Anavex Life Sciences Corp. - Exhibit 10.5 - Filed by newsfilecorp.com






PURCHASE AGREEMENT 

          PURCHASE
AGREEMENT (the “Agreement”), dated as of July 5th,
2013, by and between ANAVEX LIFE SCIENCES CORP., a Nevada 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 Ten Million Dollars ($10,000,000) of the
Company's common stock, $0.001 par value (the “Common Stock”). The shares
of Common Stock to be purchased hereunder (including, without limitation, the
Initial Purchase Shares (as defined herein)) are referred to herein as the
“Purchase Shares.”

NOW THEREFORE, in consideration of the mutual covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Company and 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 Share Amount” means, with respect to any particular
Accelerated Purchase Confirmation (as defined in Section 2(b)), the lesser of
(i) the amount of Purchase Shares directed by the Company on an Accelerated
Purchase Notice or (ii) the Accelerated Purchase Share Percentage multiplied by
the trading volume of the Common Stock on the Principal Market on the
Accelerated Purchase Date during normal trading hours. 

          (b)     
“Accelerated Purchase Date” means, with respect to any Accelerated
Purchase made pursuant to Section 2(b) hereof, the Business Day immediately
following the applicable Purchase Date with respect to the related Regular
Purchase referred to in Section 2(b) hereof. 

          (c)     
“Accelerated Purchase Notice” means, with respect to any Accelerated
Purchase pursuant to Section 2(b) hereof, an irrevocable written notice from the
Company to the Investor directing the Investor to buy an amount of Purchase
Shares equal to the lesser of (i) the amount specified by the Company therein or
(ii) the Accelerated Purchase Share Percentage, on the Accelerated Purchase Date
pursuant to Section 2(b) hereof as specified by the Company therein at the
applicable Accelerated Purchase Price. 

          (d)      “Accelerated
Purchase Share Percentage” means, with respect to any particular Accelerated
Purchase Notice pursuant to Section 2(b) hereof, a specified percentage as set
forth in the Accelerated Purchase Notice, up to 30% of the aggregate shares of
Common Stock traded on the Principal Market during normal trading hours on the
Accelerated Purchase Date. 

          (e)     
“Accelerated Purchase Price” means the lower of (i) ninety-five percent
(95%) of the VWAP during (A) the entire trading day on the Accelerated Purchase
Date, if the volume of shares of Common Stock traded on the Principal Market on
the Accelerated Purchase Date has not exceeded the Accelerated Purchase Share
Volume Maximum, or (B) the portion of the trading day of the Accelerated
Purchase Date (calculated starting at the beginning of normal trading hours)
until such time at which the volume of shares of Common Stock traded on the
Principal Market has exceeded the Accelerated Purchase Share Volume Maximum or (ii) the Closing Sale Price on
the Accelerated Purchase Date (to be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock
split or other similar transaction). 




          (f)      “Accelerated
Purchase Share Volume Maximum” means the number of shares of Common Stock
traded on the Principal Market during normal trading hours on the Accelerated
Purchase Date equal to (i) the amount of shares of Common Stock properly
directed by the Company to be purchased on the Accelerated Purchase Notice,
divided by (ii) the Accelerated Purchase Share Percentage (to be appropriately
adjusted for any reorganization, recapitalization, non-cash dividend, stock
split, reverse stock split or other similar transaction). 

          (g)     
“Available Amount” means initially Ten Million Dollars ($10,000,000) 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. 

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

          (i)     
“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.

          (j)     
“Closing Sale Price” means, for any security as of any date, the last
closing sale 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 sale 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.

          (k)      “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
disclosing party by third parties. 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
assistance in obtaining an order protecting the information from public
disclosure.

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

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          (m)      “DTC”
means The Depository Trust Company, or any successor performing substantially
the same function for the Company. 

          (n)     
“DWAC Shares” means shares of Common Stock that are (i) issued in
electronic form, (ii) freely tradable and transferable and without restriction
on resale and (iii) timely credited by the Company to the Investor’s or its
designee’s specified Deposit/Withdrawal at Custodian (DWAC) account with DTC
under its Fast Automated Securities Transfer (FAST) Program or any similar
program hereafter adopted by DTC performing substantially the same function.

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

          (p)      “Material
Adverse Effect” means any material adverse effect on (i) the enforceability
of any Transaction Document, (ii) the results of operations, assets, business or
financial condition of the Company and its Subsidiaries, taken as a whole, other
than any material adverse effect that resulted exclusively from (A) any change
in the United States or foreign economies or securities or financial markets in
general that does not have a disproportionate effect on the Company and its
Subsidiaries, taken as a whole, (B) any change that generally affects the
industry in which the Company and its Subsidiaries operate that does not have a
disproportionate effect on the Company and its Subsidiaries, taken as a whole,
(C) any change arising in connection with earthquakes, hostilities, acts of war,
sabotage or terrorism or military actions or any escalation or material
worsening of any such hostilities, acts of war, sabotage or terrorism or
military actions existing as of the date hereof, (D) any action taken by the
Investor, its affiliates or its or their successors and assigns with respect to
the transactions contemplated by this Agreement, (E) the effect of any change in
applicable laws or accounting rules that does not have a disproportionate effect
on the Company and its Subsidiaries, taken as a whole, or (F) any change
resulting from compliance with terms of this Agreement or the consummation of
the transactions contemplated by this Agreement, or (iii) the Company’s ability
to perform in any material respect on a timely basis its obligations under any
Transaction Document to be performed as of the date of determination. 

          (q)      “Maturity
Date” means the first day of the month immediately following the twenty five
(25) month anniversary of the Commencement Date.

          (r)     
“PEA Period” means the period commencing at 9:30 a.m., Eastern time, on
the tenth (10th) Business Day immediately prior to, and ending at
9:30 a.m., Eastern time, on the Business Day immediately following, the
effective date of any post-effective amendment to the Registration Statement or
New Registration Statement (as such terms are defined in the Registration Rights
Agreement). 

          (s)     
“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.

          (t)     
“Principal Market” means the OTC Bulletin Board (it being understood that
as used herein “OTC Bulletin Board” shall also mean any successor or comparable
market quotation system or exchange to the OTC Bulletin Board such as the OTCQB
operated by the OTC Markets Group, Inc.); provided however, that in the event
the Company’s Common Stock is ever listed or traded on The NASDAQ Global Market,
The NASDAQ Capital Market, The NASDAQ Global Select Market, the New York Stock
Exchange, the NYSE MKT or the NYSE Arca, then the “Principal Market” shall mean
such other market or exchange on which the Company’s Common Stock is then listed
or traded.

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

          (v)      “Purchase
Date” means with respect to any particular Regular Purchase made hereunder,
the Business Day on which the Investor receives by 5 p.m., Eastern time, of such
Business Day or at any time after closing of trading on the Principal Market on
the day prior to such Business Day a valid Regular Purchase Notice that the
Investor is to buy Purchase Shares pursuant to Section 2(a) hereof.

          (w)      “Purchase
Price” means the lower of (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 (in
each case, to be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other similar
transaction).

          (x)      “Regular
Purchase Notice” means, with respect to any Regular Purchase pursuant to
Section 2(a) hereof, an irrevocable written notice from the Company to the
Investor directing the Investor to buy such applicable amount of Purchase Shares
at the applicable Purchase Price as specified by the Company therein on the
Purchase Date.

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

          (z)      “SEC”
means the U.S. Securities and Exchange Commission.

          (aa)  
 “Securities” means, collectively, the Purchase Shares and the
Commitment Shares. 

          (bb)  
 “Securities Act” means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder. 

          (cc)   
“Subsidiary” means any Person the Company wholly-owns or controls, or in
which the Company, directly or indirectly, owns a majority of the voting stock
or similar voting interest, in each case that would be disclosable pursuant to
Item 601(b)(21) of Regulation S-K promulgated under the Securities Act. 

