Document:

EXHIBIT 4.1

                          SECURITIES PURCHASE AGREEMENT

      This Securities Purchase Agreement (this "Agreement"), dated as of May 3,
2004, between Axonyx, Inc., a Nevada corporation (the "Company"), and each
purchaser identified on the signature pages hereto (each a "Purchaser" and
collectively the "Purchasers"); and

      WHEREAS, subject to the terms and conditions set forth in this Agreement
and pursuant to Section 4(2) of the Securities Act (as defined below), and Rule
506 promulgated thereunder, the Company desires to issue and sell to the
Purchasers, and each Purchaser, severally and not jointly, desires to purchase
from the Company in the aggregate, up to $20,000,000 of the Company's Common
Stock and certain Warrants, as more fully described in this Agreement.

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

                                   ARTICLE I.
                                   DEFINITIONS

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

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

            "Affiliate" means any Person that, directly or indirectly through
      one or more intermediaries, controls or is controlled by or is under
      common control with a Person as such terms are used in and construed under
      Rule 144. With respect to a Purchaser, any investment fund or managed
      account that is managed on a discretionary basis by the same investment
      manager as such Purchaser will be deemed to be an Affiliate of such
      Purchaser.

            "Business Day" means any day except Saturday, Sunday and any day
      which shall be a federal legal holiday or a day on which banking
      institutions in the State of New York are authorized or required by law or
      other governmental action to close.

            "Closing" means the closing of the purchase and sale of the Common
      Stock and Warrants pursuant to Section 2.1(a).

            "Closing Date" means the date of the Closing.

            "Closing Price" means on any particular date (a) the last reported
      closing bid price per share of the Common Stock on such date on the
      Trading Market (as reported by Bloomberg L.P. at 4:15 PM (New York time),
      or (b) if there is no such price on such date, then the closing bid price
      on the Trading Market on the date nearest preceding such date (as reported
      by Bloomberg L.P. at 4:15 PM (New York time) for the closing bid price for
      regular session trading on such day), or (c) if the Common Stock is not
      then

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      listed or quoted on the Trading Market and if prices for the Common Stock
      are then reported in the "pink sheets" published by the National Quotation
      Bureau Incorporated (or a similar organization or agency succeeding to its
      functions of reporting prices), the most recent bid price per share of the
      Common Stock so reported, or (d) if the shares of Common Stock are not
      then publicly traded the fair market value of a share of Common Stock as
      determined by an appraiser selected in good faith by the independent
      member of the Company's Board of Directors and as to which the Company has
      received written approval from Purchasers holding a majority in interest
      of the Shares then outstanding.

            "Commission" means the Securities and Exchange Commission.

            "Common Stock" means the common stock of the Company, $0.001 par
      value per share, and any securities into which such common stock may
      hereafter be reclassified.

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

            "Company Counsel" means Ehrenreich Eilenberg & Krause LLP.

            "Effective Date" means the date on which the Registration Statement
      is first declared effective by the Commission.

            "Exchange Act" means the Securities Exchange Act of 1934, as
      amended.

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

            "Lien" means a lien, charge, security interest, encumbrance, right
      of first refusal or other restriction.

            "Material Adverse Effect" shall have the meaning ascribed to such
      term in Section 3.1(b).

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

            "Purchase Price" equals $6.50, subject to adjustment for reverse and
      forward stock splits, stock dividends, stock combinations and other
      similar transactions of the Common Stock that occur after the date of this
      Agreement.

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

            "Registrable Securities" shall have the meaning ascribed to such
      term in the Registration Rights Agreement.

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            "Registration Statement" means a registration statement meeting the
      requirements set forth in the Registration Rights Agreement and covering
      the resale by the Purchasers of the Shares and the Warrant Shares.

            "Registration Rights Agreement" means the Registration Rights
      Agreement, dated as of the date of this Agreement, among the Company and
      each Purchaser, in the form of Exhibit A hereto.

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

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

            "Securities" means the Shares, the Warrants and the Warrant Shares.

            "Securities Act" means the Securities Act of 1933, as amended.

            "Shares" means the shares of Common Stock issued to each Purchaser
      pursuant to this Agreement.

            "Subscription Amount" means, as to each Purchaser and the Closing,
      the amounts set forth below such Purchaser's signature block on the
      signature page hereto, in United States dollars and in immediately
      available funds.

            "Subsidiary" shall have the meaning ascribed to such term in Section
      3.1(a).

            "Trading Day" means (i) a day on which the Common Stock is traded on
      a Trading Market, or (ii) if the Common Stock is not listed on a Trading
      Market, a day on which the Common Stock is traded on the over-the-counter
      market, as reported by the OTC Bulletin Board, or (iii) if the Common
      Stock is not quoted on the OTC Bulletin Board, a day on which the Common
      Stock is quoted in the over-the-counter market as reported by the National
      Quotation Bureau Incorporated (or any similar organization or agency
      succeeding its functions of reporting prices); provided, that in the event
      that the Common Stock is not listed or quoted as set forth in (i), (ii)
      and (iii) hereof, then Trading Day shall mean a Business Day.

            "Trading Market" means the following markets or exchanges on which
      the Common Stock is listed or quoted for trading on the date in question:
      the American Stock Exchange, the New York Stock Exchange, the Nasdaq
      National Market or the Nasdaq SmallCap Market.

