of this Agreement, at the Closing (as defined below), the Company agrees to
sell to the Investors, and each Investor agrees to purchase from the Company
the number of shares of the Company’s Common Stock and Warrants set forth
opposite such Investor’s name on Exhibit A hereto (collectively, the “Securities”)
at the per share purchase price of $1.25 (“Purchase Price”).  The Warrants shall be exercisable at $2.00
per share for a period of 3 years from the date of issuance.


1.2           Closing.  The closing of the purchase and sale of the
Securities (the “Closing”) shall take place at the offices of the Company at
5:00 p.m., Eastern time on ___, 2006, or such other location, time or date as
the parties shall mutually agree, but only after the satisfaction or waiver of
each of the conditions set forth in Sections 6 and 7 (the “Closing Date”).


1.3           Deliveries.  At the Closing, the Company shall deliver to
each Investor at the address set forth on such Investor’s signature page
hereto, a certificate or certificates, registered in the name of the applicable
Investor, representing the shares of Common Stock and Warrants purchased by
such Investor, and each Investor shall deliver to the Company the aggregate
Purchase Price, by wire transfer of immediately available funds to the
following account:


	
   

  	
  HSBC Bank USA

  
	
   

  	
  950 Third Avenue

  
	
   

  	
  New York, NY 10022

  
	
   

  	
   

  
	
   

  	
  A/C of Sichenzia Ross Friedman Ference LLP, IOLA

  
	
   

  	
  A/C# 629034125

  
	
   

  	
  ABA# 021001088

  



 



 1
 






 



 


REMARK:  XENOMICS


2.                                       REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.


For purposes of this Section, all references to “Company”
in Sections 2.1, 2.4 (with the exception of subsection (a) thereof), 2.7, 2.9
through 2.12, and 2.14 through 2.20 shall be deemed to be a reference to the
Company and all of its direct and indirect subsidiaries.  The Company hereby represents and warrants to
each Investor that, except as set forth on a Schedule of Exceptions (the “Company
Schedule of Exceptions”) attached hereto as Schedule A, which exceptions
shall be deemed to be representations and warranties as if made hereunder:


2.1           Corporate Organization.  The Company is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation, and has the requisite corporate power and authority to own or
lease its properties and to carry on its business as now being conducted.  The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the property owned or leased by it or the nature of the business
conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or in good standing would not have, individually
or in the aggregate, a Material Adverse Effect. 
For purposes of this Agreement, “Material Adverse Effect” shall mean, as
to any entity, any material adverse effect on the business, operations,
conditions (financial or otherwise), assets or results of operations of that
entity individually or of the Company and its subsidiaries as a whole.


2.2           Capitalization; Organizational
Documents.


(a)           The authorized capital stock of the
Company will consist immediately prior to the Closing of 100,000,000 shares of
Common Stock, of which as of the date hereof, 19,247,367 shares are issued and
outstanding, and 20,000,000 shares of preferred stock of the Company, of which,
as of the date hereof, 134,840 shares of Series Convertible Preferred Stock are
issued and outstanding.  All of the
issued and outstanding shares have been duly and validly issued and are fully
paid and nonassessable and have been issued in accordance with all applicable
federal and state securities laws.  No
shares of Common Stock are subject to preemptive rights or any other similar
rights or any liens suffered or permitted by the Company.  There are no preemptive rights or rights of
first refusal or similar rights which are binding on the Company permitting any
person to subscribe for or purchase from the Company shares of its capital
stock pursuant to any provision of applicable law, the Certificate of
Incorporation (as defined below) or the Company’s By-laws.  There are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities, except for the anti-dilution provisions set forth
in the Articles of Amendment Designating the Series A Convertible Preferred
Stock of the Company.  The Company has
made available to each Investor true and correct copies of the Company’s
Articles of Incorporation, as amended and as in effect on the date hereof (the “Articles
of Incorporation”), and the Company’s By-laws, as in effect on the date hereof
(the “By-laws”).


(b)           Upon issuance of the Securities and
payment of the Purchase Price therefor in accordance with the terms of this
Agreement, the Securities will be duly authorized, validly issued, fully paid
and nonassessable, and free and clear of any restrictions on transfer and



 2
 






 



any taxes, claims, liens, pledges, options, security
interests, purchase rights, preemptive rights, trusts, encumbrances or other
rights or interests of any other person (other than any restrictions under the
Securities Act of 1933, as amended (the “Securities Act”).


2.3           Authorization; Enforcement.  (a) The Company has the requisite corporate
power and authority to enter into and perform its obligations under this
Agreement and to issue, sell and perform its obligations with respect to the
Securities in accordance with the terms hereof, (b) the execution and delivery
of this Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by the Company’s Board of
Directors and its stockholders and no further consent or authorization is
required by the Company, its Board of Directors or its stockholders, except as
disclosed on the Company Schedule of Exceptions and (c) this Agreement has been
duly executed and delivered by the Company. 
This Agreement, when executed and delivered by the Company, constitutes
a valid and binding obligation of the Company enforceable against the Company
in accordance with its terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and remedies.


2.4           No Conflicts.  The execution, delivery and performance of
this Agreement by the Company, and the consummation by the Company of the
transactions contemplated hereby, will not (a) result in a violation of the
Articles of Incorporation or By-laws of the Company, or (b) violate or
conflict with, or result in a breach of, any provision of, 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, or result in the creation of any lien on or against any of
the material properties of the Company, any material note, bond, mortgage,
agreement, license, indenture or instrument to which the Company is a party, or
result in a violation of any statute, law, rule, regulation, writ, injunction,
order, judgment or decree applicable to the Company or by which any property or
asset of the Company is bound or affected, except where such violation,
conflict, breach or other consequence would not have a Material Adverse
Effect.   Except as specifically
contemplated by this Agreement and applicable blue sky laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental or regulatory or self-regulatory
agency in order for it to execute, deliver or perform any of its obligations
under or contemplated by this Agreement in accordance with the terms
hereof.  All consents, authorizations,
orders, filings and registrations that the Company is required to obtain
pursuant to the preceding sentence have been obtained or effected on or prior
to the date hereof, except for those required pursuant to blue sky laws.


