Palatin Technologies, Inc. 8-k 


EXHIBIT
10.1


SECURITIES
PURCHASE AGREEMENT


This Securities
Purchase Agreement (this “Agreement”) is dated as of July 2, 2012, between Palatin Technologies, Inc., a Delaware
corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively the “Purchasers”).


WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933,
as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell
to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company
as more fully described in this Agreement.


NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration
the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:


ARTICLE I.

DEFINITIONS


1.1             
Definitions. In addition to the terms defined
elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section
1.1:


“Action”
shall have the meaning ascribed to such term in Section 3.1(j).


“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under Rule 405 and Rule 144 under the Securities Act.


“Agreement”
shall have the meaning set forth in the preamble of this Agreement.


“Approved
Stock Plan” means any employee benefit plan, employment agreement or any other agreement, plan or arrangement which has
been approved by a majority of the non-employee members of the Board of Directors (as defined below) or a majority of the members
of a committee of non-employee directors established for such purpose, pursuant to which the Company’s securities may be
issued to any employee, consultant, officer or director for services provided to the Company.


“Attribution
Parties” shall have the meaning ascribed to such term in the Warrants.


“Basic
Amount” shall have the meaning ascribed to such term in Section 4.18(a)(ii).


“Board
of Directors” means the board of directors of the Company.






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


“Buy-In”
shall have the meaning ascribed to such term in Section 4.1(c).


“Buy-In
Price” shall have the meaning ascribed to such term in Section 4.1(c).


“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.


“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived.


“Commission”
means the United States Securities and Exchange Commission.


“Common
Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.


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


“Company”
shall have the meaning set forth in the preamble of this Agreement.


“Company
Controlled Fundamental Transaction” shall have the meaning ascribed to such term in the Warrants.


“Company
Counsel” means Thompson Hine LLP, with offices located at, among other places, 335 Madison Avenue, 12th Floor, New York,
New York 10017.


“DRS”
shall have the meaning ascribed to such term in Section 2.2(a)(iii).


“DTC”
shall have the meaning ascribed to such term in Section 2.2(a)(iii).


“DWAC”
shall have the meaning ascribed to such term in Section 2.2(a)(iii).


 


“Effective
Date” means the earliest of the date that (a) the Initial Registration Statement (as defined in the Registration Rights
Agreement) has been declared effective by the Commission or (b) all of the Shares and the Warrant Shares required to be registered
for resale have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144, without the requirement for the Company to
be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions.


 






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“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(r).


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


“Excluded
Securities” means any shares of Common Stock issued or issuable: (i) in connection with any Approved Stock Plan; (ii)
upon exercise of the Warrants and (iii) upon conversion or exercise of any Common Stock Equivalents which are outstanding on the
day immediately preceding the date hereof, provided that the terms of such Common Stock Equivalents are not amended, modified or
changed on or after the date hereof.


 


“FAST
Program” shall have the meaning ascribed to such term in Section 2.2(a)(iii).


 


“FDA”
shall have the meaning ascribed to such term in Section 3.1(ee).


“FDCA”
shall have the meaning ascribed to such term in Section 3.1(ee).


“Fundamental
Transaction” shall have the meaning ascribed to such term in the Warrants.


“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).


“Holder”
shall have the meaning ascribed to such term in Section 4.19.


“Increased
Shares Amendment” shall have the meaning ascribed to such term in the Series B Warrants.


“Indebtedness”
of any Person means (i) any individual indebtedness or series of related indebtedness for borrowed money, including all obligations
evidenced by notes, bonds, debentures or similar instruments, in excess of five hundred thousand dollars ($500,000.00), (ii) all
debt securities convertible into or exchangeable or exercisable for Common Stock or Common Stock Equivalents, and (iii) any other
instrument or transaction (such as a sale lease back or factoring transaction) structured in a manner to circumvent the intent
of this definition and Section 4.17 or Section 4.18 in which case this definition shall be construed and implemented in a manner
otherwise than in strict conformity with the terms hereof to the extent necessary to correct this definition or any portion hereof
which may be defective or inconsistent with the intended treatment of such instrument or transaction under Section 4.17 and Section
4.18.


“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).






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“Issuance
Period End Date” means the later of (A) September 1, 2013, (B) the date that the restrictions listed on Schedule 3.1(hh)(ii)
expire and (C) the Prohibition Period End Date.


“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).


“Liens”
means a mortgage, lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.


“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).


“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(m).


“Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(gg).


“Notice
of Acceptance” shall have the meaning ascribed to such term in Section 4.18(a)(iii).


“Offer”
shall have the meaning ascribed to such term in Section 4.18(a)(ii).


“Offer
Notice” shall have the meaning ascribed to such term in Section 4.18(a)(ii).


“Offer
Period” shall have the meaning ascribed to such term in Section 4.18(a)(iii).


“Offered
Placement” shall have the meaning ascribed to such term in Section 4.18(a)(ii).


“Permitted
Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course
of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business
with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings,
(iv) Liens (A) upon or in any equipment acquired or held by the Company or its Subsidiary to secure the purchase price of such
equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing
on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements
thereon, and the proceeds of such equipment, (v) Liens incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by Liens of the type described in clause (iv) above, provided that any extension, renewal or replacement Lien
shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed
or refinanced does not increase, (vi) leases or subleases and licenses and sublicenses granted to others in the ordinary course
of the Company’s business, not interfering in any material respect with the business of the Company and its Subsidiary taken
as a whole, and (vii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom
duties in connection with the importation of goods.






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


“Pharmaceutical
Product” shall have the meaning ascribed to such term in Section 3.1(ee).


“Preferred
Stock” shall have the meaning ascribed to such term in Section 3.1(g)(i).


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


“Prohibition
Period End Date” means the earlier of the date that (A) the Increased Shares Amendment is effective and (B) no Series
B Warrants remain outstanding.


“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.16.


“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.16.


“Purchaser(s)”
shall have the meaning set forth in the preamble of this Agreement.


“Purchaser
Amount” shall have the meaning ascribed to such term in Section 4.18(a)(ii).


“Purchaser
Condition” means the satisfaction of either of the following: (i) the Maximum Percentage not being in excess of 9.99%,
or (ii) such Purchaser has delivered to the Company an opinion of counsel in a form reasonably satisfactory to the Company that
the Purchaser is not an Affiliate of the Company.


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.9.


“Refused
Placement” shall have the meaning ascribed to such term in Section 4.18(a)(iv).






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“Registration
Rights Agreement” means the Registration Rights Agreement, dated the date hereof, among the Company and the Purchasers,
in the form of Exhibit B attached hereto.


“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement.


“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).


“Required
Reserve Amount” shall have the meaning ascribed to such term in Section 4.10.


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


“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).


“Securities”
means the Shares, the Warrants and the Warrant Shares.


“Securities
Act” shall have the meaning ascribed to such term in the preamble of this Agreement.


“Series
A Warrants” means the warrants required to be delivered to the Purchasers at the Closing in accordance with Section 2.2(a)
hereof, in substantially the form of Exhibit A-1 attached hereto (with any changes thereto being acceptable to the Purchasers).


“Series
B Warrants” means the warrants required to be delivered to the Purchasers at the Closing in accordance with hereof, in
substantially the form of Exhibit A-2 attached hereto (with any changes thereto being acceptable to the Purchasers).


“Series
B Warrant Shares” means, the shares of Common Stock issuable pursuant to the Series B Warrants.


“Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement, but excluding the Warrant Shares.


“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but
shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock). 


“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Shares and Warrants purchased hereunder,
as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription
Amount,” in United States dollars and in immediately available funds.






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“Subsequent
Debt Placement” means, the Company or any Subsidiary thereof shall, either directly or indirectly, offer, sell, grant
any option to purchase, incur, guarantee, assume or suffer to exist (or announce any offer, sale, grant of any option to purchase,
incurrence, guarantee, assumption or suffering to exist of or enter into any discussions or negotiations as to) any Indebtedness
that is not (i) issued in connection with any Subsequent Equity Placement, (ii) issued in conjunction with or related to any issuance
or potential issuance of Common Stock or Common Stock Equivalents or (iii) convertible into or exchangeable or exercisable for
Common Stock or Common Stock Equivalents, including any other instrument or transaction (such as a sale lease back or factoring
transaction) structured in a manner to circumvent the intent of this definition and Section 4.17 or Section 4.18 in which case
this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms hereof to the
extent necessary to correct this definition or any portion hereof which may be defective or inconsistent with the intended treatment
of such instrument or transaction under Section 4.17 and Section 4.18.


“Subsequent
Equity Placement” means, the Company or any Subsidiary thereof shall, either directly or indirectly, offer, sell, grant
any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition
of or enter into any discussions or negotiations as to) any of the Company’s or its Subsidiaries’ equity or equity
equivalent securities, including preferred stock or other instrument or security (including any debt security) that is convertible
into or exchangeable or exercisable for Common Stock or Common Stock Equivalents and any Indebtedness that is (i) issued in connection
with any Subsequent Equity Placement, (ii) issued in conjunction with or related to any issuance or potential issuance of Common
Stock or Common Stock Equivalents or (iii) convertible into or exchangeable or exercisable for Common Stock or Common Stock Equivalents
(other than the issuance of restricted stock units and options to purchase Common Stock pursuant to the Company’s 2011 Stock
Incentive Plan, so long as no such restricted stock units vest and no such options become exercisable prior to the Issuance Period
End Date and the number of shares of Common Stock issued or issuable thereunder does not exceed the 1,886,351 shares of Common
Stock (as adjusted for any stock split, stock dividend, stock combination, reclassification, termination or expiration of any grant
under the Company’s 2011 Stock Incentive Plan or other similar transaction after the date hereof), that are currently reserved
for issuance thereunder and securities are only issued to employees, consultants, officers or directors of the Company for services
provided to the Company, or pursuant to any Approved Stock Plan), including, without limitation, any other transaction (other than
a Subsequent Debt Placement) whereby the Company raises or could receive any consideration and any other instrument or transaction
structured in a manner to circumvent the intent of this definition and Section 4.17 or Section 4.18 in which case this definition
shall be construed and implemented in a manner otherwise than in strict conformity with the terms hereof to the extent necessary
to correct this definition or any portion hereof which may be defective or inconsistent with the intended treatment of such instrument
or transaction under Section 4.17 and Section 4.18.


“Subsequent
Placement” means, any Subsequent Debt Placement and any Subsequent Equity Placement with any offer, sale, grant, disposition,
incurrence, guarantee, assumption or suffering to exist, announcement, discussion or negotiation in connection with any Subsequent
Debt Placement or any Subsequent Equity Placement specifically intended and deemed to include any method whereby the Company raises
or could receive any consideration.






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“Subsequent
Placement Agreement” shall have the meaning ascribed to such term in Section 4.18(a)(iv).


“Subsequent
Placement Documents” shall have the meaning ascribed to such term in Section 4.18(a)(vii).


“Subsequent
Placement Notice” shall have the meaning ascribed to such term in Section 4.18(a)(i).


“Subsequent
Placement Structuring Period” shall have the meaning ascribed to such term in Section 4.18(a)(i).


