Document:

Exhibit 10.3

INVESTMENT MANAGEMENT TRUST AGREEMENT

This Agreement is made as of _________, 2006 by and
between Oracle Healthcare Acquisition Corp. (the “Company”) and
Continental Stock Transfer and Trust Company (“Trustee”).

WHEREAS, the Company’s Registration Statement on
Form S-1, No. 333- 128748 (as amended from time to time) (“Registration
Statement”), for its initial public offering of securities (“IPO”)
has been declared effective as of the date hereof by the Securities and
Exchange Commission (“Effective Date”); and

WHEREAS, CRT Capital LLC (“CRT”) is acting as
the representative of the underwriters in the IPO; and

WHEREAS, as described in the Company’s Registration
Statement, and in accordance with the Company’s Amended and Restated
Certificate of Incorporation, $94,500,000 of the net proceeds of the IPO
($108,750,000 if the underwriters’ over-allotment option is exercised in full)
will be delivered to the Trustee to be deposited and held in a trust account
for the benefit of the Company and the holders of the Company’s Common Stock,
par value $0.0001 per share, issued in the IPO as hereinafter provided and in
the event the Units are registered in Colorado, pursuant to Section 11-51-302(6)
of the Colorado Revised Statutes.  A copy
of the Colorado Statute is attached hereto and made a part hereof.  The amount to be delivered to the Trustee
will be referred to herein as the “Property,” the stockholders for whose
benefit the Trustee shall hold the Property will be referred to as the “Public
Stockholders,” and the Public Stockholders and the Company will be referred
to together as the “Beneficiaries”); and

WHEREAS, the Company and the Trustee desire to enter
into this Agreement to set forth the terms and conditions pursuant to which the
Trustee shall hold the Property.

IT IS AGREED:

1.             Agreements and Covenants of Trustee.  The Trustee hereby agrees and covenants to:

(a)           Hold the Property in
trust for the Beneficiaries in accordance with the terms of this Agreement,
including the terms of Section 11-51-302(6) of the Colorado Statute, in a
segregated trust account (“Trust Account”) established by the Trustee at
Lehman Brothers Inc.;

(b)           Manage, supervise
and administer the Trust Account subject to the terms and conditions set forth
herein;

(c)           In a timely manner, upon the instruction
of the Company, to invest and reinvest the Property in (i) any “Government
Security,” which shall mean any Treasury Bill issued by the United States
government, having a maturity of one hundred and eighty days or less; or (ii)
any open ended investment company registered under the Investment Company Act
of 1940 that holds itself out as a money market fund and bears the highest
(AAA) credit rating issued by a United States nationally recognized rating
agency such as Standard & Poor’s Corporation or Moody’s Investor Services.

(d)           Collect and receive,
when due, all principal and income arising from the Property, which shall
become part of the “Property,” as such term is used herein;

(e)           Notify the Company
and CRT of all communications received by it with respect to any Property
requiring action by the Company;

 

 

(f)            Supply any
necessary information or documents as may be requested by the Company in
connection with the Company’s preparation of the tax returns for the Trust
Account;

(g)           Participate in any
plan or proceeding for protecting or enforcing any right or interest arising
from the Property if, as and when instructed by the Company to do so;

(h)           Render to the
Company and to CRT, and to such other person as the Company may instruct, monthly
statements of the activities of and amounts in the Trust Account reflecting all
receipts in writing and disbursements of the Trust Account;

(i)            If there is any income tax obligation
relating to the income of the Property in the Trust Account, then, at the
written instruction of the Company, the Trustee shall disburse funds in an
amount specified by the Company, out of the Property in the Trust Account, as
owing to each such taxing authority; and

(j)            Commence liquidation of the Trust Account
only after receipt of and only in accordance with the terms of a letter (“Termination
Letter”), in a form substantially similar to that attached hereto as either
Exhibit A or Exhibit B, signed on behalf of the Company by its President or
Chairman of the Board and Secretary and affirmed by its entire Board of
Directors, and complete the liquidation of the Trust Account and distribute the
Property in the Trust Account only as directed in the Termination Letter and
the other documents referred to therein.  The Trustee understands and agrees that
disbursements from the Trust Account shall be made only pursuant to a duly
executed Termination Letter, together with the other documents referenced
herein.  In all cases, the Trustee shall
provide CRT with a copy of any Termination Letter and/or any other
correspondence that it receives with respect to any proposed withdrawal from
the Trust Account promptly after it receives the same.