2.5           SEC Documents; Financial
Statements.  The Company has filed
all reports, schedules, forms, statements and other documents required to be
filed by it with the Securities and Exchange Commission (the “SEC”) pursuant to
the reporting requirements of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) (all of the foregoing, and all other documents and
registration statements heretofore filed by the Company with the SEC being
hereinafter referred to as the “SEC Documents”).  The Common Stock is currently traded on the
Over the Counter Bulletin Board.  The
Company has delivered or made available to each Investor true and complete
copies of the SEC Documents.  As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act, and the



 3
 






 



Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC (except those SEC Documents
that were subsequently amended), contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.  Except as disclosed in the Company Schedule
of Exceptions, as of their respective dates, the financial statements of the
Company and its subsidiaries included (or incorporated by reference) in the SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC or
other applicable rules and regulations with respect thereto.  Such financial statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except (a) as may be otherwise
indicated in such financial statements or the notes thereto, or (b) in the case
of unaudited interim statements, to the extent they may exclude footnotes or
may be condensed or summary statements) and fairly present the financial
position of the Company and its subsidiaries as of the dates thereof and the
results of its operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments).


2.6           Securities Law Exemption.  Assuming the truth and accuracy of each
Investor’s representations set forth in this Agreement, the offer, sale and
issuance of the Securities as contemplated by this Agreement are exempt from
the registration requirements of the Securities Act and applicable state
securities laws, and neither the Company nor any authorized agent acting on its
behalf has taken or will take any action hereafter that would cause the loss of
such exemption.


2.7           Litigation.  All actions, suits, arbitrations or other
proceedings or, to the Company’s knowledge, investigations pending or
threatened against the Company that would have a Material Adverse Effect on the
Company, are disclosed in the SEC Documents. 
There is no action, suit, proceeding or, to the Company’s knowledge,
investigation that questions this Agreement or the right of the Company to
execute, deliver and perform under same.


2.8           Use of Proceeds.  The net proceeds from the sale of the
Securities shall be used solely for general corporate and working capital
purposes.


2.9           Intellectual Property.  The Company owns, or has the contractual
right to use, sell or license all intellectual property necessary or required
for the conduct of its business as presently conducted and as proposed to be
conducted, including, without limitation, all trade secrets, processes, source
code, licenses, trademarks, service marks, trade names, logos, brands,
copyrights, patents, franchises, domain names and permits.  The Company has not received any communications
alleging that the Company has violated or, by conducting its business presently
conducted violates or will violate any intellectual property rights of any
other person or entity.


2.10         Title to Property and Assets.  The Company has good and marketable title to
or, in the case of leases and licenses, has valid and subsisting leasehold
interests or licenses in, all of its properties and assets (whether real or
personal, tangible or intangible) free and clear of any liens or other
encumbrances, except for liens or other encumbrances that do not, individually
or in the aggregate, have a Material Adverse Effect.  With respect to property leased by the



 4
 






 



 


Company, the Company has a valid leasehold interest in
such property pursuant to leases which are in full force and effect, and the
Company is in compliance in all material respects with the provisions of such
leases.


2.11         Compliance with Laws.  The Company is in compliance with all laws,
rules, regulations, orders, judgments or decrees that are applicable to the
Company, the conduct of its business as presently conducted, and the ownership
of its property and assets (including, without limitation, all Environmental
Laws (as defined below) and laws related to occupational safety, health, wage
and hour, and employment discrimination). 
All required reports and filings with governmental authorities have been
properly made as and when required, except where the failure to report or file
would not, individually or in the aggregate, have a Material Adverse Effect.  “Environmental Laws” means all federal,
state, local and foreign laws, ordinances, treaties, rules, regulations,
guidelines and permit conditions relating to contamination or pollution of the
environment (including ambient air, surface water, ground water, land surface
or subsurface strata) or the protection of human health and worker safety,
including, without limitation, laws and regulations relating to transportation,
storage, use, manufacture, disposal or release of, or exposure of employees or
others to, Hazardous Materials (as defined below) or emissions, discharges,
releases or threatened releases of Hazardous Materials.  “Hazardous Materials” means any substance
that has been designated by any governmental entity or by applicable
Environmental Laws to be radioactive, toxic, hazardous or otherwise a danger to
health or the environment, including, without limitation, PCBs, asbestos,
petroleum, urea formaldehyde and all substances listed as hazardous substances
pursuant to the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, or defined as a hazardous waste pursuant to
the Resource Conservation and Recovery Act of 1976, as amended, and the
regulations promulgated pursuant to Environmental Laws, but excluding office
and janitorial supplies maintained in accordance with Environmental Laws.


2.12         Licenses and Permits.  The Company has obtained and maintains all
material federal, state, local and foreign licenses, permits, consents,
approvals, registrations, memberships, authorizations and qualifications
required to be maintained in connection with the operations of the Company as
presently conducted, the lack of which could have a Material Adverse
Effect.  The Company is not in default in
any material respect under any of such licenses, permits, consents, approvals,
registrations, memberships, authorizations and qualifications.


2.13         Related Entities.  Except for the Subsidiaries set forth on the
Company Schedule of Exceptions, the Company does not presently own or control,
directly or indirectly, any interest in any other subsidiary, corporation,
association or other business entity. 
Except for SpaXen Italia, S.R.L., the Company is not a party to any
joint venture, partnership or similar arrangement.