“Subsidiary”
means RhoMed Incorporated, a New Mexico corporation.


“Successor
Entity” shall have the meaning ascribed to such term in the Warrants.


“Trading
Day” means a day on which the principal Trading Market is open for trading.


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE Amex, the Nasdaq Stock Market, the New York Stock Exchange, the OTC Bulletin Board, or the OTC Markets
(or any successors to any of the foregoing).


“Transaction
Documents” means this Agreement, the Warrants, the Registration Rights Agreement, all exhibits and schedules thereto
and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.


“Transfer
Agent” means American Stock Transfer & Trust Company, LLC, the current transfer agent of the Company, with a mailing
address of 6201 15th Avenue, Brooklyn, New York 11219 and a facsimile number of (718) 765-8718, and any successor transfer agent
of the Company.


“Warrants”
means the Series A Warrants and the Series B Warrants required to be delivered to the Purchasers at the Closing in accordance with
Section 2.2(a) hereof.


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






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ARTICLE II.

PURCHASE AND SALE


2.1             
Closing. On the Closing Date, upon
the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement
by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase hereunder,
(i) that aggregate number of Shares set forth on such Purchaser’s signature page hereto (which aggregate number of Shares
for all Purchasers shall be 3,873,000), (ii) Series A Warrants to purchase that number of shares of Common Stock set forth on such
Purchaser’s signature page hereto and (iii) Series B Warrants to purchase that number of shares of Common Stock set forth
on such Purchaser’s signature page hereto, at the aggregate Subscription Amount set forth on such Purchaser’s signature
page hereto. Each Purchaser shall deliver to the Company, via wire transfer or a certified check of immediately available funds
in an amount equal to such Purchaser’s Subscription Amount as set forth on its signature page hereto and the Company shall
deliver to each Purchaser its respective Shares and Warrants being purchased hereunder, and the Company and each Purchaser shall
deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions
set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of the Company Counsel or such other location as the
parties shall mutually agree. For all purposes of this Agreement, the Shares, Series A Warrants and Series B Warrants shall be
deemed to be issued in all respects simultaneously and under no circumstance shall any of the Shares, Series A Warrants or Series
B Warrants be deemed to be issued prior to or after any other Shares, Series A Warrants or Series B Warrants.


2.2             
Deliveries.


(a)               
On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each
Purchaser the following:


(i)                 
this Agreement duly executed by the Company; 


(ii)               
a legal opinion of Company Counsel reasonably satisfactory to the Purchasers; 


(iii)              
the number of Shares set forth on such Purchaser’s signature page to this Agreement,
via (X) upon the request of the Purchaser, credit to the Purchaser’s or its designee’s balance account with The Depository
Trust Company (“DTC”) through its Deposit Withdrawal At Custodian system (“DWAC”), or to
the Purchaser’s or its designee’s direct registration account, provided that the Transfer Agent is participating
in the Direct Registration System (“DRS”) or The DTC Fast Automated Securities Transfer Program (the “FAST
Program”), or (Y) if the Transfer Agent is not participating in either the DRS or FAST Program, a certificate registered
in the Company’s share register in the name of the Purchaser;


(iv)             
a Series A Warrant certificate, in a form acceptable to the Purchasers, registered in the
name of such Purchaser to purchase such number of shares of Common Stock as is set forth on the Purchaser’s signature page
to this Agreement, with an exercise price equal to $0.01 per share, subject to adjustment therein; 






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(v)               
a Series B Warrant certificate, in a form acceptable to the Purchasers, registered in the
name of such Purchaser to purchase such number of shares of Common Stock as is set forth on the Purchaser’s signature page
to this Agreement, with an exercise price equal to $0.01 per share, subject to adjustment therein; 


(vi)             
a copy of the Irrevocable Transfer Agent Instructions, in the form of Exhibit A attached
hereto, which instructions shall have been delivered to and acknowledged in writing by the Company’s Transfer Agent; 


(vii)            
the Registration Rights Agreement duly executed by the Company, in a form acceptable to the
Purchasers; 


(viii)          
the Schedules to this Agreement shall be in a form acceptable to the Purchasers; and


(ix)             
a certificate, executed by the Secretary of the Company and dated as of the Closing Date,
as to the resolutions consistent with the first sentence of Section 3.1(hh) as adopted by the Company’s Board of Directors
in a form reasonably acceptable to such Purchaser.


(b)              
On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to
the Company the following:


(i)                 
this Agreement duly executed by such Purchaser; 


(ii)               
such Purchaser’s Subscription Amount by wire transfer to the account as specified in
writing by the Company or a certified check of immediately available funds; and


(iii)              
the Registration Rights Agreement duly executed by such Purchaser.


2.3             
Closing Conditions.


(a)          The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:


(i)                 
the accuracy in all material respects when made and on the Closing Date of the representations
and warranties of the Purchasers contained herein (unless as of a specific date therein in which case they shall be accurate as
of such date);






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(ii)               
all obligations, covenants and agreements of each Purchaser required to be performed at or
prior to the Closing Date shall have been performed; and


(iii)              
the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.


(b)
          The respective obligations of the Purchasers hereunder in connection with the Closing are
subject to the following conditions being met:


(i)                 
the accuracy in all material respects (except for those representations and warranties that
are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) when made and on the
Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein, in which
case they shall be accurate as of such date);


(ii)               
all obligations, covenants and agreements of the Company required to be performed at or prior
to the Closing Date shall have been performed; 


(iii)              
the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement; 


(iv)             
there shall have been no Material Adverse Effect with respect to the Company since the date
hereof; 


(v)               
from the date hereof to the Closing Date, trading in the Common Stock shall not have been
suspended by the Commission or the Company’s principal Trading Market (except for any suspension of trading of limited duration
agreed to by the Company, which suspension shall be terminated prior to the Closing), and, at any time prior to the Closing Date,
trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall
not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking
moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material
outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material
adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable
or inadvisable to purchase the Securities at the Closing; and


(vi)             
from the date hereof to the Closing Date: (i) the Company shall not have taken any of the
actions set forth in Section 3(a) of the Warrants, declared or made any Distribution (as defined in the Warrants) or granted, issued
or sold any Purchase Rights (as defined in the Warrants); and (ii) no Fundamental Transaction shall have occurred.






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ARTICLE III.

REPRESENTATIONS AND WARRANTIES


3.1             
Representations and Warranties of the Company.
Except as described in the SEC Reports or any information contained or incorporated therein, the Company hereby makes the following
representations and warranties as of the date hereof and as of the Closing Date to each Purchaser (unless as of a specific date
therein) and as set forth herein covenants and agrees:


(a)               
Subsidiary. The Subsidiary of the Company is described in the SEC Reports. The Company
owns, directly or indirectly, all of the capital stock or other equity interests of the Subsidiary free and clear of any Liens,
and all of the issued and outstanding shares of capital stock of the Subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights to subscribe for or purchase securities. The Subsidiary is inactive, and has no employees,
liabilities or assets other than certain patents not material to the business of the Company.


(b)              
Organization and Qualification. Each of the Company and the Subsidiary is an entity
duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation
or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as
currently conducted. Neither the Company nor the Subsidiary is in violation nor default of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or charter documents, except to the extent that any such
default, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material adverse effect on the operations, results of operations, assets, business, prospects
or condition (financial or otherwise) of the Company and the Subsidiary, individually or taken as a whole, or (iii) a material
adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) provided, that none of the following
alone shall be deemed, in and of itself, to constitute a Material Adverse Effect: (i) a change in the market price or trading volume
of the Common Stock or (ii) changes in general economic conditions or changes affecting the industry in which the Company operates
generally (as opposed to Company-specific changes) so long as such changes do not have a materially disproportionate effect on
the Company. Each of the Company and the Subsidiary is duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or
reasonably be expected to result in a Material Adverse Effect and no Proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. 






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(c)               
Authorization; Enforcement. The Company has the requisite corporate power and authority
to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and
(but solely with respect to the issuance of the Series B Warrant Shares, subject to effecting the Increased Shares Amendment) otherwise
to carry out its obligations hereunder and thereunder. The execution and delivery of each of this Agreement and the other Transaction
Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized
by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or
the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This
Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by
the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation
of the Company enforceable against the Company in accordance with its terms (assuming due execution and delivery by all other parties
thereto), except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.


(d)              
No Conflicts. The execution, delivery and performance by the Company of this Agreement
and the other Transaction Documents to which it is a party, the issuance and sale of the Securities (assuming the exercise in full
of the Warrants without regard to any limitations on exercise of the Warrants) and the consummation by it of the transactions contemplated
hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or the Subsidiary’s
certificate or articles of incorporation (with respect to the issuance of the Series B Warrant Shares, subject to effecting the
Increased Shares Amendment) or bylaws, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company,
or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or
both) of, or require the Company to make any payment (of cash or otherwise) or adjustment or issue any shares of Common Stock or
other securities under, any agreement (including, without limitation, any employment or similar agreement), security (including,
without limitation, any option or warrant to purchase Common Stock), credit facility, debt or any other instrument (evidencing
a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company
is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject
(including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected;
except in the case of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse
Effect.






    	13



    	 	



    
 


(e)               
Filings, Consents and Approvals. The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state,
local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company
of this Agreement or the other Transaction Documents, other than: (i) the filings required pursuant to Section 4.6 of this Agreement,
(ii) the filing with the Commission of the Registration Statements in accordance with the terms of the Registration Rights Agreement,
(iii) solely with respect to the issuance of the Series B Warrant Shares, the approval of the Company’s stockholders of the
Increased Shares Amendment, (iv) solely with respect to the issuance of the Series B Warrant Shares, the Company’s filing
of the Amendment Filing (as defined in the Series B Warrants), which filing the Company is required to make as set forth in Section
5 of the Series B Warrants, (v) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of
the Securities and the listing of the Shares and Warrant Shares for trading thereon in the time and manner required thereby, and
(vi) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws
(collectively, the “Required Approvals”). Except for any reduction required by the Securities and Exchange Commission
to the number of Registrable Securities permitted to be registered for resale on a Registration Statement (as such terms are defined
in the Registration Rights Agreement), the Company is unaware of any facts or circumstances that might prevent the Company from
obtaining or effecting any of the registration, application or filings pursuant to the preceding sentence. The Company is not in
violation of the listing requirements of its principal Trading Market and has no knowledge of any facts that would reasonably lead
to delisting or suspension of the Common Stock in the foreseeable future. The issuance by the Company of the Securities shall not
have the effect of delisting or suspending the Common Stock from the Company’s principal Trading Market.


(f)                
Issuance of the Securities. The Securities (with respect to the Series B Warrant Shares,
subject to the Increased Shares Amendment) are duly authorized and, when issued and paid for in accordance with this Agreement
and the other applicable Transaction Documents, will be duly and validly issued, fully paid and non-assessable, free and clear
of all Liens imposed by the Company other than restrictions on transfer provided for in this Agreement or the other Transaction
Documents. The Warrant Shares (with respect to the Series B Warrant Shares, subject to the Increased Shares Amendment), when issued
in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and non-assessable, free and clear
of all Liens imposed by the Company other than restrictions on transfer provided for in this Agreement or the other Transaction
Documents. The Company has or will have, prior to issuance (with respect to the Series B Warrant Shares, subject to effecting the
Increased Shares Amendment), reserved from its duly authorized capital stock solely for the benefit of the Purchasers and any other
holders of Warrants, the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants. 