          (dd)  
 “Transaction Documents” means, collectively, this Agreement, the
Registration Rights Agreement, the schedules and exhibits hereto and thereto,
and each of the other agreements, documents, certificates and instruments
entered into or furnished by the parties hereto in connection with the
transactions contemplated hereby and thereby. 

          (ee)   
“Transfer Agent” means Nevada Agency & Trust Company, or such other
Person who is then serving as the transfer agent for the Company in respect of
the Common Stock. 

          (ff)  
 “VWAP” means in respect of an applicable Accelerated Purchase Date,
the volume weighted average Sale Price of the Common Stock on the Principal
Market, as reported on the Principal Market. 

          2.   
    PURCHASE OF COMMON STOCK.

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          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 250,000 Purchase Shares (such initial Purchase Shares,
the “Initial Purchase Shares”) for aggregate consideration of $100,000
(the “Initial Purchase Amount”). 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 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
up to One Hundred Thousand (100,000) Purchase Shares (which amount shall be
appropriately adjusted for any reorganization, recapitalization, non-cash
dividend, stock split or other similar transaction) (each such purchase a
“Regular Purchase”), at the Purchase Price on the Purchase Date. The
Regular Purchase may be increased to up to One Hundred Fifty Thousand (150,000)
Purchase Shares (which amount shall be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split or other
similar transaction), provided that the Closing Sale Price of the Common Stock
is not below $1.50 on the Purchase Date. The Company may deliver multiple
Regular Purchase Notices to the Investor so long as at least one (1) Business
Day has passed since the most recent Regular Purchase was completed provided,
however, that the Investor’s committed obligation under any single Regular
Purchase shall not exceed Five Hundred Thousand Dollars ($500,000) (which amount
shall be appropriately adjusted for any reorganization, recapitalization,
non-cash dividend, stock split or other similar transaction). If the Company
delivers any Regular Purchase Notice for a Purchase Amount in excess of the
limitations contained in the immediately preceding sentence, such Regular
Purchase Notice shall be void ab initio to the extent of the amount by
which the number of Purchase Shares set forth in such Regular Purchase Notice
exceeds the number of Purchase Shares which the Company is permitted to include
in such Purchase Notice in accordance herewith, and the Investor shall have no
obligation to purchase such excess Purchase Shares in respect of such Regular
Purchase Notice; provided that the Investor shall remain obligated to purchase
the number of Purchase Shares which the Company is permitted to include in such
Regular Purchase Notice. Notwithstanding the foregoing, the Company shall not
deliver any Purchase Notices during the PEA Period. 

          (b)     
Accelerated Purchases. Subject to the terms and conditions of this
Agreement, in addition to purchases of Purchase Shares as described in
Section 2(a) above, with one Business Day’s prior written notice to the
Investor, the Company shall also have the right, but not the obligation, to
direct the Investor by the Company’s delivery to the Investor of an Accelerated
Purchase Notice from time to time, and the Investor thereupon shall have the
obligation, to buy Purchase Shares at the Accelerated Purchase Price on the
Accelerated Purchase Date in an amount equal to the Accelerated Purchase Share
Amount (each such purchase, an “Accelerated Purchase”). The Company may
deliver an Accelerated Purchase Notice to the Investor only on a date on which
the Company also properly submitted a Regular Purchase Notice for a Regular
Purchase and the Closing Sale Price is not below $1.00 and executed such Regular
Purchase pursuant to and in accordance with Section 2(a) hereof, and such
Accelerated Purchase Notice may only be for Purchase Shares not to exceed the
lesser of (i) the maximum percentage of the Accelerated Purchase Share
Percentage and (ii) two (2) times the number of Purchase Shares purchased
pursuant to the corresponding Regular Purchase. Upon completion of each
Accelerated Purchase Date, the Accelerated Purchase Share Amount and the
applicable Accelerated Purchase Price shall be set forth on a confirmation of
the Accelerated Purchase (an “Accelerated Purchase Confirmation”). 

          (c)      Payment
for Purchase Shares. For each Regular Purchase, the Investor shall pay to
the Company an amount equal to the Purchase Amount with respect to such Regular
Purchase 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. For each Accelerated Purchase, the Investor shall pay to the
Company an amount equal to the Purchase Amount with respect to such Accelerated
Purchase as full payment for such Purchase Shares via wire transfer of
immediately available funds on the third Business Day following the date that
the Investor receives such Purchase Shares. 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.

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          (d)     
Purchase Price Floor. The Company and the Investor shall not effect any
purchases under this Agreement on any Purchase Date that the Closing Sale Price
is less than the Floor Price. "Floor Price" means $.50, which
shall be appropriately adjusted for any reorganization, recapitalization,
non-cash dividend, stock split or other similar transaction and, effective upon
the consummation of any such reorganization, recapitalization, non-cash
dividend, stock split or other similar transaction, the Floor Price shall mean
the lower of (i) the adjusted price and (ii) $1.00. 

          (e)      Beneficial
Ownership Limitation. Notwithstanding anything to the contrary contained in
this Agreement, the Company shall not issue or sell, and the Investor shall not
purchase or acquire, any shares of Common Stock under this Agreement which, when
aggregated with all other shares of Common Stock then beneficially owned by the
Investor and its affiliates (as calculated pursuant to Section 13(d) of the
Exchange Act and Rule 13d-3 promulgated thereunder) would result in the
beneficial ownership by the Investor and its affiliates of more than 9.99% of
the then issued and outstanding shares of Common Stock (the “Beneficial
Ownership Limitation”). Upon the written or oral request of the Investor,
the Company shall promptly (but not later than one (1) Business Day) confirm
orally or in writing to the Investor the number of shares of Common Stock then
outstanding. The Investor and the Company shall each cooperate in good faith in
the determinations required hereby and the application hereof. The Investor’s
written certification to the Company of the applicability of the Beneficial
Ownership Limitation, and the resulting effect thereof hereunder at any time,
shall be conclusive with respect to the applicability thereof and such result
absent manifest error.

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          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 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 (as defined below in Section 5(e)), 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 promulgated under the Securities Act.


          (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 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 thereof, (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 U.S. 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 an 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 seller (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. 

-7- 




          (g)      Validity;
Enforcement. This Agreement has 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 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 Rule 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, and will not engage in short sales during the term of this
Agreement. 

          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
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 nor default of any of the
provisions of its respective certificate or articles of formation or
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 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 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 such resolutions adopting the Signing
Resolutions executed by all of the members of the Board of Directors of the
Company. Except as set forth in this Agreement, no other approvals or consents
of the Company’s Board of Directors and/or shareholders is necessary under
applicable laws and the Company’s Restated Certificate of Formation and/or
By-laws 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. 

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          (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 Restated Certificate of Formation, as amended
and as in effect on the date hereof (the “Certificate of Formation”), 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 thereof 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,
charges, restrictions, rights of first refusal and preemptive rights with
respect to the issue thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock. 20,000,000 shares of Common Stock have
been duly authorized and reserved for issuance upon purchase under this
Agreement as Purchase Shares. 341,858 shares of Common Stock (subject to
equitable adjustment for any reorganization, recapitalization, non-cash
dividend, stock split or other similar transaction) have been duly authorized
and reserved for issuance as Initial Commitment Shares (as defined below in
Section 5(e)) in accordance with this Agreement. The Initial Commitment Shares
shall be validly issued, fully paid and nonassessable and free from all taxes,
liens, charges, restrictions, rights of first refusal and preemptive rights with
respect to the issue thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock. 250,000 shares of Common Stock (subject to
equitable adjustment for any reorganization, recapitalization, non-cash
dividend, stock split or other similar transaction) have been duly authorized and
reserved for issuance as Initial Purchase Shares. The Initial Purchase Shares
shall be validly issued, fully paid and nonassessable and free from all taxes,
liens, charges, restrictions, rights of first refusal and preemptive rights with
respect to the issue thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock. 133,409 shares of Common Stock (subject to
equitable adjustment for any reorganization, recapitalization, non-cash
dividend, stock split or other similar transaction) have been duly authorized
and reserved for issuance as Additional Commitment Shares (as defined below in
Section 5(e)) in accordance with this Agreement. When issued in accordance with
this Agreement, the Additional Commitment Shares shall be validly issued, fully
paid and nonassessable and free from all taxes, liens, charges, restrictions,
rights of first refusal and preemptive rights with respect to the issue thereof,
with the holders being entitled to all rights accorded to a holder of Common
Stock.

