Exhibit 10.55**PURCHASE AGREEMENT**     THIS PURCHASE AGREEMENT **(**“**Agreement”)**is made as of the      day of           ,2008, by and between **Cytocore, Inc.,**a Delaware corporation (the “**Company”),**and theInvestor set forth on the signature page affixed hereto (an “**Investor”).****Recitals**     A. The Company and the Investor are executing and delivering this Agreement in reliance uponthe exemption from securities registration afforded by the provisions of Regulation D**(**“**Regulation D”),**as promulgated by the U.S. Securities and Exchange Commission (the “**SEC”)**underthe Securities Act of 1933, as amended (the “**Securities Act”);**and     B. The Investor wishes to purchase from the Company, and the Company wishes to sell and issueto the Investors, upon the terms and conditions stated in this Agreement and the attached Summaryof Terms dated January 24, 2008, Units, each Unit comprising (i) 2 shares (the “**Shares”)**of theCompany’s Common Stock, par value $0.00 1 per share (together with any Securities into which suchshares may be reclassified the “**Common Stock”),**and (ii) one warrant to purchase one share ofCommon Stock (subject to adjustment) at an exercise price of $2.00 per share (subject toadjustment) in the form attached hereto as Exhibit A (the “**Warrants”).**The number of Unitsthe Investor is purchasing from the Company is set forth on the Subscription Agreement executed bythe Investor and delivered with this Agreement (the **“Subscription Agreement”).**The purchase priceof the Units is $4.00 per Unit.     C. Contemporaneous with the sale of the Units, the parties hereto will execute and deliver aRegistration Rights Agreement, in the form attached hereto as Exhibit B (the “**RegistrationRights Agreement”),**pursuant to which the Company will agree to provide certain registration rightsunder the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder,and applicable state securities laws. Among other things, the Registration Rights Agreementprovides (i) that the Company shall file a registration statement under the Securities Act (the“Registration Statement”) registering the shares into which the Warrants are exercisable as soon aspossible after the Final Closing, but in no case later than 120 days after the Final Closing; (ii)the Company will use it best efforts to cause the Registration Statement to be declared effectiveas soon as possible after it is filed; and (iii) if the Company fails to file the RegistrationStatement within that time frame, or if it does not use its reasonable best efforts to have theRegistration Statement declared effective as soon as possible after it is filed, it will issue eachwarrant holder Additional Warrants equivalent to two Additional Warrants for each four Warrantsowned by the Holder. The Additional Warrants will be substantially similar to the Warrants, will beexercisable for three years at an exercise price of the lower of the market price of the CommonStock on the date the Registration Statement should have been filed (or should have been declaredeffective) or $2.00 per share.     D. This Agreement is one of several purchase agreements containing the same termsentered into by the Company and investors (the Investor executing this Agreement andinvestors
 

 
executing other Agreements are referred to herein as the “**Investors”),**pursuant to the offering(the “**Offering”)**by the Company of the Units through Bathgate Capital Partners, LLC (the“Finder”).     In consideration of the mutual promises made herein and for other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged, the partieshereto agree as follows:     1. Definitions. In addition to those terms defined above and elsewhere in thisAgreement, for the purposes of this Agreement, the following terms shall have themeanings set forth below:          “Affiliate” means, with respect to any Person, any other Person which directly orindirectly through one or more intermediaries Controls, is controlled by, or is under commoncontrol with, such Person.          “Business Day” means a day, other than a Saturday or Sunday, on which banks in SanFrancisco are open for the general transaction of business.          “Company’s Knowledge” means the actual knowledge of the executive officers (asdefined in Rule 405 under the 1933 Act) of the Company, after due inquiry.          “Confidential Information” means trade secrets, confidential information andknow-how (including but not limited to ideas, formulae, compositions, processes, procedures andtechniques, research and development information, computer program code, performancespecifications, support documentation, drawings, specifications, designs, business andmarketing plans, and customer and supplier lists and related information).          “Control” (including the terms “controlling”, “controlled by” or “under commoncontrol with”) means the possession, direct or indirect, of the power to direct or cause thedirection of the management and policies of a Person, whether through the ownership of votingSecurities, by contract or otherwise.          “Material Adverse Effect” means a material adverse effect on (i) the assets,liabilities, results of operations, condition (financial or otherwise), business, orprospects of the Company and its Subsidiaries taken as a whole, or (ii) the ability of theCompany to perform its obligations under the Transaction Documents.          “Person” means an individual, corporation, partnership, limited liability company,trust, business trust, association, joint stock company, joint venture, sole proprietorship,unincorporated organization, governmental authority or any other form of entity notspecifically listed herein.          “Purchase Price” means $4.00 per Unit.          “Registration Statement” has the meaning set forth in the Registration RightsAgreement.