(g)               
Capitalization. 


(i)
     The authorized capital stock of the Company consists of 100,000,000 shares of Common Stock, par value $0.01 per share and 10,000,000
shares of preferred stock, par value $0.01 per share (“Preferred Stock”). There are 35,074,912 shares of Common
Stock and 4,697 shares of Preferred Stock, all of which are Series A Convertible Preferred Stock (which converts into 25,416 shares
of Common Stock), outstanding as of the Closing Date.



    	14



    	 	



    



(ii)     There
are options to purchase 2,181,853 shares of Common Stock outstanding as of the Closing Date.


(iii)     There
are restricted stock units to acquire 250,000 shares of Common Stock outstanding as of the Closing Date.


(iv)     There
are warrants to purchase 24,720,317 shares of Common Stock outstanding as of the Closing Date with the exercise prices and expiration
dates as set forth on Schedule 3.1(g)(iv).


(v)     There
are 1,886,351 shares reserved for future issuance under the Company’s 2011 Stock Incentive Plan.


(vi)     No
Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as set forth on Schedule 3.1(g)(vi) and except as to the Purchasers as
a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock or Common
Stock Equivalents. Except as set forth on Schedule 3.1(g)(vi), the issuance and sale of the Securities will not obligate
the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in
a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.
All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and non-assessable,
have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or purchase securities. Except for the Required Approvals, no further
approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities.
Except as disclosed in the SEC Reports or in any exhibit thereto, there are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company’s stockholders.


(vii)     As
of the Closing Date, the Company will have reserved 35,861,151 shares of Common Stock for the purpose of enabling the Company to
issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.


(viii)     Other
than as set forth on Schedule 3.1(g)(viii), since March 1, 2011, the Company has not issued any shares of Common Stock or
Common Stock Equivalents.



    	15



    	 	



    



(ix)
     As of March 1, 2011, there were 34,854,028 shares of Common Stock issued and outstanding.


(h)               
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant
to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required
by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated
by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received
a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of
their respective dates, the SEC Reports complied as to form in all material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission
with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its Subsidiary as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject,
in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.


(i)                 
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of
the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report
filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made
with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase
or redeem any shares of its capital stock, and (v) the Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company equity plans. The Company does not have pending before the Commission any request
for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement or as disclosed
in the SEC Reports, no event, liability, fact, circumstance, occurrence or development (including, without limitation, any fundamental
transaction, change of control or similar event under any agreement (including, without limitation, any employment agreement))
has occurred or exists, or is reasonably expected to occur or exist, with respect to the Company or its business, properties, operations,
assets or financial condition that, but for the passage of time, would be required to be disclosed by the Company under applicable
securities laws at the time this representation is made that has not been publicly disclosed at least one (1) Trading Day prior
to the date that this representation is made.






    	16



    	 	



    
 


(j)                
Litigation. There is no action, suit, written notice of an inquiry or investigation,
notice of violation or proceeding pending or, to the knowledge of the Company, threatened against or affecting the Company, the
Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency, trading
market or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which
(i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor the Subsidiary is or has been the subject of any Action involving a claim of violation of or liability under federal
or state securities laws or a claim of breach of fiduciary duty. To the knowledge of the Company, no director or officer of the
Company or the Subsidiary is 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. The Commission has not issued any stop order or other order suspending the effectiveness
of any registration statement filed by the Company under the Exchange Act or the Securities Act. 


(k)              
Labor Relations. No material labor dispute exists or, to the knowledge of the Company,
is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse
Effect. None of the Company’s employees is a member of a union that relates to such employee’s relationship with the
Company, the Company is not a party to a collective bargaining agreement, and the Company believes that its relationship with its
employees is good. No executive officer, to the knowledge of the Company, is, or is now expected to be, in violation of any material
term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement,
or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each
such executive officer does not subject the Company to any liability with respect to any of the foregoing matters. The Company
is in compliance with all material U.S. federal, state, local and foreign laws and regulations relating to employment and employment
practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.






    	17



    	 	



    
 


(l)                 
Compliance. Neither the Company nor the Subsidiary (i) is in default under or in violation
of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by
the Company under), nor has the Company or the Subsidiary received written notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of
any judgment, decree or order of any court, arbitrator or governmental authority, and (iii) is in violation of any statute, rule,
ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws
applicable to its business and all such laws that affect the environment, except in each case as could not have or reasonably be
expected to result in a Material Adverse Effect.


(m)             
Regulatory Permits. The Company possesses all certificates, authorizations and permits
issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its business as currently
conducted as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to
result in a Material Adverse Effect (“Material Permits”), and the Company has not received any notice of proceedings
relating to the revocation or modification of any Material Permit.


(n)               
Title to Assets. The Company has good and marketable title in fee simple to all real
property and good and marketable title in all personal property owned by it that is material to the business of the Company, in
each case free and clear of all Liens, except for (i) Liens that do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by the Company and (ii) Liens for the payment of
federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and the payment of
which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company are held
by it under valid, subsisting and enforceable leases with which the Company is in compliance except where the failure to be in
compliance would not reasonably be expected to have a Material Adverse Effect. 


(o)              
Patents and Trademarks. The Company and its Subsidiary own or possess adequate rights
or licenses to use, all patents, patent rights, patent applications, trademarks, trademark applications, service marks, trade names,
trade secrets, inventions, copyrights, licenses, approvals, government authorizations, trade secrets and other intellectual property
rights and similar rights necessary or required for use in connection with their respective businesses (collectively, the “Intellectual
Property Rights”). None of the Company’s or the Subsidiary’s material Intellectual Property Rights have expired
or terminated or have been abandoned or are expected to expire or terminate or are expected to be abandoned, within three years
from the date of this Agreement. Neither the Company nor its Subsidiary has received a notice (written or otherwise) that any of
the Intellectual Property Rights used by the Company or its Subsidiary violates or infringes upon the rights of any Person. To
the knowledge of the Company, all such Intellectual Property Rights are enforceable. There is no existing infringement by another
Person of any of the Intellectual Property Rights which would reasonably be expected to have a Material Adverse Effect. Neither
the Company nor the Subsidiary is aware of any facts or circumstances which might give rise to any of the foregoing infringements
or claims, actions or proceedings. The Company and its Subsidiary have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.






    	18



    	 	



    
 


(p)              
Insurance. The Company is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary in the business in which the Company is engaged.
The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant
increase in cost.


(q)              
Transactions With Affiliates and Employees. None of the officers or directors of the
Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with
the Company or its Subsidiary (other than for services as employees, officers and directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or
from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $120,000 other than for: (i)
payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and
(iii) other employee benefits, including stock option, restricted stock or other compensation-related agreements under any equity
plan of the Company.


(r)                
Sarbanes-Oxley; Internal Accounting Controls. The Company is in material compliance
with all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable
rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date.
The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance
that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that information required
to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered
by the Company’s most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).
Since the Evaluation Date, there have been no changes in the Company’s internal control over financial reporting (as such
term is defined in the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company’s
internal control over financial reporting.






    	19



    	 	



    
 


(s)               
Certain Fees. No brokerage or finder’s fees or commissions are or will be payable
by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect
to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section
that may be due in connection with the transactions contemplated by the Transaction Documents.


(t)                
Private Placement. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities
by the Company to the Purchasers as contemplated hereby. 


(u)               
Investment Company. The Company is not, and immediately after receipt of payment for
the Securities, and for so long as any Purchaser holds any Securities, will not be, an “investment company” within
the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will
not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended. The
Company is not controlled by an “investment company” and shall not take any actions that would cause the Company to
be controlled by an “investment company”.


(v)               
Registration Rights. Except as disclosed in the SEC Reports or in any exhibit thereto,
other than each of the Purchasers pursuant to the Registration Rights Agreement, no Person has any right to cause the Company to
effect the registration under the Securities Act of any securities of the Company.


(w)             
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section
12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have
the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification
that the Commission is contemplating terminating such registration. Except as described in the SEC Reports, the Company has not,
in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed
or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market.


(x)               
Disclosure. Except with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided
any of the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material,
non-public information. The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting
transactions in securities of the Company. The disclosure furnished by or on behalf of the Company to the Purchasers regarding
the Company, the Subsidiary, their respective businesses and the transactions contemplated hereby does not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in the Transaction Documents.






    	20



    	 	



    
 


(y)               
No Integrated Offering. Assuming the accuracy of the Purchasers’ representations
and warranties set forth in Section 3.2, neither the Company, nor the Subsidiary, nor any of their respective Affiliates, nor any
Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers
to buy any security, under circumstances that would reasonably cause this offering of the Securities to be integrated with prior
offerings by the Company for purposes of (i) the Securities Act, which would require the registration of any such securities under
the Securities Act, or (ii) any applicable stockholder approval provisions, including, without limitation, of any Trading Market
on which any of the securities of the Company are listed or designated.


(z)               
Tax Status. Except for matters that would not, individually or in the aggregate, have
or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiary has filed all necessary federal,
state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and the Company has
no knowledge of a tax deficiency which has been asserted or threatened against the Company or its Subsidiary.


(aa)           
No General Solicitation. Neither the Company nor any person acting on behalf of the
Company has offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered
the Securities for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule
501 under the Securities Act.


(bb)          
Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the Company,
any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment
to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which
the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt
Practices Act of 1977, as amended.


(cc)           
Accountants. The Company’s registered public accounting firm is KPMG LLP. To
the Company’s knowledge, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act
and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report
for the fiscal year ending June 30, 2012.






    	21



    	 	



    
 


(dd)          
Regulation M Compliance.  The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased,
or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any
compensation for soliciting another to purchase any other securities of the Company.


(ee)           
FDA. As to each product subject to the jurisdiction of the U.S. Food and Drug Administration
(“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”)
that is being studied by the Company (each such product, a “Pharmaceutical Product”), such Pharmaceutical Product
is being manufactured, packaged, labeled, and tested by the Company, or to the Company’s knowledge on behalf of the Company,
in compliance with all applicable requirements under the FDCA relating to registration, investigational use, good manufacturing
practices, good laboratory practices, good clinical practices, labeling, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company’s
knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge,
complaint, or investigation) relating to the Pharmaceutical Products against the Company or the Subsidiary, and neither the Company
nor the Subsidiary has received any written notice, warning letter or other written communication from the FDA or any other governmental
entity, which (i) imposes a clinical hold on any clinical investigation by the Company, (ii) enters or proposes to enter into a
consent decree of permanent injunction with the Company, or (iii) otherwise alleges any violation of the FDCA and the related rules
or regulations by the Company or the Subsidiary, and which, either individually or in the aggregate, would have a Material Adverse
Effect. The properties, business and operations of the Company have been and are being conducted
in all material respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not been informed
by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed,
produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product
being developed or proposed to be developed by the Company.