            "Transaction Documents" means this Agreement, the Registration
      Rights Agreement, the Warrants and any other documents or agreements
      executed in connection with the transactions contemplated hereunder.

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            "Warrants" means the Common Stock Purchase Warrants, in the form of
      Exhibit B, issuable to the Purchasers at the Closing, with a term of
      exercise of 5 years and an exercise price equal to $8.50, subject to
      adjustment therein.

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

                                  ARTICLE II.
                                PURCHASE AND SALE

      2.1 Closing. At the Closing, the Purchasers shall purchase, severally and
not jointly, and the Company shall issue and sell, in the aggregate, up to
$20,000,000 of Common Stock, together with the Warrants. Each Purchaser shall
purchase from the Company, and the Company shall issue and sell to each
Purchaser, (a) a number of Shares equal to such Purchaser's Subscription Amount
divided by the Purchase Price and 0.3 Warrant for every Share purchased. Upon
satisfaction of the conditions set forth in Section 2.2, the Closing shall occur
at the offices of Company Counsel, or such other location as the parties shall
mutually agree.

      2.2 Closing 2.3 Deliveries.

            (a) At the Closing, the Company shall deliver or cause to be
      delivered to each Purchaser:

                  (i) this Agreement duly executed by the Company;

                  (ii) a certificate evidencing a number of Shares equal to such
            Purchaser's Subscription Amount divided by the Purchase Price,
            registered in the name of such Purchaser or its designee(s);

                  (iii) the Registration Rights Agreement duly executed by the
            Company;

                  (iv) a legal opinion of Company Counsel, in the form of
            Exhibit C attached hereto; and

                  (v) a Warrant, registered in the name of such Purchaser,
            pursuant to which such Purchaser shall have the right to acquire up
            to the number of shares of Common Stock equal to 30% of the Shares
            to be issued to such Purchaser at the Closing.

            (b) At the Closing, each Purchaser shall deliver or cause to be
      delivered to the Company:

                  (i) this Agreement duly executed by such Purchaser;

                  (ii) such Purchaser's Subscription Amount by wire transfer of
            immediately available funds to the account of the Company; and

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

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      2.3 Conditions to Purchasers' Obligations at the Closing. Each Purchaser's
obligation to effect the Closing, including without limitation its obligation to
purchase Shares or Warrants at the Closing, is conditioned upon the fulfillment
(or waiver by such Purchaser in its sole and absolute discretion) of each of the
following events as of the Closing Date:

            (a) the representations and warranties of the Company set forth in
      this Agreement and in the other Transaction Documents shall be true and
      correct in all material respects as of such date as if made on such date
      (except that to the extent that any such representation or warranty
      relates to a particular date, in which case such representation or
      warranty shall be true and correct in all respects as of that particular
      date);

            (b) as of the Closing Date, there shall have been no Material
      Adverse Effect with respect to the Company since the date hereof;

            (c) such Purchaser shall have received (or waived its right to
      receive) at the Closing the items described in Section 2.2(a) above;

            (d) the Closing shall have occurred on or before May 5, 2004; and

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

      2.4 Conditions to Company's Obligations at the Closing. The Company's
obligation to effect the Closing with each Purchaser is conditioned upon the
fulfillment (or waiver by the Company in its sole and absolute discretion) of
each of the following events as of the Closing Date:

            (a) the representations and warranties of such Purchaser set forth
      in this Agreement and in the other Transaction Documents shall be true and
      correct in all material respects as of such date as if made on such date
      (except that to the extent that any such representation or warranty
      relates to a particular date, in which case such representation or
      warranty shall be true and correct in all respects as of that particular
      date); and

            (b) the Company shall have received (or waived its right to receive)
      at the Closing the items described in Section 2.2(b) above.

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                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

      3.1 Representations and Warranties of the Company. The Company hereby
makes the following representations and warranties as of the date hereof and as
of the Closing Date to each Purchaser:

            (a) Subsidiaries. The Company's sole wholly-owned operating
      subsidiary is Axonyx Europe BV (the "Subsidiary"). The Company owns,
      directly or indirectly, all of the capital stock of the Subsidiary free
      and clear of any lien, charge, security interest, encumbrance, right of
      first refusal or other restriction (collectively, "Liens"), and all the
      issued and outstanding shares of capital stock of the Subsidiary are
      validly issued and are fully paid, non-assessable and free of preemptive
      and similar rights. The Company acquired in January 2004 and currently
      owns a majority of the outstanding common stock of Oxis International,
      Inc. ("Oxis"), a reporting company under the Exchange Act. The shares of
      common stock of Oxis owned by the Company are free and clear of any Liens.

            (b) Organization and Qualification. Each of the Company and the
      Subsidiary is an entity duly incorporated or otherwise organized, validly
      existing and in good standing under the laws of the jurisdiction of its
      incorporation or organization (as applicable), with the requisite power
      and authority to own and use its properties and assets and to carry on its
      business as currently conducted. Neither the Company nor the Subsidiary is
      in violation of any of the provisions of its respective certificate or
      articles of incorporation, bylaws or other organizational or charter
      documents. Each of the Company and the Subsidiary is duly qualified to
      conduct business and is in good standing as a foreign corporation or other
      entity in each jurisdiction in which the nature of the business conducted
      or property owned by it makes such qualification necessary, except where
      the failure to be so qualified or in good standing, as the case may be,
      would not have or reasonably be expected to result in (i) a material
      adverse effect on the legality, validity or enforceability of any
      Transaction Document, (ii) a material adverse effect on the results of
      operations, assets, business or financial condition of the Company and the
      Subsidiary, taken as a whole, or (iii) adversely impair the Company's
      ability to perform in any material respect on a timely basis its
      obligations under any Transaction Document (any of (i), (ii) or (iii), a
      "Material Adverse Effect").