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          “SEC Filings” has the meaning set forth in Section 6.6.          “Securities” means the Units, the Shares, the Warrants, and the Warrant Shares.          “Subsidiary” of any Person means another Person, an amount of the voting Securities,other voting ownership or voting partnership interests of which is sufficient to elect at least amajority of its Board of Directors or other governing body (or, if there are no such votinginterests, 50% or more of the equity interests of which) is owned directly or indirectly by suchfirst Person.          “Transaction Documents” means this Agreement, the Warrants, the SubscriptionAgreement, and the Registration Rights Agreement.          “Warrant Shares” means the shares of Common Stock issuable upon the exercise ofthe Warrants.          “1933 Act” means the Securities Act of 1933, as amended, or any successor statute,and the rules and regulations promulgated thereunder.          “1934 Act” means the Securities Exchange Act of 1934, as amended, or anysuccessor statute, and the rules and regulations promulgated thereunder.     2.Purchase and Sale of the Units. Subject to the terms and conditions ofthis Agreement, on the Closing Date (as defined below), each of the Investors shall purchase, andthe Company shall sell and issue to each Investor, the Units in the respective amounts set forthopposite the Investor’s name on the signature page of the Subscription Agreements in exchange forthe Purchase Price.     3.Escrow Account. The proceeds from the sale of at least the first 250,000Units ($1,000,000) in the Offering shall be promptly deposited in an escrow account **(**“**EscrowAccount”)**entitled “Cytocore, Inc. Escrow Account” with Front Range Bank (the “**Escrow Agent”)**pursuant to an agreement between the Escrow Agent, the Finder, and the Company. The proceeds fromany sale of Units after the First Closing (hereinafter defined) may continue to be deposited to theEscrow Account.     4. Subscription Acceptance. The acceptance of subscriptions for Units tendered byInvestors will be conditional upon (i) the tendering of Subscriptions and receipt of paymentfor such Subscriptions for at least 250,000 Units (“Minimum Subscriptions”) by February 29, 2008(which date may be extended by the Company and the Finder) to March 31, 2008)(the “**Escrow Date”)**and (ii) the receipt, on the First Closing Date, of the net proceeds from subscribers for theMinimum Subscriptions (“Minimum Payments”) less the Finder’s Fees due the Finder as describedbelow. If subscriptions are received for more than 1,750,000 Units, the Company may (i) accept onesubscription over another (ii) accept subscriptions for up to an additional 125,000 Units, and/or(iii) allocate available Units among subscribers as it deems appropriate. If the MinimumSubscriptions and/or Minimum Payments are not received by the Escrow Date, all proceeds will bereturned to Investors, without deduction and without interest.
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     5.Payment. Payment for Units sold shall be made by the Escrow Agent to theCompany at such place and at such time and date as may be fixed by agreement between the Companyand the Finder, which in no case shall be later than five (5) business days after the Escrow Date.The delivery of the Units against payment therefore is defined as the “Closing” and the time anddate thereof are defined as the “Closing Date.” The first Closing will be held when the MinimumPayments are received (“First Closing”). It is anticipated that there may be additional Closings asadditional funds are received, and the final Closing will be referred to as the “Final Closing.”The Final Closing could also be the First Closing in the event that no Units are sold after theFirst Closing. As soon as practicable after each Closing Date, the Company shall deliver by mail toeach Investor a certificate for the Shares and Warrants that have been purchased and which containsa legend conforming to the requirements of Rule 502(d)(3) under the Act.     6.Representations and Warranties of the Company. The Company herebyrepresents and warrants to the Investor that, except as set forth in the SEC Filings:          6.1 Organization, Good Standing and Qualification. Each of the Company and itsSubsidiaries is a corporation duly organized, validly existing and in good standing under the lawsof the jurisdiction of its incorporation and has all requisite corporate power and authority tocarry on its business as now conducted and to own its properties. Each of the Company and itsSubsidiaries is duly qualified to do business as a foreign corporation and is in good standing in each jurisdictionin which the conduct of its business or its ownership or leasing of property makes suchqualification or leasing necessary unless the failure to so qualify has not and could notreasonably be expected to have a Material Adverse Effect. The Company’s Subsidiaries are listed inthe SEC Filings.          6.2 Authorization. The Company has full power and authority and, except for thefiling of such securities filings relating to the offer, sale and issuance of the Securitieswith the relevant authorities, has taken all requisite action on the part of the Company, itsofficers, directors and stockholders necessary for (i) the authorization, execution and delivery ofthe Transaction Documents, (ii) the authorization of the performance of all obligations of theCompany hereunder or thereunder, and (iii) the authorization, issuance (or reservation forissuance) and delivery of the Securities. The Transaction Documents constitute the legal, valid andbinding obligations of the Company, enforceable against the Company in accordance with their terms,subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar lawsof general applicability, relating to or affecting creditors’ rights generally.          6.3 Capitalization. The capitalization of the Company is described in the SECFilings. All of the issued and outstanding shares of the Company’s capital stock have beenduly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rightsand were issued in full compliance with applicable state and federal securities law and any rightsof third parties. All of the issued and outstanding shares of capital stock of each Subsidiary havebeen duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptiverights, were issued in full compliance with applicable state and federal securities law and anyrights of third parties and are owned by the Company, beneficially and of record, subject to nolien, encumbrance or other adverse claim. No Person is entitled to pre-emptive or similar statutoryor contractual rights with respect to any securities of the Company. Except as described in the SECFilings, there are no outstanding warrants, options, convertible securities or other rights,agreements or arrangements of
