Exhibit
10.1

    


    EXECUTION
COPY

    PURCHASE
AGREEMENT

    


    PURCHASE AGREEMENT (the
“Agreement”), dated as of June 2, 2010, by and between BIO-PATH HOLDINGS, INC., a
Utah corporation, (the “Company”), and LINCOLN PARK CAPITAL FUND,
LLC, an Illinois limited liability company (the “Investor”).

    


    WHEREAS:

    Subject
to the terms and conditions set forth in this Agreement, the Company wishes to
sell to the Investor, and the Investor wishes to buy from the Company, up to
Seven Million Dollars ($7,000,000) of the Company's common stock, $0.001 par
value  per share (the "Common Stock"). The shares of Common Stock to
be purchased hereunder are referred to herein as the "Purchase Shares;"
provided,  however, the term “Purchase Shares” shall not include
Commitment Shares or Warrant Shares (each of which is defined
herein).

    NOW
THEREFORE, the Company and the Investor hereby agree as follows:

    1.           CERTAIN
DEFINITIONS.

    


    For
purposes of this Agreement, the following terms shall have the following
meanings:

    


    (a)          “Accelerated
Purchase Notice” shall mean an irrevocable written notice from the Company to
the Investor directing the Investor to buy such Accelerated Purchase Amount in
Purchase Shares as specified by the Company therein on the Purchase
Date.

    


    (b)         
“Available Amount” means initially Seven Million Dollars ($7,000,000) in the
aggregate which amount shall be reduced by the Purchase Amount each time the
Investor purchases shares of Common Stock pursuant to Section 2
hereof.

    


    (c)          “Bankruptcy
Law” means Title 11, U.S. Code, or any similar federal or state law for the
relief of debtors.

    


    (d)          “Business
Day” means any day on which the Principal Market is open for trading including
any day on which the Principal Market is open for trading for a period of time
less than the customary time.

    


    (e)          “Closing
Sale Price” means, for any security as of any date, the last closing trade price
for such security on the Principal Market as reported by the Principal Market,
or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing trade price of such security on the
principal securities exchange or trading market where such security is listed or
traded as reported by the Principal Market.

    


    (f)           “Confidential
Information” means any information disclosed by either party to the other party,
either directly or indirectly, in writing, orally or by inspection of tangible
objects (including, without limitation, documents, prototypes, samples, plant
and equipment), which is designated as "Confidential," "Proprietary" or some
similar designation. Information communicated orally shall be considered
Confidential Information if such information is confirmed in writing as being
Confidential Information within ten (10) Business Days after the initial
disclosure. Confidential Information may also include information disclosed to a
receiving party by third parties on behalf of such disclosing party.
Confidential Information shall not, however, include any information which (i)
was publicly known and made generally available in the public domain prior to
the time of disclosure by the disclosing party; (ii) becomes publicly known and
made generally available after disclosure by the disclosing party to the
receiving party through no action or inaction of the receiving party; (iii) is
already in the possession of the receiving party at the time of disclosure by
the disclosing party as shown by the receiving party’s files and records
immediately prior to the time of disclosure; (iv) is obtained by the receiving
party from a third party without a breach of such third party’s obligations of
confidentiality; (v) is independently developed by the receiving party without
use of or reference to the disclosing party’s Confidential Information, as shown
by documents and other competent evidence in the receiving party’s possession;
or (vi) is required by law to be disclosed by the receiving party, provided that
the receiving party gives the disclosing party prompt written notice of such
requirement prior to such disclosure and, to the extent reasonably requested by
disclosing party, assistance in obtaining an order protecting the information
from public disclosure.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (g)          “Custodian”
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.

    


    (h)          “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

    


    (i)           “Maturity
Date” means the date that is 480 Business Days (24 Monthly Periods) from the
Commencement Date.

    


    (j)           “Monthly
Period” means each successive 20 Business Day period commencing with the
Commencement Date.

    


    (k)          “Person”
means an individual or entity including but not limited to any limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.

    


    (l)           “Principal
Market” means the OTC Bulletin Board; provided however, that in the event the
Company’s Common Stock is ever listed or traded on the Nasdaq Global Market, the
Nasdaq Global Select Market, the Nasdaq Capital Market, the New York Stock
Exchange, or the NYSE Amex, , then the “Principal Market” shall mean such other
market or exchange on which the Company’s Common Stock is then listed or
traded.

    


    (m)         “Purchase
Amount” means, with respect to any particular purchase made hereunder, the
portion of the Available Amount to be purchased by the Investor pursuant to
Section 2 hereof.

    


    (n)          “Purchase
Date” means with respect to any particular purchase made hereunder, the Business
Day on which the Investor receives by 10:00 a.m. eastern time of such Business
Day a valid Regular Purchase Notice or a valid Accelerated Purchase Notice that
the Investor is to buy Purchase Shares pursuant to Section 2
hereof.

    


    (o)  
       “Purchase Price” means the lower of the (A)
the lowest Sale Price of the Common Stock on the Purchase Date and (B) the
arithmetic average of the three (3) lowest Closing Sale Prices for the Common
Stock during the twelve (12) consecutive Business Days ending on the Business
Day immediately preceding such Purchase Date (to be appropriately adjusted for
any reorganization, recapitalization, non-cash dividend, stock split, reverse
stock split or other similar transaction).

    


    (p)          “Regular
Purchase Notice” shall mean an irrevocable written notice from the Company to
the Investor directing the Investor to buy such Regular Purchase Amount in
Purchase Shares as specified by the Company therein on the Purchase
Date.

    


    (q)          “Sale
Price” means any trade price for the shares of Common Stock on the Principal
Market as reported by the Principal Market.

    


    (r)           “SEC”
means the United States Securities and Exchange Commission.

    


    (s)          “Securities
Act” means the Securities Act of 1933, as amended.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (t)           “Transfer
Agent” means the transfer agent of the Company as set forth in Section 11(f)
hereof or such other person who is then serving as the transfer agent for the
Company in respect of the Common Stock.

    


    2.  PURCHASE OF COMMON
STOCK.

    Subject
to the terms and conditions set forth in this Agreement, the Company has the
right to sell to the Investor, and the Investor has the obligation to purchase
from the Company, Purchase Shares as follows:

    (a)       Initial Purchase and
Commencement of Regular Sales of Common Stock. Upon execution of this
Agreement, the Company shall sell to the Investor and the Investor shall
purchase 571,429 Purchase Shares (such initial Purchase Shares, the “Initial
Purchase Shares”) together with warrants (the “Warrants”) to purchase 571,429
shares (“Warrant Shares”) of Common Stock, for aggregate consideration of
$200,000.  The Warrants shall have a term of two (2) years from the
date they are exercisable, an exercise price of $1.50 per share and shall be in
the form of Exhibit F hereto.  Upon the satisfaction of the conditions
set forth in Sections 7 and 8 hereof (the “Commencement” and the date of
satisfaction of such conditions the “Commencement Date”) the Investor shall
purchase 375,000 Purchase Shares for aggregate consideration of
$150,000.  Thereafter, the Company shall have the right but not the
obligation to direct the Investor by its delivery to the Investor of a Regular
Purchase Notice from time to time to buy Purchase Shares (each such purchase a
“Regular Purchase”) in any amount up to Fifty Thousand Dollars ($50,000.00) per
Regular Purchase Notice (the “Regular Purchase Amount”) at the Purchase Price on
the Purchase Date.  The Company may deliver multiple Regular Purchase
Notices to the Investor so long as at least three (3) Business Days have passed
since the most recent Regular Purchase was completed.