-9- 




          (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 and the Commitment Shares) will not (i) result in a violation of
the Certificate of Formation, any Certificate of Designations, Preferences and
Rights of any outstanding series of preferred stock of the Company 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 Formation, any Certificate of Designation,
Preferences and Rights of any outstanding series of preferred stock of the
Company or By-laws or their organizational charter or bylaws, 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 and
the rules and regulations of the Principal Market, 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)
and set forth elsewhere in this agreement, 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 and to the best of the Company’s knowledge, the SEC
Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable. 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 SEC 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. 

-10- 




          (g)      Absence
of Certain Changes. Except as disclosed in Schedule 4(g), since
December 31, 2012, 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. 

-11- 




          (j)      No
General Solicitation; No Integrated Offering. 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. Neither the Company, nor any of its affiliates, nor any Person
acting on its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under
circumstances that would cause this offering of the Securities to be integrated
with prior offerings by the Company in a manner that would require stockholder
approval pursuant to the rules of the Principal Market on which any of the
securities of the Company are listed or designated. The issuance and sale of the
Securities hereunder does not contravene the rules and regulations of the
Principal Market. 

          
(k)      Intellectual Property Rights. Except as
set forth on Schedule 4(k), 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. Except as set forth on Schedule 4(k), 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 being 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. 

-12- 




          (n)      Insurance.
The Company and each of its Subsidiaries are not 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 $120,000
other than for (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii)
other employee benefits, including stock option 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 Formation 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. 

-13- 




          (s)     
Disclosure. Except with respect to the material terms and conditions of
the transactions contemplated by the Transaction Documents that will be timely
publicly disclosed by the Company, 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 the SEC Documents. 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. 

          (u)     
DTC Eligible. The Company, through the Transfer Agent, currently
participates in the DTC Fast Automated Securities Transfer (FAST) Program and
the Common Stock can be transferred electronically to third parties via the DTC
Fast Automated Securities Transfer (FAST) Program. 

          (v)     
Sarbanes-Oxley. The Company is in material compliance with all provisions
of the Sarbanes-Oxley Act of 2002, as amended, which are applicable to it as of
the date hereof, except where the failure to be in compliance is not reasonably
likely to result in a Material Adverse Effect. 

          (w)      Certain
Fees. Except as disclosed on Schedule 4(w), no other brokerage or
finder’s fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
the Transaction Documents. Except as disclosed on Schedule 4(w), the
Investor shall have no obligation with respect to any fees or with respect to
any claims made by or on behalf of other Persons for fees of a type contemplated
in this Section 4(w) that may be due in connection with the transactions
contemplated by the Transaction Documents. 

          (x)      Investment
Company. The Company is not, and immediately after receipt of payment for
the Securities will not be, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended. 

-14- 




          (y)     
Listing and Maintenance Requirements. The Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock pursuant to the
Exchange Act nor has the Company received any notification that the SEC is
currently contemplating terminating such registration. Except as set forth on
Schedule 4(e): (i) the Company has not, in the twelve (12) months
preceding the date hereof, received any notice from any Person to the effect
that the Company is not in compliance with the listing or maintenance
requirements of the Principal Market; and (ii) the Company is, and has no reason
to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements. 

          (z)      Accountants.
The Company’s accountants are set forth in the SEC Documents and, to the
knowledge of the Company, such accountants are an independent registered public
accounting firm as required by the Securities Act. 

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

          (bb)   
Shell Company Status. The Company is not currently, and within the past
three years has not been, an issuer identified in Rule 144(i)(1) under the
Securities Act. 

          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 twenty (20) days from the date hereof a new registration
statement (the “Registration Statement”) covering only the sale of a
portion of the Purchase Shares (including, without limitation, 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”). The Company shall
permit the Investor to review and comment upon the Current Report at least two
(2) Business Days prior to its filing with the SEC, the Company shall give due
consideration to all such comments, and the Company shall not file the Current
Report with the SEC in a form to which the Investor reasonably objects. The
Investor shall use its reasonable best efforts to comment upon the Current
Report within one (1) Business Day from the date the Investor receives the final
pre-filing draft version thereof from the Company. 

          (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 issuance of the
Commitment Shares and the sale of the Purchase Shares to the Investor under this
Agreement and (ii) any subsequent resale of the Commitment Shares and all
Purchase Shares by the Investor, in each case, under applicable securities or
“Blue Sky” laws of the states of the United States in such states as is
reasonably requested by the Investor from time to time, and shall provide
evidence of any such action so taken to the Investor. 

          (c)     
Listing/DTC. The Company shall promptly secure the listing of all of the
Purchase Shares and Commitment Shares to be issued to the Investor hereunder on
the Principal Market (subject to official notice of issuance). The Company shall
use reasonable best efforts to maintain, so long as any shares of Common Stock
shall be listed on the Principal Market, such listing of all such Securities
from time to time issuable hereunder. The Company shall use commercially
reasonable efforts to maintain the listing of the Common Stock on the Principal Market and shall
comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules and regulations of the Principal Market.
Neither the Company nor any of its Subsidiaries shall take any action that would
reasonably be 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 the Principal Market; provided, however, that the
Company shall not be required to provide the Investor copies of any such notice
that the Company reasonably believes constitutes material non-public information
and the Company would not be required to publicly disclose such notice in any
report or statement filed with the SEC under the Exchange Act (including on Form
8-K) or the Securities Act. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section. The Company shall
take all action necessary to ensure that its Common Stock can be transferred
electronically as DWAC Shares. 

-15- 




          (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 Rule 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. In consideration for (i) the Investor’s execution and
delivery of this Agreement and (ii) an initial investment of One Hundred
Thousand Dollars ($100,000) by the Investor in the Company on the date hereof,
the Company shall cause the Transfer Agent to issue, on the date of this
Agreement, 341,858 shares of Common Stock (the “Initial Commitment Shares”) and
the 250,000 Initial Purchase Shares directly to the Investor and shall deliver
to the Transfer Agent the Irrevocable Transfer Agent Instructions with respect
to the issuance of the Initial Commitment Shares and Initial Purchase Shares in
the form as set forth in Exhibit E attached hereto. For the
avoidance of doubt, all of the Initial Commitment Shares shall be fully earned
as of the date of this Agreement, whether or not the Commencement shall occur or
any Purchase Shares are purchased by the Investor under this Agreement and
irrespective of any termination of this Agreement. In connection with each
Regular Purchase and each Accelerated Purchase of Purchase Shares hereunder, the
Company shall 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) 133,409 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 Regular Purchase and Accelerated Purchase (as
applicable) of Purchase Shares and the denominator of which is Ten Million
Dollars ($10,000,000). The Additional Commitment Shares shall be issued to the
Investor on the same Business Day as Purchase Shares are issued to the Investor
in connection with the applicable Regular Purchase and Accelerated Purchase (as
applicable) in accordance with Section 2(c). In no event shall the amount of the
Additional Commitment Shares to be issued under this Agreement exceed 133,409
shares of Common Stock, provided that such Additional Commitment Shares shall be
equitably adjusted for any reorganization, recapitalization, non-cash dividend,
stock split or other similar transaction. 