2.             Agreements and Covenants of the Company.  The Company hereby agrees and covenants to:

(a)           Give all
instructions to the Trustee hereunder in writing, signed by the Company’s
President, Chairman of the Board or Chief Financial Officer.  In addition, except with respect to its
duties under paragraph 1(i) above, the Trustee shall be entitled to rely on,
and shall be protected in relying on, any verbal or telephonic advice or
instruction which it in good faith believes to be given by any one of the
persons authorized above to give written instructions, provided that the
Company shall promptly confirm such instructions in writing;

(b)           Hold the Trustee
harmless and indemnify the Trustee from and against any and all expenses,
including reasonable counsel fees and disbursements, or loss suffered by the
Trustee in connection with any action, suit or other proceeding brought against
the Trustee involving any claim, or in connection with any claim or demand
which in any way arises out of or relates to this Agreement, the services of
the Trustee hereunder, or the Property or any income earned from investment of
the Property, except for expenses and losses resulting from the Trustee’s gross
negligence or willful misconduct. 
Promptly after the receipt by the Trustee of notice of demand or claim
or the commencement of any action, suit or proceeding, pursuant to which the
Trustee intends to seek indemnification under this paragraph, it shall notify
the Company in writing of such claim (hereinafter referred to as the “Indemnified
Claim”).  The Trustee shall have the
right to conduct and manage the defense against such Indemnified Claim,
provided, that the Trustee shall obtain the consent of the Company with respect
to the selection of counsel, which consent shall not be unreasonably
withheld.  The Company may participate in
such action with its own counsel; and

(c)           Pay the Trustee an
initial acceptance fee of $1,000 and an annual fee of $3,000 (it being
expressly understood that the Property shall not be used to pay such fee).  The Company shall pay 

2

 

the
Trustee the initial acceptance fee and first year’s fee at the consummation of
the IPO and thereafter on the anniversary of the Effective Date.  The Trustee shall refund to the Company the
fee (on a pro rata basis) with respect to any period after the liquidation of the
Trust Fund.  The Company shall not be
responsible for any other fees or charges of the Trustee except as may be
provided in paragraph 2(b) hereof (it being expressly understood that the
Property shall not be used to make any payments to the Trustee under such
paragraph).

3.             Limitations of Liability.  The Trustee shall have no responsibility or
liability to:

(a)           Take any action with
respect to the Property, other than as directed in paragraph 1 hereof and the
Trustee shall have no liability to any party except for liability arising out
of its own gross negligence or willful misconduct;

(b)           Institute any
proceeding for the collection of any principal and income arising from, or
institute, appear in or defend any proceeding of any kind with respect to, any of
the Property unless and until it shall have received instructions from the
Company given as provided herein to do so and the Company shall have advanced
or guaranteed to it funds sufficient to pay any expenses incident thereto;

(c)           Change the
investment of any Property, other than in compliance with paragraph 1(c);

(d)           Refund any
depreciation in principal of any Property;

(e)           Assume that the
authority of any person designated by the Company to give instructions
hereunder shall not be continuing unless provided otherwise in such
designation, or unless the Company shall have delivered a written revocation of
such authority to the Trustee;

(f)            The other parties
hereto or to anyone else for any action taken or omitted by it, or any action
suffered by it to be taken or omitted, in good faith and in the exercise of its
own best judgment, except for its gross negligence or willful misconduct.  The Trustee may rely conclusively and shall
be protected in acting upon any order, notice, demand, certificate, opinion or
advice of counsel (including counsel chosen by the Trustee), statement,
instrument, report or other paper or document (not only as to its due execution
and the validity and effectiveness of its provisions, but also as to the truth
and acceptability of any information therein contained) which is believed by
the Trustee, in good faith, to be genuine and to be signed or presented by the
proper person or persons.  The Trustee
shall not be bound by any notice or demand, or any waiver, modification,
termination or rescission of this Agreement or any of the terms hereof, unless
evidenced by a written instrument delivered to the Trustee signed by the proper
party or parties and, if the duties or rights of the Trustee are affected,
unless it shall give its prior written consent thereto;

(g)           Verify the
correctness of the information set forth in the Registration Statement or to
confirm or assure that any acquisition made by the Company or any other action
taken by it is as contemplated by the Registration Statement;

(h)           File income tax or
information returns with the United States Internal Revenue Service and payee
statements with the Company, documenting the taxes payable by the Company, if
any, relating to interest earned on the Property; and

(i)            Pay any taxes on behalf of
the Trust Account (it being expressly understood that, if there is any income tax obligation
relating to the income of the Property in the Trust Account, then, at 

3

 

the written instruction
of the Company, the Trustee shall disburse funds in an amount specified by the
Company, out of the Property in the Trust Account, as owing to each such taxing
authority); and

(j)            Compute, confirm or otherwise verify
amounts requested by the Company pursuant to Paragraph 1(i) above.

4.             Trust Fund Waiver.  The Trustee has no right,
title, interest, or claim of any kind (“Claim”) in or to any monies in
the Trust Account, and hereby waives any Claim in or to any monies in the Trust
Account it may have in the future, and hereby agrees not to seek recourse,
reimbursement, payment or satisfaction for any Claim against the Trust Account
for any reason whatsoever.