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any character under which the Company or any of its Subsidiaries is or may be obligated to issueany equity securities of any kind and except as contemplated by this Agreement, and neither theCompany nor any of its Subsidiaries is currently in negotiations for the issuance of any equitysecurities of any kind. Except as described in the SEC Filings and except for the RegistrationRights Agreement, there are no voting agreements, buy-sell agreements, option or right of firstpurchase agreements or other agreements of any kind among the Company and any of thesecurityholders of the Company relating to the Securities of the Company held by them. Except asdescribed in the SEC Filings and except as provided in the Registration Rights Agreement, no Personhas the right to require the Company to register any securities of the Company under the 1933 Act,whether on a demand basis or in connection with the registration of securities of the Company forits own account or for the account of any other Person.     The issuance and sale of the Securities hereunder will not obligate the Company to issueshares of Common Stock or other securities to any other Person (other than the Investors and theFinder) and will not result in the adjustment of the exercise, conversion, exchange or resetprice of any outstanding security.     Except as described in the SEC Filings, the Company does not have outstanding stockholderpurchase rights or “poison pill” or any similar arrangement in effect giving any Person the rightto purchase any equity interest in the Company upon the occurrence of certain events.          6.4 Valid Issuance. The Securities have been duly and validly authorized and,when issued and paid for pursuant to this Agreement, will be validly issued, fully paid andnonassessable, and shall be free and clear of all encumbrances and restrictions (other than thosecreated by the Investors), except for restrictions on transfer set forth in the TransactionDocuments or imposed by applicable securities laws. The Warrants have been duly and validlyauthorized, and when issued will be valid and enforceable under their terms. Upon the due exerciseof the Warrants, the Warrant Shares will be validly issued, fully paid and non-assessable free andclear of all encumbrances and restrictions, except for restrictions on transfer set forth in theTransaction Documents or imposed by applicable securities laws and except for those created by theInvestors. The Company has reserved a sufficient number of shares of Common Stock for issuance uponthe exercise of the Warrants, free and clear of all encumbrances and restrictions, except forrestrictions on transfer set forth in the Transaction Documents or imposed by applicable securitieslaws and except for those created by the Investors.          6.5 Consents. The execution, delivery and performance by the Company of theTransaction Documents and the offer, issuance and sale of the Securities require no consentof, action by or in respect of, or filing with, any Person, governmental body, agency, or officialother than filings that have been made pursuant to applicable state securities laws and post-salefilings pursuant to applicable state and federal securities laws, which the Company undertakes tofile within the applicable time periods. Subject to the accuracy of the representations andwarranties of each Investor set forth in Subscription Agreements, the Company has taken all actionnecessary to exempt (i) the issuance and sale of the Securities, (ii) the issuance of the WarrantShares upon due exercise of the Warrants, and (iii) the other transactions contemplated by theTransaction Documents from the provisions of any stockholder rights plan or other “poison pill”arrangement, any anti-takeover, business combination or control share law or statute binding on theCompany or to which the
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Company or any of its assets and properties may be subject and any provision of the Company’sCertificate of Incorporation or By-laws that is or could reasonably be expected to becomeapplicable to the Investors as a result of the transactions contemplated hereby, including withoutlimitation, the issuance of the Securities and the ownership, disposition or voting of theSecurities by the Investors or the exercise of any right granted to the Investors pursuant to thisAgreement or the other Transaction Documents.          6.6 Delivery of SEC Filings; Business. The Company has made available to theInvestors through the EDGAR system, true and complete copies of the Company’s most recentAnnual Report on Form 10-K for the fiscal year ended December 31, 2006 (the “**10-K”),**and all otherreports filed by the Company pursuant to the 1934 Act since the filing of the 10-K and prior to thedate hereof (collectively, the “**SEC Filings”).**The SEC Filings are the only filings required of theCompany pursuant to the 1934 Act for such period. The Company and its Subsidiaries are engaged inall material respects only in the business described in the SEC Filings and the SEC Filings containa complete and accurate description in all material respects of the business of the Company and itsSubsidiaries, taken as a whole.          6.7 Use of Proceeds. The net proceeds of the sale of the Units hereunder shall beused by the Company for working capital and general corporate purposes.          