          (f)      Due
Diligence; Non-Public Information. 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 constitutes or might
constitute material, non-public information, unless a simultaneous public
announcement thereof is made by the Company in the manner contemplated by
Regulation FD. In the event of a breach of the foregoing covenant by the Company
or any Person acting on its behalf (as determined in the reasonable good faith
judgment of the Investor), in addition to any other remedy provided herein or in
the other Transaction Documents, the Investor shall have the right to make a
public disclosure, in the form of a press release, public advertisement or
otherwise, of such material, non-public information without the prior approval
by the Company; provided the Investor shall have first provided notice to the
Company that it believes it has received information that constitutes material,
non-public information and the Company shall have at least 24 hours to respond
to such notice, and thereafter the Investor shall have provided a draft final
version of such press release, public advertisement or otherwise at least 24
hours prior to the Investor’s intended public disclosure, and the Investor shall
have incorporated any reasonable comments made by the Company on such draft
press release, and the Company shall have failed to publicly disclose such
material, non-public information prior to such disclosure by the Investor. The
Investor shall not have any liability to the Company, any of its Subsidiaries,
or any of their respective directors, officers, employees, stockholders or
agents, for any such disclosure. The Company understands and confirms that the
Investor shall be relying on the foregoing covenants in effecting transactions
in securities of the Company. 

-16- 




          (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)      Use
of Proceeds. The Company will use the net proceeds from the offering as
described in the Registration Statement or the SEC Documents. 

          (j)      Other
Transactions. The Company shall not enter into, announce or recommend to its
stockholders any agreement, plan, arrangement or transaction in or of which the
terms thereof would restrict, materially delay, conflict with or impair the
ability or right of the Company to perform its obligations under the Transaction
Documents, including, without limitation, the obligation of the Company to
deliver the Purchase Shares and the Commitment Shares to the Investor in
accordance with the terms of the Transaction Documents, provided, however, that
nothing in this section shall prevent the Company from terminating this
Agreement pursuant to Section 11. 

          (k)     
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
shares of Common Stock or Common Stock Equivalents for cash consideration (or a
combination of units thereof) involving a Variable Rate Transaction, provided
that the Company shall be permitted to effect an Exempt Issuance. “Common
Stock Equivalents” means any securities of the Company or its Subsidiaries
which entitle the holder thereof to acquire at any time shares of Common Stock,
including, without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, shares
of Common Stock. “Variable Rate Transaction” means a transaction in which
the Company enters into, or issues securities under, any “at-the-market” or
similar agreement, including, but not limited to, an equity line of
credit (other than any transaction between the Company and the Investor),
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 the Board of Directors or a
majority of the members of a committee of 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 the 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.

-17- 




          (l)     
Integration. During the term of this Agreement, the Company shall not
sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in Section 2 of the Securities Act) of the Company
that would be integrated with the offer or sale of the Securities such that the
rules or regulations of the Principal Market would require stockholder approval
of this transaction prior to the closing of such other transaction unless
stockholder approval is obtained before the closing of such subsequent
transaction. 

          6.     
  TRANSFER AGENT INSTRUCTIONS. 

          (a)     
On the date of this Agreement, the Company shall issue irrevocable instructions
to the Transfer Agent substantially in the form attached hereto as Exhibit
E to issue the Initial Purchase Shares and the Initial Commitment Shares
in accordance with the terms of this Agreement (the “Initial
Irrevocable Transfer Agent Instructions”). The certificate(s)
representing the Initial Purchase Shares and the Initial Commitment Shares,
except as set forth below, 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)      On
the earlier of (i) the Commencement Date and (ii) such time that the Investor
shall request, provided all conditions of Rule 144 under the Securities Act are
met, the Company shall, no later than one (1) Business Day following the
delivery by the Investor to the Company or the Transfer Agent of one or more
legended certificates representing the Initial Purchase Shares and the Initial
Commitment Shares (which certificates the Investor shall promptly deliver
on or prior to the first to occur of the events described in clauses (i) and
(ii) of this sentence), as directed by the Investor, issue and deliver (or cause
to be issued and delivered) to the Investor, as requested by the Investor,
either: (A) a certificate representing such Initial Purchase Shares and the
Initial Commitment Shares that is free from all restrictive and other legends or
(B) a number of shares of Common Stock equal to the number of Initial Purchase
Shares and the Initial Commitment Shares represented by the certificate(s) so
delivered by the Investor as DWAC Shares. The Company shall take all actions to
carry out the intent and accomplish the purposes of the immediately preceding
sentence, including, without limitation, delivering all such legal opinions,
consents, certificates, resolutions and instructions to the Transfer Agent, and
any successor transfer agent of the Company, as may be requested from time to
time by the Investor or necessary or desirable to carry out the intent and
accomplish the purposes of the immediately preceding sentence. On the
Commencement Date, the Company shall issue to the Transfer Agent, and any
subsequent transfer agent, (i) irrevocable instructions in the form
substantially similar to those used by the Investor in substantially similar
transactions (the “Commencement Irrevocable Transfer Agent Instructions”)
and (ii) the notice of effectiveness of the Registration Statement in the form
attached as an exhibit to the Registration Rights Agreement (the “Notice of
Effectiveness of Registration Statement”), in each case to issue the
Commitment Shares, the Initial Purchase Shares and the Purchase Shares in
accordance with the terms of this Agreement and the Registration Rights
Agreement. All Purchase Shares and Commitment Shares to be issued from and after
Commencement to or for the benefit of the Investor pursuant to this Agreement
shall be issued only as DWAC Shares. The Company represents and warrants to the
Investor that, while this Agreement is effective, no instruction other than the
Commencement Irrevocable Transfer Agent Instructions and the Notice of
Effectiveness of Registration Statement referred to in this Section 6(b) will be given by the Company to the Transfer Agent with respect to the
Commitment Shares, the Initial Purchase Shares or the Purchase Shares from and
after Commencement, and the Commitment Shares, the Initial Purchase Shares and
the Purchase Shares shall otherwise be freely transferable on the books and
records of the Company. The Company agrees that if the Company fails to fully
comply with the provisions of this Section 6(b) within five (5) Business
Days of the Investor providing the deliveries referred to above, the Company
shall, at the Investor’s written instruction, purchase such shares of Common
Stock containing the Restrictive Legend from the Investor at the greater of the
(i) Purchase Price or Accelerated Purchase Price paid for such shares of Common
Stock (as applicable) and (ii) the Closing Sale Price of the Common Stock on the
date of the Investor’s written instruction. 

-18- 




          (c)      Investor
acknowledges that the Company is a reporting issuer in Canada, and under
Canadian Multilateral Instrument 51-105 (“MI 51-105”), the securities of the
Company may not be resold in Canada unless the resale conditions of MI 51-105
are met, including the placement of a MI 51-105 legend on the securities. The
Investor agrees not to resell the securities of the Company from or into Canada
and instructs the Company not to place an MI 51-105 legend on the securities
issued to the Investor.

          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 (other
than the Initial Purchase Shares) on the Commencement Date 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;

          (b)      A
registration statement covering the sale of a portion of the Commitment
Shares and Purchase Shares (including, without limitation, all of 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; and

-19- 




          (c)     
The representations and warranties of the Investor shall be true and correct in
all material respects as of the date hereof and as of the Commencement Date as
though made at that time. 