    


    (b)           Accelerated
Purchases.   At any time on or after the Commencement
Date, the Company shall also have the right to direct the Investor to buy
Purchase Shares (each such purchase an “Accelerated Purchase”) in the amounts
specified in this Section 2(b) per Accelerated Purchase Notice (the “Accelerated
Purchase Amount”) at the Accelerated Purchase Price on the Purchase Date by
delivering to the Investor Accelerated Purchase Notices as
follows:  the Accelerated Purchase Amount may be up to Seventy Five
Thousand Dollars ($75,000.00) per Accelerated Purchase Notice provided that the
Closing Sale Price of the Common Stock must not be below $0.40 (subject to
equitable adjustment for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar transaction) on the
Purchase Date.  The Accelerated Purchase Amount may be increased to up
to One Hundred Thousand Dollars ($100,000.00) per Accelerated Purchase Notice if
the Closing Sale Price of the Common Stock is not below $0.50 (subject to
equitable adjustment for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar transaction) on the
Purchase Date.  The Accelerated Purchase Amount may be increased to up
to Two Hundred Fifty Thousand Dollars ($250,000.00) per Accelerated Purchase
Notice if the Closing Sale Price of the Common Stock is not below $0.70 (subject
to equitable adjustment for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar transaction) on the
Purchase Date.  The Accelerated Purchase Amount may be increased to up
to Five Hundred Thousand Dollars ($500,000.00) per Accelerated Purchase Notice
if the Closing Sale Price of the Common Stock is not below $1.00 (subject to
equitable adjustment for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar transaction) on the
Purchase Date.  The Accelerated Purchase Amount may be increased to up
to One Million Dollars ($1,000,000.00) per Accelerated Purchase Notice if the
Closing Sale Price of the Common Stock is not below $2.30 (subject to equitable
adjustment for any reorganization, recapitalization, non-cash dividend, stock
split, reverse stock split or other similar transaction) on the Purchase Date.
With respect to each such Accelerated Purchase, the Company must deliver the
Purchase Shares before 1:00 p.m. eastern time on the Business Day following the
Purchase Date.  As used herein, the term “Accelerated Purchase Price”
shall mean the lesser of (i) the lowest Sale Price of the Common Stock on the
Purchase Date or (ii) the lowest Purchase Price during the previous ten (10)
Business Days prior to the date that the valid Accelerated Purchase Notice was
received by the Investor.  However, if on any Purchase Date the
Closing Sale Price of the Common Stock is below the applicable Accelerated
Purchase threshold price, such Accelerated Purchase shall be void and the
Investor’s obligations to buy Purchase Shares in respect of that Accelerated
Purchase Notice shall be terminated.  Thereafter, the Company shall
again have the right to submit an Accelerated Purchase Notice as set forth
herein by delivery of a new Accelerated Purchase Notice only if the Closing Sale
Price of the Common Stock is at or above the applicable Accelerated Purchase
Amount threshold price on the date of the delivery of the Accelerated Purchase
Notice.  The Company may deliver multiple Accelerated Purchase Notices
to the Investor so long as at least three (3) Business Days have passed since
the most recent Accelerated Purchase was completed.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (c)   
     Payment for Purchase
Shares.   The Investor shall pay to the Company an amount
equal to the Purchase Amount with respect to such Purchase Shares as full
payment for such Purchase Shares via wire transfer of immediately available
funds on the same Business Day that the Investor receives such Purchase Shares
if they are received by the Investor before 1:00 p.m. eastern time or if
received by the Investor after 1:00 p.m. eastern time, the next Business Day.
The Company shall not issue any fraction of a share of Common Stock upon any
purchase. If the issuance would result in the issuance of a fraction of a share
of Common Stock, the Company shall round such fraction of a share of Common
Stock up or down to the nearest whole share. All payments made under this
Agreement shall be made in lawful money of the United States of America or wire
transfer of immediately available funds to such account as the Company may from
time to time designate by written notice in accordance with the provisions of
this Agreement. Whenever any amount expressed to be due by the terms of this
Agreement is due on any day that is not a Business Day, the same shall instead
be due on the next succeeding day that is a Business Day.

    (d)     
  Purchase
Price Floor.   The Company and the Investor shall not
effect any sales and purchases under this Agreement on any Purchase Date where
the Purchase Price for any purchases of Purchase Shares would be less than the
Floor Price. "Floor Price" means $0.20, which shall be appropriately adjusted
for any reorganization, recapitalization, non-cash dividend, stock split,
reverse stock split or other similar transaction.

    


    3.           INVESTOR'S
REPRESENTATIONS AND WARRANTIES.

    


    The
Investor represents and warrants to the Company that as of the date hereof and
as of the Commencement Date:

    


    (a)          Investment
Purpose.   The Investor is acquiring the Purchase Shares
and Commitment Shares (“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, has no present intention of distributing any of such Securities in
violation of the Securities Act or any applicable state securities law and 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 the Investor’s right to sell the Securities at any time
pursuant to the registration statement described herein or otherwise in
compliance with applicable federal and state securities laws and with respect to
the Commitment Shares, subject to Section 5(e) hereof).  The Investor
is acquiring the Securities hereunder in the ordinary course of its
business.

    


    (b)          Accredited Investor
Status.  The Investor is an "accredited investor" as that term
is defined in Rule 501(a)(3) of Regulation D.

    


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


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (d)          Information.  The
Investor has been furnished with all materials relating to the business,
finances and operations of the Company and materials relating to the offer and
sales of the Securities that have been reasonably requested by the
Investor.  The Investor understands that its investment in the
Securities involves a high degree of risk.  The Investor (i) is able
to bear the economic risk of an investment in the Securities including a total
loss of its investment with respect to the Securities, (ii) has such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of the proposed investment in the Securities and
(iii) has had an opportunity to ask questions of and receive answers from the
officers of the Company concerning the financial condition and business of the
Company and others matters related to an investment in the
Securities.  Neither such inquiries nor any other due diligence
investigations conducted by the Investor or its representatives shall modify,
amend or affect the Investor's right to rely on the Company's representations
and warranties contained in Section 4 below.  The Investor has sought
such accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the
Securities.

    


    (e)          No Governmental
Review.  The Investor understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.

    


    (f)           Transfer or
Sale.  The Investor understands that(i) the Securities may not
be offered for sale, sold, assigned or transferred unless (A) registered
pursuant to the Securities Act or (B) an exemption exists permitting such
Securities to be sold, assigned or transferred without such registration; (ii)
any sale of the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the  Securities under circumstances in which
the Investor (or the person through whom the sale is made) may be deemed to be
an underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder.

    


    (g)          Validity;
Enforcement.  This Agreement and the Registration Rights
Agreement have been duly and validly authorized, executed and delivered on
behalf of the Investor and is a valid and binding agreement of the Investor
enforceable against the Investor in accordance with its terms, subject as to
enforceability to general principles of equity and to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of applicable creditors'
rights and remedies.