2.14         Changes.  Except as disclosed on the Company Schedule
of Exceptions and in the SEC Documents, since January 31, 2006, the Company has
operated its business diligently and in the ordinary course of business and, to
the knowledge of the Company, there has not been, or the Company has not (as
the case may be):


(a)           any Material Adverse Effect;



 5
 






 



 


(b)           any damage, destruction or loss,
whether or not covered by insurance, which would have a Material Adverse
Effect;


(c)           any waiver or compromise by the
Company of a valuable right or of a material debt owed it;


(d)           sold, encumbered, assigned or
transferred any material assets or properties of the Company, other than in the
ordinary course of business;


(e)           incurred any liability, whether
accrued, absolute, contingent or otherwise, and whether due or to become due,
other than (i) in the ordinary course of business or (ii) liabilities that are
not, individually or in the aggregate, material to the business, operations,
condition (financial or otherwise), assets or results of operations of the
Company;


(f)            created, incurred, assumed or
guaranteed any indebtedness or subjected any of its assets to any lien or
encumbrance, except for indebtedness, liens or encumbrances that are not,
individually or in the aggregate, material to the business, operations,
condition (financial or otherwise), assets or results of operations of the
Company;


(g)           directly or indirectly redeemed,
purchased or otherwise acquired any shares of capital stock of the Company;


(h)           declared, set aside or paid any
dividends or made any other distributions in cash or property on the Company’s
capital stock;


(i)            except in the ordinary course of
business of the Company, materially increased the compensation payable or to
become payable by the Company to any of its officers, employees or directors or
materially increased any bonus, insurance, pension or other employee benefit
plan, payment or arrangement made by the Company for or with any such officers,
employees or directors;


(j)            made any direct or indirect loan to
any stockholder, employee, officer or director of the Company, other than
advances made in the ordinary course of business;


(k)           changed any agreement to which the
Company is a party which would have a Material Adverse Effect; or


(l)            entered into any agreement or commitment
to do any of the things described in this Section 2.14.


2.15         Employee Benefit Plans.  All “employee benefit plans,” as such term is
defined in the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
to which the Company has any liability or obligation, contingent or otherwise,
comply in all material respects and have been maintained and administered in
material compliance with



 6
 






 



ERISA, the Internal Revenue Code of 1986, as amended
(the “Code”), and all other statutes, orders and governmental rules and
regulations applicable to such employee benefit plans.


2.16         Insurance.  The Company has in full force and effect
fire, casualty and liability insurance policies sufficient in amount (subject
to reasonable deductibles) to allow the Company to replace any of its
properties that might be damaged or destroyed to the extent and in the manner
customary for companies in similar business similarly situated.


2.17         Employees.  The Company does not have any collective
bargaining agreements with any of its employees.  There is no labor union organizing activity
pending or, to the Company’s knowledge, threatened with respect to the Company.


2.18         Material Contracts.  All contracts, agreements, instruments,
leases, licenses, arrangements, understandings or other documents filed with or
required to be filed as exhibits to the SEC Documents to which the Company
therein is a party or by which it may be bound have been so filed (the “Material
Contracts”).  The Material Contracts that
have been filed as exhibits are complete and correct copies of the contracts,
agreements, instruments, leases, licenses, arrangement, understanding or other
documents of which they purport to be copies. 
The Material Contracts are valid and in full force and effect as to the
Company, and, to the Company’s knowledge, to the other parties thereto.


2.21         Brokers
and Finders.  Except as disclosed in
the Schedule of Exceptions, the Company has not employed any broker, finder,
consultant or intermediary in connection with the transactions contemplated by
this Agreement that would be entitled to a broker’s, finder’s or similar fee or
commission in connection herewith and therewith.


2.22         Disclosure.  This Agreement, Schedules and Exhibits hereto
and all other documents delivered to the Investors in connection herewith or
therewith at the Closing, do not contain any untrue statement of a material
fact, or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading.  There are no facts that, individually or in
the aggregate, would have a Material Adverse Effect that have not been
disclosed to each Investor in this Agreement (including the Schedules and
Exhibits hereto), the SEC Documents or any other documents delivered to each
Investor in connection herewith or therewith at the Closing.


3.             REPRESENTATIONS
AND WARRANTIES OF INVESTOR.


Each of the Investors, severally and not jointly,
hereby represents and warrants to the Company as to itself and not as to any other
Investor, that:


3.1           Organization.  The Investor represents and warrants to, and
covenants with, the Company that the Investor has full right, power, authority
and capacity to enter into this Agreement and to consummate the transactions
contemplated hereby.


3.2           Authorization; Enforcement.  (a) The Investor has the requisite power and
authority to enter into and perform its obligations under this Agreement, (b)
the execution and delivery of this Agreement by the Investor and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of



 7
 






 



the Investor, and (c) this Agreement has been duly
executed and delivered by the Investor. 
To the knowledge of the Investor, no other proceedings on the part of
the Investor are necessary to approve and authorize the execution and delivery
of this Agreement.  This Agreement, when
executed and delivered, constitutes a valid and binding obligation of the
Investor, enforceable against the Investor in accordance with its terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies.


3.3           No Conflicts.  The execution, delivery and performance of
this Agreement by the Investor, and the consummation by the Investor of the
transactions contemplated hereby will not (a) result in a violation of the
organizational documents of the Investor, or (b) result in a violation of
any statute, law, rule, regulation, writ, injunction, order, judgment or decree
applicable to the Investor, except where such violation, conflict, breach or
other consequence would not have a Material Adverse Effect.  The Investor is not required to obtain any
consent, authorization or order of, or make any filing or registration with,
any court or governmental or regulatory or self-regulatory agency in order for
it to execute, deliver or perform any of its obligations under or contemplated
by this Agreement in accordance with the terms hereof.


3.4           Investment
Representations.


(a)           The Investor is an “accredited
investor”, as defined in Regulation D promulgated under the Securities Act, and
has such knowledge, sophistication and experience in financial and business
matters that the Investor is capable of evaluating the merits and risks of the
investment in the Securities.


(b)           The Investor (i) has adequate means
of providing for its current financial needs and possible contingencies, and
has no need for liquidity of investment in the Company, (ii) can afford to hold
unregistered Securities for an indefinite period of time and sustain a complete
loss of the entire amount of the subscription, and (iii) has not made an
overall commitment to investments which are not readily marketable that is so
disproportionate as to cause such overall commitment to become excessive.