5.             Termination. 
This Agreement shall terminate as follows:

(a)           If the Trustee gives
written notice to the Company that it desires to resign under this Agreement,
the Company shall use its reasonable efforts to locate a successor
trustee.  At such time that the Company
notifies the Trustee that a successor trustee has been appointed by the Company
and has agreed to become subject to the terms of this Agreement, the Trustee
shall transfer the management of the Trust Account to the successor trustee,
including but not limited to the transfer of copies of the reports and
statements relating to the Trust Account, whereupon this Agreement shall
terminate; provided, however, that, in the event that the Company does not
locate a successor trustee within ninety days of receipt of the resignation
notice from the Trustee, the Trustee may submit an application to have the
Property deposited with the United States District Court for the Southern
District of New York and upon such deposit, the Trustee shall be immune from
any liability whatsoever that arises due to any actions or omissions to act by
any party after such deposit; or

(b)           At such time that
the Trustee has completed the liquidation of the Trust Account in accordance
with the provisions of paragraph 1(j)
hereof, and distributed the Property in accordance with the provisions of the
Termination Letter, this Agreement shall terminate except with respect to
Paragraph 2(b); or

(c)           On such date after
________ __, 2007 when the Trustee deposits the Property with the United States
District Court for the Southern District of New York in the event that, prior
to such date, the Trustee has not received a Termination Letter from the
Company pursuant to paragraph 1(j).

6.             Miscellaneous.

(a)           The Company and the
Trustee each acknowledge that the Trustee will follow the security procedures
set forth below with respect to funds transferred from the Trust Account.  Upon receipt of written instructions, the
Trustee will confirm such instructions with an Authorized Individual at an
Authorized Telephone Number listed on the attached Exhibit C.  The Company and the Trustee will each
restrict access to confidential information relating to such security
procedures to authorized persons.  Each
party must notify the other party immediately if it has reason to believe
unauthorized persons may have obtained access to such information, or of any
change in its authorized personnel.  In
executing funds transfers, the Trustee will rely upon account numbers or other
identifying numbers of a beneficiary, beneficiary’s bank or intermediary bank,
rather than names.  The Trustee shall not
be liable for any loss, liability or expense resulting from any error in an
account number or other identifying number, provided it has accurately
transmitted the numbers provided.

(b)           This Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of New York, without giving effect to conflict of laws.  It may be executed in 

 

4

 

several
counterparts, each one of which shall constitute an original, and together
shall constitute but one instrument.

(c)           This Agreement
contains the entire agreement and understanding of the parties hereto with
respect to the subject matter hereof. 
This Agreement or any provision hereof may only be changed, amended or
modified by a writing signed by each of the parties hereto; provided, however,
that no such change, amendment or modification may be made without the prior
written consent of CRT.  As to any claim,
cross-claim or counterclaim in any way relating to this Agreement, each party
waives the right to trial by jury.

(d)           The parties hereto
consent to the jurisdiction and venue of any state or federal court located in
the City of New York for purposes of resolving any disputes hereunder.

(e)           Any notice, consent
or request to be given in connection with any of the terms or provisions of
this Agreement shall be in writing and shall be sent by express mail or similar
private courier service, by certified mail (return receipt requested), by hand
delivery or by facsimile transmission:

 

	
   

  	
  if to the Trustee, to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Continental Stock
  Transfer

  	
   

  
	
   

  	
   

  	
  & Trust Company

  	
   

  
	
   

  	
   

  	
  17 Battery Place

  	
   

  
	
   

  	
   

  	
  New York, New York
  10004

  	
   

  
	
   

  	
   

  	
  Attn: Steven G. Nelson

  	
   

  
	
   

  	
   

  	
  Fax No.: (212) 509-5150

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  if to the Company, to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Oracle Healthcare
  Acquisition Corp.

  	
   

  
	
   

  	
   

  	
  200 Greenwich Avenue

  	
   

  
	
   

  	
   

  	
  3rd Floor

  	
   

  
	
   

  	
   

  	
  Greenwich, Connecticut
  06830

  	
   

  
	
   

  	
   

  	
  (203) 862-7900

  	
   

  
	
   

  	
   

  	
  Attn:

  	
  Joel D. Liffmann

  
	
   

  	
   

  	
  Fax No.:

  	
  (203) 862-1601

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  in either case with a
  copy to:

  	
   

  	
   

  
	
   

  	
   

  	
  CRT Capital Group LLC

  	
   

  
	
   

  	
   

  	
  262 Harbor Drive

  	
   

  
	
   

  	
   

  	
  Stamford, CT 06902

  	
   

  
	
   

  	
   

  	
  Attn:

  	
   

  	
   

  
	
   

  	
   

  	
  Fax No.:

  	
  [                               ]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Bingham McCutchen LLP

  	
   

  
	
   

  	
   

  	
  399 Park Avenue

  	
   

  
	
   

  	
   

  	
  New York, New York
  10022

  	
   

  
	
   

  	
   

  	
  Attn:

  	
  Floyd I. Wittlin, Esq.

  
	
   

  	
   

  	
  Fax No.:

  	
  (212) 752-5370

  
							

 

5

 

 

	
   

  	
  and

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Willkie Farr &
  Gallagher LLP

  	
   

  
	
   

  	
  787 Seventh Avenue

  	
   

  
	
   

  	
  New York, New York
  10019-6099

  	
   

  
	
   

  	
  Attn:

  	
  William H. Gump, Esq.