    


    (h)          Residency.  The
Investor is a resident of the State of Illinois.

    


    (i)           No Prior Short
Selling.  The Investor represents and warrants to the Company
that at no time prior to the date of this Agreement has any of the Investor, its
agents, representatives or affiliates engaged in or effected, in any manner
whatsoever, directly or indirectly, any (i) "short sale" (as such term is
defined in Section 242.200 of Regulation SHO of the Exchange Act) of the Common
Stock or (ii) hedging transaction, which establishes a net short position with
respect to the Common Stock.

    


    4.           REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

    


    The
Company represents and warrants to the Investor that as of the date hereof and
as of the Commencement Date:

    


    (a)          Organization and
Qualification. The Company and each of the Subsidiaries (which for
purposes of this Agreement means any entity in which the Company, directly or
indirectly, owns 50% or more of the voting stock or capital stock or other
similar equity interests) 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 corporate power and authority
to own and use its properties and assets and to carry on its business as
currently conducted.  Neither the Company nor any Subsidiary is in
violation or default of any of the provisions of its respective certificate or
articles of incorporation, bylaws or other organizational or charter
documents.  Each of the Company and the Subsidiaries 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: (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, 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”) 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.  The Company has no Subsidiaries
except as set forth on Schedule
4(a).


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (b)          Authorization; Enforcement;
Validity.  (i) The Company has the requisite corporate power
and authority to enter into and perform its obligations under this Agreement,
the Registration Rights Agreement  and each of the other agreements
entered into by the parties on the Commencement Date and attached hereto as
exhibits to this Agreement (collectively, the "Transaction Documents"), and to
issue the Securities in accordance with the terms hereof and thereof, (ii) the
execution and delivery of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby,
including without limitation, the issuance of the Commitment Shares and the
reservation for issuance and the issuance of the Purchase Shares issuable under
this Agreement, have been duly authorized by the Company's Board of Directors
and no further consent or authorization is required by the Company, its Board of
Directors or its shareholders, (iii) this Agreement has been, and each other
Transaction Document shall be on the Commencement Date, duly executed and
delivered by the Company and (iv) this Agreement constitutes, and each other
Transaction Document upon its execution on behalf of the Company, shall
constitute, the valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and
remedies.  The Board of Directors of the Company has approved the
resolutions (the “Signing Resolutions”) substantially in the form as set forth
as Exhibit C
attached hereto to authorize this Agreement and the transactions contemplated
hereby.  The Signing Resolutions are valid, in full force and effect
and have not been modified or supplemented in any respect.  The
Company has delivered to the Investor a true and correct copy of a unanimous
written consent adopting the Signing Resolutions executed by all of the members
of the Board of Directors of the Company.  No other approvals or
consents of the Company’s Board of Directors and/or shareholders is necessary
under applicable laws and the Company’s Certificate of Incorporation and/or
Bylaws to authorize the execution and delivery of this Agreement or any of the
transactions contemplated hereby, including, but not limited to, the issuance of
the Commitment Shares and the issuance of the Purchase Shares.

    


    (c)          Capitalization.  As
of the date hereof, the authorized capital stock of the Company is set forth on
Schedule
4(c).  Except as disclosed in Schedule 4(c), (i) no
shares of the Company's capital stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company, (ii) there are no outstanding debt securities, (iii) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its Subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its Subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its Subsidiaries, (iv) there
are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of their securities under
the Securities Act (except the Registration Rights Agreement), (v) there are no
outstanding securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries, (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement and (vii) the Company does not
have any stock appreciation rights or "phantom stock" plans or agreements or any
similar plan or agreement.  The Company has furnished to the Investor
true and correct copies of the Company's Certificate of Incorporation, as
amended and as in effect on the date hereof (the "Certificate of
Incorporation"), and the Company's By-laws, as amended and as in effect on the
date hereof (the "By-laws"), and summaries of the terms of all securities
convertible into or exercisable for Common Stock, if any, and copies of any
documents containing the material rights of the holders thereof in respect
thereto.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (d)          Issuance of
Securities.  Upon issuance and payment therefor in accordance
with the terms and conditions of this Agreement, the Purchase Shares shall be
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof, with the holders being entitled to
all rights accorded to a holder of Common Stock. The Initial Purchase Shares
have been duly authorized and, upon issuance in accordance with the terms
hereof, the Initial Purchase Shares shall be (i) validly issued, fully paid and
non-assessable and (ii) free from all taxes, liens and charges with respect to
the issue thereof. The Commitment Shares have been duly authorized and, upon
issuance in accordance with the terms hereof, the Commitment Shares shall be (i)
validly issued, fully paid and non-assessable and (ii) free from all taxes,
liens and charges with respect to the issue thereof.  The Warrant
Shares have been duly authorized and reserved for issuance upon exercise in
accordance with the Warrants.  When issued in accordance with the
Warrants, the Warrant Shares shall be validly issued, fully paid and
non-assessable and to the Company’s knowledge, free of all taxes, liens,
charges, restrictions, rights of first refusal and preemptive rights. 7,000,000
shares of Common Stock have been duly authorized and reserved for issuance upon
purchase under this Agreement as Purchase Shares.  283,401 shares of
Common Stock (subject to equitable adjustment for any reorganization,
recapitalization, non-cash dividend, stock split, reverse stock split or other
similar transaction) have been duly authorized and reserved for issuance as
Additional Commitment Shares in accordance with this Agreement.

    


    (e)          No
Conflicts.  Except as disclosed in Schedule 4(e), the
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the reservation for issuance and
issuance of the Purchase Shares) will not (i) result in a violation of the
Certificate of Incorporation or the By-laws or (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its Subsidiaries is a party, or result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and the rules and regulations of the
Principal Market applicable to the Company or any of its Subsidiaries) or by
which any property or asset of the Company or any of its Subsidiaries is bound
or affected, except in the case of conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations under clause (ii), which
could not reasonably be expected to result in a Material Adverse
Effect.  Except as disclosed in Schedule 4(e),
neither the Company nor its Subsidiaries is in violation of any term of or in
default under its Certificate of Incorporation or By-laws or their
organizational charter or by-laws, respectively.  Except as disclosed
in Schedule
4(e), neither the Company nor any of its Subsidiaries is in violation of
any term of or is in default under any material contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order or any statute,
rule or regulation applicable to the Company or its Subsidiaries, except for
possible conflicts, defaults, terminations or amendments which could not
reasonably be expected to have a Material Adverse Effect.  The
business of the Company and its Subsidiaries is not being conducted, and shall
not be conducted, in violation of any law, ordinance, regulation of any
governmental entity, except for possible violations, the sanctions for which
either individually or in the aggregate could not reasonably be expected to have
a Material Adverse Effect.  Except as specifically contemplated by
this Agreement and as required under the Securities Act or applicable state
securities laws, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or any regulatory or self-regulatory agency in order for it
to execute, deliver or perform any of its obligations under or contemplated by
the Transaction Documents in accordance with the terms hereof or
thereof.  Except as disclosed in Schedule 4(e), all
consents, authorizations, orders, filings and registrations which the Company is
required to obtain pursuant to the preceding sentence shall be obtained or
effected on or prior to the Commencement Date.  Except as listed in
Schedule 4(e),
since one year prior to the date hereof,  the Company has not received
nor delivered any notices or correspondence from or to the Principal
Market.  The Principal Market has not commenced any delisting
proceedings against the Company.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (f)           SEC Documents; Financial
Statements. Except as disclosed in Schedule 4(f) 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 Documents”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Documents prior to
the expiration of any such extension.  As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable, and none of the SEC
Documents, 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 Documents 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 consolidated
Subsidiaries 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.  Except
as listed in Schedule
4(f), the Company has received no notices or correspondence from the SEC
for the one year preceding the date hereof.  The SEC has not
commenced any enforcement proceedings against the Company or any of its
subsidiaries.