6.8 No Material Adverse Change. Since September 30, 2007, except as identifiedand described in the SEC Filings, there has not been:               (i) any change in the consolidated assets, liabilities, financial condition or operatingresults of the Company from that reflected in the financial statements included in the Company’sQuarterly Report on Form 10-Q for the quarter ended September 30, 2007, except for changes in theordinary course of business which have not had and could not reasonably be expected to have aMaterial Adverse Effect, individually or in the aggregate;               (ii) any declaration or payment of any dividend, or any authorization or payment of anydistribution, on any of the capital stock of the Company, or any redemption or repurchase of anysecurities of the Company;               (iii) any material damage, destruction or loss, whether or not covered by insurance to anyassets or properties of the Company or its Subsidiaries;               (iv) any waiver, not in the ordinary course of business, by the Company or any Subsidiary of amaterial right or of a material debt owed to it;               (v) any satisfaction or discharge of any lien, claim or encumbrance or payment of anyobligation by the Company or a Subsidiary, except in the ordinary course of business and which isnot material to the assets, properties, financial condition, operating results or business of theCompany and its Subsidiaries taken as a whole (as such business is presently conducted and as itis proposed to be conducted);               (vi) any change or amendment to the Company’s Certificate of Incorporation or Bylaws, ormaterial change to any material contract or arrangement by which the
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Company or any Subsidiary is bound or to which any of their respective assets or propertiesis subject;               (vii) any material labor difficulties or labor union organizing activities with respect toemployees of the Company or any Subsidiary;               (viii) any material transaction entered into by the Company or a Subsidiary other than in theordinary course of business;               (ix) the loss of the services of any key employee, or material change in the composition orduties of the senior management of the Company or any Subsidiary;               (x) the loss or threatened loss of any customer which has had or could reasonably beexpected to have a Material Adverse Effect; or               (xi) any other event or condition of any character that has had or couldreasonably be expected to have a Material Adverse Effect.          6.9SEC Filings. At the time of filing thereof, the SEC Filings complied as toform in all material respects with the requirements of the 1934 Act and did not contain anyuntrue statement of a material fact or omit to state any material fact necessary in order tomake the statements made therein, in the light of the circumstances under which they were made,not misleading.          6.10 No Conflict, Breach, Violation or Default. The execution, delivery andperformance of the Transaction Documents by the Company and the issuance and sale of theSecurities will not conflict with or result in a breach or violation of any of the terms andprovisions of, or constitute a default under (i) the Company’s Certificate of Incorporation or theCompany’s Bylaws, both as in effect on the date hereof (true and complete copies of which have beenmade available to the Investors through the EDGAR system), or (ii)(a) any statute, rule, regulationor order of any governmental agency or body or any court, domestic or foreign, having jurisdictionover the Company, any Subsidiary or any of their respective assets or properties, or (b) anyagreement or instrument to which the Company or any Subsidiary is a party or by which the Companyor a Subsidiary is bound or to which any of their respective assets or properties is subject.          6.11 Tax Matters. Except as described in the SEC Filings: the Company and eachSubsidiary has timely prepared and filed all tax returns required to have been filed by theCompany or such Subsidiary with all appropriate governmental agencies and timely paid all taxesshown thereon or otherwise owed by it; the charges, accruals and reserves on the books of theCompany in respect of taxes for all fiscal periods are adequate in all material respects, and thereare no material unpaid assessments against the Company or any Subsidiary nor, to the Company’sKnowledge, any basis for the assessment of any additional taxes, penalties or interest for anyfiscal period or audits by any federal, state or local taxing authority except for any assessmentwhich is not material to the Company and its Subsidiaries, taken as a whole; all taxes and otherassessments and levies that the Company or any Subsidiary is required to withhold or to collect forpayment have been duly withheld and collected and paid to the proper governmental entity or thirdparty when due; and there
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are no tax liens or claims pending or, to the Company’s Knowledge, threatened against the Companyor any Subsidiary or any of their respective assets or property. There are no outstanding taxsharing agreements or other such arrangements between the Company and any Subsidiary or othercorporation or entity.          6.12 Title to Properties. Except as disclosed in the SEC Filings, the Company and eachSubsidiary has good and marketable title to all real properties and all other properties and assetsowned by it, in each case free from liens, encumbrances and defects that would materially affectthe value thereof or materially interfere with the use made or currently planned to be made thereofby them; and except as disclosed in the SEC Filings, the Company and each Subsidiary holds anyleased real or personal property under valid and enforceable leases with no exceptions that wouldmaterially interfere with the use made or currently planned to be made thereof by them.          6.13 Certificates, Authorities and Permits. The Company and each Subsidiary possessadequate certificates, authorities or permits issued by appropriate governmental agencies or bodiesnecessary to conduct the business now operated by it, and neither the Company nor any Subsidiaryhas received any notice of proceedings relating to the revocation or modification of any suchcertificate, authority or permit that, if determined adversely to the Company or such Subsidiary,could reasonably be expected to have a Material Adverse Effect, individually or in the aggregate.          