  
	
   

  	
  Fax No.:

  	
  (212) 728-8111

  
				

 

(f)            This Agreement may
not be assigned by the Trustee without the prior written consent of the Company
and CRT.

(g)           Each of the Trustee
and the Company hereby represents that it has the full right and power and has
been duly authorized to enter into this Agreement and to perform its respective
obligations as contemplated hereunder.  The
Trustee acknowledges and agrees that it shall not make any claims or proceed
against the Trust Account, including by way of set-off, and shall not be
entitled to any funds in the Trust Account under any circumstance.

(h)           The Trustee hereby
consents to the inclusion of Continental Stock Transfer & Trust Company in
the Registration Statement and other materials relating to the IPO.

 

6

 

IN WITNESS WHEREOF, the parties have duly
executed this Investment Management Trust Agreement as of the date first
written above.

	
   

  	
  CONTINENTAL STOCK TRANSFER & TRUST
  COMPANY,

  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
   

  	
  ORACLE HEALTHCARE ACQUISITION CORP.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President and Chief
  Operating Officer

  
					

 

7

 

EXHIBIT
A

[Letterhead of
Company]

[Insert date]

[________________]

Attn:  ]

Re:          Trust Account No. [                    ] Termination Letter

Gentlemen:

Pursuant
to the Investment Management Trust Agreement between Oracle
Healthcare Acquisition Corp. (“Company”) and Continental Stock Transfer& Trust Company (“Trustee”),
dated as of __________, 2005 (“Trust Agreement”), this is to advise you
that the Company has entered into an agreement (“Business Agreement”)
with __________________ (“Target Business”) to consummate a business
combination with Target Business (“Business Combination”) on or about
[insert date].  The Company shall notify
you at least two business days in advance of the actual date of the
consummation of the Business Combination (“Consummation Date”).

In
accordance with the terms of the Trust Agreement, we hereby authorize you to
commence liquidation of the Trust Account to the effect that, on the
Consummation Date, all of funds held in the Trust Account will be immediately
available for transfer to the account or accounts that the Company shall direct
on the Consummation Date.

On
the Consummation Date (i) counsel for the Company shall deliver to you written
notification that (a) the Business Combination has been consummated and [(b)
the provisions of Section 11-51-302(6) and Rule 51-3.4 of the Colorado Statute
have been met,] and (ii) the Company shall deliver to you written instructions
with respect to the transfer of the funds held in the Trust Account (“Instruction
Letter”).  You are hereby directed
and authorized to transfer the funds held in the Trust Account immediately upon
your receipt of the counsel’s letter and the Instruction Letter, in accordance
with the terms of the Instruction Letter. 
In the event that certain deposits held in the Trust Account may not be
liquidated by the Consummation Date without penalty, you will notify the
Company of the same and the Company shall direct you as to whether such funds
should remain in the Trust Account and be distributed after the Consummation
Date to the Company.  Upon the
distribution of all the funds in the Trust Account pursuant to the terms
hereof, the Trust Agreement shall be terminated and the Trust Account closed.

In
the event that the Business Combination is not consummated on the Consummation
Date described in the notice thereof and we have not notified you on or before
the original Consummation Date of a new Consummation Date, then the funds held
in the Trust Account shall be reinvested as provided in the Trust Agreement on
the business day immediately following the Consummation Date as set forth in
the notice.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ORACLE HEALTHCARE ACQUISITION CORP.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President and Chief
  Operating Officer

  
						

 

 

 

EXHIBIT
B

[Letterhead
of Company]

[Insert date]

[___________________

Attn:  ]

Re:          Trust
Account No. [             ] Termination
Letter

Gentlemen:

Pursuant to the Investment Management Trust
Agreement between Oracle Healthcare Acquisition Corp. (“Company”) and Continental Stock Transfer& Trust
Company (“Trustee”), dated as of _____________, 2005 (“Trust
Agreement”), this is to advise you that the Board of Directors of the
Company has voted to dissolve and liquidate the Company.  Attached hereto is a copy of the minutes of
the meeting of the Board of Directors of the Company relating thereto,
certified by the Secretary of the Company as true and correct and in full force
and effect.

In accordance with the terms of the Trust Agreement,
we hereby (a) certify to you that, if applicable, the provisions of Section
11-51-302(6) and Rule 51-3.4 of the Colorado Statute have been met and (b)
authorize you, to commence liquidation of the Trust Account.  You will notify the Company and
_________________ (“Designated Paying Agent”) in writing as to when all
of the funds in the Trust Account will be available for immediate transfer (“Transfer
Date”).  The Designated Paying Agent
shall thereafter notify you as to the account or accounts of the Designated
Paying Agent that the funds in the Trust Account should be transferred to on
the Transfer Date so that the Designated Paying Agent may commence distribution
of such funds in accordance with the Company’s instructions.  You shall have no obligation to oversee the
Designated Paying Agent’s distribution of the funds.  Upon the payment to the Designated Paying
Agent of all the funds in the Trust Account, the Trust Agreement shall be
terminated and the
Trust Account closed.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ORACLE HEALTHCARE ACQUISITION CORP.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President and Chief
  Operating Officer

  
						

 

 

 

 

EXHIBIT
C

 

	
  AUTHORIZED INDIVIDUAL(S)

  FOR TELEPHONE CALL BACK

  	
  AUTHORIZED

  TELEPHONE NUMBER(S)

  

 

	
   

  	
   

  
	
  Company:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Oracle Healthcare
  Acquisition Corp.