    


    (g)          Absence of Certain
Changes.  Except as disclosed in Schedule 4(g), since
December 31, 2009, there has been no material adverse change in the business,
properties, operations, financial condition or results of operations of the
Company or its Subsidiaries.  The Company has not taken any steps, and
does not currently expect to take any steps, to seek protection pursuant to any
Bankruptcy Law nor does the Company or any of its Subsidiaries have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy or
insolvency proceedings.  The Company is financially solvent and is
generally able to pay its debts as they become due.

    


    (h)          Absence of
Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the Company
or any of its Subsidiaries, threatened against or affecting the Company, the
Common Stock or any of the Company's Subsidiaries or any of the Company's or the
Company's Subsidiaries' officers or directors in their capacities as such, which
could reasonably be expected to have a Material Adverse
Effect.   A description of each action, suit, proceeding, inquiry
or investigation before or by any court, public board, government agency,
self-regulatory organization or body which, as of the date of this Agreement, is
pending or threatened in writing against or affecting the Company, the Common
Stock or any of the Company's Subsidiaries or any of the Company's or the
Company's Subsidiaries' officers or directors in their capacities as such, is
set forth in Schedule
4(h).

    


    (i)           Acknowledgment Regarding
Investor's Status.  The Company acknowledges and agrees that
the Investor is acting solely in the capacity of arm's length purchaser with
respect to the Transaction Documents and the transactions contemplated hereby
and thereby.  The Company further acknowledges that the Investor is
not acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to the Transaction Documents and the transactions
contemplated hereby and thereby and any advice given by the Investor or any of
its representatives or agents in connection with the Transaction Documents and
the transactions contemplated hereby and thereby is merely incidental to the
Investor's purchase of the Securities.  The Company further represents
to the Investor 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 and advisors.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (j)           No General
Solicitation.  Neither the Company, nor any of its affiliates,
nor any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of the
Securities.

    


    (k)          Intellectual Property
Rights.  The Company and its Subsidiaries own or possess
adequate rights or licenses to use all material trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental authorizations, trade
secrets and rights necessary to conduct their respective businesses as now
conducted.  Except as set forth on Schedule 4(k), none
of the Company's material trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, government authorizations, trade secrets or other
intellectual property rights have expired or terminated, or, by the terms and
conditions thereof, could expire or terminate within two years from the date of
this Agreement.  The Company and its Subsidiaries do not have any
knowledge of any infringement by the Company or its Subsidiaries of any material
trademark, trade name rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service mark registrations, trade secret
or other similar rights of others, or of any such development of similar or
identical trade secrets or technical information by others and, except as set
forth on Schedule
4(k), there is no claim, action or proceeding that has been made or
brought against, or to the Company's knowledge, being threatened against, the
Company or its Subsidiaries regarding trademark, trade name, patents, patent
rights, invention, copyright, license, service names, service marks, service
mark registrations, trade secret or other infringement, which could reasonably
be expected to have a Material Adverse Effect.

    


    (l)           Environmental
Laws.  The Company and its Subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where, in each of the
three foregoing clauses, the failure to so comply could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.

    


    (m)         Title.  The
Company and the Subsidiaries have good and marketable title in fee simple to all
real property owned by them and good and marketable title in all personal
property owned by them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all liens, encumbrances and defects
(“Liens”) and , except for Liens as 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 the Subsidiaries and Liens for the
payment of federal, state or other taxes, the payment of which is neither
delinquent nor subject to penalties.  Any real property and facilities
held under lease by the Company and the Subsidiaries are held by them under
valid, subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance with such exceptions as are not material and do
not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries. Any real property and
facilities held under lease by the Company and any of its Subsidiaries are held
by them under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its Subsidiaries.

    


    (n)   
      Insurance.  The
Company and each of its Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in the businesses
in which the Company and its Subsidiaries are engaged.  Neither the
Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for and neither the Company nor any such Subsidiary has any 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 at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its Subsidiaries, taken as a
whole.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (o)          Regulatory
Permits.  The Company and its Subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.

    


    (p)          Tax
Status.  The Company and each of its Subsidiaries has made or
filed all federal and state income and all other material tax returns, reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply.  There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.

    


    (q)          Transactions With
Affiliates.   Except as set forth in the
SEC Documents, 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 any 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, 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 $100,000 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 agreements under any stock option plan of the Company.

    


    (r)           Application of Takeover
Protections.  The Company and its board of directors have taken
or will take prior to the Commencement Date 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 Certificate of Incorporation
or the laws of the state of its incorporation which is or could become
applicable to the Investor as a result of the transactions contemplated by this
Agreement, including, without limitation, the Company's issuance of the
Securities and the Investor's ownership of the Securities.

    


    (s)          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 the Investor or its
agents or counsel with any information that it believes constitutes or might
constitute material, non-public information which is not otherwise disclosed in
the Registration Statement or prospectus supplements
thereto.   The Company understands and confirms that the Investor
will rely on the foregoing representation in effecting purchases and sales of
securities of the Company.  All of the disclosure furnished by or on
behalf of the Company to the Investor regarding the Company, its business and
the transactions contemplated hereby, including the disclosure schedules to this
Agreement, is true and correct and 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 press releases disseminated by the Company during the
twelve months preceding the date of this Agreement taken as a whole do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made and when made,
not misleading.  The Company acknowledges and agrees that the Investor
neither makes nor has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 3 hereof.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (t)           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.

    


    5.           COVENANTS.

    


    (a)          Filing of Form 8-K and
Registration Statement.  The Company agrees that it shall,
within the time required under the Exchange Act file a Report on Form 8-K
disclosing this Agreement and the transaction contemplated hereby.  The Company shall also
file within fifteen (15) days from the date hereof a new registration statement
covering only the sale of the Purchase Shares (other than the Initial Purchase
Shares) and the Commitment Shares, in accordance with the terms of the
Registration Rights Agreement between the Company and the Investor, dated as of
the date hereof (“Registration Rights Agreement”).  Any securities
issuable under this Agreement that have not been registered under the Securities
Act shall bear the following restrictive legend (the “Restrictive
Legend”):

    


    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL,
IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS.

      

    (b)          Blue Sky. The Company
shall take such action, if any, as is reasonably necessary in order to obtain an
exemption for or to qualify (i) the initial sale of the Commitment Shares and
any Purchase Shares to the Investor under this Agreement and (ii) any subsequent
resale of the Commitment Shares and any Purchase Shares by the Investor, in each
case, under applicable securities or "Blue Sky" laws of New York and the states
in which the Company and Investor are incorporated and domiciled, and shall
provide evidence of any such action so taken to the Investor.