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

          The
obligation of the Investor to buy Purchase Shares (other than the Initial
Purchase Shares) under this Agreement is subject to the satisfaction of each of
the following conditions on or prior to the Commencement Date 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 issued or caused to be issued to the Investor (i) one or
more certificates representing the Initial Commitment Shares and Initial
Purchase Shares free from all restrictive and other legends or (ii) a number of
shares of common stock equal to the number of Initial Commitment Shares and the
Initial Purchase Shares as DWAC Shares, in each case in accordance with Section
6(b);

          (d)      The
Common Stock shall be listed 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 all Securities to be issued by the Company to the Investor
pursuant to this Agreement shall have been approved for listing on the Principal
Market in accordance with the applicable rules and regulations of the Principal
Market, subject only to official notice of issuance; 

          (d)     
The Investor shall have received the opinion of the Company's legal counsel
dated as of the Commencement Date substantially in the form agreed to prior to
the date of this Agreement by the Company’s legal counsel and the Investor’s
legal counsel; 

          (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 A; 

          (f)      The
Board of Directors of the Company shall have adopted resolutions in the form
attached hereto as Exhibit B 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, 20,000,000 shares of Common Stock and (B) as
Commitment Shares in accordance with Section 5(e) hereof, 133,409 shares of
Common Stock; 

-20- 




          (h)      The
Irrevocable Transfer Agent Instructions 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 Nevada issued by
the Secretary of State of the State of Nevada 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 Formation as certified by the Secretary of State of the State of Nevada
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 C; 

          (l)      The
Registration Statement covering the sale of a portion of the Purchase Shares and
Commitment Shares (including, without limitation, all of 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. 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 Purchase Shares or Commitment Shares, and to be filed by the Company one
Business Day after the Commencement Date. The Current Report shall have been
filed with the SEC, as required pursuant to Section 5(a). 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)      All
federal, state and local governmental laws, rules and regulations applicable to
the transactions contemplated by the Transaction Documents and necessary for the
execution, delivery and performance of the Transaction Documents and the
consummation of the transactions contemplated thereby in accordance with the
terms thereof shall have been complied with, and all consents, authorizations
and orders of, and all filings and registrations with, all federal, state and
local courts or governmental agencies and all federal, state and local
regulatory or self-regulatory agencies necessary for the execution, delivery and
performance of the Transaction Documents and the consummation of the
transactions contemplated thereby in accordance with the terms thereof shall
have been obtained or made, including, without limitation, in each case those
required under the Securities Act, the Exchange Act, applicable state securities
or “Blue Sky” laws or applicable rules and regulations of the Principal Market,
or otherwise required by the SEC, the Principal Market or any state securities
regulators; 

         (o)      No
statute, regulation, order, decree, writ, ruling or injunction shall have been
enacted, entered, promulgated, threatened or endorsed by any federal, state,
local or foreign court or governmental authority of competent jurisdiction which
prohibits the consummation of or which would materially modify or delay any of
the transactions contemplated by the Transaction Documents; 

          (p)     
No action, suit or proceeding before any federal, state, local or foreign
arbitrator or any court or governmental authority of competent jurisdiction
shall have been commenced or threatened, and no inquiry or investigation by any federal, state, local or
foreign governmental authority of competent jurisdiction shall have been
commenced or threatened, against the Company, or any of the officers, directors
or affiliates of the Company, seeking to restrain, prevent or change the
transactions contemplated by the Transaction Documents, or seeking material
damages in connection with such transactions; and 

-21- 




          (q)     
The Company shall have provided the Investor with the information requested by
the Investor in connection with its due diligence requests in accordance with
the terms of Section 5(f) hereof. The Company shall have retained Christopher U.
Missling, PhD., as CEO and President and appointed him as a member of the Board
of Directors of the Company. 

          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 any 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. Payment under this indemnification shall be made within thirty
(30) days from the date Investor makes written request for it. A certificate
containing reasonable detail as to the amount of such indemnification submitted
to the Company by Investor shall be prima facie evidence, absent manifest error,
of the amount due from the Company to Investor. If any action shall be brought
against any Indemnitee in respect of which indemnity may be sought pursuant to
this Agreement, such Indemnitee shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof with counsel
of its own choosing reasonably acceptable to the Indemnitee. Any Indemnitee
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnitee, except to the extent that (i) the
employment thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to assume such
defense and to employ counsel or (iii) in such action there is, in the
reasonable opinion of such separate counsel, a material conflict on any material
issue between the position of the Company and the position of such Indemnitee,
in which case the Company shall be responsible for the reasonable fees and
expenses of no more than one such separate counsel. 

-22- 




          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 and
Commitment Shares lapses for any reason (including, without limitation, the
issuance of a stop order) or such registration statement or the prospectus
forming a part thereof is unavailable to the Investor for resale of any or all
of the Purchase Shares and Commitment Shares, 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, but excluding a
lapse or unavailability where (i) the Company terminates a registration
statement after the Investor has confirmed in writing that all of the Purchase
Shares and Commitment Shares covered thereby have been resold or (ii) the
Company supersedes one registration statement with another registration
statement, including (without limitation) by terminating a prior registration
statement when it is effectively replaced with a new registration statement
covering Purchase Shares and Commitment Shares (provided in the case of this
clause (ii) that all of the Purchase Shares and Commitment Shares covered by the
superseded (or terminated) registration statement that have not theretofore been
resold are included in the superseding (or new) registration statement); 

          (b)     
the suspension of the Common Stock from trading or the 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 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, the NYSE MKT, the NYSE Arca or the OTC Bulletin Board (or
nationally recognized successor thereto); 

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

          (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; 

          (f)     
if any Person commences a proceeding against the Company pursuant to or within
the meaning of any Bankruptcy Law which is not discharged within 90 days;

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

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


-23- 




          (i)      if
at any time the Company is not eligible to transfer its Common Stock
electronically as DWAC Shares. 

In addition to any other rights and remedies under applicable
law and this Agreement, including the Investor termination rights set forth in
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
Closing Sale Price is below the Floor Price, the Company shall not deliver to
the Investor any Regular Purchase Notice or Accelerated Purchase Notice, and the
Investor shall not purchase any shares of Common Stock under this Agreement.


          11.      TERMINATION


          This
Agreement may be terminated only as follows:

          (a)      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 which is
not discharged within 90 days, 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
(except as set forth below) without further action or notice by any Person.

          (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 July 31,
2013, 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 (except as set
forth below).

          (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 (except as set forth below). The Company Termination Notice shall
not be effective until one (1) Business Day after it has been received by the
Investor.

          (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 (except as set forth
below). 

          (f)     
If for any reason or for no reason the full Available Amount has not been
purchased in accordance with Section 2 of this Agreement by the Maturity Date,
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
below).

Except as set forth in Sections 11(a) (in respect of an Event
of Default under Sections 10(f), 10(g) and 10(h)) 11(e) 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, 11 and 12, shall survive the
Commencement and any termination of this Agreement. No termination of this
Agreement shall (i) affect the Company's or the Investor's rights or obligations
(A) under this Agreement with respect to pending Regular Purchases and
Accelerated Purchases, and the Company and the Investor shall complete their
respective obligations with respect to any pending Regular Purchases and
Accelerated Purchases under this Agreement, and (B) under the Registration
Rights Agreement, which shall survive any such termination, or (ii) be deemed to
release the Company or the Investor from any liability for intentional
misrepresentation or willful breach of any of the Transaction Documents. 

-24- 




          12.      MISCELLANEOUS.


          (a)      Governing
Law; Jurisdiction; Jury Trial. The corporate laws of the State of Nevada
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 signature. 

          (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. 

-25- 




          (e)      Entire
Agreement. The Transaction Documents supersede all other prior oral or
written agreements between the Investor, the Company, their affiliates and
Persons acting on their behalf with respect to the subject matter thereof, 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 the Transaction Documents. 