6.14 Labor Matters.               (a) The Company is not a party to or bound by any collective bargaining agreements or otheragreements with labor organizations. The Company has not violated in any material respect anylaws, regulations, orders or contract terms, affecting the collective bargaining rights ofemployees, labor organizations or any laws, regulations or orders affecting employmentdiscrimination, equal opportunity employment, or employees’ health, safety, welfare, wages andhours.               (b) (i) There are no labor disputes existing, or to the Company’s Knowledge, threatened,involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts or any otherdisruptions of or by the Company’s employees, (ii) there are no unfair labor practices or petitionsfor election pending or, to the Company’s Knowledge, threatened before the National Labor RelationsBoard or any other federal, state or local labor commission relating to the Company’s employees,(iii) no demand for recognition or certification heretofore made by any labor organization or groupof employees is pending with respect to the Company and (iv) to the Company’s Knowledge, theCompany enjoys good labor and employee relations with its employees and labor organizations.               (c) The Company is in compliance in all material respects with all applicable laws respecting employment (including laws relating to classification of employeesand independent contractors) and employment practices, terms and conditions of employment, wagesand hours, and immigration and naturalization. There no claims are pending against the Companybefore the Equal Employment Opportunity Commission or any other administrative body or in any courtasserting any violation of Title VII of the Civil Rights Act of 1964, the Age Discrimination Act
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of 1967, 42 U.S.C. §§ 1981 or 1983 or any other federal, state or local Law, statute orordinance barring discrimination in employment.               (d) Except as disclosed in the SEC Filings, the Company is not a party to, or bound by, anyemployment or other contract or agreement that contains any severance, termination pay or changeof control liability or obligation, including, without limitation, any “excess parachute payment,”as defined in Section 2806(b) of the Internal Revenue Code.               (e) Each of the Company’s employees is a Person who is either a United States citizen or apermanent resident entitled to work in the United States. To the Company’s Knowledge, the Companyhas no liability for the improper classification by the Company of such employees as independentcontractors or leased employees prior to the Closing.          6.15 Environmental Matters. Neither the Company nor any Subsidiary is in violation ofany statute, rule, regulation, decision or order of any governmental agency or body or any court,domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances orrelating to the protection or restoration of the environment or human exposure to hazardous ortoxic substances (collectively, “**Environmental Laws”),**owns or operates any real propertycontaminated with any substance that is subject to any Environmental Laws, is liable for anyoff-site disposal or contamination pursuant to any Environmental Laws, or is subject to any claimrelating to any Environmental Laws, which violation, contamination, liability or claim has had orcould reasonably be expected to have a Material Adverse Effect, individually or in the aggregate;and there is no pending or, to the Company’s Knowledge, threatened investigation that might lead tosuch a claim.          6.16 Litigation. Except as disclosed in the SEC Filings, there are no pending actions,suits or proceedings against or affecting the Company, its Subsidiaries or any of its or theirproperties; and to the Company’s Knowledge, no such actions, suits or proceedings are threatened orcontemplated.          6.17 Financial Statements. The financial statements included in each SEC Filingpresent fairly, in all material respects, the consolidated financial position of the Company as ofthe dates shown and its consolidated results of operations and cash flows for the periods shown,and such financial statements have been prepared in conformity with United States generallyaccepted accounting principles applied on a consistent basis **(**“**GAAP”)**(except as may be disclosedtherein or in the notes thereto, and, in the case of quarterly financial statements, as permittedby Form 10-Q under the 1934 Act). Except as set forth in the financial statements of the Companyincluded in the SEC Filings filed prior to the date hereof, neither the Company nor any of itsSubsidiaries has incurred any liabilities, contingent or otherwise, except those incurred in theordinary course of business, consistent (as to amount and nature) with past practices since thedate of such financial statements, none of which, individually or in the aggregate, have had orcould reasonably be expected to have a Material Adverse Effect.          6.18 Insurance Coverage. The Company and each Subsidiary maintains in full force andeffect insurance coverage that is customary for comparably situated companies for the businessbeing conducted and properties owned or leased by the Company and each Subsidiary, and