            (c) Authorization; Enforcement. The Company has the requisite
      corporate power and authority to enter into and to consummate the
      transactions contemplated by each of the Transaction Documents and
      otherwise to carry out its obligations thereunder. The execution and
      delivery of each of the Transaction Documents by the Company and the
      consummation by it of the transactions contemplated thereby have been duly
      authorized by all necessary action on the part of the Company and no
      further action is required by the Company in connection therewith. Each
      Transaction Document has been (or upon delivery will have been) duly
      executed by the Company and, when delivered in accordance with the terms
      hereof, will constitute the valid and binding obligation of the Company
      enforceable against the Company in accordance with its terms except (i) as
      limited by applicable bankruptcy, insolvency, reorganization, moratorium
      and other laws of general application affecting enforcement of creditors'
      rights generally and (ii) as

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      limited by laws relating to the availability of specific performance,
      injunctive relief or other equitable remedies.

            (d) No Conflicts. The execution, delivery and performance of the
      Transaction Documents by the Company and the consummation by the Company
      of the transactions contemplated thereby do not and will not (i) conflict
      with or violate any provision of the Company's or the Subsidiary's
      certificate or articles of incorporation, bylaws or other organizational
      or charter documents, or (ii) conflict with, or constitute a default (or
      an event that 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 (with or without notice, lapse of time or
      both) of, any agreement, credit facility, debt or other instrument
      (evidencing a Company or Subsidiary debt or otherwise) or other
      understanding to which the Company or the Subsidiary is a party or by
      which any property or asset of the Company or the Subsidiary is bound or
      affected, or (iii) result in a violation of any law, rule, regulation,
      order, judgment, injunction, decree or other restriction of any court or
      governmental authority to which the Company or the Subsidiary is subject
      (including federal and state securities laws and regulations), or by which
      any property or asset of the Company or the Subsidiary is bound or
      affected; except in the case of each of clauses (ii) and (iii), such as
      would not have or reasonably be expected to result in a Material Adverse
      Effect.

            (e) Filings, Consents and Approvals. The Company is not required to
      obtain any consent, waiver, authorization or order of, give any notice to,
      or make any filing or registration with, any court or other federal,
      state, local or other governmental authority or other Person in connection
      with the execution, delivery and performance by the Company of the
      Transaction Documents, other than (a) the filing with the Commission of
      the Registration Statement, the application(s) to each Trading Market for
      the listing of the Shares and Warrant Shares for trading thereon in the
      time and manner required thereby, and applicable Blue Sky filings, (b)
      such as have already been obtained or such exemptive filings as are
      required to be made under applicable securities laws, (c) such other
      filings as may be required following the Closing Date under the Securities
      Act, the Exchange Act and corporate law.

            (f) Issuance of the Securities. The Securities are duly authorized
      and, when issued and paid for in accordance with the Transaction
      Documents, will be duly and validly issued, fully paid and nonassessable,
      free and clear of all Liens. The Company has reserved from its duly
      authorized capital stock the maximum number of shares of Common Stock
      issuable pursuant to this Agreement and the Warrants.

            (g) Capitalization. The capitalization of the Company is as
      described in the Company's most recent periodic report filed with the
      Commission. The Company has not issued any capital stock since such filing
      other than pursuant to the exercise of employee stock options under the
      Company's stock option plans, the issuance of shares of Common Stock to
      employees pursuant to the Company's employee stock purchase plan and
      pursuant to the conversion or exercise of outstanding Common Stock
      Equivalents. No Person has any right of first refusal, preemptive right,
      right of participation, or any similar right to participate in the
      transactions contemplated by the Transaction Documents. Except as a result
      of the purchase and sale of the Securities, and

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      except as described in the SEC Reports, there are no outstanding options,
      warrants, script rights to subscribe to, calls or commitments of any
      character whatsoever relating to, or securities, rights or obligations
      convertible into or exchangeable for, or giving any Person any right to
      subscribe for or acquire, any shares of Common Stock, or contracts,
      commitments, understandings or arrangements by which the Company or the
      Subsidiary is or may become bound to issue additional shares of Common
      Stock, or securities or rights convertible or exchangeable into shares of
      Common Stock. Except for certain standard and customary "weighted average"
      anti-dilution adjustment provisions in outstanding warrants of the
      Company, the issue and sale of the Securities will not obligate the
      Company to issue shares of Common Stock or other securities to any Person
      (other than the Purchasers) and will not result in a right of any holder
      of Company securities to adjust the exercise, conversion, exchange or
      reset price under such securities.