          (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: 
          Anavex
Life Sciences
Corp. 
          Address
for
Notice: 
          c/o
RF Lafferty & Co,
Inc. 
          80
Broad Street 26th
Floor 
          New
York, NY 10004 

          Telephone:      212-332-4440
          Facsimile:        
917-591-5941 
          Attention:       
Tom Skarpelos 

With a copy to: 

          Clark
Wilson
LLP 
          900 –
885 West Georgia
Street 
          Vancouver,
BC, Canada V6C 3H1 

          Telephone:      604-687-5700 
          Facsimile:        
604-687-6314 
          Attention:       
Bernard Pinsky 

With a copy to: 

          RF
Lafferty & Co,
Inc. 
          Attention
to Rob Hackel,
CCO
          80 Broad
Street 26th
Floor 
          New
York, New York 10004 

          Telephone:      212-293-9090
          Facsimile:        
917-591-5941 

If to the Investor: 

-26- 




          Lincoln
Park Capital Fund,
LLC 
          440
North Wells, Suite
410 
          Chicago,
IL
60654 
          Telephone:     
312-822-9300 
          Facsimile:        
312-822-9301 
          Attention:       
Josh Scheinfeld/Jonathan Cope 

If to the Transfer Agent: 

          Nevada
Agency and Transfer
Company 
          50
West Liberty Street, Suite
880 
          Reno,
Nevada
89501 
          Telephone:      (775)
322-0626 
          Facsimile:       
 (775)
322-5623 
          Attention:       
Tiffany Erickson 


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 or the rules of the Principal Market
so long as the Company and its counsel consult with the Investor in connection
with any such press release or other public disclosure prior to its release. The
Investor must be provided with a copy thereof 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. 

-27- 




          (k)     
Financial Advisor, Placement Agent, Broker or Finder. The Company
represents and warrants to the Investor that, except as disclosed in Schedule
4(w), it has not engaged any other 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.

          (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, including, without limitation, the Investor’s
remedies provided in Section 9, 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; (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. If this Agreement is placed by the Company in the
hands of an attorney for enforcement or is enforced by the Company through any
legal proceeding, then the Investor shall pay to the Company, as incurred by the
Company, all reasonable costs and expenses including attorneys' fees incurred in
connection therewith, in addition to all other amounts due hereunder. 

-28- 




          (o)      Amendment
and Waiver; Failure or Indulgence Not Waiver. No provision of this Agreement
may be amended or waived by the parties from and after the date that is one (1)
Business Day immediately preceding the initial filing of the Registration
Statement with the SEC. Subject to the immediately preceding sentence, (i) no
provision of this Agreement may be amended other than by a written instrument
signed by both parties hereto and (ii) no provision of this Agreement may be
waived other than in a written instrument signed by the party against whom
enforcement of such waiver is sought. 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.


* * * * * 

-29- 




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

	 	THE COMPANY: 
	 	  
	 	ANAVEX LIFE SCIENCES CORP. 
	 	  
	 	By: /s/ Christopher Missling 
	 	Name: Christopher Missling 
	 	Title: CEO & President 
	 	  
	 	  
	 	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 


-30- 




SCHEDULES

	Schedule 4(a) 	Subsidiaries 
	Schedule 4(c) 	Capitalization 
	Schedule 4(e) 	Conflicts 
	Schedule 4(f) 	Exchange Act Filings 
	Schedule 4(g) 	Material Changes 
	Schedule 4(h) 	Litigation 
	Schedule 4(k) 	Intellectual Property 
	Schedule 4(w) 	Broker Dealer



EXHIBITS

	Exhibit A 	Form of Company Counsel Opinion
    
	Exhibit B 	Form of Officer’s Certificate
  
	Exhibit C 	Form of Resolutions of Board of
      Directors of the Company 
	Exhibit D 	Form of Secretary’s Certificate
    
	Exhibit E 	Form of Letter to Transfer Agent
    






DISCLOSURE SCHEDULES 

Schedule 4(a) – Subsidiaries 

Anavex Life Sciences (France): not in good standing and no
longer required.

Schedule 4(c) – Capitalization as at May 17, 2013 

Issued and Outstanding: 30,240,687 
Options: 1,475,000

Warrant: 2,700,513
Subscriptions for up to $2,000,000 in units of $0.40
comprising one share and one warrant exercisable at $0.75 for 5 years. 
There
are agreements to convert certain debt and accounts payable of $1,702,017.05
into shares and warrants to the same terms as the above subscription.

Schedule 4(e) - No Conflicts 

None. 

Schedule 4(f) - Exchange Act Filings 

Order for production from the BC Securities requesting
information on investor relations activities dated November 7, 2012.

Schedule 4(g) - Absence of Certain Changes 

The company requires funds in order to continue operations.
Since December 31, 2012, Sean Lowry and Robert Chisholm resigned as directors
and officers and Tom Skarpelos was appointed.

Schedule 4(h) - Litigation 

There are outstanding promissory notes for a total of
approximately $210,000 from prior directors or their affiliates that the Company
has chosen not to pay and, if action is taken by the note holders, to defend in
court.

Schedule 4(k) - Intellectual Property Rights 

No infringement that the Company knows of.

Schedule 4(w) – Finder’s Fees 

The Company engaged R.F. Lafferty & Co., Inc., a FINRA
registered broker-dealer as placement agent (the “Placement Agent”). Upon a
Closing, the Placement Agent will receive a cash placement fee of ten percent
(10%) of the gross proceeds received by the Company. The Placement Agent will
also receive a 5-year warrant to purchase 2% of the number of shares of Common
Stock issuable upon sale of the Units and exercise of the Warrants issued to the
investors at Closing on the same terms and conditions as the Warrants issued in
the Offering. The warrants to be issued to the Placement Agent may be exercised
on a cashless basis. 








          Except
for the R.F. Lafferty & Co., Inc., neither the Company nor any of the
Company's officers, directors, employees or shareholders has employed or engaged
any broker or finder in connection with the transactions contemplated by this
Agreement and no fee or other compensation is or will be due and owing to any
broker, finder, underwriter, placement agent or similar person other than the Placement Agent in connection with the transactions contemplated by this Agreement. The Company is not party to any agreement, arrangement or understanding whereby any person other than R.F. Lafferty & Co., Inc. has
  an exclusive right to raise funds and/or place or purchase any debt or equity securities for or on behalf of the Company.





EXHIBIT A 

FORM OF COMPANY COUNSEL OPINION 

          Capitalized
terms used herein but not defined herein, have the meaning set forth in the
Purchase Agreement. Based on the foregoing, and subject to the assumptions and
qualifications set forth herein, we are of the opinion that: 

                    1.      The
Company is a corporation existing and in good standing under the laws of the
State of Nevada. The Company is qualified to do business as a foreign
corporation and is in good standing in the States of Nevada. 

                    2.      The
Company has the corporate power to execute and deliver, and perform its
obligations under, each Transaction Document to which it is a party. The Company
has the corporate power to conduct its business as, to the best of our
knowledge, it is now conducted, and to own and use the properties owned and used
by it. 

                    3.     
The execution, delivery and performance by the Company of the Transaction
Documents to which it is a party have been duly authorized by all necessary
corporate action on the part of the Company. The execution and delivery of the
Transaction Documents by the Company, the performance of the obligations of the
Company thereunder and the consummation by it of the transactions contemplated
therein have been duly authorized and approved by the Company's Board of
Directors and no further consent, approval or authorization of the Company, its
Board of Directors or its stockholders is required. The Transaction Documents to
which the Company is a party have been duly executed and delivered by the
Company and are 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 creditor’s rights and remedies. 

                    4.      The
execution, delivery and performance by the Company of the Transaction Documents,
the consummation by the Company of the transactions contemplated thereby
including the offering, sale and issuance of the Commitment Shares and the
Purchase Shares in accordance with the terms and conditions of the Purchase
Agreement, and fulfillment and compliance with terms of the Transaction
Documents, does not and shall not: (i) conflict with, constitute a breach of or
default (or an event which, with the giving of notice or lapse of time or both,
constitutes or could constitute a breach or a default), under (a) the
Certificate of Incorporation or the Bylaws of the Company, (b) any material
agreement, note, lease, mortgage, deed or other material instrument to which to
our knowledge the Company is a party or by which the Company or any of its
assets are bound, (ii) result in any violation of any statute, law, rule or
regulation applicable to the Company, or (iii) to our knowledge, violate any
order, writ, injunction or decree applicable to the Company or any of its
subsidiaries. 