(ff)              
Office of Foreign Assets Control. Neither the Company nor,
to the Company’s knowledge, any director, officer, agent, employee or Affiliate of the Company is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.


(gg)           
Money Laundering. The operations of the Company are and have
been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations
thereunder (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is
pending or, to the knowledge of the Company, threatened.






    	22



    	 	



    
 


(hh)           
Application of Takeover Protections. The Company and its Board of Directors have taken
all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate
of incorporation or bylaws or the restrictions on business combinations set forth in Section 203 of the Delaware General Corporation
Law and any other similar applicable anti-takeover law that is or could become applicable to each Purchaser as a result of such
Purchaser, any other Attribution Party and the Company fulfilling their obligations or exercising their rights under the Transaction
Documents, including without limitation as a result of the Company’s issuance of the Shares, Warrants or Warrant Shares and
such Purchaser’s ownership of any of, or rights to, any such Securities including upon any exercise of any and all of the
Warrants (assuming the exercise in full of the Warrants without regard to any limitations on exercise of the Warrants and as if
the Increased Shares Amendment had, as of the date hereof, been adopted and become effective). The Company hereby represents that
the Board has approved the transactions contemplated under the Transaction Documents for purposes of Section 203 of the Delaware
General Corporation Law. The Company hereby represents and warrants that there will be no consequence under Section 203 of the
Delaware General Corporation Law to any Purchaser or any other Attribution Party by virtue of such Purchaser becoming an “Interested
Stockholder” or an “Affiliate” or “Associate” of an “Interested Stockholder” (as such
terms are defined in Section 203 of the Delaware General Corporation Law) as a result of the Company’s issuance of the Shares,
Warrants or Warrant Shares and such Purchaser’s ownership of any of, or rights to, any such Securities including upon any
exercise of any and all of the Warrants (assuming the exercise in full of the Warrants without regard to any limitations on exercise
of the Warrants and as if the Increased Shares Amendment had, as of the date hereof, been adopted and become effective). For the
avoidance of doubt, such Purchaser’s ownership of any or all of such Securities shall not be taken into account when calculating
such Purchaser’s percentage ownership in the Company and shall not count towards any ownership threshold for purposes of
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement), or other
similar anti-takeover provision under the Company’s certificate of incorporation or bylaws or the laws of its state of incorporation
(including Section 203 of the Delaware General Corporation Law). The Company has no control share acquisition, business combination,
poison pill or similar anti-takeover provision under any agreement (other than the letter agreement, dated October 7, 2011, between
the Company and Biotechnology Value Fund, L.P. filed with the Current Report on Form 8-K filed by the Company with the Commission
on October 7, 2011) or the Company’s certificate of incorporation or bylaws. The Company has no fundamental transaction,
change of control or similar provision under any agreement (including, without limitation, any employment agreement), outstanding
security (including, without limitation, any option or warrant to purchase Common Stock) or other instrument (other than as set
forth on Schedule 3.1(hh)(i)). The execution, delivery and performance by the Company of this Agreement and the other Transaction
Documents to which it is a party, and the issuance of the Shares and Warrants on the Closing Date do not and will not result in
any fundamental transaction, change of control or similar event, the requirement to make any payment or adjustment or issue any
shares of Common Stock or other securities with respect to any fundamental transaction, change of control or similar event, or
an event that with the passage of time could result in a fundamental transaction, change of control or similar event under any
agreement (including, without limitation, any employment agreement), outstanding security (including, without limitation, any option
or warrant to purchase Common Stock) or other instrument. Other than as set forth on Schedule 3.1(hh)(ii), the exercise
in full of the Warrants (without regard to any limitations on exercise of the Warrants and as if the Increased Shares Amendment
had, as of the date hereof, been adopted and become effective) will not result in any fundamental transaction, change of control
or similar event, the requirement to make any payment (whether of cash or otherwise) or adjustment or issue any shares of Common
Stock or other securities with respect to any fundamental transaction, change of control or similar event, or an event that with
the passage of time could result in a fundamental transaction, change of control or similar event under any agreement (including,
without limitation, any employment agreement), outstanding security (including, without limitation, any option or warrant to purchase
Common Stock) or other instrument. 






    	23



    	 	



    
 


(ii)               
Shell Company Status. The Company is not and has never been, prior to the date hereof,
an issuer subject to Rule 144(i) under the Securities Act.


(jj)              
Acknowledgment Regarding Purchaser’s Purchase of Securities. The Company acknowledges
and agrees that each Purchaser is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and thereby and that no Purchaser, together with its other Attribution Parties,
is (i) an officer or director of the Company or the Subsidiary, (ii) assuming the accuracy of the Purchasers’ representation
set forth in Section 3.2(g), an Affiliate of the Company or the Subsidiary or (iii) assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2(g), to the knowledge of the Company, a “beneficial owner” (as
defined for purposes of Rule 13d-3 of the 1934 Act) of more than 10% of the aggregate number of shares of Common Stock currently
outstanding. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company or
the Subsidiary (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby
and thereby, and any advice given by a Purchaser or any of its representatives or agents in connection with the Transaction Documents
and the transactions contemplated hereby and thereby is merely incidental to such Purchaser’s purchase of the Securities.
The Company further represents to each Purchaser that the Company’s decision to enter into the Transaction Documents has
been based solely on the independent evaluation by the Company and its representatives. 


(kk)          
U.S. Real Property Holding Corporation. The Company is not, has never been, and so
long as any Securities remain outstanding, shall not become, a U.S. real property holding corporation within the meaning of Section
897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon any Purchaser’s request.


(ll)               
Acknowledgement Regarding Buyers’ Trading Activity. The Company acknowledges
and agrees that, other than as specifically set forth in Section 4.13, none of the Purchasers have been asked to agree, nor has
any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company. The Company further understands and acknowledges that one or more Purchasers
may engage in hedging and/or trading activities (including long and short sales) at various times during the period that the Securities
are outstanding. The Company acknowledges that such aforementioned hedging and/or trading activities (including long and short
sales) do not constitute a breach of this Agreement, the Securities or any of the documents executed in connection herewith.


(mm)       
Increased Shares Stockholder Approval. From and after the Authorized Shares Increase
Date (as defined in the Series B Warrants), the Increased Shares Amendment will increase the number of shares of the Company’s
authorized Common Stock to a number of shares of Common Stock that will be sufficient to allow the Company to issue all shares
of Common Stock that could be issuable pursuant to this Agreement and the Warrants (without regard to any limitation on exercise
contained therein).






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3.2 
             Representations and Warranties of the Purchasers.
Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing
Date (unless as of a specific date therein) to the Company as follows:


(a)               
Organization; Authority. Such Purchaser
is either an individual or an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of
its organization with full right, corporate, partnership, limited partnership, limited liability company or similar power and authority
to enter into and to consummate the transactions contemplated by this Agreement and the other Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and the other Transaction Documents
and performance by such Purchaser of the transactions contemplated by this Agreement and the other Transaction Documents have been
duly authorized by all necessary corporate, partnership, limited partnership, limited liability company or similar action, as applicable,
on the part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when
delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.



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(b)              
Own Account. Such Purchaser (i) understands that the Securities
are “restricted securities” and have not been registered under the Securities Act or any applicable state securities
law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any applicable state securities law, (ii) has no present
intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law, and
(iii) has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution
of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty
not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course
of its business.


(c)               
Purchaser Status. At the time such Purchaser was offered the Securities,
it was, and as of the date hereof it is, and on each date on which it exercises any Warrants it will be, an “accredited
investor” as defined in Rule 501 under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer
under the Exchange Act.


(d)              
Experience of Such Purchaser.Such Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks
of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser
is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss
of such investment.


(e)               
No Tax or Legal Advice. Such Purchaser understands that nothing
in this Agreement, any other Transaction Document or any other materials presented to such Purchaser in connection with the purchase
and sale of the Securities constitutes legal, tax or investment advice. Such Purchaser has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Securities.


(f)               
General Solicitation. Such Purchaser is not purchasing the Securities
as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation
or general advertisement.


(g)              
Ownership. Except for the Securities acquired pursuant to this Agreement,
such Purchaser does not own any securities of the Company.


(h)              
Certain Transactions and Confidentiality. Other than consummating
the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding
with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of
the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from
the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder
and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed
investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s
assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager
that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this
Agreement and the Purchaser’s employees, representatives and agents, such Purchaser has maintained the confidentiality of
all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding
the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any
actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect
Short Sales or similar transactions in the future.



    	26



    	 	



    



The Company
acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement 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.


ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES


4.1             
Transfer Restrictions.


(a)               
The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer
of Securities other than pursuant to an effective registration statement or Rule 144 (in connection with which the Company may
require the Purchaser to provide reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule
144), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor
and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company,
to the effect that such transfer does not require registration of such transferred Securities under the Securities 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 and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Purchaser effecting 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.


(b)              
The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities
in the following form:


THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (B) PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, THE SUBSTANCE
OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY, OR (II) UNLESS 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.


(c)                Certificates
evidencing the Shares and Warrant Shares, or the applicable portion thereof, shall not contain any legend (including the
legend set forth in Section 4.1(b) hereof), (i) once a registration statement (including the Registration Statement) covering
the resale of such Shares and the Warrant Shares is effective under the Securities Act, (ii) following any sale of
such Shares or Warrant Shares pursuant to Rule 144, or (iii) if such Shares or Warrant Shares are eligible for sale under
Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule
144 as to such Shares and Warrant Shares and without volume or manner-of-sale restrictions. At the Purchaser’s request,
for the applicable portion of the Shares and Warrant Shares, the Company shall cause its counsel to issue a legal opinion to
the Transfer Agent within two (2) Trading Days after the Effective Date if required by the Transfer Agent to effect the
removal of the legend hereunder. When the Shares or Warrant Shares may be sold under Rule 144 without the requirement for the
Company to be in compliance with the current public information required under Rule 144 as to such Shares or Warrant Shares
and without volume or manner-of-sale restrictions, then such Warrant Shares shall be issued free of all legends. The Company
agrees that following the Effective Date of a Registration Statement with respect to the Shares and Warrant Shares registered
on such Registration Statement, or at such time as such legend is no longer required under this Section 4.1(c), it will, no
later than three (3) Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent of (A) a
certificate representing the applicable portion of the Shares or Warrant Shares, as the case may be, issued with a
restrictive legend and (B) to the extent the Purchaser is an Affiliate of the Company (it being agreed and acknowledged that
the Purchaser shall not be deemed to be an Affiliate of the Company at any time that the Purchaser Condition is satisfied)
any documentation reasonably requested by the Company demonstrating such Purchaser’s compliance with all of the
applicable requirements of Rule 144 (such third (3rd) Trading Day, the “Legend Removal Date”), deliver or
cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other
legends. If the Company shall fail for any reason or for no reason to issue to such Purchaser of the Securities on or
before the Legend Removal Date a certificate without such legend or to issue such Securities to such Purchaser by electronic
delivery at the applicable balance account at DTC, and if on or after such Trading Day the Purchaser purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Purchaser of such
Securities that the Purchaser anticipated receiving without legend from the Company (a “Buy-In”), then the
Company 



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shall,
within three (3) Trading Days after the Purchaser’s request and in the Purchaser’s discretion, either (i) pay cash
to the Purchaser in an amount equal to the Purchaser’s total purchase price (including brokerage commissions and other out-of-pocket
expenses, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s
obligation to deliver such unlegended Securities shall terminate, or (ii) promptly honor its obligation to deliver to the Purchaser
such unlegended Securities or to issue such Securities to such Purchaser by electronic delivery at the applicable balance account
at DTC as provided above and pay cash to the Purchaser in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Common Stock, times (B) the Weighted Average Price (as defined in the Warrants) of the
Common Stock on the Legend Removal Date. The Company may not make any notation on its records or give instructions to the Transfer
Agent that enlarge the restrictions on transfer set forth in this Section 4. Certificates for Securities subject to legend removal
hereunder shall be transmitted by the Transfer Agent to the Purchaser by (X) upon the request of the Purchaser, crediting
the Purchaser’s or its designee’s balance account with the DTC through DWAC, or to the Purchaser’s or its designee’s
direct registration account, provided that the Transfer Agent is participating in the DRS or FAST Program, or (Y)
if the Transfer Agent is not participating in either the DRS or FAST Program, issuing and dispatching by overnight courier to
the address as specified in the notice section hereof, a certificate registered in the Company’s share register in the name
of the Purchaser.