    


    (c)          Listing.  The
Company shall promptly secure the listing of all of the Purchase Shares and
Commitment Shares upon the Principal Market (subject to official notice of
issuance) and shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all such securities from time to time issuable
under the terms of the Transaction Documents.  The Company shall
maintain the Common Stock's authorization for quotation on the Principal
Market.  Neither the Company nor any of its Subsidiaries shall take
any action that would be reasonably expected to result in the delisting or
suspension of the Common Stock on the Principal Market.  The Company
shall promptly, and in no event later than the following Business Day, provide
to the Investor copies of any notices it receives from the Principal Market
regarding the continued eligibility of the Common Stock for listing on such
automated quotation system or securities exchange.  The Company shall
pay all fees and expenses in connection with satisfying its obligations under
this Section.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (d)          Limitation on Short Sales
and Hedging Transactions.  The Investor agrees that beginning
on the date of this Agreement and ending on the date of termination of this
Agreement as provided in Section 11, the Investor and its agents,
representatives and affiliates shall not in any manner whatsoever enter into or
effect, directly or indirectly, any (i) "short sale" (as such term is defined in
Section 242.200 of Regulation SHO of the Exchange Act) of the Common Stock or
(ii) hedging transaction, which establishes a net short position with respect to
the Common Stock.

    


    (e)          Issuance of Commitment
Shares.  Immediately upon the execution of this Agreement, the
Company shall cause to be issued to the Investor as consideration for the
Investor entering into this Agreement 566,801 shares of Common Stock (the
"Initial Commitment Shares") by delivering to the Transfer Agent a letter in the
form as set forth as Exhibit E attached
hereto with respect to the issuance of the Initial Commitment
Shares.  In connection with each purchase of Purchase Shares
hereunder, the Company agrees to issue to the Investor a number of shares of
Common Stock (the “Additional Commitment Shares” and together with the Initial
Commitment Shares, the “Commitment Shares”) equal to the product of (x) 283,401
and (y) the Purchase Amount Fraction.  The “Purchase Amount Fraction”
shall mean a fraction, the numerator of which is the Purchase Amount purchased
by the Investor with respect to such purchase of Purchase Shares and the
denominator of which is Seven Million Dollars ($7,000,000).  The
Additional Commitment Shares shall be equitably adjusted for any reorganization,
recapitalization, non-cash dividend, stock split, reverse stock split or other
similar transaction.  The Initial Commitment
Shares shall be issued in certificated form and shall bear the Restrictive
Legend. The
Investor agrees that the Investor shall not pledge, transfer or sell the
Commitment Shares until the earlier of (a) 480 Business Days (24 Monthly
Periods) from the date hereof or (b) the date on which this Agreement has been
terminated, provided, however, that such restrictions shall not apply: (i) in
connection with any transfers to or among affiliates (as defined in the Exchange
Act), or (ii) if an Event of Default has occurred and is continuing, including
any failure by the Company to timely issue Purchase Shares under this
Agreement.  Notwithstanding the forgoing, the Investor may transfer
Commitment Shares to a third party in order to settle a sale made by the
Investor where the Investor reasonably expects the Company to deliver additional
Purchase Shares to the Investor under this Agreement so long as the Investor
maintains ownership of the amount of Commitment Shares received up to that point
by "replacing" such Commitment Shares so transferred with new Purchase Shares
when the new Purchase Shares are actually issued by the Company to the
Investor.

    


    (f)           Due
Diligence.  The Investor shall have the right, from time to
time as the Investor may reasonably deem appropriate, to perform reasonable due
diligence on the Company during normal business hours.  The Company
and its officers and employees shall provide information and reasonably
cooperate with the Investor in connection with any reasonable request by the
Investor related to the Investor's due diligence of the Company.  Each
party hereto agrees not to disclose any Confidential Information of the other
party to any third party and shall not use the Confidential Information for any
purpose other than in connection with, or in furtherance of, the transactions
contemplated hereby.  Each party hereto acknowledges that the
Confidential Information shall remain the property of the disclosing party and
agrees that it shall take all reasonable measures to protect the secrecy of any
Confidential Information disclosed by the other party.  The Company
confirms that neither it nor any other Person acting on its behalf shall provide
the Investor or its agents or counsel with any information that it believes
constitutes or might constitute material, non-public information which is not
otherwise disclosed in the SEC Documents, the Registration Statement or
prospectus supplements thereto.

    


    (g)          Purchase Records. The
Investor and the Company shall each maintain records showing the remaining
Available Amount at any given time and the dates and Purchase Amounts for each
purchase or shall use such other method, reasonably satisfactory to the Investor
and the Company.

    (h)          Taxes.   The
Company shall pay any and all transfer, stamp or similar taxes that may be
payable with respect to the issuance and delivery of any shares of Common Stock
to the Investor made under this Agreement.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (i)         
No Variable Rate
Transactions.  From the date hereof until the Maturity Date,
the Company shall be prohibited from effecting or entering into an agreement to
effect any issuance by the Company or any of its Subsidiaries of Common Stock or
securities convertible into Common Stock of the Company for cash consideration
(or a combination of units thereof) involving a Variable Rate Transaction other
than in connection with an Exempt Issuance.  “Variable Rate
Transaction” means a transaction in which the Company (i) issues or sells any
debt or equity securities that are convertible into, exchangeable or exercisable
for, or include the right to receive additional shares of Common Stock either
(A) at a conversion price, exercise price or exchange rate or other price that
is based upon and/or varies with the trading prices of or quotations for the
shares of Common Stock at any time after the initial issuance of such debt or
equity securities, or (B) with a conversion, exercise or exchange price that is
subject to being reset at some future date after the initial issuance of such
debt or equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for
the Common Stock or (ii) enters into any agreement, including, but not limited
to, an equity line of credit, whereby the Company may sell securities at a
future determined price. “Exempt Issuance”
means the issuance of (a) shares of Common Stock or options to employees,
officers, directors or vendors of the Company pursuant to any stock or option
plan duly adopted for such purpose, by a majority of the non-employee members of
the Board of Directors or a majority of the members of a committee of
non-employee directors established for such purpose, (b) securities upon the
exercise or exchange of or conversion of any Securities issued hereunder and/or
other securities exercisable or exchangeable for or convertible into shares of
Common Stock issued and outstanding on the date of this Agreement, provided that
such securities have not been amended since the date of this Agreement to
increase the number of such securities or to decrease the exercise price,
exchange price or conversion price of such securities, and (c) securities issued
pursuant to acquisitions or strategic transactions approved by a majority of the
disinterested directors of the Company, which acquisitions or strategic
transactions can have a Variable Rate Transaction component,  provided
that any such issuance shall only be to a Person (or to the equity holders of a
Person) which is, itself or through its subsidiaries, an operating company or an
asset in a business synergistic with the business of the Company and shall
provide to the Company additional benefits in addition to the investment of
funds, but shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities.