                    5.      The
issuance of the Purchase Shares and Commitment Shares pursuant to the terms and
conditions of the Transaction Documents has been duly authorized and the
Commitment Shares and Initial Purchase Shares are validly issued, fully paid and
non-assessable, to our knowledge, free of all taxes, liens, charges,
restrictions, rights of first refusal and preemptive rights. 20,000,000 shares
of Common Stock have been properly reserved for issuance under the Purchase
Agreement. When issued and paid for in accordance with the Purchase Agreement,
the Purchase Shares shall be validly issued, fully paid and non-assessable, to
our knowledge, free of all taxes, liens, charges, restrictions, rights of first
refusal and preemptive rights. To our knowledge, the execution and delivery of
the Registration Rights Agreement do not, and the performance by the Company of
its obligations thereunder shall not, give rise to any rights of any other person for the registration under
the Securities Act of any shares of Common Stock or other securities of the
Company which have not been waived. 




                    6.      As
of the date hereof, the authorized capital stock of the Company consists of
150,000,000 shares of common stock, par value $0.001 per share, of which to our
knowledge 30,240,687 shares are issued and outstanding. Except as set forth on
Schedule 4(c) of the Purchase Agreement or otherwise as set out herein, to our
knowledge, there are no outstanding shares of capital stock or other securities
convertible into or exchangeable or exercisable for shares of the capital stock
of the Company. 

                    7.      Assuming
the accuracy of the representations and your compliance with the covenants made
by you in the Transaction Documents, the offering, sale and issuance of the
Initial Commitment Shares to you pursuant to the Transaction Documents is exempt
from registration under the Securities Act and the securities laws and
regulations of the State of Nevada. 

                    8.      Other
than that which has been obtained and completed prior to the date hereof, no
authorization, approval, consent, filing or other order of any federal or state
governmental body, regulatory agency, or stock exchange or market, or any court,
or, to our knowledge, any third party is required to be obtained by the Company
to enter into and perform its obligations under the Transaction Documents or for
the Company to issue and sell the Purchase Shares as contemplated by the
Transaction Documents. 

                    9.      The
Common Stock is registered pursuant to Section 12(g) of the Exchange Act. To our
knowledge, since one year preceding the date of the Purchase Agreement, the
Company has been in compliance with the reporting requirements of the Exchange
Act applicable to it. To our knowledge, since one year preceding the date of the
Purchase Agreement, the Company has not received any written notice from the
Principal Market stating that the Company has not been in compliance with any of
the rules and regulations (including the requirements for continued listing) of
the Principal Market. 

          We
further advise you that to our knowledge, except as disclosed on Schedule 4(h)
in the Purchase Agreement or otherwise as set out herein, there is no action,
suit, proceeding, inquiry or investigation before or by any court, public board
or body, any governmental agency, any stock exchange or market, or
self-regulatory organization, which has been threatened in writing or which is
currently pending against the Company, any of its subsidiaries, any officers or
directors of the Company or any of its subsidiaries or any of the properties of
the Company or any of its subsidiaries.

          In
addition, we have participated in the preparation of the Registration Statement
(SEC File #________) covering the sale of the Purchase Shares and the Commitment
Shares ncluding the prospectus dated ____________, contained therein and in
conferences with officers and other representatives of the Company (including
the Company’s independent auditors) during which the contents of the
Registration Statement and related matters were discussed and reviewed and,
although we are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, on the basis of the information that was developed in
the course of the performance of the services referred to above, considered in
the light of our understanding of the applicable law, nothing came to our
attention that caused us to believe that the Registration Statement (other than
the financial statements and schedules and the other financial and statistical
data included therein, as to which we express no belief), as of their dates,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. 




EXHIBIT B 

FORM OF OFFICER’S CERTIFICATE 

          This
Officer’s Certificate (“Certificate”) is being delivered pursuant to
Section 8(e) of that certain Purchase Agreement dated as of ________, 2013,
(“Purchase Agreement”), by and between ANAVEX LIFE SCIENCES CORP.,
a Nevada corporation (the “Company”), and LINCOLN PARK CAPITAL FUND,
LLC (the “Investor”). Terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Purchase Agreement. 

          The
undersigned, ___________, ______________ of the Company, hereby certifies as
follows: 


            1.     
    I am the _____________ of the Company and make the statements contained in this
    Certificate; 

            2.      The
    representations and warranties of the Company are 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 of the Purchase
    Agreement, in which case, such representations and warranties are 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); 

            3.      The
    Company has performed, satisfied and complied in all material respects with
    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. 

            4.      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. 

  IN WITNESS WHEREOF, I have hereunder signed my name on this ___
    day of ___________. 



______________________
Name:

Title: 

          The
undersigned as Secretary of ANAVEX LIFE SCIENCES CORP., a Nevada
corporation, hereby certifies that ___________ is the duly elected, appointed,
qualified and acting 
________ of  _________ and that the signature
appearing above is his genuine signature. 

___________________________________
Secretary 




EXHIBIT C 

FORM OF COMPANY RESOLUTIONS
FOR SIGNING PURCHASE
AGREEMENT 

UNANIMOUS WRITTEN CONSENT OF
ANAVEX LIFE SCIENCES
CORP. 

          In
accordance with the corporate laws of the state of Nevada, the undersigned,
being all of the directors of ANAVEX LIFE SCIENCES CORP., a Nevada
corporation (the “Corporation”) do hereby consent to and adopt the following
resolutions as the action of the Board of Directors for and on behalf of the
Corporation and hereby direct that this Consent be filed with the minutes of the
proceedings of the Board of Directors: 

          WHEREAS,
there has been presented to the Board of Directors of the Corporation a draft of
the Purchase Agreement (the “Purchase Agreement”) by and between the Corporation
and Lincoln Park Capital Fund, LLC (“Lincoln Park”), providing for the purchase
by Lincoln Park of up to Ten Million Dollars ($10,000,000) of the Corporation’s
common stock, $0.001 par value per share (the “Common Stock”); and 

          WHEREAS,
after careful consideration of the Purchase Agreement, the documents incident
thereto and other factors deemed relevant by the Board of Directors, the Board
of Directors has determined that it is advisable and in the best interests of
the Corporation to engage in the transactions contemplated by the Purchase
Agreement, including, but not limited to, the issuance of 341,858 shares of
Common Stock to Lincoln Park as an initial commitment fee (the “Initial
Commitment Shares”) and the sale of shares of Common Stock to Lincoln Park up to
the available amount under the Purchase Agreement (the "Purchase Shares"). 

Transaction Documents

          NOW,
THEREFORE, BE IT RESOLVED, that the transactions described in the Purchase
Agreement are hereby approved and Tom Skarpelos and Christopher Missling (the
“Authorized Officers”) are severally authorized to execute and deliver the
Purchase Agreement, and any other agreements or documents contemplated thereby
including, without limitation, a registration rights agreement (the
“Registration Rights Agreement”) providing for the registration of the shares of
the Company’s Common Stock issuable in respect of the Purchase Agreement on
behalf of the Corporation, with such amendments, changes, additions and
deletions as the Authorized Officers may deem to be appropriate and approve on
behalf of, the Corporation, such approval to be conclusively evidenced by the
signature of an Authorized Officer thereon; and 

          FURTHER
RESOLVED, that the terms and provisions of the Registration Rights Agreement by
and among the Corporation and Lincoln Park are hereby approved and the
Authorized Officers are authorized to execute and deliver the Registration
Rights Agreement (pursuant to the terms of the Purchase Agreement), with such
amendments, changes, additions and deletions as the Authorized Officer may deem
appropriate and approve on behalf of, the Corporation, such approval to be
conclusively evidenced by the signature of an Authorized Officer thereon; and


          FURTHER
RESOLVED, that the terms and provisions of the Form of Transfer Agent
Instructions (the “Instructions”) are hereby approved and the Authorized
Officers are authorized to execute and deliver the Instructions (pursuant to the
terms of the Purchase Agreement), with such amendments, changes, additions and
deletions as the Authorized Officers may deem appropriate and approve on behalf of, the Corporation, such approval to be
conclusively evidenced by the signature of an Authorized Officer thereon; and