(d)              
Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell
any Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom, and that if Securities are sold pursuant to a registration statement (including the Registration
Statement), they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal
of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company’s
reliance upon this understanding.


4.2             
Continued Registration; Public Information. Until such time that
the Purchaser owns no Securities, the Company covenants to use reasonable best efforts to maintain the registration of the Common
Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within
the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act
even if the Company is not then subject to the reporting requirements of the Exchange Act, and if the Company is not required
to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance
with Rule 144(c) such information as is required for the Purchasers to sell the Securities, including without limitation, under
Rule 144.


4.3             
Integration. The Company shall not sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of
the sale of the Securities or that would be integrated with the offer or sale of the Securities such that it would require stockholder
approval for purposes of the rules and regulations of any Trading Market or otherwise unless stockholder approval is obtained
before the closing of such subsequent transaction.



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4.4             
Warrants. The Company hereby covenants and agrees to comply with
each and every one of its obligations and other terms set forth in the Warrants, including, without limitation, Section 3(d) of
the Warrants and Section 5 of the Series B Warrants, for so long as any such Warrants remain outstanding.


4.5             
Shareholder Rights Plan and Anti-Takeover Plans. Assuming that the
Purchaser does not beneficially own any Common Stock or Common Stock Equivalents immediately prior to the execution of this Agreement,
at no time following the Company’s issuance of the Shares, Warrants or Warrant Shares (assuming the exercise in full of
the Warrants without regard to any limitations on exercise of the Warrants and as if the Increased Shares Amendment had, as of
the date hereof, been adopted and become effective) will any claim be raised or enforced by the Company or, with the consent of
or without the opposition of the Company, any other Person, that (i) any Purchaser is an “Acquiring Person” or functionally
equivalent Person under any control share acquisition, business combination, poison pill (including any distribution under a rights
agreement), or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company or other similar anti-takeover
provision under the Company’s certificate of incorporation or the laws of its state of incorporation, (ii) any Purchaser
could be deemed to trigger the provisions of any such plan or arrangement or other anti-takeover provision, in whole or in part,
by virtue of receiving Shares or Warrants under this Agreement or Warrant Shares upon exercise of any such Warrants or under any
other agreement between the Company and the Purchasers, assuming that the facts and circumstances that exist as of the Closing
Date are not materially changed by a Purchaser (it being agreed and acknowledged by the Company that neither an exercise of any
or all of the Warrants (assuming the exercise in full of the Warrants without regard to any limitations on exercise of the Warrants
and as if the Increased Shares Amendment had, as of the date hereof, been adopted and become effective) nor any waiver of Section
2(d) of the Warrants in accordance with the terms thereof shall be deemed to be a material change in the facts and circumstances
that exist as of the Closing Date), or (iii) any Purchaser is an “Interested Stockholder” or an “Affiliate”
or “Associate” of an “Interested Stockholder” (as such terms are defined in Section 203 of the Delaware
General Corporation Law). For the avoidance of doubt, no Purchaser’s ownership of any or all of the Securities shall be
taken into account when calculating such Purchaser’s percentage ownership in the Company and shall not count towards any
ownership threshold for purposes of any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement), or other similar anti-takeover provision under the Company’s certificate of incorporation or
bylaws or the laws of its state of incorporation (including Section 203 of the Delaware General Corporation Law).


4.6             
Securities Laws Disclosure; Publicity. The Company shall (a) by
5:30 p.m. (New York City time) on July 2, 2012, issue a press release disclosing the material terms of the transactions contemplated
hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission
within the time required by the Exchange Act. From and after the issuance of such press release, the Company shall have publicly
disclosed all material, non-public information delivered to any of the Purchasers by the Company, the Subsidiary or any of their
respective officers, directors, employees or agents, that is not disclosed in the press release.



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4.7             
Non-Public Information. From and after the filing of the press release
contemplated by Section 4.6, the Company covenants and agrees that neither it, the Subsidiary, nor any other Person acting on
its or their behalf, will provide any Purchaser or its agents or counsel with any material non-public information, unless prior
thereto such Purchaser shall have entered into a written agreement with the Company regarding the confidentiality and use of such
information. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting
transactions in the Securities of the Company. If a Purchaser has, or believes it has, received any such material, nonpublic information
regarding the Company or the Subsidiary from the Company, the Subsidiary or any of their respective officers, directors, Affiliates
or agents, it may provide the Company with written notice thereof. The Company shall, within two (2) Trading Days of receipt of
such notice, make public disclosure of such material, nonpublic information. To the extent that the Company delivers any material,
non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such
Purchaser shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis of, such material, non-public
information.


4.8             
Use of Proceeds. The Company shall use the net proceeds from the
sale of the Securities hereunder primarily for the ongoing development of bremelanotide for treatment of female sexual dysfunction,
preclinical and clinical development of its melanocortin receptor-1 peptide program, preclinical and clinical development of its
PL-3994 product and preclinical and clinical development of other portfolio products, and for working capital and general corporate
purposes.


4.9             
Indemnification of Purchasers. Subject to the provisions of this
Section 4.9, the Company will indemnify and hold each Purchaser and its Affiliates, investment manager, directors, officers, stockholders,
members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the Affiliates, directors, officers, stockholders, agents, members,
partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur as a result of or relating to (a) any breach of, failure to comply with
or adhere to, misrepresentation with respect to or 



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relating to, or any act or omission inconsistent with, any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents, including, without
limitation, and for purposes of clarification, any claims any Purchaser Party may have against the Company for any such breach,
failure misrepresentation, act or omission pursuant to any provision of any Transaction Document, including, without limitation,
Sections 4.4, 4.5 and 4.17 through 4.24 of this Agreement, or (b) any action instituted against the Purchaser Parties in any
capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser
Parties, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a
breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements
or understandings such Purchaser Parties may have with any such stockholder or any violations by such Purchaser Parties of state
or federal securities laws or any conduct by such Purchaser Parties which constitutes fraud, gross negligence, willful misconduct
or willful malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought
pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the
right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser
Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof
has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume
such defense and to employ counsel or (iii) in such action there is, in the reasonable written opinion of counsel to the Purchasers
furnished to the Company, a material conflict on any material issue between the position of the Company and the position of such
Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such
separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser
Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z)
to the extent, but only to the extent, that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in
the other Transaction Documents or any agreements or understandings such Purchaser
Parties may have with any such stockholder or any violations by such Purchaser Parties of state or federal securities laws or
any conduct by such Purchaser Parties which constitutes fraud, gross negligence, willful misconduct or willful malfeasance. Except
as otherwise set forth herein, the mechanics and procedures with respect to the rights and obligations under this Section 4.9
shall be the same as those set forth in Section 5 of the Registration Rights Agreement.



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4.10         
Reservation of Common Stock. As of the date hereof, the Company
has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient
number of shares of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement and Warrant
Shares pursuant to any exercise of the Warrants (solely with respect to the reservation of the Series B Warrant Shares, subject
to effecting the Increased Shares Amendment). The Company shall reserve and so long as any Securities are outstanding, the Company
shall continue to reserve and keep available at all times, free of preemptive rights, a number of shares of Common Stock equal
to the maximum number of Shares issuable pursuant to this Agreement and Warrant Shares issuable pursuant to any exercise of the
Warrants (without regard to any restrictions on exercise thereof) (solely with respect to the reservation of the Series B Warrant
Shares, subject to effecting the Increased Shares Amendment) (the “Required Reserve Amount”).


4.11         
Listing of Common Stock.
The Company hereby agrees to use commercially reasonable efforts to maintain the listing or quotation of the Common Stock on the
Trading Market on which it is currently listed, and the Company shall apply to list or quote the Shares and Warrant Shares on
such Trading Market (solely with respect to the listing or quotation of the Series B Warrant Shares, subject to effecting the
Increased Shares Amendment) and use commercially reasonable efforts to secure the listing of the Shares and Warrant Shares (solely
with respect to the listing of the Series B Warrant Shares, subject to effecting the Increased Shares Amendment) on such Trading
Market in the time and manner required thereby. The Company further agrees, if the Company applies to have the Common Stock traded
on any other Trading Market, it will then include in such application the Shares and Warrant Shares (solely with respect to the
of the Series B Warrant Shares, subject to effecting the Increased Shares Amendment), and will take such other action as is necessary
to cause the Shares and Warrant Shares to be listed or quoted (solely with respect to the listing or quotation of the Series B
Warrant Shares, subject to effecting the Increased Shares Amendment) on such other Trading Market in the time and manner required
thereby. The Company will then take all action reasonably necessary to continue the listing and trading of its Common Stock on
a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws
or rules of the Trading Market.



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4.12         
Equal Treatment of Purchasers. No consideration (including any modification
of any Transaction Document) shall be offered or paid to any Purchaser (or any Affiliate of a Purchaser) to amend or consent to
a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to
all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate right granted
to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers
as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.


4.13         
Certain Transactions and Confidentiality. Each Purchaser, severally
and not jointly with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any
understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during
the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this
Agreement are first publicly announced pursuant to the initial press release as described in Section 4.6. 
Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section
4.6, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included
in the Transaction Documents. Notwithstanding the foregoing, any Purchaser may disclose the existence and terms of this transaction
and the information included in the Transaction Documents if it reasonably believes it is required to make such disclosure in
order to comply with applicable law, regulation or rule (including, without limitation, any rule, regulation or policy statement
of (i) any organized securities exchange, market or automated quotation system on which the Company’s securities are listed
or quoted, (ii) any self-regulatory organization of which a party is a member, or (iii) any legal or judicial process) or
as part of any audit or regulatory examination. Notwithstanding the foregoing and notwithstanding
anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser nor
any other Attribution Party makes any representation, warranty or covenant hereby that it or any other Attribution Party will
not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this
Agreement are first publicly announced pursuant to the initial press release as described in Section 4.6, (ii) no Purchaser nor
any other Attribution Party shall be restricted or prohibited from effecting any transactions in any securities of the Company
in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in Section 4.6, and (iii) no Purchaser nor any other
Attribution Party shall have any duty of confidentiality to the Company after the issuance of the initial press release as described
in Section 4.6. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets,
the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made
the investment decision to purchase the Securities covered by this Agreement.