    


    6.           TRANSFER
AGENT INSTRUCTIONS.

    


    On the
Commencement Date, the Company shall cause any restrictive legend on the Initial
Commitment Shares to be removed and all of the Purchase Shares (other than the
Initial Purchase Shares) and Additional Commitment Shares to be issued under
this Agreement shall be issued without any restrictive legend unless the
Investor expressly consents otherwise.  The Company shall issue
irrevocable instructions to the Transfer Agent, and any subsequent transfer
agent, to issue Purchase Shares in the amounts sold to the Investor from time to
time in the name of the Investor for the Purchase Shares (the "Irrevocable
Transfer Agent Instructions").  The Company warrants to the Investor
that no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 6, will be given by the Company to the Transfer
Agent with respect to the Purchase Shares and that the Commitment Shares and the
Purchase Shares shall otherwise be freely transferable on the books and records
of the Company as and to the extent provided in this Agreement.

    


    
      
        7.         
CONDITIONS
TO THE COMPANY'S RIGHT TO COMMENCE

                    
SALES
OF SHARES OF COMMON STOCK.

      

    

    


    The right
of the Company hereunder to commence sales of the Purchase Shares is subject to
the satisfaction of each of the following conditions:

    


    (a)
         The Investor shall have
executed each of the Transaction Documents and delivered the same to the
Company; and


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (b)          A
registration statement covering the sale of all of the Commitment Shares and Purchase Shares
(other than the Initial Purchase Shares) shall have been declared effective
under the Securities Act by the SEC and no stop order with respect to the
registration statement shall be pending or threatened by the SEC.

    


    
      8.          
CONDITIONS
TO THE INVESTOR'S OBLIGATION TO PURCHASE SHARES OF

                                  
COMMON STOCK.

    

    


    The
obligation of the Investor to buy Purchase Shares under this Agreement is
subject to the satisfaction of each of the following conditions and once such
conditions have been initially satisfied, there shall not be any ongoing
obligation to satisfy such conditions after the Commencement has
occurred:

    


    (a)          The
Company shall have executed each of the Transaction Documents and delivered the
same to the Investor;

    


    (b)          The
Company shall have caused to be issued to the Investor the Initial Commitment
Shares without restrictive legend;

    


    (c)          The
Common Stock shall be authorized for quotation on the Principal Market, trading
in the Common Stock shall not have been within the last 365 days suspended by
the SEC or the Principal Market and the Purchase Shares and Commitment Shares
shall be approved for listing upon the Principal Market;

    


    (d)          The
Investor shall have received the opinions of the Company's legal counsel dated
as of the Commencement Date substantially in the form of Exhibit
A attached hereto;

    


    (e)          The
representations and warranties of the Company shall be true and correct in all
material respects (except to the extent that any of such representations and
warranties is already qualified as to materiality in Section 4 above, in which
case, such representations and warranties shall be true and correct without
further qualification) as of the date when made and as of the Commencement Date
as though made at that time (except for representations and warranties that
speak as of a specific date) and the Company shall have performed, satisfied and
complied with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Commencement Date.  The Investor shall have
received a certificate, executed by the CEO, President or CFO of the Company,
dated as of the Commencement Date, to the foregoing effect in the form attached
hereto as Exhibit
B;

    


    (f)           The
Board of Directors of the Company shall have adopted resolutions in the form
attached hereto as Exhibit
C which shall be in full force and effect without any amendment or
supplement thereto as of the Commencement Date;

    


    (g)          As
of the Commencement Date, the Company shall have reserved out of its authorized
and unissued Common Stock, (A) solely for the purpose
of effecting purchases of Purchase Shares hereunder, 7,000,000 shares of Common
Stock, (B) as Additional Commitment Shares in accordance with Section 5(e)
hereof, 283,401 shares of Common Stock and (C) 571,429 Warrant
Shares;

    


    (h)          The
Irrevocable Transfer Agent Instructions, in form acceptable to the Investor
shall have been delivered to and acknowledged in writing by the Company and the
Company's Transfer Agent;

    


    (i)    
      The Company shall have delivered to the
Investor a certificate evidencing the incorporation and good standing of the
Company in the State of Utah issued by the Secretary of State of the State of
Utah as of a date within ten (10) Business Days of the Commencement
Date;


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (j)           The
Company shall have delivered to the Investor a certified copy of the Certificate
of Incorporation as certified by the Secretary of State of the State of Utah
within ten (10) Business Days of the Commencement Date;

    


    (k)          The
Company shall have delivered to the Investor a secretary's certificate executed
by the Secretary of the Company, dated as of the Commencement Date, in the form
attached hereto as Exhibit
D;

    


    (l)           A
registration statement covering the sale of all of the Purchase Shares (other
than the Initial Purchase Shares) and Commitment Shares shall have been declared
effective under the Securities Act by the SEC and no stop order with respect to
the registration statement shall be pending or threatened by the
SEC.  The Company shall have prepared and delivered to the Investor a
final and complete form of prospectus, dated and current as of the Commencement
Date, to be used by the Investor in connection with any sales of any Commitment
Shares, or any Purchase Shares (other than the Initial Purchase Shares), and to
be filed by the Company one (1) Business Day after the Commencement Date. The
Company shall have made all filings under all applicable federal and state
securities laws necessary to consummate the issuance of the Commitment Shares
and Purchase Shares pursuant to this Agreement in compliance with such
laws;

    


    (m)         No
Event of Default has occurred, or any event which, after notice and/or lapse of
time, would become an Event of Default has occurred;

    


    (n) 
        On or prior to the Commencement
Date, the Company shall take all necessary action, if any, and such actions as
reasonably requested by the Investor, in order to render inapplicable any
control share acquisition, business combination, shareholder rights plan or
poison pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Certificate of Incorporation or the
laws of the state of its incorporation which is or could become applicable to
the Investor as a result of the transactions contemplated by this Agreement,
including, without limitation, the Company's issuance of the Securities and the
Investor's ownership of the Securities; and

    


    (o)          The
Company shall have provided the Investor with the information requested by the
Investor in connection with its due diligence requests made prior to, or in
connection with, the Commencement, in accordance with the terms of Section 5(f)
hereof.

    


    
      9.           
INDEMNIFICATION.

    

    


    In
consideration of the Investor's execution and delivery of the Transaction
Documents and acquiring the Securities hereunder and in addition to all of the
Company's other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless the Investor and all of its
affiliates, shareholders, officers, directors, employees and direct or indirect
investors and any of the foregoing person's agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "Indemnitees")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby, or
(c) any cause of action, suit or claim brought or made against such Indemnitee
and arising out of or resulting from the execution, delivery, performance or
enforcement of the Transaction Documents or any other certificate, instrument
or  document contemplated hereby or thereby, other than with respect
to Indemnified Liabilities which directly and primarily result from the gross
negligence or willful misconduct of the Indemnitee.  To the extent
that the foregoing undertaking by the Company may be unenforceable for any
reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    10.         EVENTS
OF DEFAULT.