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the Company reasonably believes such insurance coverage to be adequate against allliabilities, claims and risks against which it is customary for comparably situated companiesto insure.          6.19 Brokers and Finders. Except for the Finder, no Person will have, as a result ofthe transactions contemplated by the Transaction Documents, any valid right, interest or claimagainst or upon the Company, any Subsidiary or an Investor for any commission, fee or othercompensation pursuant to any agreement, arrangement or understanding entered into by or on behalfof the Company.          6.20 No Directed Selling Efforts or General Solicitation. Neither the Company nor anyPerson acting on its behalf has conducted any general solicitation or general advertising (as thoseterms are used in Regulation D) in connection with the offer or sale of any of the Securities.          6.21 No Integrated Offering. Neither the Company nor any of its Affiliates, nor anyPerson acting on its or their behalf has, directly or indirectly, made any offers or sales of anyCompany security or solicited any offers to buy any security, under circumstances that wouldadversely affect reliance by the Company on Section 4(2) for the exemption from registration forthe transactions contemplated hereby or would require registration of the Securities under the 1933Act.          6.22 Private Placement. The offer and sale of the Securities to the Investors ascontemplated hereby is exempt from the registration requirements of the 1933 Act.          6.23 Questionable Payments. Neither the Company nor any of its Subsidiaries nor, tothe Company’s Knowledge, any of their respective current or former stockholders, directors,officers, employees, agents or other Persons acting on behalf of the Company or any Subsidiary, hason behalf of the Company or any Subsidiary or in connection with their respective businesses: (a)used any corporate funds for unlawful contributions, gifts, entertainment or other unlawfulexpenses relating to political activity; (b) made any direct or indirect unlawful payments to anygovernmental officials or employees from corporate funds; (c) established or maintained anyunlawful or unrecorded fund of corporate monies or other assets; (d) made any false or fictitiousentries on the books and records of the Company or any Subsidiary; or (e) made any unlawful bribe,rebate, payoff, influence payment, kickback or other unlawful payment of any nature.          6.24 Transactions with Affiliates. Except as disclosed in the SEC Filings, none ofthe officers or directors of the Company and, to the Company’s Knowledge, none of the employees ofthe Company is presently a party to any transaction with the Company or any Subsidiary (other thanas holders of stock options and/or warrants, and for services as employees, officers anddirectors), including any contract, agreement or other arrangement providing for the furnishing ofservices to or by, providing for rental of real or personal property to or from, or otherwiserequiring payments to or from any officer, director or such employee or, to the Company’sKnowledge, any entity in which any officer, director, or any such employee has a substantialinterest or is an officer, director, trustee or partner.          6.25 Internal Controls. Except as described in the SEC Filings: the Company is inmaterial compliance with the provisions of the Sarbanes-Oxley Act of 2002 currently applicable tothe Company; the Company and the Subsidiaries maintain a system of internal accounting controls
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sufficient to provide reasonable assurance that (i) transactions are executed in accordance withmanagement’s general or specific authorizations, (ii) transactions are recorded as necessary topermit preparation of financial statements in conformity with GAAP and to maintain assetaccountability, (iii) access to assets is permitted only in accordance with management’s general orspecific authorization, and (iv) the recorded accountability for assets is compared with theexisting assets at reasonable intervals and appropriate action is taken with respect to anydifferences; and, the Company has established disclosure controls and procedures (as defined in1934 Act Rules 13a-14 and 15d-14) for the Company and designed such disclosure controls andprocedures to ensure that material information relating to the Company, including the Subsidiaries,is made known to the certifying officers by others within those entities, particularly during theperiod in which the Company’s most recently filed period report under the 1934 Act, as the case maybe, is being prepared. The Company maintains and will continue to maintain a standard system ofaccounting established and administered in accordance with GAAP and the applicable requirements ofthe 1934 Act.          6.26 Disclosures. Neither the Company nor any Person acting on its behalf hasprovided the Investors or their agents or counsel with any information that constitutes ormight constitute material, non-public information. The written materials delivered to theInvestors in connection with the transactions contemplated by the Transaction Documents do notcontain any untrue statement of a material fact or omit to state a material fact necessary inorder to make the statements contained therein, in light of the circumstances under which theywere made, not misleading.     7.Representations and Warranties of the Investors. The Investor herebyrepresents and warrants to the Company that representations and warranties it has made in theSubscription Agreement are accurate. Those representations are incorporated by reference herein.     8.Conditions to Closing.          8.1 Conditions to the Investor’ Obligations. The obligation of the Investor topurchase the Units at the Closing is subject to the fulfillment to such Investor’ssatisfaction, on or prior to the Closing Date, of the following conditions, any of which may bewaived by such Investor (as to itself only):               (a) The representations and warranties made by the Company in Section 6hereof qualified as to materiality shall be true and correct at all times prior to and on theClosing Date, except to the extent any such representation or warranty expressly speaks as of anearlier date, in which case such representation or warranty shall be true and correct as of suchearlier date, and, the representations and warranties made by the Company in Section 6 hereof notqualified as to materiality shall be true and correct in all material respects at all times priorto and on the Closing Date, except to the extent any such representation or warranty expresslyspeaks as of an earlier date, in which case such representation or warranty shall be true andcorrect in all material respects as of such earlier date. The Company shall have performed in allmaterial respects all obligations and conditions herein required to be performed or observed by iton or prior to the Closing Date.