(c)           The Investor agrees and understands
that the Securities are being offered and sold to the Investor in reliance upon
specific exemptions from the registration requirements of the Securities Act
and the rules and regulations promulgated thereunder and that, in order to
determine the availability of such exemptions and the eligibility of the Investor
to acquire the Securities, the Company is relying upon the truth and accuracy
of the Investor’s representations and warranties, and compliance with the
Investor’s covenants and agreements, set forth in this Agreement.  The Investor further agrees with the Company
that (i) no Securities were offered or sold to the Investor by means of any
form of general solicitation or general advertising, and in connection
therewith, the Investor did not (1) receive or review any advertisement,
article, notice or other communication published in a newspaper or magazine or
similar media or broadcast over television or radio, whether closed circuit or
generally available; or (2) attend any seminar meeting or industry investor
conference whose attendees were invited by any general solicitation or general
advertising.  The Investor hereby
acknowledges that the offering of the Securities has not been reviewed by the
SEC or any state regulatory authority



 8
 






 



since the offering of the Securities is intended to be
exempt from the registration requirements of Section 5 of the Securities Act
pursuant to Regulation S promulgated thereunder.  The Investor understands that the Securities
have not been registered under the Securities Act and agrees not to sell or
otherwise transfer the Securities unless they are registered under the
Securities Act or unless an exemption from such registration is available.


(d)           The Investor is not acquiring the
Securities for the account or benefit of, directly or indirectly, any U.S.
Person.  The Investor is not a U.S.
Person. The Investor is acquiring the Securities for investment only and not
with a view to resale or distribution and, in particular, it has no intention
to distribute either directly or indirectly any of the Securities in the United
States or to U.S. Persons.  The Investor
acknowledges that the Investor has not acquired the Securities as a result of,
and will not itself engage in, any “directed selling efforts” (as defined in
Regulation S under the 1933 Act) in the United States in respect of the
Securities which would include any activities undertaken for the purpose of, or
that could reasonably be expected to have the effect of, conditioning the
market in the United States for the resale of the Securities; provided,
however, that the Investor may sell or otherwise dispose of the Securities
pursuant to registration of the Securities pursuant to the 1933 Act and any
applicable state and provincial securities laws or under an exemption from such
registration requirements and as otherwise provided herein.


(e)           The Investor has had access to the
Company’s SEC Documents and other public filings.


(f)            With respect to corporate tax and
other economic considerations involved in an investment in the Securities, the
Investor is not relying on the Company. 
The Investor has carefully considered and has, to the extent the
Investor believes such discussion necessary, discussed with its professional
legal, tax, accounting and financial advisors the suitability of an investment
in the Securities for its particular tax and financial situation and has
determined that the Securities are a suitable investment for the Investor.


(g)           The Company has made available to the
Investor all documents and information that the Investor has requested relating
to an investment in the Securities.


(h)           Subject to the Company’s disclosures
in this Agreement and the SEC Documents, the Investor recognizes that the
Company has generated no revenues to date, is not expected to have any products
commercially available for a number of years, if at all, and that investment in
the Company involves substantial risks, including loss of the entire amount of
such investment and has taken full cognizance of and understands all of the
risk factors relating to the purchase of the Securities.


(i)            The Investor has not been formed for
the specific purpose of acquiring the Securities.


4.             COVENANTS.


4.1           Confidentiality.  Each Investor hereby acknowledges that
unauthorized disclosure of information regarding the offering of the Securities
pursuant to this Agreement may cause the Company to violate Regulation FD and
each Investor agrees to keep such information



 9
 






 



confidential. The Company shall not publicly disclose
the name of any Investor, or include the name of any Investor in any filing
with the Commission or any regulatory agency or trading market, without the
prior written consent of such Investor, except (i) as required by the federal
securities laws and in connection with the registration statement contemplated
by this Agreement and (ii) to the extent such disclosure is required by law or
trading market regulations.


4.2           Restrictions
on Transfer.


(a)           Each Investor hereby agrees,
severally and not jointly, that, except in accordance with a registration
statement filed pursuant to Section 5.2 of this Agreement, it will not dispose
of any of such Investor’s Securities (other than pursuant to Rule 144
promulgated under the Securities Act (“Rule 144”) or pursuant to a registration
statement filed with the SEC pursuant to the Securities Act) unless and until such
Investor shall have (A) notified the Company of the proposed disposition
and shall have furnished the Company with a statement of the circumstances
surrounding the proposed disposition and (B) if requested by the Company,
furnished the Company with an opinion of counsel, reasonably satisfactory in
form and substance to the Company and the Company’s counsel, to the effect that
such disposition will not require registration under the Securities Act.  The restrictions on transfer imposed by this
Section 4.2 shall cease and terminate as to the Securities held by an Investor
when:  (x) such Securities shall have
been effectively registered under the Securities Act and sold by the holder
thereof in accordance with such registration, or (y) on delivery of an opinion
of the kind described in the preceding sentence with respect to such
Securities.  Each certificate evidencing
the Securities shall bear an appropriate restrictive legend as set forth in
Section 4.2(b), except that such legend shall not be required after a transfer
is made in compliance with Rule 144 or pursuant to a registration statement or
if the opinion of counsel referred to above is issued and provides that such
legend is not required in order to establish compliance with any provisions of
the Securities Act.  The Company agrees
that pursuant to the prior sentence, it will, no later than five Business Days
(“Business Day” shall mean any day banks are open for business in New York, New
York) following (a) receipt by the Company’s transfer agent of a certificate
representing Securities issued with a restrictive legend, accompanied by a
certification of the Investor in form suitable for processing by the Company
that a prospectus has been delivered (in the case of sale pursuant to
prospectus, a “Prospectus Letter”) or customary supporting documentation,
including legal opinion if required pursuant to Clause (B) above, “Supporting
Documentation”) and (b) receipt by the Company of notice of such delivery to
the transfer agent and Prospectus Letter or Supporting Documentation, as the
case may be (such notice to be sent by facsimile to the attention of the
Company’s president and CEO at the fax number set forth in Section 8.6 hereof)
deliver or cause to be delivered (evidence of deposit for next day delivery
with a nationally recognized overnight delivery service shall be deemed
delivery) to such Investor a certificate representing such Securities that is
free from all restrictive and other legends. 
The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section. 
In the event the Prospectus Letter or Supporting Documentation is not in
form suitable for processing by to the Company, the five Business Days shall
toll until the Company receives a Prospectus Letter or Supporting Documentation
that is in form suitable for processing.