  	
   

  
	
  200 Greenwich Avenue

  	
   

  
	
  3rd Floor

  	
   

  
	
  Greenwich, Connecticut 06830

  	
   

  
	
  (203) 862-7900

  	
   

  
	
  Fax No.:  (203) 862-1601

  	
   

  
	
  Attn: Joel D. Liffmann, President and 

  	
   

  
	
  Chief Operating Officer

  	
  (203) 862-7900

  

 

	
   

  	
   

  
	
  Trustee:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Continental Stock Transfer

  & Trust Company

  	
   

  
	
  17 Battery Place

  	
   

  
	
  New York, New York 10004

  	
   

  
	
  Fax No.:  (212) 509-5150

  	
   

  
	
  Attn:  Steven G. Nelson

  	
  (212)Exhibit
10.7

ORACLE
HEALTHCARE ACQUISITION CORP.

FORM
OF

FOUNDING DIRECTOR WARRANT

PURCHASE AGREEMENT

THIS FOUNDING DIRECTOR
WARRANT PURCHASE AGREEMENT (the “Agreement”) is made as of January __,
2006 between Oracle Healthcare Acquisition Corp., a Delaware corporation (the “Company”),
on the one hand, and Larry N. Feinberg and Joel D. Liffmann, on the
other hand (collectively, the “Purchasers” or individually, a “Purchaser”).  Except as otherwise indicated herein,
capitalized terms used herein are defined in Section 9 hereof.

WHEREAS, the Purchasers are
directors of the Company; and

WHEREAS, in furtherance of
the Company’s plan to obtain funding through an initial public offering (the “Offering”)
of its units (the “Units”), each Unit consisting of one share of common stock
(the “Unit Common Stock”) and one warrant to purchase one share of common stock
(the “Unit Warrants” or a “Unit Warrant”) and to demonstrate the commitment of
the Purchasers to this plan, the Purchasers desire to make an investment in the
Company by purchasing 833,334 warrants (the “Founding Director Warrants” or a “Founding
Director Warrant”) on the terms and conditions described herein; and

WHEREAS, the consummation of
this Agreement is a condition to the closing of the Offering as described in
the Underwriting Agreement between the Company and CRT Capital Group LLC (the “Representative”),
which Underwriting Agreement is filed as an exhibit to the Company’s
registration statement on Form S-1, File No. 333-128748, as the same has
been and may be amended from time to time hereafter (the “Registration
Statement”) and filed with the Securities and Exchange Commission (the “Commission”).

NOW THEREFORE, in
consideration of the mutual promises contained in this Agreement and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as follows:

Section
1.  Authorization, Purchase and Sale;
Terms of the Founding Director Warrants.

A.  Authorization
of the Founding Director Warrants. 
The Company has authorized, and hereby ratifies such authorization by
execution hereof, the issuance and sale to the Purchasers of an aggregate of
833,334 Founding Director Warrants.  Each
Founding Director Warrant shall upon exercise and payment of the exercise price
specified therein entitle the holder to purchase one share of the Company’s
common stock, par value $0.0001 per share (the “Common Stock”).

B.  Purchase
and Sale of the Founding Director Warrants.  The Company shall sell to the Purchasers, and
subject to the terms and conditions set forth herein, the Purchasers shall
severally purchase from the Company, contemporaneously with the 

 

 

closing of the IPO, an
aggregate of 833,334 Founding Director Warrants.  Each Purchaser shall purchase that number of
the Founding Director Warrants as is set forth opposite his name in the table
contained in Exhibit A hereto.  The
purchase price of each Founding Director Warrant shall be $1.20 per Founding
Director Warrant (the “Purchase Price”), which shall be paid in immediately
available funds through wire transfers to the account (the “Account”)
designated by the Company.  The Purchase
Price shall be wired to the Account by the Purchasers so as to be on deposit in
the Account upon the closing of the Offering. 
Amounts so received in the Account shall be credited against the
respective purchase obligations of the Purchasers as described on
Exhibit A hereto.