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               (b) The Company shall have obtained any and all consents, permits, approvals, registrationsand waivers necessary or appropriate for consummation of the purchase and sale of the Shares andthe Warrants and the consummation of the other transactions contemplated by the TransactionDocuments to be consummated on or prior to the Closing Date, all of which shall be in full forceand effect.               (c) The Company shall have executed and delivered the Registration Rights Agreement.               (d) No judgment, writ, order, injunction, award or decree of or by any court, or judge,justice or magistrate, including any bankruptcy court or judge, or any order of or by anygovernmental authority, shall have been issued, and no action or proceeding shall have beeninstituted by any governmental authority, enjoining or preventing the consummation of thetransactions contemplated hereby or in the other Transaction Documents.               (e) The Company shall have delivered a Certificate, executed on behalf of the Company by itsChief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying tothe fulfillment of the conditions specified in subsections (a), (b), (d), (e) and (g) of thisSection 8.1.               (f) The Company shall have delivered a Certificate, executed on behalf of the Company by itsSecretary, dated as of the Closing Date, certifying the resolutions adopted by the Board ofDirectors of the Company approving the transactions contemplated by this Agreement and the otherTransaction Documents, and the issuance of the Securities, certifying the current versions of theCertificate of Incorporation and Bylaws of the Company and certifying as to the signatures andauthority of Persons signing the Transaction Documents and related documents on behalf of theCompany.               (g) No stop order or suspension of trading shall have been imposed by the SEC or any othergovernmental or regulatory body with respect to public trading in the Common Stock.          8.2 Conditions to Obligations of the Company. The Company’s obligation to selland issue the Shares and the Warrants at the Closing is subject to the fulfillment to thesatisfaction of the Company on or prior to the Closing Date of the following conditions, any ofwhich may be waived by the Company:               (a) The representations and warranties made by the Investors in the Subscription Agreementsshall be true and correct in all material respects when made, and shall be true and correct in allmaterial respects on the Closing Date with the same force and effect as if they had been made onand as of said date. The Investors shall have performed in all material respects all obligationsand conditions herein required to be performed or observed by them on or prior to the Closing Date.               (b) The Investors shall have executed and delivered the Registration Rights Agreement.
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               (c) The Investors shall have delivered the Purchase Price to the Company.          8.3 Termination of Obligations to Effect Closing; Effects. The obligations of theCompany, on the one hand, and the Investors, on the other hand, to effect the Closing shallterminate as follows:               (i) Upon the mutual written consent of the Company and the Investors;               (ii) By the Company if any of the conditions set forth in Section 8.2 shall have becomeincapable of fulfillment, and shall not have been waived by the Company; or               (iii) By an Investor (with respect to itself only) if any of the conditions setforth in Section 6.1 shall have become incapable of fulfillment, and shall not have beenwaived by the Investor;*provided, however,*that, except in the case of clause (i) above, the party seeking to terminateits obligation to effect the Closing shall not then be in breach of any of its representations,warranties, covenants or agreements contained in this Agreement or the other TransactionDocuments if such breach has resulted in the circumstances giving rise to such party’s seekingto terminate its obligation to effect the Closing.     9. Covenants and Agreements of the Company.          9.1 Reservation of Common Stock. The Company shall at all times reserve andkeep available out of its authorized but unissued shares of Common Stock, solely for thepurpose of providing for the exercise of the Warrants, such number of shares of Common Stock asshall from time to time equal the number of shares sufficient to permit the exercise of theWarrants issued pursuant to this Agreement in accordance with their respective terms.          9.2 No Conflicting Agreements. The Company will not take any action, enter into anyagreement or make any commitment that would conflict or interfere in any material respect with theCompany’s obligations to the Investors under the Transaction Documents.          9.3 Listing of Underlying Shares and Related Matters. If the Company applies tohave its Common Stock or other securities traded on any stock exchange or market, it shallinclude in such application the Shares and the Warrant Shares and will take such other action as isnecessary to cause such Common Stock to be so listed.          9.4 Removal of Legends. Upon the earlier of (i) (A) the registration for resalepursuant to the Registration Rights Agreement and (B) receipt of a written certification froman Investor that Shares have been sold in accordance with the Plan of Distribution contained in theRegistration Statement and that such Investor has delivered or intends to deliver a currentprospectus in compliance with the prospectus delivery requirements of the 1933 Act or (ii) Rule144(k) becoming available the Company shall, upon an Investor’s written request, promptly causecertificates evidencing the Shares sold (in the case of clause (i)) or the Investor’s Securities(in the case of clause (ii)) to be replaced with certificates which do not bear such restrictivelegends, and Warrant Shares subsequently issued upon due exercise of the Warrants shall not bearsuch restrictive