    


    An "Event
of Default" shall be deemed to have occurred at any time as any of the following
events occurs:

    


    (a)          the
effectiveness of a registration statement registering the Purchase Shares or
Commitment Shares lapses for any reason (including, without limitation, the
issuance of a stop order) or is unavailable to the Investor for sale of any or
all of the Purchase Shares (other than the Initial Purchase Shares) or
Commitment Shares (“Registrable Securities”), and such lapse or unavailability
continues for a period of ten (10) consecutive Business Days or for more than an
aggregate of thirty (30) Business Days in any 365-day period;

    


    (b)          the
suspension from trading or failure of the Common Stock to be listed on the
Principal Market for a period of three (3) consecutive Business
Days;

    


    (c)          the
delisting of the Company’s Common Stock from the Principal Market, provided,
however, that the Common Stock is not immediately thereafter trading on the New
York Stock Exchange, the Nasdaq Global Market, the Nasdaq Global Select Market,
the Nasdaq Capital Market, or NYSE Amex;

    


    (d)          the
failure for any reason by the Transfer Agent to issue Purchase Shares to the
Investor within five (5) Business Days after the applicable Purchase Date which
the Investor is entitled to receive;

    


    (e)          the
Company breaches any representation, warranty, covenant or other term or
condition under any Transaction Document if such breach could have a Material
Adverse Effect and except, in the case of a breach of a covenant which is
reasonably curable, only if such breach continues for a period of at least five
(5) Business Days after notice thereof is provided to the Company by
Investor;

    


    (f)           if
any Person commences a proceeding against the Company pursuant to or within the
meaning of any Bankruptcy Law ;

    


    (g)          if
the Company pursuant to or within the meaning of any Bankruptcy Law; (A)
commences a voluntary case, (B) consents to the entry of an order for relief
against it in an involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (D) makes a
general assignment for the benefit of its creditors or is generally unable to
pay its debts as the same become due; or

    


    (h)          a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that (A) is for relief against the Company in an involuntary case, (B)
appoints a Custodian of the Company or for all or substantially all of its
property, or (C) orders the liquidation of the Company or any
Subsidiary.

    


    In
addition to any other rights and remedies under applicable law and this
Agreement, including the Investor termination rights under Section 11 hereof, so
long as an Event of Default has occurred and is continuing, or if any event
which, after notice and/or lapse of time, would become an Event of Default, has
occurred and is continuing, or so long as the Purchase Price is below the Floor
Price, the Investor shall not be permitted or obligated to purchase any shares
of Common Stock under this Agreement.  If pursuant to or within the
meaning of any Bankruptcy Law, the Company commences a voluntary case or any
Person commences a proceeding against the Company, a Custodian is appointed for
the Company or for all or substantially all of its property, or the Company
makes a general assignment for the benefit of its creditors, (any of which would
be an Event of Default as described in Sections 10(f), 10(g) and 10(h) hereof) this Agreement
shall automatically terminate without any liability or payment to the Company
without further action or notice by any Person.  No such termination
of this Agreement under Section 11(a) or 11(d) shall affect the Company's or the
Investor's obligations under this Agreement with respect to pending purchases
and the Company and the Investor shall complete their respective obligations
with respect to any pending purchases under this Agreement.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    11.         TERMINATION

    


    This
Agreement may be terminated only as follows:

    


    (a)          By
the Investor any time an Event of Default exists without any liability or
payment to the Company.  However, if pursuant to or within the meaning
of any Bankruptcy Law, the Company commences a voluntary case or any Person
commences a proceeding against the Company, a Custodian is appointed for the
Company or for all or substantially all of its property, or the Company makes a
general assignment for the benefit of its creditors, (any of which would be an
Event of Default as described in Sections 10(f), 10(g) and 10(h) hereof) this
Agreement shall automatically terminate without any liability or payment to the
Company without further action or notice by any Person.  No such
termination of this Agreement under this Section 11(a) shall affect the
Company's or the Investor's obligations under this Agreement with respect to
pending purchases and the Company and the Investor shall complete their
respective obligations with respect to any pending purchases under this
Agreement.

    


    (b)          In
the event that the Commencement shall not have occurred, the Company shall have
the option to terminate this Agreement for any reason or for no reason without
any liability whatsoever of any party to any other party under this
Agreement.

    


    (c)          In
the event that the Commencement shall not have occurred on or before August 31,
2010, due to the failure to satisfy the conditions set forth in Sections 7 and 8
above with respect to the Commencement, the non-breaching party shall have the
option to terminate this Agreement at the close of business on such date or
thereafter without liability of any party to any other party.

    


    (d)        
At any time after the Commencement Date, the Company shall have the option to
terminate this Agreement for any reason or for no reason by delivering notice (a
“Company Termination Notice”) to the Investor electing to terminate this
Agreement without any liability whatsoever of any party to any other party under
this Agreement.  The Company Termination Notice shall not be effective
until one (1) Business Day after it has been received by the Investor. No such
termination of this Agreement under this Section 11(d) shall affect the
Company's or the Investor's obligations under this Agreement with respect to
pending purchases and the Company and the Investor shall complete their
respective obligations with respect to any pending purchases under this
Agreement.

    


    (e)          This
Agreement shall automatically terminate on the date that the Company sells and
the Investor purchases the full Available Amount as provided herein, without any
action or notice on the part of any party and without any liability whatsoever
of any party to any other party under this Agreement.

    


    (f)           If
by the Maturity Date for any reason or for no reason the full Available Amount
under this Agreement has not been purchased as provided for in Section 2 of this
Agreement, this Agreement shall automatically terminate on the Maturity Date,
without any action or notice on the part of any party and without any liability
whatsoever of any party to any other party under this Agreement.

    


    Except as
set forth in Sections 11(a) (in respect of an Event of Default under Sections
10(f), 10(g) and 10(h)) and 11(f), any termination of this Agreement pursuant to
this Section 11 shall be effected by written notice from the Company to the
Investor, or the Investor to the Company, as the case may be, setting forth the
basis for the termination hereof.  The representations and warranties
and covenants of the Company and the Investor contained in Sections 3, 4, 5, and
6 hereof, the indemnification provisions set forth in Section 9 hereof and the
agreements and covenants set forth in Sections 10 and 11, shall survive
the Commencement and any termination of this Agreement.  No
termination of this Agreement shall affect the Company's or the Investor's
rights or obligations (i) under the Registration Rights Agreement which shall
survive any such termination or (ii) under this Agreement with respect to
pending purchases and the Company and the Investor shall complete their
respective obligations with respect to any pending purchases under this
Agreement.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    12.         MISCELLANEOUS.

    


    (a)          Governing Law; Jurisdiction;
Jury Trial.  The corporate laws of the State of Utah shall
govern all issues concerning the relative rights of the Company and its
shareholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the other Transaction
Documents shall be governed by the internal laws of the State of Illinois,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Illinois or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of
Illinois.  Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Chicago, for
the adjudication of any dispute hereunder or under the other Transaction
Documents or in connection herewith or therewith, or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper.  Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

    


    (b)          Counterparts.  This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature or signature delivered by e-mail in a “.pdf”
format data file shall be considered due execution and shall be binding upon the
signatory thereto with the same force and effect as if the signature were an
original, not a facsimile signature or a signature in a “.pdf” format data
file.

    


    (c)          Headings.  The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.

    


    (d)          Severability.  If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.

    


    (e)          Entire
Agreement.  With the exception of the Mutual Nondisclosure
Agreement between the parties dated as of May 3, 2010, this Agreement supersedes
all other prior oral or written agreements between the Investor, the Company,
their affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement, the other Transaction Documents and the
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Investor
makes any representation, warranty, covenant or undertaking with respect to such
matters.  The Company acknowledges and agrees that is has not relied
on, in any manner whatsoever, any representations or statements, written or
oral, other than as expressly set forth in this Agreement.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


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

    


    If to the
Company:

     

    Bio-Path
Holdings, Inc.