C.  Terms of
the Founding Director Warrants. 
The Founding Director Warrants shall carry rights and terms identical to
those possessed by the Unit Warrants described in the Registration Statement,
subject to the following exceptions:  the
Founding Director Warrants (i) will not be transferable or salable by the
Purchasers until such time as the Company has completed a Business Combination,
and (ii) together with the shares of Common Stock underlying the Founding
Director Warrants, are and will be entitled to registration rights under the
registration rights agreement (the “Registration Rights Agreement”) to be
signed contemporaneously herewith between the Purchasers, the Existing
Stockholders (as such term is defined in the Registration Statement) and the
Company.  The transfer restriction set
forth in (i) above shall not apply to (a) transfers resulting from the
death of any of the Purchasers, (b) transfers by operation of law,
(c) any transfer for estate planning purposes to persons immediately
related to the transferor by blood, marriage or adoption, or (d) transfers
to any trust solely for the benefit of such transferor and/or the persons
described in the preceding clause; provided, however, that with respect to each
of the transfers described in clauses (a), (b), (c) and (d) of this sentence,
that prior to such transfer, each permitted transferee or the trustee or legal
guardian for each permitted transferee (hereinafter collectively, “Permitted
Transferees” or a “Permitted Transferee”) agrees in writing to be bound by the
terms of this Agreement.  Should any of
the Purchasers transfer or sell Founding Director Warrants to persons other
than Permitted Transferees after the Company has completed a Business
Combination, then such Founding Director Warrants shall on the date of such
transfer immediately become redeemable under the same terms as the Unit
Warrants.  Except as specifically
provided in this Agreement, the terms of the Founding Director Warrants shall
in all other respects be as set forth in the Warrant Agreement relating to the
Unit Warrants by and between the Company and Continental.  In the event of any conflict between this
Agreement and the Warrant Agreement, the terms and provisions of which are
incorporated herein by reference, this Agreement shall control.

Section 2.  The Closing.  The closing of the purchase and sale of the
Founding Director Warrants to the Purchasers (the “Closing”) shall take place
at the offices of Willkie Farr & Gallagher LLP, or at such other time and
place as the parties may mutually agree, at the closing of the Offering.  At the Closing, the Company shall deliver
warrant certificates evidencing the Founding Director Warrants to be purchased
by the Purchasers hereunder, registered in each Purchaser’s name, upon the
payment of the aggregate purchase price therefor, by wire transfer of
immediately available funds to the Account.

 

2

 

Section 3.  Representations and Warranties of
the Company.  As a
material inducement to the Purchasers to enter into this Agreement and purchase
the Founding Director Warrants, the Company hereby represents and warrants
that:

A.  Organization
and Corporate Power.  The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and is qualified to do business in
every jurisdiction in which the failure to so qualify would reasonably be
expected to have a material adverse effect on the financial condition,
operating results or assets of the Company. 
The Company possesses all requisite corporate power and authority
necessary to carry out the transactions contemplated by this Agreement.

B.  Authorization; No Breach.

(i)  The execution, delivery and performance of
this Agreement to which the Company is a party will have been duly authorized
by the Company as of the Closing upon the approval hereof by the Company and
its Board of Directors.  This Agreement
constitutes a valid and binding obligation of the Company, enforceable in
accordance with its terms upon its execution.

(ii)  The execution and delivery by the Company of
this Agreement, the sale and issuance of the Founding Director Warrants
hereunder, the issuance of the Common Stock upon exercise of the Founding
Director Warrants (except, with respect thereto, any filings required under
Federal or state securities laws or issuance of one or more legal opinions in
form and content reasonably satisfactory to the Company) and the fulfillment of
and compliance with the respective terms hereof and thereof by the Company, do
not and will not as of the Closing (i) conflict with or result in a breach
of the terms, conditions or provisions of, (ii) constitute a default
under, (iii) result in the creation of any lien, security interest, charge
or encumbrance upon the Company’s capital stock or assets pursuant to,
(iv) result in a violation of, or (v) require any authorization,
consent, approval, exemption or other action by or notice or declaration to, or
filing with, any court or administrative or governmental body or agency
pursuant to the Amended and Restated Certificate of Incorporation of the
Company or the Amended and Restated Bylaws of the Company, or any material law,
statute, rule or regulation to which the Company is subject, or any agreement,
order, judgment or decree to which the Company is subject, except for any
filings required after the date hereof under Federal or state securities laws.

C.  Title to
Securities.  Upon issuance in
accordance with, and payment pursuant to, the terms hereof, the Founding
Director Warrants to be purchased hereunder and, upon exercise of the Founding Director
Warrants, payment of the exercise price set forth therein and conformance with
the other provisions relating to the exercise thereto, the Common Stock
issuable upon exercise of such Founding Director Warrants will be duly and
validly issued, fully paid, nonassessable, and the Purchasers will have or
receive good title to such securities, free and clear of all liens, claims and
encumbrances of any kind, other than (a) transfer restrictions hereunder and
under the other agreements 

 

3

 

contemplated hereby, (b)
transfer restrictions under federal and state securities laws, and (c) liens,
claims or encumbrances imposed due to the actions of the Purchaser.

D.  Governmental
Consents.  Except as otherwise
disclosed in the Registration Statement or pursuant to any applicable state
securities laws, no permit, consent, approval or authorization of, or
declaration to or filing with, any governmental authority is required in
connection with the execution, delivery and performance by the Company of this
Agreement, or the consummation by the Company of any other transactions
contemplated hereby.