(b)           Notwithstanding the provisions of
Section 4.2(a), no registration statement or opinion of counsel shall be necessary
for a transfer by an Investor of the Securities



 10
 






 



to a subsidiary, member, partner, stockholder or
affiliate of that Investor, if the transferee agrees in writing to be subject
to the terms hereof to the same extent as if such transferee were an Investor
hereunder.


(c)           It is understood that, subject to
Sections 4.2(a) and 4.2(b), the certificates evidencing the Securities will
bear the following legends:


(i)            THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) OR UNDER
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH REGISTRATION,
PROVIDED THAT THE SELLER DELIVERS TO THE COMPANY AN OPINION OF COUNSEL (WHICH
OPINION IS REASONABLY SATISFACTORY TO THE COMPANY) CONFIRMING THE AVAILABILITY
OF SUCH EXEMPTION.


(ii)           Any legend required by the laws of
any other applicable jurisdiction.


4.3           Securities Compliance.  The Company shall take all action necessary
to comply with any federal or state securities laws applicable to the
transactions contemplated hereunder.


5.             REGISTRATION
RIGHTS.


5.1           Registrable Shares.  As used herein the term “Registrable Security”
means (a) each of the Shares, (b) the shares of Common Stock of the Company
issuable upon exercise of the Warrants and (c) any Common Stock of the Company
issued as (or issuable on the conversion or exercise of any warrant, right or
other security that is issued as) a dividend or other distribution with respect
to, or in exchange for, or in replacement of, the shares referenced in clause
(a) above; provided, however, that with respect to
any particular Registrable Security held by an Investor, such security shall
cease to be a Registrable Security when, as of the date of determination,
(a) it has been effectively registered under the Securities Act and
disposed of pursuant thereto, or (b) registration under the Securities Act
is no longer required for the immediate public distribution of any particular
Registrable Shares held by that Investor and its affiliates.  In the event of any merger, reorganization,
consolidation, recapitalization or other change in corporate structure
affecting the Common Stock, such adjustment shall be made in the definition of “Registrable
Security” as is appropriate in order to prevent any dilution or enlargement of
the rights granted pursuant to this Section 5.


5.2           Mandatory
Registration.


(a)           On or before 90 days following the Closing
Date, the Company shall prepare and file with the Commission the Registration
Statement covering the resale of all of the Registrable Shares for an offering
to be made on a continuous basis pursuant to Rule 415 (the “Required Filing
Date”).  The Registration Statement
required hereunder shall be on Form SB-2 (except if the Company is not then
eligible to register for resale the Registrable Shares on Form



 11
 






 



SB-2, in which case the Registration Statement shall
be on another appropriate form in accordance herewith).  The Company shall use its commercially
reasonable efforts to cause the Registration Statement to be declared effective
under the Securities Act as promptly as possible after the filing thereof, but
in any event not later than the 120th day after the Closing Date, if no review by
the SEC or the 150th day if reviewed by the SEC (the “Effectiveness
Date”), and shall use its commercially reasonable efforts to keep the
Registration Statement continuously effective under the Securities Act until
the earlier of the date when all Registrable Shares covered by the Registration
Statement (a) have been sold pursuant to the Registration Statement or an
exemption from the registration requirements of the Securities Act or (b) may
be sold without volume restrictions pursuant to Rule 144(k) as determined by
the counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company’s transfer agent and the affected
Investors or (c) the second anniversary of the date on which the Registration
Statement is declared effective (the “Effectiveness Period”) or such
longer time as the Company may determine.


(b)  If: (i) the Registration Statement is not
filed on or prior to its Required Filing Date or (ii) the Company fails to file
with the Commission a request for acceleration in accordance with Rule 461
promulgated under the Securities Act, within five business days of the date
that the Company is notified (orally or in writing, whichever is earlier) by
the Commission that a Registration Statement will not be “reviewed”, or not
subject to further review, or (iii) a Registration Statement filed or required
to be filed hereunder is not declared effective by the Commission on or before
the required Effectiveness Date, or (iv) after a Registration Statement is
first declared effective by the Commission, it ceases for any reason to remain
continuously effective as to all Registrable Securities for which it is
required to be effective, or the Investors are not permitted to utilize the
Prospectus therein to resell such Registrable Securities, for in any such cases
75 business days (which need not be consecutive days) in the aggregate during
any 12-month period (any such failure or breach being referred to as an “Event”)
and for purposes of clause (i) or (iii) the date on which such Event occurs, or
for purposes of clause (ii) the date on which such five business day period is
exceeded, or for purposes of clause (iv) the date on which such 75 business day
period is exceeded, being referred to as “Event Date”, then in addition
to any other rights the Investors may have hereunder or under applicable law
the Company shall pay to each Investor an amount in cash, as liquidated damages
and not as a penalty, equal to 1% of the aggregate purchase price paid by such
Investor pursuant to this Agreement for any Registrable Securities then held by
such Investor on each monthly anniversary of each such Event Date (if the
applicable Event shall not have been cured by such date) until the applicable Event
is cured.  The liquidated damages
pursuant to the terms hereof shall apply on a pro-rata basis for any portion of
a month prior to the cure of an Event and shall not exceed an aggregate of 8%
of the aggregate purchase price paid by the Investors pursuant to this
Agreement.



 12
 






 



(c)           Notwithstanding the foregoing, if the
Company shall furnish to the Investors a certificate signed by the Chief
Executive Officer of the Company stating that in the good faith judgment of the
Board of Directors of the Company it would not be in the best interest of the
Company for such registration statement to be filed, the Company shall have the
right to defer taking such action with respect to such filing for a period of
not more than seventy-five (75) days after the date of such certificate; provided,
however, that the Company shall not defer its obligation in this manner
more than once in any twelve (12) month period.