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4.14         
Form D; Blue Sky Filings. The Company agrees to timely file a Form
D with respect to the Securities as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser.
The Company shall 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 Purchasers at the Closing under applicable securities or “Blue Sky”
laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.


4.15         
Acknowledgment of Dilution. The Company and each of the Purchasers
acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common Stock, which dilution
may be substantial under certain market conditions. The Company further acknowledges that its obligations under the Transaction
Documents, including, without limitation, its obligation to issue the Shares and Warrant Shares pursuant to the Transaction Documents,
are not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any
claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership
of the other stockholders of the Company.


4.16         
Public Information. At any time during the period commencing on
the six (6) month anniversary of the Closing Date and ending at such time that all of the Securities, if a registration statement
is not available for the resale of all of the Securities, may be sold without restriction or limitation pursuant to Rule 144 and
without the requirement to be in compliance with Rule 144(c)(1), if the Company shall (i) fail to use its best efforts to satisfy
the requirements of Rule 144(c)(1), including, without limitation, the failure to satisfy the current public information requirement
under Rule 144(c) or (ii) if the Company has ever been an issuer described in Rule 144(i)(1)(i) or becomes such an issuer in the
future, and the Company shall fail to use its best efforts to satisfy any condition set forth in Rule 144(i)(2) (a “Public
Information Failure”) then, as partial relief for the damages to any Purchaser
or other holder of Securities by reason of any such delay in or reduction of its ability to sell the Securities (which remedy
shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to each such Purchaser and
holder an amount in cash equal to one percent (1.0%) of the aggregate Subscription Amount of such Purchaser or holder’s
Securities on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling less than
thirty (30) days) thereafter until the earlier of (i) the date such Public Information Failure is cured and (ii) such time that
such public information is no longer required pursuant to Rule 144. The payments to which a Purchaser and other holders shall
be entitled pursuant to this Section 4.16 are referred to herein as “Public Information Failure Payments.”
Public Information Failure Payments shall be paid on the earlier of (I) the last day of the calendar month during which
such Public Information Failure Payments are incurred and (II) the third Business Day after the event or failure giving
rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure
Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month
(prorated for partial months) until paid in full. The Company shall be liable for all payments to each Purchaser pursuant to this
Section 4.16 and such payments shall be a liability and debt obligation of the Company, and each Purchaser shall be a creditor
of the Company with respect to such obligation, that is immediately due and payable pursuant to and in accordance with this Section
4.16.



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4.17         
Additional Issuances of Securities and Indebtedness. From the date
hereof until the Issuance Period End Date, the Company shall not enter into any Subsequent Equity Placement or any Subsequent
Debt Placement and neither any Subsequent Equity Placement nor any Subsequent Debt Placement shall occur. Upon any increase in
the number of authorized shares of Common Stock of the Company following the date hereof including in connection with the Increased
Shares Amendment, the Company shall use such increased number of authorized shares to satisfy its obligations to keep the Required
Reserve Amount of shares reserved for the Purchasers before reserving or using shares for any other purpose. The Company shall
provide the Purchasers with notice of all issuances, including, without limitation upon exercise or conversion of any Common Stock
Equivalents, of any shares of Common Stock issued from and after the date hereof through September 30, 2013.


4.18         
Right of Participation. (a) From and after the Issuance Period End
Date (it being acknowledged and agreed that prior to such date the Company is subject to the prohibitions set forth in the first
sentence of Section 4.17 above) until the six (6) year anniversary of the Closing Date, so long as the Purchasers in the aggregate
beneficially own Common Stock or Common Stock Equivalents equal to or convertible or exercisable, as the case may be, into at
least 20% of the Company’s outstanding shares of Common Stock (calculated as if the Warrants were exercised in full without
regard to any limitations on exercise of the Warrants and as if the Increase Shares Amendment has been adopted and become effective),
the Company shall not, and the Company shall not permit its Subsidiary to, directly or indirectly, effect any Subsequent Placement
unless the Company shall have first complied with this Section 4.18.


(i)                
If the Company desires to raise any capital, incur any Indebtedness or otherwise effect any Subsequent Placement, the Company
shall give notice of such desired Subsequent Placement (the “Subsequent Placement Notice”) to the Purchasers
prior to the Company or any representative of the Company contacting or entering into any discussions with any other Person with
respect to any such desired Subsequent Placement. For a period of ten (10) Business Days after receipt of the Subsequent Placement
Notice (the “Subsequent Placement Structuring Period”), the Company shall negotiate in good faith and provide
the Purchasers the opportunity to structure and negotiate with the Company a Subsequent Placement on terms mutually acceptable
to the Company and the Purchasers. If the Company and the Purchasers agree upon mutually acceptable terms with respect to a Subsequent
Placement, (x) the Company shall offer to issue and sell to or exchange with the Purchasers all of the securities contemplated
pursuant to such Subsequent Placement, allocated among such Purchasers as indicated by the Purchasers and (y) the parties shall
negotiate definitive documentation in good faith in accordance with the agreed upon terms of such Subsequent Placement.



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(ii)              
If the Company and the Purchasers do not agree to terms of a Subsequent Placement during the Subsequent Placement Structuring
Period, during the twenty (20) Business Day period following the Subsequent Placement Structuring Period the Company may contact
other investors or agents about a potential Subsequent Placement. Prior to entering into any Subsequent Placement with any Person
other than the Purchasers, the Company shall deliver to each Purchaser an irrevocable written notice (the “Offer Notice”)
of any proposed or intended issuance or sale or exchange (the “Offer”) of the securities or Indebtedness being
offered (the “Offered Placement”) in a Subsequent Placement, which Offer Notice shall (w) offer to issue and
sell to or exchange with such Purchasers at least 55% of the Offered Placement (the “Purchaser Amount”), in
each instance allocated among such Purchasers as indicated by the Purchasers, (x) identify and describe the Offered Placement,
(y) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the securities
or Indebtedness comprising the Offered Placement to be issued, sold or exchanged and (z) identify the persons or entities (if
known) to which or with which the securities or Indebtedness comprising the Offered Placement are to be offered, issued, sold
or exchanged (the “Basic Amount”).


(iii)            
To accept an Offer, whether of the entirety of the Purchaser Amount or a portion thereof, such Purchaser must deliver
a written notice to the Company prior to the end of the tenth (10th) Business Day after such Purchaser’s receipt
of the Offer Notice (the “Offer Period”), setting forth the portion of such Purchaser’s Purchaser Amount,
which may be all or any portion of such Purchaser’s Purchaser Amount, that such Purchaser elects to purchase (the “Notice
of Acceptance”). Notwithstanding anything to the contrary contained herein, if the Company desires to modify or amend
the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to the Purchasers a
new Offer Notice and the Offer Period shall expire on the tenth (10th) Business Day after such Purchaser’s receipt
of such new Offer Notice.


(iv)            
The Company shall have twenty (20) Business Days from the expiration of the Offer Period above to consummate the Subsequent
Placement with respect to all or any part of such Offered Placement as to which a Notice of Acceptance has not been given by the
Purchasers (the “Refused Placement”) pursuant to a definitive agreement (the “Subsequent Placement
Agreement”) but only upon terms and conditions (including, without limitation, unit prices and interest rates) that
are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice.



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(v)              
In the event the Company shall propose to sell less than 80% of all the securities or Indebtedness comprising the Refused
Placement (any such sale to be in the manner and on the terms specified in Section 4.18(a)(iv) above), then prior to the end of
the fifth (5th) Business Day after such Purchaser’s receipt of written notice of the Company’s proposal
to sell such reduced amount of securities or Indebtedness comprising the Refused Placement, each Purchaser may, at its sole option
and in its sole discretion, reduce the number or amount of the securities or Indebtedness comprising the Offered Placement specified
in its Notice of Acceptance or revoke its Notice of Acceptance. In the event the Company shall propose to sell less than 100%
but 80% or more of all the securities or Indebtedness comprising the Refused Placement (any such sale to be in the manner and
on the terms specified in Section 4.18(a)(iv) above), then prior to the end of the fifth (5th) Business Day after such
Purchaser’s receipt of written notice of the Company’s proposal to sell such reduced amount of securities or Indebtedness
comprising the Refused Placement, each Purchaser may, at its sole option and in its sole discretion, proportionally reduce the
number or amount of the securities or Indebtedness comprising the Offered Placement specified in its Notice of Acceptance. In
the event that any Purchaser so elects to reduce the number or amount of securities or Indebtedness comprising the Offered Placement
specified in its Notice of Acceptance or revoke its Notice of Acceptance, the Company may not issue, sell or exchange more than
the reduced number or amount of the Offered Placement unless and until such securities have again been offered to the Purchasers
in accordance with Section 4.18(a)(ii) above.


(vi)            
Any securities or Indebtedness comprising the Offered Placement not acquired by the Purchasers or other Persons in accordance
with Section 4.18(a)(iv) above may not be issued, sold or exchanged until they are again offered to the Purchasers under the procedures
specified in this Agreement.


(vii)          
The purchase by the Purchasers of any securities or Indebtedness comprising the Offered Placement is subject in all cases
to the preparation, execution and delivery by the Company and the Purchasers of a purchase agreement relating to such Offered
Placement reasonably satisfactory in form and substance to the Purchasers and their respective counsel. The Company and the Purchasers
agree that if any Purchaser elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such
Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”)
shall include any term or provisions whereby any Purchaser shall be required to agree to any restrictions in trading as to any
securities of the Company owned by such Purchaser prior to such Subsequent Placement.


(viii)        
Notwithstanding anything to the contrary in this Section 4.18 and unless otherwise agreed to by the Purchasers, the Company
shall either confirm in writing to the Purchasers that the transaction with respect to the proposed Subsequent Placement has been
abandoned or shall publicly disclose its intention to consummate the transactions contemplated by the proposed Subsequent Placement,
in either case in a manner such that the Purchasers will not be in possession of material non-public information, by the twentieth
(20th) Business Day following delivery of any Subsequent Placement Notice or Offer Notice. If by the twentieth (20th)
Business Day following delivery of any Subsequent Placement Notice or an Offer Notice no public disclosure regarding a transaction
with respect to the proposed Subsequent Placement has been made, and no notice regarding the abandonment of such transaction has
been received by the Purchasers, such transaction shall be deemed to have been abandoned and the Purchasers shall not be deemed
to be in possession of any material, non-public information with respect to the Company. Should the Company decide to pursue such
transaction with respect to the proposed Subsequent Placement, the Company shall provide each Purchaser with another Subsequent
Placement Notice and, if applicable, another Offer Notice and each Purchaser will again have the right of participation set forth
in this Section 4.18(a). The Company shall not be permitted to deliver more than one Subsequent Placement Notice or Offer Notice
to the Purchasers in any forty (40) Business Day period.