            (h) SEC Reports; Financial Statements. The Company has filed all
      reports required to be filed by it 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 to file such material) (the foregoing
      materials, including the exhibits thereto, being collectively referred to
      herein as the "SEC Reports") on a timely basis or has received a valid
      extension of such time of filing and has filed any such SEC Reports prior
      to the expiration of any such extension. As of their respective dates, the
      SEC Reports complied in all material respects with the requirements of the
      Securities Act and the Exchange Act and the rules and regulations of the
      Commission promulgated thereunder, and none of the SEC Reports, when
      filed, contained any untrue statement of a material fact or omitted to
      state a material fact required to be stated therein or necessary in order
      to make the statements therein, in light of the circumstances under which
      they were made, not misleading. The financial statements of the Company
      included in the SEC Reports comply in all material respects with
      applicable accounting requirements and the rules and regulations of the
      Commission with respect thereto as in effect at the time of filing. Such
      financial statements have been prepared in accordance with 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.

            (i) Material Changes. Since the date of the latest audited financial
      statements included within the SEC Reports, except as disclosed in the SEC
      Reports filed at least five (5) Business Days prior to the date hereof,
      (i) there has been no event, occurrence or development that has had or
      that could reasonably be expected to result in a Material Adverse Effect,
      (ii) the Company has not incurred any liabilities (contingent or
      otherwise) other than (A) trade payables and accrued expenses incurred in
      the ordinary course of business consistent with past practice and (B)
      liabilities not required to be reflected in the Company's financial
      statements pursuant to GAAP or required to be disclosed in filings made
      with the Commission, (iii) the Company has not altered its method of
      accounting, (iv) the Company has not declared or made any dividend or

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      distribution of cash or other property to its stockholders or purchased,
      redeemed or made any agreements to purchase or redeem any shares of its
      capital stock and (v) the Company has not issued any equity securities to
      any officer, director or Affiliate, except pursuant to existing Company
      stock option plans. The Company does not have pending before the
      Commission any request for confidential treatment of information.

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

            (k) Labor Relations. No material labor dispute exists or, to the
      knowledge of the Company, is imminent with respect to any of the employees
      of the Company which could reasonably be expected to result in a Material
      Adverse Effect.

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

            (m) Regulatory Permits. The Company and the Subsidiary possess all
      certificates, authorizations and permits issued by the appropriate
      federal, state, local or foreign regulatory authorities necessary to
      conduct their respective businesses as described in the SEC Reports,
      except where the failure to possess such permits would not have or
      reasonably be expected to result in a Material Adverse Effect ("Material
      Permits"), and neither the Company nor the Subsidiary has received any
      notice of proceedings relating to the revocation or modification of any
      Material Permit.

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            (n) Title to Assets. The Company and the Subsidiary have good and
      marketable title in fee simple to all real property owned by them that is
      material to the business of the Company and the Subsidiary and good and
      marketable title in all personal property owned by them that is material
      to the business of the Company and the Subsidiary, in each case free and
      clear of all Liens, 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 Subsidiary 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 Subsidiary are held
      by them under valid, subsisting and enforceable leases of which the
      Company and the Subsidiary are in compliance.

            (o) Patents and Trademarks. To the knowledge of the Company and the
      Subsidiary, the Company and the Subsidiary have, or have rights to use,
      all patents, patent applications, trademarks, trademark applications,
      service marks, trade names, copyrights, licenses and other similar rights
      that are necessary or material for use in connection with their respective
      businesses as described in the SEC Reports and which the failure to so
      have could have or reasonably be expected to result in a Material Adverse
      Effect (collectively, the "Intellectual Property Rights"). Neither the
      Company nor the Subsidiary has received a written notice that the
      Intellectual Property Rights used by the Company or the Subsidiary
      violates or infringes upon the rights of any Person. To the knowledge of
      the Company, all such Intellectual Property Rights are enforceable.

            (p) Insurance. The Company and the Subsidiary are insured by
      insurers of recognized financial responsibility against such losses and
      risks and in such amounts as are prudent and customary in the businesses
      in which the Company and the Subsidiary are engaged. Neither the Company
      nor the 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 without a significant increase in cost.

            (q) Transactions With Affiliates and Employees. Except as set forth
      in the SEC Reports, 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 the 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
      $60,000 other than (a) for payment of salary or consulting fees for
      services rendered, (b) reimbursement for expenses incurred on behalf of
      the Company and (c) for other employee benefits, including stock option
      agreements under any stock option plan of the Company.

            (r) Internal Accounting Controls. Each of the Company and the
      Subsidiary maintains a system of internal accounting controls sufficient
      to provide reasonable assurance that (i) transactions are executed in
      accordance with management's general or

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      specific authorizations, (ii) transactions are recorded as necessary to
      permit preparation of financial statements in conformity with GAAP and to
      maintain asset accountability, (iii) access to assets is permitted only in
      accordance with management's general or specific authorization, and (iv)
      the recorded accountability for assets is compared with the existing
      assets at reasonable intervals and appropriate action is taken with
      respect to any differences. The Company has established disclosure
      controls and procedures (as defined in Exchange Act Rules 13a-14 and
      15d-14) for the Company and designed such disclosures controls and
      procedures to ensure that material information relating to the Company,
      including its subsidiaries, is made known to the certifying officers by
      others within those entities, particularly during the period in which the
      Company's Form 10-K or 10-Q, as the case may be, is being prepared. The
      Company's certifying officers have evaluated the effectiveness of the
      Company's controls and procedures as of the date prior to the filing date
      of the Form 10-K for the year ended December 31, 2003 (such date, the
      "Evaluation Date"). The Company presented in its most recently filed Form
      10-K or Form 10-Q the conclusions of the certifying officers about the
      effectiveness of the disclosure controls and procedures based on their
      evaluations as of the Evaluation Date. Since the Evaluation Date, there
      have been no significant changes in the Company's internal controls (as
      such term is defined in Item 307(b) of Regulation S-K under the Exchange
      Act) or, to the Company's knowledge, in other factors that could
      significantly affect the Company's internal controls.