(d)           In the event, the Investor fails to
provide the Company with any information that is required to be provided in the
Registration Statement with respect to such Investor pursuant to Section 5.3(k)
within ten (10) days of receiving a request for such information from the
Company, the Company shall send an additional request to the Investor (the “Additional
Request”) and in the event the Investor fails to respond to the Company within
five (5) days of receipt of the Additional Request, the Company shall be
entitled to exclude such Investor’s Registrable Shares from the Registration
Statement.


5.3           Covenants
of the Company With Respect to Registration.


The Company covenants and agrees as follows:


(a)           Not less than five business days
prior to the filing of the Registration Statement or any related Prospectus or
any amendment or supplement thereto, furnish to the Investors copies of all
such documents proposed to be filed (including documents incorporated or deemed
incorporated by reference to the extent requested by such person), which
documents will be subject to the review of such Investors within such five
business days. The Company shall not file the Registration Statement or any
such Prospectus or any amendments or supplements thereto to which the holders
of a majority of the Registrable Shares shall reasonably object in good faith
based on the advice of counsel and the Company shall make reasonable efforts to
address the objections raised.  In the
event the holders of a majority of the Registrable Shares object to any such
filing pursuant to the previous sentence, then the Required Filing Date or
Effectiveness Date, as the case may be, shall be extended by the number of days
that elapse between the date the Company is notified of the objection until the
day following the date the Company has been notified that such objection no
longer exists.


(b)           Following
the effective date of the Registration Statement under Section 5.2, the Company
shall, upon the request of the Investors, forthwith supply such reasonable
number of copies of the Registration Statement, preliminary prospectus and
prospectus meeting the requirements of the Securities Act, and other documents
necessary or incidental to the public offering of the Registrable Shares, as
shall be reasonably requested by the Investors to permit the Investors to make
a public distribution of the Registrable Shares registered in connection with
the Registration Statement.


(c)           The
Company shall prepare and file with the SEC such amendments and supplements to
such Registration Statement and the prospectus used in connection with such
Registration Statement as may be necessary to comply with the Securities Act
with respect to the disposition of all Shares covered by such Registration
Statement during the period of time such Registration Statement remains
effective;


 



 13














 


 


(d)         The
Company shall use its commercially reasonable efforts to register and qualify
the Shares covered by such Registration Statement under such other securities
or Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Investors; provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions;


(e)          During
the period of time such Registration Statement remains effective, the Company
shall notify each Investor of Registrable Shares covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act or the happening of any event as a result of
which the prospectus included in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;


(f)          The
Company shall use its commercially reasonable efforts to cause all such
Registrable Shares registered hereunder to be listed on each securities
exchange on which securities of the same class issued by the Company are then
listed;


(g)         The
Company shall provide a transfer agent and registrar for all Registrable Shares
registered hereunder and a CUSIP number for all such Registrable Shares, in
each case not later than the effective date of such registration; and


(k)          The
obligations of the Company hereunder with respect to the Registrable Shares are
subject to the Investors’ furnishing to the Company such information concerning
the Investors, the Registrable Shares and the terms of the Investors’ offering
of such Registrable Shares as are required to be included in the Registration
Statement by Commission regulations or pursuant to a specific Commission
comment on the Registration Statement.


5.4           Expenses.  All expenses incurred in effecting a
registration pursuant to this Agreement (including, without limitation, all
registration, qualification and filing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses) shall be
borne by the Company.  All transfer
taxes, underwriting discounts and selling commissions applicable to the sale of
the Registrable Shares shall be borne by the Investors thereof.


5.5           Indemnification.  In the event any Registrable Shares are
included in a Registration Statement under this Section 5:


(a)           To the extent permitted by law, the
Company will indemnify and hold harmless each Investor, the partners, officers,
directors, stockholders, members and managers of such Investor, each person, if
any, who controls such Investor within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations (each, a “Violation”):
(i) any untrue statement or alleged untrue statement of a material fact contained
in such Registration Statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission 



 14
 






 



 


or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law; and the Company will pay to each such Investor, underwriter or
controlling person, as incurred, any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however,
that the indemnity agreement contained in this Section 5.5(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability, or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld or delayed), nor shall the Company
be liable to any Investor, underwriter or controlling person for any such loss,
claim, damage, liability, or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Investor, underwriter or controlling person.


(b)           To the extent permitted by law, each
selling Investor will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the Registration Statement, each
person, if any, who controls the Company within the meaning of the Securities
Act, against any losses, claims, damages, or liabilities (joint or several) to
which any of the foregoing persons may become subject, under the Securities
Act, the Exchange Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Investor expressly for use in connection
with such registration; and each such Investor will pay, as incurred, any legal
or other expenses reasonably incurred by any person indemnified pursuant to
this Section 5.5(b), in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that
the indemnity agreement contained in this Section 5.5(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Investor (which
consent shall not be unreasonably withheld or delayed); provided
further that in no event shall any indemnity under this Section
5.5(b) exceed the net proceeds from the offering received by such Investor.


(c)           Promptly after receipt by an
indemnified party under this Section 5.5 of notice of the commencement of any
action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 5.5, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party (together with all other
indemnified parties which may be represented without conflict by one counsel)
shall have the right to retain one separate counsel, with the reasonable fees
and expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the 



 15
 






 



 


indemnifying party within a reasonable time after
receipt of notice of the commencement of any such action, if prejudicial to its
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 5.5, but the omission so
to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 5.5.


(d)           If the indemnification provided for
in this Section 5.5 is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss, liability, claim,
damage or expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions that resulted
in such loss, liability, claim, damage or expense as well as any other relevant
equitable considerations; provided that
in no event shall any contribution by an Investor under this Section 5.5(d)
exceed the net proceeds from the offering received by such Investor.  The relative fault of the indemnifying party
and of the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative
intent, knowledge, access to information, and opportunity to correct or prevent
such statement or omission.


(e)           Notwithstanding the foregoing, to the
extent that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.


(f)            The obligations of the Company and
Investors under this Section 5.5 shall survive the completion of any offering
of Registrable Shares in a registration statement and the termination of this
Agreement.