E.  Disclosure.  (a) The Company has provided each
Purchaser with a copy of the Registration Statement and each Amendment to the
Company’s Registration Statement, or informed each Purchaser of the filing
thereof and instructed or requested the Purchasers to review the Registration
Statement and each such Amendment on the Commission’s website.  The Company will provide the Purchasers with
a copy of any and all amendments to the Registration Statement filed by the
Company with the Commission prior to the Closing.  (b) To the best of the Company’s
knowledge as of the date hereof, neither this Agreement nor the Registration
Statement, taken as a whole, contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements herein or
therein not misleading in light of the circumstances in which such statements
were made.

Section 4.  Representations, Warranties and
Covenants of Purchasers.  As a
material inducement to the Company to enter into this Agreement and issue and
sell the Founding Director Warrants to the Purchasers, the Purchasers hereby
severally represent, warrant and covenant to the Company (which
representations, warranties and covenants shall survive the Closing) that:

A.  Capacity
and State Law Compliance. 
Each Purchaser is an individual over the age of 21 years with the legal
capacity to execute and perform the obligations imposed on each of the
Purchasers hereunder.  Each Purchaser has
engaged in the transactions contemplated by this Agreement within a state in
which the offer and sale of the Founding Director Warrants is permitted under
applicable securities laws.  The Purchaser
understands and acknowledges that the purchase of Common Stock on exercise of
the Founding Director Warrants may require the registration of such Common
Stock under Federal and/or state securities laws or the availability of an
exemption from such registration requirements.

B.  Authorization; No Breach.

(i)  This Agreement constitutes a valid and
binding obligation of each Purchaser, enforceable in accordance with its terms.

(ii)  The execution and delivery by Purchasers of
this Agreement and the fulfillment of and compliance with the respective terms
hereof by Purchasers do not and shall not as of the Closing conflict with or
result in a breach of the terms,

 

4

 

conditions or provisions of
any other agreement, instrument, order, judgment or decree to which Purchaser
is subject.

C.  No Group.  By virtue of the Purchasers purchasing the
Founding Director Warrants under this Agreement, such participation shall not
be construed so as to make any of the Purchasers part of, or a participant in,
a “group” as defined in Rule 13d-5 of the Exchange Act with respect to
any securities of the Company.

D.  Waiver and Indemnification.

(i)  Each Purchaser agrees not to seek recourse
against the Trust Account for any reason whatsoever in connection with his
purchase of the Founding Director Warrants or any and all known or unknown
actions, causes of action, suits, claims, or proceedings (collectively, “Claims”)
that may arise now or in the future and related losses, costs, penalties, fees,
liabilities and damages, whether compensatory, consequential or exemplary, and
expenses in connection therewith (collectively, “Losses and Expenses”)
including reasonable attorneys’ and expert witness fees and disbursements and
all other expenses reasonably incurred in investigating, preparing or defending
against any Claims, whether pending or threatened, in connection with any
present or future actual or asserted right relating to the purchase of the
Founding Director Warrants and the transactions contemplated hereby.

(ii)  The Purchasers agree to severally indemnify
and hold harmless the Company, the Representative and the Trust Account against
any and all Losses and Expenses whatsoever to which the Company, the
Representative and the Trust Account may become subject as a result of the
purchase of the Founding Director Warrants by the Purchasers or a Purchaser,
including but not limited to any Claim by any Purchaser of the Founding
Director Warrants, but only to the extent necessary to ensure that such Losses
and Expenses do not reduce the amount in the Trust Account.  To the extent that the foregoing several
indemnification by the Purchasers may be unenforceable for any reason, each
Purchaser agrees to make the maximum contribution permissible by applicable law
to the payment and satisfaction of any Losses and Expenses relating to Claims
that may or will otherwise reduce the amount in the Trust Account.  Any Losses and Expenses indemnified hereunder
by the Purchasers will be paid equally by them except to the extent that such
Claims are brought by either Purchaser, in which case the foregoing indemnity
obligation shall only be that of the person making the Claim, it being the
understanding and agreement of the Purchasers that each of them shall be held
harmless by the other as to any Claims, Losses and Expenses.

(iii)  The Purchasers acknowledge and agree that the
stockholders of the Company, including those who purchase the Units in the
Offering, are and shall be third-party beneficiaries of the foregoing
provisions of Section 4D of this Agreement.

 

5

 

(iv)  Each Purchaser agrees that to the extent any
waiver of rights under this Section 4D is ineffective as a matter of law,
each Purchaser has offered such waiver for the benefit of the Company as an
equitable right that shall survive any statutory disqualification or bar that
applies to a legal right.  Each Purchaser
acknowledges the receipt and sufficiency of consideration received from the
Company hereunder in this regard.

Section
5.  Conditions of the Purchasers’
Obligations at the Closing.

The obligation of the
Purchasers to purchase and pay for the Founding Director Warrants is subject to
the fulfillment, at or before the Closing, of each of the following conditions:

A.  Representations
and Warranties.  The
representations and warranties of the Company contained in Section 3,
except for those stated to be made as of the date hereof, shall be true and
correct in all material respects at and as of the Closing as though then made,
except to the extent of changes caused by the transactions expressly
contemplated herein or in the prospectus contained in the Registration
Statement.