            (s) Private Placement. Assuming the accuracy of the Purchasers'
      representations and warranties set forth in Section 3.2, no registration
      under the Securities Act is required for the offer and sale of the
      Securities by the Company to the Purchasers as contemplated hereby. The
      issuance and sale of the Securities hereunder does not contravene the
      rules and regulations of the Trading Market.

            (t) Investment Company. The Company is not, and is not an Affiliate
      of, an "investment company" within the meaning of the Investment Company
      Act of 1940, as amended.

            (u) Registration Rights. No Person other than the Purchasers or the
      placement agent of the Securities has any right to cause the Company to
      include in the Registration Statement contemplated by the Registration
      Rights Agreement any other securities of the Company.

            (v) Listing and Maintenance Requirements. The Company has not, in
      the 12 months preceding the date hereof, received notice from any Trading
      Market on which the Common Stock is or has been listed or quoted to the
      effect that the Company is not in compliance with the listing or
      maintenance requirements of such Trading Market. 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.

            (w) Application of Takeover Protections. The Company and its Board
      of Directors have taken all necessary action, if any, in order to render
      inapplicable any control share acquisition, business combination, poison
      pill (including any distribution under a rights agreement) or other
      similar anti-takeover provision under the Company's Certificate of
      Incorporation (or similar charter documents) or the laws of its state of

                                       11
<PAGE>

      incorporation that is or could become applicable to the Purchasers as a
      result of the Purchasers and the Company fulfilling their obligations or
      exercising their rights under the Transaction Documents, including without
      limitation the Company's issuance of the Securities and the Purchasers'
      ownership of the Securities.

            (x) Disclosure. The Company confirms that, neither the Company nor
      any other Person acting on its behalf has provided any of the Purchasers
      or their agents or counsel with any information that constitutes or might
      constitute material, non-public information. The Company understands and
      confirms that the Purchasers will rely on the foregoing representations
      and covenants in effecting transactions in securities of the Company. All
      disclosure provided to the Purchasers regarding the Company, its business
      and the transactions contemplated hereby furnished by or on behalf of the
      Company are true and correct and do 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.

            (y) No Integrated Offering. 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 for purposes of the Securities Act or any applicable shareholder
      approval provisions, including, without limitation, under the rules and
      regulations of any Trading Market.

            (z) Solvency. Based on the financial condition of the Company as of
      the Closing Date, (i) the Company's fair saleable value of its assets
      exceeds the amount that will be required to be paid on or in respect of
      the Company's existing debts and other liabilities (including known
      contingent liabilities) as they mature; (ii) the Company's assets do not
      constitute unreasonably small capital to carry on its business for the
      current fiscal year as now conducted and as proposed to be conducted
      including its capital needs taking into account the particular capital
      requirements of the business conducted by the Company, and projected
      capital requirements and capital availability thereof; and (iii) the
      current cash flow of the Company, together with the proceeds the Company
      would receive, were it to liquidate all of its assets, after taking into
      account all anticipated uses of the cash, would be sufficient to pay all
      amounts on or in respect of its debt when such amounts are required to be
      paid. The Company does not intend to incur debts beyond its ability to pay
      such debts as they mature (taking into account the timing and amounts of
      cash to be payable on or in respect of its debt).

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

            (a) Organization; Authority. Such Purchaser is an entity duly
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its organization with full right, corporate or partnership
      power and authority to enter into and to consummate the transactions
      contemplated by the Transaction Documents and otherwise to carry out its
      obligations thereunder. The execution, delivery and performance by such

                                       12
<PAGE>

      Purchaser of the transactions contemplated by this Agreement has been duly
      authorized by all necessary corporate action on the part of such
      Purchaser. Each Transaction Document to which it is party has been duly
      executed by such Purchaser, and when delivered by such Purchaser in
      accordance with terms hereof, will constitute the valid and legally
      binding obligation of such Purchaser, enforceable against it in accordance
      with its terms.

            (b) Investment Intent. Such Purchaser understands that the
      Securities are "restricted securities" and have not been registered under
      the Securities Act or any applicable state securities law and is acquiring
      the Securities as principal for its own account for investment purposes
      only and not with a view to or for distributing or reselling such
      Securities or any part thereof, has no present intention of distributing
      any of such Securities and has no arrangement or understanding with any
      other persons regarding the distribution of such Securities (this
      representation and warranty not limiting such Purchaser's right to sell
      the Securities pursuant to the Registration Statement or otherwise in
      compliance with applicable federal and state securities laws). Such
      Purchaser is acquiring the Securities hereunder in the ordinary course of
      its business. Such Purchaser does not have any agreement or understanding,
      directly or indirectly, with any Person to distribute any of the
      Securities.