Execution of Purchase Agreement

          FURTHER
RESOLVED, that the Corporation be and it hereby is authorized to execute the
Purchase Agreement providing for the purchase of up to Ten Million Dollars
($10,000,000) of the Corporation’s common stock; and 

Issuance of Common Stock

          FURTHER
RESOLVED, that the Corporation is hereby authorized to issue to Lincoln Park
Capital Fund, LLC, 341,858 shares of Common Stock as Initial Commitment Shares
and that upon issuance of the Initial Commitment Shares pursuant to the Purchase
Agreement the Commitment Shares shall be duly authorized, validly issued, fully
paid and nonassessable with no personal liability attaching to the ownership
thereof; and 

          FURTHER
RESOLVED, that the Corporation is hereby authorized to issue to Lincoln Park
Capital Fund, LLC, 250,000 shares of Common Stock as Initial Purchase Shares and
that upon issuance of the Initial Purchase Shares pursuant to the Purchase
Agreement the Initial Purchase Shares shall be duly authorized, validly issued,
fully paid and nonassessable with no personal liability attaching to the
ownership thereof; and 

          FURTHER
RESOLVED, that the Corporation is hereby authorized to issue shares of Common
Stock upon the purchase of Purchase Shares up to the Available Amount under the
Purchase Agreement in accordance with the terms of the Purchase Agreement and
that, upon issuance of the Purchase Shares pursuant to the Purchase Agreement,
the Purchase Shares will be duly authorized, validly issued, fully paid and
nonassessable with no personal liability attaching to the ownership thereof; and


          FURTHER
RESOLVED, that the Corporation shall initially reserve 20,000,000 shares of
Common Stock for issuance as Purchase Shares under the Purchase Agreement;
and

          FURTHER
RESOLVED, that the Corporation is hereby authorized to issue 133,409 shares of
Common Stock (subject to equitable adjustment for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction)
in connection with the purchase of Purchase Shares (the “Additional Commitment
Shares”) in accordance with the terms of the Purchase Agreement and that, upon
issuance of the Additional Commitment Shares pursuant to the Purchase Agreement,
the Additional Commitment Shares will be duly authorized, validly issued, fully
paid and nonassessable with no personal liability attaching to the ownership
thereof; and 

          FURTHER
RESOLVED, that the Corporation shall initially reserve 133,409 shares of Common
Stock (subject to equitable adjustment for any reorganization, recapitalization,
non-cash dividend, stock split or other similar transaction) for issuance as
Additional Commitment Shares under the Purchase Agreement. 

Approval of Actions

          FURTHER
RESOLVED, that, without limiting the foregoing, the Authorized Officers are, and
each of them hereby is, authorized and directed to proceed on behalf of the
Corporation and to take all such steps as deemed necessary or appropriate, with the advice
and assistance of counsel, to cause the Corporation to consummate the agreements
referred to herein and to perform its obligations under such agreements; and




          FURTHER
RESOLVED, that the Authorized Officers be, and each of them hereby is,
authorized, empowered and directed on behalf of and in the name of the
Corporation, to take or cause to be taken all such further actions and to
execute and deliver or cause to be executed and delivered all such further
agreements, amendments, documents, certificates, reports, schedules,
applications, notices, letters and undertakings and to incur and pay all such
fees and expenses as in their judgment shall be necessary, proper or desirable
to carry into effect the purpose and intent of any and all of the foregoing
resolutions, and that all actions heretofore taken by any officer or director of
the Corporation in connection with the transactions contemplated by the
agreements described herein are hereby approved, ratified and confirmed in all
respects. 

          IN
WITNESS WHEREOF, the Board of Directors has executed and delivered this Consent
effective as of __________, 2013. 

Tom Skarpelos 

______________________


Christopher U Missling 

______________________


 

being all of the directors of ANAVEX LIFE SCIENCES
CORP.




EXHIBIT D 

FORM OF SECRETARY’S CERTIFICATE 

          This
Secretary’s Certificate (“Certificate”) is being delivered pursuant to Section
7(k) of that certain Purchase Agreement dated as of _____ __, 2013(“Purchase
Agreement”), by and between ANAVEX LIFE SCIENCES CORP., a Nevada
corporation (the “Company”) and LINCOLN PARK CAPITAL FUND, LLC (the
“Investor”), pursuant to which the Company may sell to the Investor up to Ten
Million Dollars ($10,000,000) of the Company's Common Stock, $0.001 par value
per share (the "Common Stock"). Terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Purchase Agreement. 

          The
undersigned, ____________, Secretary of the Company, hereby certifies as
follows: 


            1.      I am
    the Secretary of the Company and make the statements contained in this
    Secretary’s Certificate. 

            2.      Attached
    hereto as Exhibit A and Exhibit B are true, correct and complete
    copies of the Company’s bylaws (“Bylaws”) and Certificate of Incorporation
    (“Articles”), in each case, as amended through the date hereof, and no action
    has been taken by the Company, its directors, officers or shareholders, in
    contemplation of the filing of any further amendment relating to or affecting
    the Bylaws or Articles. 

            3.      Attached
    hereto as Exhibit C are true, correct and complete copies of the
    resolutions duly adopted by the Board of Directors of the Company on
    _____________, at which a quorum was present and acting throughout. Such
    resolutions have not been amended, modified or rescinded and remain in full
    force and effect and such resolutions are the only resolutions adopted by the
    Company’s Board of Directors, or any committee thereof, or the shareholders of
    the Company relating to or affecting (i) the entering into and performance of
    the Purchase Agreement, or the issuance, offering and sale of the Purchase
    Shares and the Commitment Shares and (ii) and the performance of the Company of
    its obligation under the Transaction Documents as contemplated therein. 

            4.      As
    of the date hereof, the authorized, issued and reserved capital stock of the
    Company is as set forth on Exhibit D hereto. 



IN WITNESS WHEREOF, I have hereunder signed my name on
this ___ day of ____________. 

_________________________
                 
Secretary

The undersigned as ___________of ANAVEX LIFE SCIENCES CORP., a
Nevada corporation, hereby certifies that ____________is the duly elected,
appointed, qualified and acting Secretary of _________, and that the signature
appearing above is his genuine signature. 

___________________________________




EXHIBIT E 

FORM OF LETTER TO THE TRANSFER AGENT FOR THE ISSUANCE OF THE
INITIAL 
PURCHASE SHARES AND COMMITMENT SHARES AT SIGNING OF THE
PURCHASE 
AGREEMENT 

[COMPANY LETTERHEAD] 

[DATE] 

[TRANSFER AGENT]

__________________
__________________
__________________


Re: Issuance of Common Shares to Lincoln Park Capital Fund,
LLC

Dear ________, 

On behalf of ANAVEX LIFE SCIENCES CORP., (the
“Company”), you are hereby instructed to issue as soon as
possible a share certificate representing an aggregate of 591,858
shares of our common stock (consisting of 250,000 Initial Purchase Shares and
341,858 Commitment Shares) in the name of Lincoln Park Capital Fund,
LLC. The share certificate should be dated [DATE OF THE PURCHASE
AGREEMENT]. I have included a true and correct copy of a unanimous written
consent executed by all of the members of the Board of Directors of the Company
adopting resolutions approving the issuance of these shares. The shares should
be issued subject to the following 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. 






The share certificate should be sent as soon as possible
via overnight mail to the following address: 

Lincoln Park Capital Fund, LLC 
440
North Wells, Suite 410 
Chicago, IL 60654 
Attention: Josh
Scheinfeld/Jonathan Cope 


Thank you very much for your help. Please call me at
______________ if you have any questions or need anything further. 

ANAVEX LIFE SCIENCES CORP. 

BY:_____________________________
          [name] 
          [title]