5.6           Suspension of Sales.


(a)           With respect to the Registration
Statement filed pursuant to Section 5.2, subject to the payment of any
liquidated damages which may accrue pursuant to Section 5.2(b)(iv), the Company
may suspend sales of Registrable Shares under such Registration Statement for a
period of not more than seventy-five (75) days in any twelve (12) month period
with respect to such Registration Statement if, at any time the Company is
engaged in confidential negotiations or other confidential business activities,
the disclosure of which would be required if such sales were not suspended and
the Board of Directors of the Company determines in good faith that such
suspension would be in the Company’s best interest at such time; provided,
that the Company shall not be permitted to suspend such sales for more than
seventy-five (75) days in any twelve (12) month period.  In order to suspend sales pursuant to this
Section 5.6(a), the Company shall promptly (but in any event within five (5)
business days), upon determining to seek such suspension, deliver to each
holder of Registrable Shares a certificate signed by an executive officer of
the Company stating that the Company is suspending such filing pursuant to this
Section 5.6(a). Each holder of Registrable Shares hereby agrees to 



 16
 






 



 


keep confidential any information disclosed to it in
any such certificate (including the fact that a certificate was delivered).


(b)           If the Company suspends such
Registration Statement pursuant to Section 5.6(a) above, the Company shall, as
promptly as practicable following the termination of the circumstances which
entitled the Company to do so but in no event more than fifteen (15) days
thereafter, take such actions as may be necessary to file or reinstate the
effectiveness of such Registration Statement and/or give written notice to the
selling Investors authorizing them to resume sales pursuant to such
Registration Statement.  If, as a result
thereof, the prospectus included in such Registration Statement has been
amended to comply with the requirements of the Securities Act, the Company
shall enclose such revised prospectus with the notice to the selling Investors
given pursuant to this Section 5.6(b), and the selling Investors shall make no
offers or sales of Shares pursuant to such Registration Statement other than by
means of such revised prospectus.


5.7           Transfer or Assignment of
Registration Rights.  The rights to
cause the Company to register Registrable Shares granted to an Investor by the
Company under this Section 5 may be transferred or assigned by an Investor to a
transferee or assignee of such Registrable Shares that (i) is a subsidiary,
parent, current or former partner, current or former limited partner, current
or former member, current or former manager or stockholder of an Investor, (ii)
is an entity controlling, controlled by or under common control, or under
common investment management, with an Investor, including without limitation a
corporation, partnership or limited liability company that is a direct or
indirect parent or subsidiary of the Investor, or (iii) is a transferee or
assignee of not less than 50,000 shares of Registrable Shares (as presently
constituted and subject to subsequent adjustments for stock splits, stock
dividends, reverse stock splits and the like), provided that
the Company is given written notice at the time of or within a reasonable time
after said transfer or assignment, stating the name and address of said
transferee or assignee and identifying the Securities with respect to which
such registration rights are being transferred or assigned, and provided further that the transferee or assignee of such
rights assumes the obligations of such Investor under this Section 5.


5.8           Reports Under Exchange Act.  With a view to making available to the
Investors the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the SEC that may at any time permit an Investor to
sell Securities of the Company to the public without registration, the Company
agrees to:


(a)           Make and keep public information
available, as those terms are used in SEC Rule 144, at all times;


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


(c)           Furnish to any Investor, so long as
the Investor owns any Registrable Shares, forthwith on request, (i) a written
statement by the Company that it has complied with the reporting requirements
of SEC Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the
most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as may
be 



 17
 






 



 


reasonably requested in availing any Investor of any
rule or regulation of the SEC that permits the selling of any such securities
without registration; and


(d)           Undertake any additional actions
reasonably necessary to maintain the availability of the use of Rule 144.


5.9           Delay of Registration.  No Investor shall have any right to obtain or
seek an injunction restraining or otherwise delaying any registration as the
result of any controversy that might arise with respect to the interpretation
or implementation of this Section 5.


6.             CONDITIONS
TO INVESTOR OBLIGATIONS AT CLOSING.


The obligations of the
Investors to purchase the Securities at the Closing are subject to the
fulfillment on or prior to the Closing of each of the following conditions:


6.1           Representations and Warranties.  The representations and warranties of the
Company contained in Section 2 shall be true in all material respects on and as
of the Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date, except that any
representations and warranties stated as being true and correct as of a date
other than the date hereof shall be true and correct as of such other date.


6.2           Performance.  The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with by it on or before the
Closing.


6.3           Qualifications.  All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or
of any state of the United States that are required in connection with the
lawful issuance and sale of the Securities to the Investors pursuant to this
Agreement shall have been duly obtained and shall be effective on and as of the
Closing.


6.4           Proceedings and Documents.  All corporate and other proceedings undertaken
in connection with the transactions contemplated at the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to each Investor, and they shall have received all such counterpart
original and certified or other copies of such documents as they may reasonably
request.


6.5           Absence of Litigation.  No proceeding challenging this Agreement or
the transactions contemplated hereby or thereby, or seeking to prohibit, alter,
prevent or delay the Closing, shall have been instituted against the Company
before any court, arbitrator or governmental body, agency or official and shall
be pending.


6.6           Compliance Certificate.  The Company shall deliver to the Investors at
the Closing, relating to the Investors’ purchase of Securities, a certificate
signed by the Chief Executive Officer of the Company stating that the Company
has complied with or satisfied each of the conditions to the Investors’
obligation to consummate the Closing set forth in Sections 6.1 through 6.5,
unless waived in writing by the Investors.



 18
 






 



 


 


6.7           Legal Prohibition.  The purchase of the Securities by the
Investors shall not be prohibited by any law or governmental order or
regulation.


7.             CONDITIONS
TO THE COMPANY’S OBLIGATIONS AT CLOSING.


The obligations of the Company under Section 1 of this
Agreement are subject to the fulfillment on or before the Closing of each of
the following conditions:


7.1           Representations and Warranties.  The representations and warranties of each
Investor contained in Section 3 shall be true in all respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of the Closing Date, except that any representations
and warranties stated as being true and correct as of a date other than the
date hereof shall be true and correct as of such other date.


7.2           Performance.  Each Investor shall have performed and
complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing.