            (c) Purchaser Status. At the time such Purchaser was offered the
      Securities, it was, and at the date hereof it is an "accredited investor"
      as defined in Rule 501(a) under the Securities Act. Such Purchaser is not
      required to be registered as a broker-dealer under Section 15 of the
      Exchange Act.

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

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

            (f) Registration Required. Such Purchaser hereby covenants with the
      Company not to make any sale of the Shares and the Warrant without
      complying with the provisions hereof and of the Registration Rights
      Agreement, and without effectively causing the prospectus delivery
      requirement under the Securities Act to be satisfied (unless such
      Purchaser is selling such Shares or Warrant Shares in a transaction not
      subject to the prospectus delivery requirement), and such Purchaser
      acknowledges that the certificates evidencing the Shares and Warrant
      Shares will be imprinted with a legend that prohibits their transfer
      except in accordance therewith.

            (g) No Tax or Legal Advice. Such Purchaser understands that nothing
      in this Agreement, any other Transaction Document or any other materials
      presented to such

                                       13
<PAGE>

      Purchaser in connection with the purchase and sale of the Securities
      constitutes legal, tax or investment advice. Such Purchaser has consulted
      such legal, tax and investment advisors as it, in its sole discretion, has
      deemed necessary or appropriate in connection with its purchase of
      Securities.

      The Company acknowledges and agrees that each Purchaser does not make or
has not made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 3.2.

                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

      4.1 Transfer Restrictions.

            (a) The Securities may only be disposed of in compliance with state
      and federal securities laws. In connection with any transfer of Securities
      other than pursuant to an effective registration statement, to the
      Company, to an Affiliate of a Purchaser or in connection with a pledge as
      contemplated in Section 4.1(b), the Company may require the transferor
      thereof to provide to the Company an opinion of counsel selected by the
      transferor, the form and substance of which opinion shall be reasonably
      satisfactory to the Company, to the effect that such transfer does not
      require registration of such transferred Securities under the Securities
      Act. As a condition of transfer, any such transferee shall agree in
      writing to be bound by the terms of this Agreement and shall have the
      rights of a Purchaser under this Agreement and the Registration Rights
      Agreement.

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

            THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
            EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
            RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
            ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
            MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
            AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
            REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
            WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
            OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE
            OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE
            SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
            ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
            FINANCIAL INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
            RULE 501(a) UNDER THE SECURITIES ACT.

            The Company acknowledges and agrees that a Purchaser may from time
      to time pledge pursuant to a bona fide margin agreement with a registered
      broker-dealer or grant

                                       14
<PAGE>

      a security interest in some or all of the Securities to a financial
      institution that is an "accredited investor" as defined in Rule 501(a)
      under the Securities Act and, if required under the terms of such
      arrangement, such Purchaser may transfer pledged or secured Securities to
      the pledgees or secured parties. Such a pledge or transfer would not be
      subject to approval of the Company and no legal opinion of legal counsel
      of the pledgee, secured party or pledgor shall be required in connection
      therewith. Further, no notice shall be required of such pledge. At the
      appropriate Purchaser's expense, the Company will execute and deliver such
      reasonable documentation as a pledgee or secured party of Securities may
      reasonably request in connection with a pledge or transfer of the
      Securities, including the preparation and filing of any required
      prospectus supplement under Rule 424(b)(3) of the Securities Act or other
      applicable provision of the Securities Act to appropriately amend the list
      of Selling Stockholders thereunder.

            (c) Certificates evidencing the Shares and Warrant Shares shall not
      contain any legend (including the legend set forth in Section 4.1(b)), (i)
      while a registration statement (including the Registration Statement)
      covering the resale of such security is effective under the Securities Act
      (provided, however, that a Purchaser's prospectus delivery requirements
      under the Securities Act and as set forth in Section 3.2(f) will remain
      applicable), or (ii) following any sale of such Shares or Warrant Shares
      pursuant to Rule 144, or (iii) if such Shares or Warrant Shares are
      eligible for sale under Rule 144(k), or (iv) if such legend is not
      required under applicable requirements of the Securities Act (including
      judicial interpretations and pronouncements issued by the Staff of the
      Commission). The Company shall cause its counsel to issue a legal opinion
      to the Company's transfer agent promptly after the Effective Date if
      required by the Company's transfer agent to effect the removal of the
      legend hereunder. The Company agrees that following the Effective Date or
      at such time as such legend is no longer required under this Section
      4.1(c), it will, no later than five Trading Days following the delivery by
      a Purchaser to the Company or the Company's transfer agent of a
      certificate representing Shares or Warrant Shares, as the case may be,
      issued with a restrictive legend, deliver or cause to be delivered to such
      Purchaser a certificate representing such Securities that is free from all
      restrictive and other legends. The Company may not make any notation on
      its records or give instructions to any transfer agent of the Company that
      enlarge the restrictions on transfer set forth in this Section or in
      Section 3.2(f).

      4.2 Furnishing of Information. As long as any Purchaser owns Securities,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act. Upon the request
of any such holder of Securities, the Company shall deliver to such holder a
written certification of a duly authorized officer as to whether it has complied
with the preceding sentence. As long as any Purchaser owns Securities, if the
Company is not required to file reports pursuant to such laws, it will prepare
and furnish to each such Purchaser and make publicly available in accordance
with Rule 144(c) such information as is required for a Purchaser to sell the
Securities under Rule 144. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, all to the
extent required from time to time to enable such Person to sell such Securities
publicly without registration under the Securities Act within the limitation of
the exemptions provided by Rule 144.