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legends provided the provisions of either clause (i) or clause (ii) above, as applicable, aresatisfied with respect to such Warrant Shares.     10.Survival and Indemnification.          10.1 Survival. The representations, warranties, covenants and agreementscontained in this Agreement shall survive the Closing of the transactions contemplated bythis Agreement for one year after the Closing.          10.2 Indemnification. The Company agrees to indemnify and hold harmless each Investorand its Affiliates and their respective directors, officers, employees and agents from and againstany and all losses, claims, damages, liabilities and expenses (including without limitationreasonable attorney fees and disbursements and other expenses incurred in connection withinvestigating, preparing or defending any action, claim or proceeding, pending or threatened andthe costs of enforcement thereof) (collectively, “**Losses”)**to which such Person may become subjectas a result of any breach of representation, warranty, covenant or agreement made by or to beperformed on the part of the Company under the Transaction Documents, and will reimburse any suchPerson for all such amounts as they are incurred by such Person.          10.3 Conduct of Indemnification Proceedings. Promptly after receipt by any Person (the“**Indemnified Person”)**of notice of any demand, claim or circumstances which would or might giverise to a claim or the commencement of any action, proceeding or investigation in respect of whichindemnity may be sought pursuant to Section 10.2, such Indemnified Person shall promptly notify theCompany in writing and the Company shall assume the defense thereof, including the employment ofcounsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of allfees and expenses; provided, however, that the failure of any Indemnified Person so to notify theCompany shall not relieve the Company of its obligations hereunder except to the extent that theCompany is materially prejudiced by such failure to notify. In any such proceeding, any IndemnifiedPerson shall have the right to retain its own counsel, but the fees and expenses of such counselshall be at the expense of such Indemnified Person unless: (i) the Company and the IndemnifiedPerson shall have mutually agreed to the retention of such counsel; or (ii) in the reasonablejudgment of counsel to such Indemnified Person representation of both parties by the same counselwould be inappropriate due to actual or potential differing interests between them. The Companyshall not be liable for any settlement of any proceeding effected without its written consent,which consent shall not be unreasonably withheld, but if settled with such consent, or if there bea final judgment for the plaintiff, the Company shall indemnify and hold harmless such IndemnifiedPerson from and against any loss or liability (to the extent stated above) by reason of suchsettlement or judgment. Without the prior written consent of the Indemnified Person, which consentshall not be unreasonably withheld, the Company shall not effect any settlement of any pending orthreatened proceeding in respect of which any Indemnified Person is or could have been a party andindemnity could have been sought hereunder by such Indemnified Party, unless such settlementincludes an unconditional release of such Indemnified Person from all liability arising out of suchproceeding.     11.Miscellaneous.
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          11.1 Successors and Assigns. This Agreement may not be assigned by a party heretowithout the prior written consent of the Company or the Investor, as applicable, provided, however,that (i) an Investor may assign its rights and delegate its duties hereunder in whole or in part toan Affiliate or to a third party acquiring some or all of its Securities in a private transactionwithout the prior written consent of the Company or the other Investors, after notice duly given bysuch Investor to the Company provided, that no such assignment or obligation shall affect theobligations of such Investor hereunder, and (ii) the Company may assign its rights and delegate itsduties hereunder to any surviving or successor corporation in connection with a merger orconsolidation of the Company with another corporation, or a sale, transfer or other disposition ofall or substantially all of the Company’s assets to another corporation, without the prior writtenconsent of the Investors. The provisions of this Agreement shall inure to the benefit of and bebinding upon the respective permitted successors and assigns of the parties. Nothing in thisAgreement, express or implied, is intended to confer upon any party other than the parties heretoor their respective successors and assigns any rights, remedies, obligations, or liabilities underor by reason of this Agreement, except as expressly provided in this Agreement.          11.2 Counterparts; Faxes. This Agreement may be executed in two or morecounterparts, each of which shall be deemed an original, but all of which together shallconstitute one and the same instrument. This Agreement may also be executed via facsimile, whichshall be deemed an original.          11.3 Titles and Subtitles. The titles and subtitles used in this Agreement are usedfor convenience only and are not to be considered in construing or interpreting this Agreement.          11.4 Notices. Unless otherwise provided, any notice required or permitted under thisAgreement shall be given in writing and shall be deemed effectively given as hereinafter described(i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii)if given by telex or telecopier, then such notice shall be deemed given upon receipt ofconfirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemedgiven upon the earlier of (A) receipt of such notice by the recipient or (B) three days after suchnotice is deposited in first class mail, postage prepaid, and (iv) if given by an internationallyrecognized overnight air courier, then such notice shall be deemed given one Business Day afterdelivery to such carrier. All notices shall be addressed to the party to be notified at the addressas follows, or at such other address as such party may designate by ten days’ advance writtennotice to the other party:     If to the Company:Cytocore, Inc.