    
      	
               
      

            	
              3293
      Harrison Blvd., Suite 220

            


    

    
      	
               
      

            	
              Ogden,
      UT 84403

            


    

    
      	
              
              

            	
              Telephone:

            	
              801-399-5500

            


    

    
      	
               
      

            	
              Facsimile:

            	
              ____________

            


    

    
      	
               
      

            	
              Attention:

            	
              Chief
      Executive Officer

            


    

    


    With a
copy to:

    
      	
               
      

            	
              Winstead
      PC

            


    

    
      	
               
      

            	
              24
      Waterway Avenue, Suite 500

            


    

    
      	
               
      

            	
              The
      Woodlands, Texas 77380

            


    

    
      	
              
              

            	
              Telephone:

            	
              281-681-5931

            


    

    
      	
               
      

            	
              Facsimile:

            	
              281-681-5901

            


    

    
      	
               
      

            	
              Attention:

            	
              Jeffrey
      R. Harder

            


    

    


    If to the
Investor:

    
      	
               
      

            	
              Lincoln
      Park Capital Fund, LLC

            


    

    
      	
               
      

            	
              440
      North Wells, Suite 620

            


    

    
      	
               
      

            	
              Chicago,
      IL 60654

            


    

    
      	
              
              

            	
              Telephone:

            	
              312-822-9300

            


    

    
      	
               
      

            	
              Facsimile:

            	
              312-822-9301

            


    

    
      	
               
      

            	
              Attention:

            	
              Josh
      Scheinfeld/Jonathan Cope

            


    

    


    If to the
Transfer Agent:

    
      	
               
      

            	
              Fidelity
      Transfer Company

            


    

    
      	
               
      

            	
              8915
      South 700 East, Suite 102

            


    

    
      	
               
      

            	
              Sandy,
      Utah 84070

            


    

    
      	
              
              

            	
              Telephone:

            	
              (801)
      562-1300

            


    

    
      	
               
      

            	
              Facsimile:

            	
              (801)
      562-1300

            


    

    
      	
               
      

            	
              Attention:

            	
              Heidi
      Sadowski

            


    

    


    or at
such other address and/or facsimile number and/or to the attention of such other
person as the recipient party has specified by written notice given to each
other party three (3) Business Days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of
such notice, consent or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, and
recipient facsimile number or (C) provided by a nationally recognized overnight
delivery service, shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.

    


    (g)         Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and
assigns.  The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Investor,
including by merger or consolidation.  The Investor may not assign its
rights or obligations under this Agreement.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (h)         No Third Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person.

    


    (i)   
       Publicity.  The
Investor shall have the right to approve before issuance any press release, SEC
filing or any other public disclosure made by or on behalf of the Company
whatsoever with respect to, in any manner, the Investor, its purchases hereunder
or any aspect of this Agreement or the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior
approval of the Investor, to make any press release or other public disclosure
(including any filings with the SEC) with respect to such transactions as is
required by applicable law and regulations so long as the Company and its
counsel consult with the Investor in connection with any such press release or
other public disclosure at least two (2) Business Days prior to its
release.  The Investor must be provided with a copy thereof at least
two (2) Business Days prior to any release or use by the Company
thereof.  The Company agrees and acknowledges that its failure to
fully comply with this provision constitutes a material adverse effect on its
ability to perform its obligations under this Agreement.

    


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

    


    (k)          No Financial Advisor,
Placement Agent, Broker or Finder.    The Company
represents and warrants to the Investor that it has not engaged any financial
advisor, placement agent, broker or finder in connection with the transactions
contemplated hereby.  The Investor represents and warrants to the
Company that it has not engaged any financial advisor, placement agent, broker
or finder in connection with the transactions contemplated
hereby.  The Company shall be responsible for the payment of any fees
or commissions, if any, of any financial advisor, placement agent, broker or
finder relating to or arising out of the transactions contemplated
hereby.  The Company shall pay, and hold the Investor harmless
against, any liability, loss or expense (including, without limitation,
attorneys' fees and out of pocket expenses) arising in connection with any such
claim.  The Investor shall be responsible for the payment of any fees
or commissions, if any, of any financial advisor, placement agent, broker or
finder engaged by it relating to or arising out of the transactions contemplated
hereby.

    


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

    


    (m)         Remedies, Other Obligations,
Breaches and Injunctive Relief.  The Investor’s remedies
provided in this Agreement shall be cumulative and in addition to all other
remedies available to the Investor under this Agreement, at law or in equity
(including a decree of specific performance and/or other injunctive relief), no
remedy of the Investor contained herein shall be deemed a waiver of compliance
with the provisions giving rise to such remedy and nothing herein shall limit
the Investor's right to pursue actual damages for any failure by the Company to
comply with the terms of this Agreement.  The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to
the Investor and that the remedy at law for any such breach may be
inadequate.  The Company therefore agrees that, in the event of any
such breach or threatened breach, the Investor shall be entitled, in addition to
all other available remedies, to an injunction restraining any breach, without
the necessity of showing economic loss and without any bond or other security
being required.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (n)         Enforcement
Costs.  If: (i) this Agreement is placed by the Investor in the
hands of an attorney for enforcement or is enforced by the Investor through any
legal proceeding; or (ii) an attorney is retained to represent the Investor in
any bankruptcy, reorganization, receivership or other proceedings affecting
creditors' rights and involving a claim under this Agreement; or (iii) an
attorney is retained to represent the Investor in any other proceedings
whatsoever in connection with this Agreement, then the Company shall pay to the
Investor, as incurred by the Investor, all reasonable costs and expenses
including attorneys' fees incurred in connection therewith, in addition to all
other amounts due hereunder.

    


    (o)         Failure or Indulgence Not
Waiver.  No failure or delay in the exercise of any power,
right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or
privilege.

    


    (p)         Costs
and Expenses.  Except for such amounts as have been required to be
paid on or prior to the date hereof, each party shall pay all costs and expenses
incurred by it in connection the preparation, negotiation, execution and
delivery of this Agreement and the other Transaction Documents.

    


    *     *     *     *     *


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF, the
Investor and the Company have caused this Purchase Agreement to be duly executed
as of the date first written above.

    


    
      
        
          
            	 
      	
                    THE
      COMPANY:

                  
	 
      	 
      
	 
      	
                    BIO-PATH
      HOLDINGS, INC.

                  
	 
      	 
      
	 
      	
                    By:

                  	
                    /s/
      Peter H. Nielsen

                  
	 
      	
                    Name:  Peter
      H. Nielsen

                  
	 
      	
                    Title:  President
      and CEO

                  
	 
      	 
      
	 
      	
                    INVESTOR:

                  
	 
      	 
      
	 
      	
                    LINCOLN
      PARK CAPITAL FUND, LLC

                  
	 
      	 
      
	 
      	
                      BY:
      LINCOLN PARK CAPITAL, LLC

                  
	 
      	
                    BY:
      ALEX NOAH INVESTORS, INC.

                  
	 
      	 
      
	 
      	
                    By:

                  	
                    /s/
      Jonathan Cope

                  
	 
      	
                    Name:
      Jonathan Cope

                  
	 
      	
                    Title:
      President