                                       15
<PAGE>

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

      4.4 Securities Laws Disclosure; Publicity. The Company shall, by 8:30 a.m.
Eastern time on the Business Day following the date of this Agreement, issue a
press release or file a Current Report on Form 8-K, in each case reasonably
acceptable to the placement agent of the Securities disclosing the transactions
contemplated hereby and make such other filings and notices in the manner and
time required by the Commission. The Company and the placement agent of the
Securities shall consult with each other in issuing any press releases with
respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release or otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of the placement agent of
the Securities, with respect to any press release of the Company, which consent
shall not unreasonably be withheld, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (i) as required by federal securities law in connection with
the registration statement contemplated by the Registration Rights Agreement and
(ii) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under subclause (i) or (ii).

      4.5 Shareholders Rights Plan. No claim will be made or enforced by the
Company or any other Person that any Purchaser is an "Acquiring Person" under
any shareholders rights plan or similar plan or arrangement in effect or
hereafter adopted by the Company, or that any Purchaser could be deemed to
trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents or under any other agreement between
the Company and the Purchasers.

      4.6 Non-Public Information. The Company covenants and agrees that neither
it nor any other Person acting on its behalf will provide any Purchaser or its
agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such Purchaser shall have
agreed in writing to receive such information and shall have executed a written
agreement regarding the confidentiality and use of such information. The Company
understands and confirms that each Purchaser shall be relying on the foregoing
representations in effecting transactions in securities of the Company.

      4.7 Use of Proceeds. Except as set forth on Schedule 4.7 attached hereto,
the Company shall use the net proceeds from the sale of the Securities hereunder
for working capital purposes and to broaden the Company's technology portfolio
by means of acquiring or licensing additional, new technologies or by means of
merger or acquisition, and not for the satisfaction of any portion of the
Company's debt (other than payment of trade payables in the ordinary course

                                       16
<PAGE>

of the Company's business and prior practices), to redeem any Company equity or
equity-equivalent securities or to settle any outstanding litigation.

      4.8 Indemnification of Purchasers. The Company will indemnify and hold
each Purchaser and its directors, officers, shareholders, partners, employees
and agents (each, a "Purchaser Party") harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys' fees and costs of investigation that any such Purchaser Party may
suffer or incur as a result of or relating to: (a) any misrepresentation, breach
or inaccuracy, or any allegation by a third party that, if true, would
constitute a material breach or inaccuracy, of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents; or (b) any cause of action, suit or claim
brought or made against such Purchaser Party and arising solely out of or solely
resulting from the execution, delivery, performance or enforcement of this
Agreement or any of the other Transaction Documents and without causation by any
other activity, obligation, condition or liability pertaining to such Purchaser.
The Company will reimburse such Purchaser for its reasonable legal and other
expenses (including the cost of any investigation, preparation and travel in
connection therewith) incurred in connection therewith, as such expenses are
incurred.

      4.9 Indemnification of the Company. Each Purchaser, severally and not
jointly with the other Purchasers, will indemnify and hold the Company and their
directors, officers, shareholders, partners, employees and agents (each, a
"Company Party") harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys' fees and
costs of investigation that any such Company Party may suffer or incur as a
result of or relating to any material breach or inaccuracy of any of the
representations, warranties, covenants or agreements made by such Purchaser in
this Agreement or in the other Transaction Documents. Each such Purchaser will
reimburse the Company for its reasonable legal and other expenses (including the
cost of any investigation, preparation and travel in connection therewith)
incurred in connection therewith, as such expenses are incurred.

      4.10 Reservation of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of shares of Common Stock
for the purpose of enabling the Company to issue Shares pursuant to this
Agreement and Warrant Shares pursuant to any exercise of the Warrants.

      4.11 Listing of Common Stock. The Company hereby agrees to use
commercially reasonably efforts to maintain the listing of the Common Stock on
the Trading Market, and as soon as reasonably practicable following the Closing
(but not later than the earlier of the Effective Date and the first anniversary
of the Closing Date) to list the applicable Shares and Warrant Shares on the
Trading Market. The Company further agrees, if the Company applies to have the
Common Stock traded on any other Trading Market, it will include in such
application the Shares and the Warrant Shares, and will take such other action
as is necessary or desirable in the opinion of the Investors to cause the Shares
and Warrant Shares to be listed on such other Trading Market as promptly as
possible. The Company will take all action reasonably necessary to continue the
listing and trading of its Common Stock on a Trading Market and will comply in

                                       17
<PAGE>

all respects with the Company's reporting, filing and other obligations under
the bylaws or rules of the Trading Market.

                                   ARTICLE V.
                                  MISCELLANEOUS

      5.1 Fees and Expenses. Except as otherwise set forth in this Agreement,
each party shall pay the fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of
this Agreement. The Company shall pay all stamp and other taxes and duties
levied in connection with the sale of the Securities.

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

      5.3 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Section prior to 6:30 p.m. (New York City time) on a Trading
Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section on a day that is not a Trading Day or later than 6:30 p.m. (New
York City time) on any Trading Day, (c) the Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon actual receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as set forth on the
signature pages attached hereto.