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

C.  Registration
Statement.  The Registration
Statement shall have been declared effective by the Commission and the closing
of the Offering shall take place within four business days of such effective
date or, if the Registration Statement is declared effective before 2:00 p.m.
on a business day, the closing of the Offering shall take place within three business
days of such effective date.

Section
6.  Conditions of the Company’s
Obligations at the Closing.

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

A.  Representations
and Warranties.  The
representations and warranties of Purchasers contained in Section 4 shall
be true at and as of the Closing as though then made.

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

C.  Corporate
Consents.  The Company shall
have obtained the consent of its Board of Directors authorizing the execution,
delivery and performance of this Agreement and the issuance and sale of the
Founding Director Warrants hereunder.

Section 7.  Termination.  This Agreement may or will be terminated at
any time prior to the consummation of the Closing under the following described
circumstances:

 

6

 

(i)  automatically upon the mutual written consent
of the Company and the Purchasers;

(ii)  by either of the Company or the Purchasers by
delivery of written notice thereof, if the Offering shall not have been
consummated prior to the one-month anniversary of the date of this Agreement;
or

(iii)  automatically if the Offering is not closed
within the time periods described in the Underwriting Agreement after the Registration
Statement is declared effective.

Section 8.  Survival of Representations and
Warranties.  All of the
representations and warranties contained herein shall survive the Closing for a
period of six (6) months except as otherwise specifically provided herein.

Section 9.  Definitions.  For the purposes of this Agreement, the
following terms have the meanings set forth:

“Affiliate” of any
particular Person means any other Person controlling, controlled by or under
common control with such particular Person, where “control” means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person whether through the ownership of voting securities,
contract or otherwise.

“Business Combination” means
a merger, stock exchange, asset acquisition or similar business combination of
the Company with a target business that is its initial business combination and
which meets the size, timing and other criteria outlined in the Registration
Statement.

“Common Stock” means the
Company’s Common Stock, par value $0.0001 per share.

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

“Person” means any
individual, partnership, corporation, limited liability company, association,
joint stock company, trust, joint venture, unincorporated organization or
governmental entity or any department, agency or political subdivision thereof.

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

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

“Trust Account” means the
trust account to be established by the Investment Management Trust Agreement,
dated [____] [___], 2006, between the Company and Continental Stock
Transfer & Trust Company.

“Warrant Agreement” means the
Warrant Agreement, dated as of [____] [___], 2006, between the Company and
Continental Stock Transfer & Trust Company.

 

7

 

Section
10.  Miscellaneous.

A.  Successors
and Assigns.  Except as
otherwise expressly provided herein, all covenants and agreements contained in
this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not.  Notwithstanding
the foregoing or anything to the contrary herein, the parties may not assign
this Agreement.

B.  Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.

C.  Counterparts.  This Agreement may be executed simultaneously
in two or more counterparts, any one of which need not contain the signatures
of more than one party, but all such counterparts taken together shall
constitute one and the same Agreement.

D.  Descriptive
Headings; Interpretation.  The
descriptive headings of this Agreement are inserted for convenience only and do
not constitute a substantive part of this Agreement.  The use of the word “including” in this
Agreement shall be by way of example rather than by limitation.

E.  Governing
Law.  The general corporation
law of the State of Delaware shall govern all issues and questions concerning
the construction, validity, enforcement and interpretation of this Agreement,
without giving effect to any choice of law or conflict of law rules or
provisions that would cause the application of the laws of any jurisdiction
other than the State of Delaware.

F.  Notices.  All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable overnight
courier service (charges prepaid) or mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid.  Such notices, demands and other
communications shall be sent:

	
  If to the Company:

  	
  Oracle Healthcare Acquisition Corp.

  200 Greenwich Avenue

  3rd Floor

  Greenwich, Connecticut 06830

  Fax No.: (203) 862-1601

  

 

8

 

	
  With a copy to:

  	
  Willkie Farr & Gallagher LLP

  787 Seventh Avenue

  New York, New York 10019-6099

  Attn:William H. Gump, Esq.

  Fax No.: (212) 728-8111

  
	
   

  	
   

  
	
   

  	
   

  
	
  If to the Purchaser:

  	
  At the address of the respective Purchaser
  as set forth in the records of the Company.

  

 

or
to such other address or to the attention of such other person as the recipient
party has specified by prior written notice to the sending party.

G.  No Strict
Construction.  The parties
hereto have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.

IN WITNESS WHEREOF, the
parties hereto have executed this Purchase Agreement on the date first written
above.

	
   

  	
  ORACLE HEALTHCARE ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Mark A. Radzik

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  THE PURCHASERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Larry N. Feinberg

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Joel D. Liffmann

  

 

 

9

 

Exhibit A

 

	
  Larry
  N. Feinberg

  	
   

  	
  $500,000

  	
   

  
	
  Joel D. Liffmann

  	
   

  	
  $500,000

  	
   

  

 

 

10

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