7.3           Qualifications.  All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or
of any state of the United States that are required in connection with the
lawful issuance and sale of the Securities to the Investors pursuant to this
Agreement shall have been duly obtained and shall be effective on and as of the
Closing.


7.4           Proceedings and Documents.  All corporate and other proceedings undertaken
in connection with the transactions contemplated by this Agreement and all
documents incident thereto shall be reasonably satisfactory in form and
substance to the Company and its counsel, and they shall have received all such
counterpart original and certified or other copies of such documents as they
may reasonably request.


8.             MISCELLANEOUS.


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


8.2           Incorporation by Reference.  All Exhibits and Schedules appended to this
Agreement are herein incorporated by reference and made a part hereof.


8.3           Successor and Assignees.  All terms, covenants, agreements,
representations, warranties and undertakings in this Agreement made by and on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto (including transferees
of any Securities) whether so expressed or not, subject to Section 5.7.



 19
 






 



 


8.4           Amendments and Waivers.  Neither this Agreement nor any provision
hereof shall be waived, modified, changed, discharged, terminated, revoked or
canceled except by an instrument in writing signed by the party against whom
any change, discharge or termination is sought. 
Failure of either party to exercise any right or remedy under this
Agreement or any other agreement between the Company and the Investors, or
otherwise, or delay by the Company or the Investors in exercising such right or
remedy, will not operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. 
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.


8.5           Governing Law.  This Agreement shall be deemed a contract
made under the laws of the State of New York, without giving effect to the
conflicts of law principles thereof.


8.6           Notices.  All notices, requests, consents, demands,
notice or other communication required or permitted under this Agreement shall
be in writing and shall be deemed duly given and received when delivered
personally or transmitted by facsimile, or one business day after being
deposited for next-day delivery with a nationally recognized overnight delivery
service, or three days after being deposited as first class mail with the
United States Postal Services, all charges or postage prepaid, and properly
addressed:


to the Company at:


Xenomics,
Inc.

420 Lexington Avenue, Suite 1701

New York, New York 10170

Tel:  (212) 297-0808

Fax:  (212) 297-1888

Attention:  Chief Executive Officer


with a copy (which shall not constitute notice) to:


Sichenzia
Ross Friedman Ference LLP

1065 Avenue of the Americas

New York, New York 10018

Fax: (212) 930-9725

Attention: Jeffrey J. Fessler


or to the Investors at the address set forth opposite
each Investor’s name on Exhibit A hereto


or such other address as
may be furnished in writing by a party hereto.


8.7           Counterparts. This Agreement
may be executed in counterparts, all of which together shall constitute one and
the same instrument.


8.8           Effect of Headings.  The section and paragraph headings herein are
included for convenience only and shall not affect the construction hereof.



 20
 






 



 


8.9           Entire Agreement.  This Agreement and the Exhibits and Schedules
hereto and thereto constitute the entire agreement among the Company and the
Investors with respect to the subject matter hereof.  There are no representations, warranties,
covenants or undertakings with respect to the subject matter hereof other than
those expressly set forth herein.  This
Agreement supersedes all prior agreements between the parties with respect to
the Securities purchased hereunder and the subject matter hereof.


8.10         Publicity.  Neither party shall originate any publicity,
news release or other public announcement, written or oral, whether relating to
the performance under this Agreement or the existence of any arrangement
between the parties, without the prior written consent of the other party
(which consent shall not be unreasonably withheld or delayed), except where
such publicity, news release or other public announcement is required by law or
by Section 4.1; provided that, in such event,
each such party shall (a) promptly consult the other party in connection with
any such publicity, news release or other public announcement prior to its
release; (b) promptly provide the other party a copy thereof; and (c) use
commercially reasonable efforts to ensure that such portions of such
information as may reasonably be designated by the other party are accorded
confidential treatment by the applicable governmental entity.


8.11         Severability.  If any provision of this Agreement is held by
a court of competent jurisdiction to be unenforceable under applicable law,
such provision shall be replaced with a provision that accomplishes, to the
extent possible, the original business purpose of such provision in a valid and
enforceable manner, and the balance of the Agreement shall be interpreted as if
such provision were so modified and shall be enforceable in accordance with its
terms.


8.12         Interpretation.  This Agreement shall be construed according
to its fair language.  The rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.


8.13         No Strict 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.


8.14         Independent Nature of Investors’
Obligations and Rights. The obligations of each Investor under this
Agreement are several and not joint with the obligations of any other Investor,
and no Investor shall be responsible in any way for the performance of the
obligations of any other Investor under this Agreement. The decision of each
Investor to purchase Securities pursuant to this Agreement has been made by
such Investor independently of any other Investor and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company which may have been made
or given by any other Investor or by any agent or employee of any other
Investor, and no Investor or any of its agents or employees shall have any
liability to any other Investor (or any other person) relating to or arising from
any such information, materials, statements or opinions.  Nothing contained herein, and no action taken
by any Investor pursuant thereto, shall be deemed to constitute the Investors
as a partnership, an association, a joint venture or any other kind of entity,
or create a 



 21
 






 



 


presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement. Each Investor
acknowledges that no other Investor has acted as agent for such Investor in
connection with making its investment hereunder and that no other Investor will
be acting as agent of such Investor in connection with monitoring its
investment hereunder.  Each Investor
shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not
be necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. The Company has elected to provide all Investors
with the same terms and form of this Agreement for the convenience of the
Company and not because it was required or requested to do so by the Investors.



 22
 






 



 


IN WITNESS WHEREOF, this Agreement has been executed
as of the date first above written, by the duly authorized representatives of
the parties hereto.


	
  

  	
   

  	
  XENOMICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INVESTOR

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  



 



 23
 






 



 


Schedule A


COMPANY SCHEDULE
OF EXCEPTIONS


Exhibit A


	
   

  	
  Investor Name and

  Notice Address

  	
   

  	
   

  	
  Cash Investment

  Amount

  	
   

  	
  Number of

  Shares

  	
   

  	
  Number of

  Warrants

  (1)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


(1)             A
number of warrants as equals 50% of the Shares subscribed for by each Investor


 



 24