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(b) The
restrictions contained in this Section 4.18 shall not apply in connection with the issuance of any Excluded Securities. Notwithstanding
anything to the contrary contained herein, all rights of any Purchaser set forth in this Section 4.18 shall be assignable at the
election of any Purchaser to one or more of any Purchaser’s Affiliates, but not otherwise. For purposes of clarification,
the provisions of this Section 4.18 are to apply to any Subsequent Placement, including multiple Subsequent Placements, whether
related or unrelated, during the period covered hereby.


4.19         
Fundamental Transactions. The Company covenants and agrees while
any Warrants are outstanding, it (i) will not permit (to the extent within its control), (ii) will take all necessary action to
prevent both the occurrence or consummation of (including, without limitation, adopting a poison pill or other similar anti-takeover
provision or method) and the requirement to make any payment or adjustment or issue any shares of Common Stock or other securities
with respect to, and (iii) will not be party to, any fundamental transaction, change of control or similar event, or an event
that with the passage of time could result in a fundamental transaction, change of control or similar event under any agreement
(including, without limitation, any employment agreement), outstanding security (including, without limitation, any option or
warrant to purchase Common Stock) or other instrument or make any announcement of any of the foregoing. In
furtherance of the foregoing and without limiting in any manner any other rights of the Purchasers or obligations of the Company
set forth in any of the Transaction Documents, in the event the Company learns of any third party attempting or seeking to take
action to cause a fundamental transaction, change of control or similar event (including, without limitation, through a tender
or exchange offer), or an event that with the passage of time could result in a fundamental transaction, change of control or
similar event (including, without limitation, through a tender or exchange offer) under any agreement (including, without limitation,
any employment agreement), outstanding security (including, without limitation, any option or warrant to purchase Common Stock)
or other instrument, that does not conform to the requirements of the Transaction Documents and that does not afford or grant
the Purchasers all of the rights and payments they would receive in a Company Controlled Fundamental Transaction (including, without
limitation, any payments they would receive if they were holders of the shares of Common Stock issuable upon exercise of the Warrants
(without regard to any limitation



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on
the exercise of the Warrants and as if the Increased Shares Amendment had been adopted and become effective)), subject to the
exercise by the Board of Directors of the Company of its fiduciary duties in accordance with applicable law, the Company covenants
and agrees to take all reasonable efforts to adopt a poison pill, and to the extent that any previously
adopted poison pill ceases to be effective, to re-adopt a poison pill, or any other anti-takeover provision or method necessary
to prevent such fundamental transaction, change of control or similar event (including, without limitation, through a tender or
exchange offer), or event that with the passage of time could result in a fundamental transaction, change of control or similar
event (including, without limitation, through a tender or exchange offer) under any agreement or other instrument, that does not
conform to the requirements of the Transaction Documents and that does not afford or grant the Purchasers all of the rights and
payments they would receive in a Company Controlled Fundamental Transaction (including, without limitation, any payments they
would receive if they were holders of the shares of Common Stock issuable upon exercise of the Warrants (without regard to any
limitation on the exercise of the Warrants and as if the Increased Shares Amendment had been adopted and become effective)).
In addition, in no event will the Company permit any Company Controlled Fundamental Transaction if after such Company Controlled
Fundamental Transaction any Series B Warrant will not be fully exercisable without limitation by reason of there being insufficient
authorized and reserved capital stock of any applicable Successor Entity or Successor Entities involved in such Company Controlled
Fundamental Transaction. The Company covenants and agrees while any Warrants are outstanding, that it will not permit, will take
all necessary action to prevent (including, without limitation, adopting a poison pill or other similar anti-takeover provision),
and will not be party to, any Fundamental Transaction unless the Company and each applicable acquirer or beneficial owner of securities
that is directly or indirectly party to or associated with any applicable Fundamental Transaction, including each Successor Entity
or Successor Entities, jointly and severally agrees (x) to the requirements and other provisions set forth in the Warrants, including,
without limitation, Section 3(d) thereto and all requirements to issue cash, securities (including, without limitation any options
or warrants to purchase Common Stock) or other assets thereunder, and (y) to treat each holder of the Warrants (each, a “Holder”)
in all respects no worse than as if such Holder was a holder of Warrant Shares and no worse (and, other than in connection with
a Company Controlled Fundamental Transaction (as defined in the Warrants), no better) than its treatment of any other holder of
shares of Common Stock. For purposes of clarification, the foregoing shall mean that no Fundamental Transaction shall occur or
be consummated unless (i) to the extent set forth in the Warrants, each Holder shall have the right to require the Company and/or
the Successor Entity and/or Successor Entities, jointly and severally, to deliver upon the occurrence or consummation, and it
shall be a required condition to such occurrence or consummation, of the Fundamental Transaction or at any time thereafter, in
satisfaction of the Warrants, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants
or other purchase or subscription rights and any shares of Common Stock) which each Holder would have been entitled to receive
upon the happening of such Fundamental Transaction or the record, eligibility or other determination date for the event 



    	39



    	 



    
resulting
in such Fundamental Transaction, had the Warrants been exercised in full (without regard to any limitations on exercise of the
Warrants and as if the Increased Shares Amendment had, as of such date, been adopted and become effective) with such Holder becoming
a holder of such shares of Common Stock issuable upon such exercise immediately prior to such Fundamental Transaction or the record,
eligibility or other determination date for the event resulting in such Fundamental Transaction; (ii) it is recognized that the
purpose of this Section 4.19 is to assure that in all circumstances of any Fundamental Transaction or similar corporate type transaction,
each Holder will have rights pursuant to the terms of the Warrants no worse (and, other than in connection with a Company Controlled
Fundamental Transaction, no better) in any way than or adversely affected relative to or in any manner not as advantageous (or,
other than in connection with a Company Controlled Fundamental Transaction, disadvantageous) as those of a holder of the number
of shares of Common Stock issuable upon exercise of the Warrants (without regard to any limitations on exercise of the Warrants
and as if the Increased Shares Amendment had, as of such date, been adopted and become effective) as if the Warrants had already
been exercised into Common Stock (without regard to any limitations on exercise of the Warrants and as if the Increased Shares
Amendment had, as of such date, been adopted and become effective) prior to such Fundamental Transaction or the record, eligibility
or other determination date for the event resulting in such Fundamental Transaction and shall not receive worse (or, other than
in connection with a Company Controlled Fundamental Transaction pursuant to the terms of the Warrants, better) treatment, be prejudiced
or adversely affected relative to (or treated in any manner not as advantageous or, other than in connection with a Company Controlled
Fundamental Transaction, disadvantageous) as the treatment afforded to any holders of shares of Common Stock in such Fundamental
Transaction or similar corporate type transaction by virtue of the fact that a Holder holds a Warrant rather than the shares of
Common Stock issuable upon exercise of the Warrant (without regard to any limitations on exercise of the Warrant and as if the
Increased Shares Amendment had, as of such date, been adopted and become effective); (iii) it is specifically intended that no
Person attempt to structure a transaction in any manner to circumvent the intent of this Section 4.19 and therefore the provisions
of this Section 4.19 shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this
Section 4.19 and pursuant to the terms of the Warrants to the extent necessary to correct this paragraph or any portion hereof
which may be defective or inconsistent with the intended treatment of each Holder, or to make changes or supplements necessary
or desirable to properly give effect to such treatment, as no worse (or, other than in connection with a Company Controlled Fundamental
Transaction, no better) in any way than or adversely effected relative to or in any manner not as advantageous (or, other than
in connection with a Company Controlled Fundamental Transaction, disadvantageous) as a holder of the number of shares of Common
Stock issuable upon exercise of the Warrants (without regard to any limitations on exercise of the Warrants and as if the Increased
Shares Amendment had, as of such date, been adopted and become effective) in any Fundamental Transaction or similar corporate
type transaction as herein contained; (iv) it is specifically intended, among other events and transactions, that any tender offer
or similar transaction made with respect to the Company or 50% or more of the Common Stock is deemed a Fundamental Transaction
under the Warrants; (v) it is acknowledged that notwithstanding any provision that may be interpreted to the contrary, as provided
in the Warrants each Holder has an express right to receive at least the same proportion and amount of cash, if any, per Warrant
Share (provided, that the foregoing shall in no way limit the rights of the Holder to get any Fundamental Transaction Warrant
Early Termination Price (as defined in the Warrants) entirely in cash) that each holder of a share of Common Stock is entitled
to receive from the Company or any Successor Entity or Successor Entities, upon any Fundamental Transaction (such as a cash merger
or cash tender offer) where cash comprises any portion of the applicable consideration or payment, that they would have been entitled
to receive had they exercised their SPA Warrants prior to the Fundamental 



    	40



    	 



    
Transaction or the record, eligibility or other determination
date for the event resulting in such Fundamental Transaction (without regard to any limitations on the exercise of this Warrant
and as if the Increased Shares Amendment had, as of such date, been adopted and become effective); (vi) it is acknowledged that
the provisions of this Section 4.19 may not be waived, modified or otherwise implemented otherwise than in strict conformity with
the intention hereof and shall apply to a successor holder of the Warrants and any Successor Entity or Successor Entities, and
(vii) notwithstanding any provision of this Agreement, the Warrants or any other agreement or contract that could in any way be
read to limit the right of any Holder to elect and receive at any time in perpetuity any payments pursuant to Section 5(a) of
the Warrants, no provision of this Agreement, the Warrants or any other agreement or contract shall limit the rights of any Holder
(including, without limitation, the right to receive any Redemption Price (as defined in the Warrants)) to receive at any time
in perpetuity any payments pursuant to Section 5(a) of the Warrants. The Purchasers shall be third party beneficiaries to any
agreements between the Company and any applicable Successor Entity in order to give effect to this Section 4.19.


4.20         
Subdivisions. So long as any Warrants are outstanding, the Company
shall not subdivide (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock into a greater number of shares or take any other action or otherwise allow the Exercise Price (as defined
in the Warrants) of the Warrants to be less than the par value of the Common Stock.


4.21         
Contrary Positions. The Company covenants and agrees not to take
any position contrary to (x) the representations set forth in Section 3.1(hh) and Section 3.1(jj), as if each such representation
was made on any date from and after the Closing Date assuming (i) the facts and circumstances that exist as of the Closing Date
are not materially changed by a Purchaser and (ii) with respect to the representation in clause (ii) of the first sentence of
Section 3.1(jj), the Purchaser Condition is satisfied or (y) any of its other representations set forth herein, as if each such
representation was made on the Closing Date, assuming the facts and circumstances that exist as of the Closing Date with respect
to such representations are not materially changed. The Company acknowledges and agrees that, with respect to Section 3.1(hh)
neither an exercise of any or all of the Warrants (assuming the exercise in full of the Warrants without regard to any limitations
on exercise of the Warrants and as if the Increased Shares Amendment had, as of the date hereof, been adopted and become effective)
nor any waiver of Section 2(d) of the Warrants in accordance with the terms thereof shall be deemed to be a material change in
the facts and circumstances that exist as of the Closing Date.


4.22         
No Stock Buy-Backs, Dividends or Purchase Rights. So long as any
Purchaser holds any of the Securities, the Company shall not redeem, repurchase or otherwise reduce the number of outstanding
shares of Common Stock. So long as the Purchasers in the aggregate beneficially own Common Stock or Common Stock Equivalents equal
to or convertible or exercisable, as the case may be, into at least 20% of the Company’s outstanding shares of Common Stock
(calculated as if the Warrants were exercised in full without regard to any limitations on exercise of the Warrants and as if
the Increase Shares Amendment has been adopted and become effective), the Company shall not, and the Company shall not permit
its Subsidiary to, directly or indirectly, (x) declare or make any dividend or other distributions of its assets (or rights to
acquire its assets) to any or all holders of its Common Stock, capital stock or Common Stock Equivalents, by way of return of
capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options
by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
or (y) grant, issue or sell any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro
rata to the record holders of any class of its capital stock or Common Stock Equivalents.



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4.23         
Existence of Liens. So long as the Purchasers in the aggregate beneficially
own Common Stock or Common Stock Equivalents equal to or convertible or exercisable, as the case may be, into at least 20% of
the Company’s outstanding shares of Common Stock (calculated as if the Warrants were exercised in full without regard to
any limitations on exercise of the Warrants and as if the Increase Shares Amendment has been adopted and become effective), the
Company shall not, and the Company shall not permit its Subsidiary to, directly or indirectly, allow or suffer to exist any Lien
other than Permitted Liens.


4.24         
Amendments and Future Agreements. So long as any Purchaser holds
any of the Warrants, the Company shall not (i) amend, waive, modify or terminate any provision of any outstanding securities (including,
without limitation, any warrants) or (ii) be party to any transaction, including any contract, agreement or other arrangement
or issue any security (including, without limitation, any option or warrant to purchase Common Stock) or other instrument with
a provision or term (including, without limitation, any fundamental transaction, change of control or similar event provision)
which in any way restricts the Company’s ability to issue, or is in any way triggered by, or could require the Company to
make any payment or adjustment or issue any shares of Common Stock or other securities as a result of, the Company’s issuance
of, any of the Securities to the Purchasers hereunder or under the Warrants.


ARTICLE V.

MISCELLANEOUS


5.1             
Survival. Other than as specifically set forth herein, this Agreement,
the representations and warranties contained herein and the obligations contained herein, including, without limitation, the covenants
and indemnification obligations contained herein, and other terms hereunder shall survive indefinitely.


5.2             
Fees and Expenses. At Closing, the Company shall reimburse the Purchasers
or their designee(s) for all reasonable costs and expenses up to $250,000, in the aggregate, incurred in connection with the transactions
contemplated by the Transaction Documents (including all reasonable legal fees and disbursements in connection therewith, documentation
and implementation of the transactions contemplated by the Transaction Documents and due diligence in connection therewith), which
amount may be withheld by each Purchaser from its Subscription Amount at the Closing. Except as expressly set forth in herein
and in the other Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties
levied in connection with the delivery of any Securities to the Purchasers.



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5.3             
Entire Agreement. The Transaction Documents, together with the exhibits
and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules.


5.4             
Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of:
(a) the date of transmission, if such notice or communication is delivered via facsimile or email delivery at the facsimile number
or email address set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day,
(b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile or email delivery
at the facsimile number or email address set forth on the signature pages attached hereto on a day that is not a Trading Day or
later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing,
if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.


5.5             
Amendments; Waivers. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers
holding at least a majority in interest of the Securities then outstanding or, in the case of a waiver, by the party against whom
enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder
in any manner impair the exercise of any such right.


5.6             
Headings. The headings herein are for convenience only, do not constitute
a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.


5.7             
Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any
rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger or otherwise by operation
of law). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or
transfers any Securities, provided that such transferee agrees in writing
to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers”.


5.8             
No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.9.



    	43



    	 



    



5.9             
Governing Law and Jurisdiction. All questions concerning the construction,
validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees
that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement
and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers,
stockholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in
the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any other manner permitted by law.


5.10         
Execution. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have
been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart.
In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data
file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.


5.11         
Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction.
It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.


5.12         
Replacement of Securities. If any certificate or instrument evidencing
any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution
for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument,
but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction, and, if requested
by the Company, the posting of a customary bond. The applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.



    	44



    	 



    



5.13         
Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance
under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred
by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any
action for specific performance of any such obligation the defense that a remedy at law would be adequate. The Company therefore
agrees that the Holders shall be entitled to seek temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages and without posting a bond or other security. In the event that the Purchaser delivers a Fundamental
Transaction Early Termination Notice (as defined in the Warrants) pursuant to a Clause C Fundamental Transaction (as defined in
the Warrants) and the Company pays in full to the Purchaser, pursuant to and in accordance with the terms of Section 3(d) of the
Warrants, the related Fundamental Transaction Warrant Early Termination Price (as defined in the Warrants), the Purchaser shall
not be entitled to any other payment for damages hereunder with respect to such redeemed Warrants solely in connection with such
Clause C Fundamental Transaction.


5.14         
Independent Nature of Purchasers’ Obligations and Rights.
The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser,
and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser
under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser
pursuant hereof or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect
to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled, at its own
expense, to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement
or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review
and negotiation of the Transaction Documents.


5.15         
Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such
action may be taken or such right may be exercised on the next succeeding Business Day.


5.16         
Construction. The parties agree that each of them and/or their respective
counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal 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
the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common
Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.



    	45



    	 



    



WAIVER OF JURY
TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY
ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE
LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 


 


(Signature
Pages Follow)



    	46



    	 



    





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


 


	 PALATIN TECHNOLOGIES, INC. 	 
	 	 	 
	 By:	 /s/ Stephen T. Wills	 
	 	 Name: 	Stephen T. Wills	 
	 	 Title: 	Executive Vice President, Chief Financial Officer and Chief Operating Officer	 



 





Address for Notice:


 


Palatin Technologies, Inc.


4-B Cedar Brook Drive


Cedar Brook Corporate Center


Cranbury, NJ 08512


Attention: Stephen A. Slusher, Chief Legal Officer


Facsimile number: (609) 495-2202


Electronic mail: sslusher@palatin.com


 





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


 





Faith L. Charles, Esq.


Thompson Hine LLP


335 Madison Avenue


12th Floor


New York, NY 10017


Facsimile number: (212) 344-6101


Electronic mail: Faith.Charles@thompsonhine.com


 





[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE PAGE FOR PURCHASER FOLLOWS]


 



    	47



    	 



    


























 


 [PURCHASER SIGNATURE PAGES TO PTN SECURITIES PURCHASE AGREEMENT]


 


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


Name of Purchaser: QVT FUND
IV LP, by its general partner QVT Associates GP LLC


Signature of Authorized Signatory
of Purchaser: /s/ Tracy Fu


Name
                                     of Authorized Signatory: Tracy Fu


Title of Authorized Signatory: Managing
Member


Email Address of Authorized Signatory:_________________________________________


Facsimile Number of Authorized Signatory: ______________________________________


Address for Notice to Purchaser:


QVT Fund IV LP


c/o QVT Financial LP


1177 Avenue of the Americas, 9th Floor


New York, New York 10036


Attention: General Counsel


Email: legalnotices@qvt.com


 


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


Schulte Roth & Zabel LLP


919 Third Avenue


New York, New York 10022


Attention: Eleazer Klein, Esq.


Facsimile number: (212) 593-5955


Electronic mail: eleazer.klein@srz.com


 


Address for Delivery of Securities to Purchaser (if not same as
address for notice):


Schulte Roth & Zabel LLP


919 Third Avenue


New York, New York 10022


Attention: Eleazer Klein, Esq.


Facsimile number: (212) 593-5955


Electronic mail: eleazer.klein@srz.com


 


Subscription Amount: $4,532,500.00


501,360  Shares,


Series A Warrants to purchase 4,140,866 shares of Common Stock,
and


Series B Warrants to purchase 4,593,971 shares of Common Stock


 


EIN Number: [PROVIDED UNDER SEPARATE COVER]


 



    	48



    	 



    



 


[PURCHASER SIGNATURE PAGES TO PTN SECURITIES PURCHASE AGREEMENT]


 


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


Name of Purchaser: QUINTESSENCE
FUND L.P., by its general partner QVT Associates GP LLC


Signature of Authorized Signatory
of Purchaser: /s/ Tracy Fu


Name of Authorized Signatory: Tracy
Fu


Title of Authorized Signatory: Managing
Member


Email Address of Authorized Signatory:_________________________________________


Facsimile Number of Authorized Signatory: ______________________________________


Address for Notice to Purchaser:


QVT Fund IV LP


c/o QVT Financial LP


1177 Avenue of the Americas, 9th Floor


New York, New York 10036


Attention: General Counsel


Email: legalnotices@qvt.com


 


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


Schulte Roth & Zabel LLP


919 Third Avenue


New York, New York 10022


Attention: Eleazer Klein, Esq.


Facsimile number: (212) 593-5955


Electronic mail: eleazer.klein@srz.com


 


Address for Delivery of Securities to Purchaser (if not same as
address for notice):


Schulte Roth & Zabel LLP


919 Third Avenue


New York, New York 10022


Attention: Eleazer Klein, Esq.


Facsimile number: (212) 593-5955


Electronic mail: eleazer.klein@srz.com


 


Subscription Amount: $3,927,000.00


434,628  Shares,


Series A Warrants to purchase 3,589,710 shares of Common Stock,
and


Series B Warrants to purchase 3,982,506 shares of Common Stock


 


EIN Number: [PROVIDED UNDER SEPARATE COVER]


 



    	49



    	 



    





 


[PURCHASER SIGNATURE PAGES TO PTN SECURITIES
PURCHASE AGREEMENT]


 


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


Name of Purchaser: QVT
FUND V LP, by its general partner QVT Associates GP LLC


Signature of Authorized Signatory of
Purchaser: /s/ Tracy Fu_


Name of Authorized Signatory: Tracy
Fu


Title of Authorized Signatory: Managing
Member


Email Address of Authorized Signatory:_________________________________________


Facsimile Number of Authorized Signatory: ______________________________________


Address for Notice to Purchaser:


QVT Fund IV LP


c/o QVT Financial LP


1177 Avenue of the Americas, 9th Floor


New York, New York 10036


Attention: General Counsel


Email: legalnotices@qvt.com


 


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


Schulte Roth & Zabel LLP


919 Third Avenue


New York, New York 10022


Attention: Eleazer Klein, Esq.


Facsimile number: (212) 593-5955


Electronic mail: eleazer.klein@srz.com


 


Address for Delivery of Securities to Purchaser (if not same as
address for notice):


Schulte Roth & Zabel LLP


919 Third Avenue


New York, New York 10022


Attention: Eleazer Klein, Esq.


Facsimile number: (212) 593-5955


Electronic mail: eleazer.klein@srz.com


 


Subscription Amount: $26,540,500.00


2,937,012  Shares,


Series A Warrants to purchase 24,257,575 shares of Common Stock,
and


Series B Warrants to purchase 26,911,903 shares of Common Stock


 


EIN Number: [PROVIDED UNDER SEPARATE COVER]





50