      5.4 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, (i) in the case of an amendment,
by the Company, on the one hand, and by those Purchasers (or their transferees)
then holding at least two-thirds (2/3) of the aggregate amount of Registrable
Securities issued or issuable under the Transaction Documents and not yet sold
under the Registration Statement or under Rule 144, on the other hand and (ii)
in the case of a waiver, by the party against whom enforcement thereof is
sought. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of either party
to exercise any right hereunder in any manner impair the exercise of any such
right.

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

      5.6 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The
Company may not assign

                                       18
<PAGE>

this Agreement or any rights or obligations hereunder without obtaining the
prior written consent of those Purchasers (or their transferees) then holding at
least two-thirds (2/3) of the aggregate amount of Registrable Securities issued
or issuable and not yet sold under the Registration Statement or under Rule 144,
other than in accordance with a sale of substantially all or substantially of
its assets or a merger approved by the stockholders of the Company, in which
case such consent shall not be required. Any Purchaser may assign any or all of
its rights under this Agreement to any Person to whom such Purchaser assigns or
transfers any Securities, provided such transferee agrees in writing to be
bound, with respect to the transferred Securities, by the provisions hereof that
apply to the "Purchasers", including without limitation, the representations and
warranties as to such transferee's status as an "accredited investor" under the
Securities Act.

      5.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.8.

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

      5.9 Survival. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and delivery of the Shares and
Warrant Shares.

      5.10 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any

                                       19
<PAGE>

signature is delivered by facsimile transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof.

      5.11 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

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

      5.13 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

      5.14 Payment Set Aside. To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

      5.15 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out of
the other

                                       20
<PAGE>

Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose. Each
Purchaser has been represented by its own separate legal counsel in their review
and negotiation of the Transaction Documents. For reasons of administrative
convenience only, each Purchaser and its counsel have chosen to communicate with
the Company through Duval & Stachenfeld LLP. ("D&S"), counsel for one of the
Purchasers. D&S does not represent any other Purchaser in this transaction. The
Company has elected to provide each Purchaser with the same terms and
Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by any Purchaser.

                            (Signature Page Follows)

                                       21
<PAGE>

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

AXONYX, INC.                                    Address for Notice:

                                                500 Seventh Avenue, 10th Floor
                                                New York, NY 10018
By: /s/ S. Colin Neill                          Attn: S. Colin Neill, CFO
    -------------------------------             Tel: (212) 645-7704
    Name: S. Colin Neill                        Fax: (212) 989-1745
    Title: Chief Financial Officer

With copy to (which shall not constitute notice):

Ehrenreich Eilenberg & Krause LLP
11 East 44th Street, 17th Floor
New York, New York 10017
Attn: Adam D. Eilenberg, Esq.
Tel: (212) 986-9700
Fax: (212) 986-2399

                [PURCHASERS' COUNTERPART SIGNATURE PAGES FOLLOW]

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:
Provident Premier Master Fund

By: /s/ Steven W. Winters
   -------------------------
Name:  Steven W. Winters
Title: Attorney-in-Fact

Shares of Common Stock: 300,000
Warrants: 90,000
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 1,950,000

Address for Notice:

                                          c/o Gemini Investment Strategies, LLC
                                          Attn: Steven Winters
                                                35 Waterview Blvd.
                                                Parsippany, NJ 07054

Tax ID No. (if applicable)___________________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:
Satellite Strategic Finance Associates, LLC

By: Satellite Asset Management, L.P., its Manager

By: /s/ Brian S. Kriftcher
    --------------------------
Name:  Brian S. Kriftcher
Title: Chief Operating Officer and Principal

Shares of Common Stock: 1,076,923
Warrants: 323,077
Aggregate Purchase Price @ $6.50 per Share and 0.3Warrant: $ 7,000,000

Address for Notice:

                                                  623 Fifth Avenue, 20th Floor
                                                  New York, New York 10022

Tax ID No. (if applicable)_________________________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:
UBS O'Connor LLC F/B/O
O'Connor PIPES Corporate Strategies Master Ltd.

By: /s/ Jeffrey Putman
    ----------------------
Name:  Jeffrey Putman
Title: Executive Director

Shares of Common Stock: 310,000
Warrants: 93,000
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 2,015,000.00

Address for Notice:

Tax ID No. (if applicable)___________________________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:
SF Capital Partners, Ltd.

By: /s/ Brian Davidson
    ----------------------
Name: Brian Davidson
Title:Authorized Signatory

Shares of Common Stock: 300,000
Warrants: 90,000
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 1,950,000

Address for Notice:

                                                     360 S. Calo Drive
                                                     St. Francis, WI 53235

Tax ID No. (if applicable)______________________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:
Longview Equity Fund, LP

By: /s/ Wayne Coleson
    -----------------------
Name:  Wayne Coleson
Title: Investment Manager

Shares of Common Stock: 174,591
Warrants: 52,379
Aggregate Purchase Price @ $6.50 per Share and 0.3Warrant: $ 1,134,841.50

Address for Notice:

                                               c/o Redwood Grove Cap Management
                                               600 Montgomery Street, 44th Floor
                                               San Francisco, CA 94111

Tax ID No. (if applicable)___________________________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:
Longview Fund, LP

By: Viking Asset Management, LLC, its General Partner

By: /s/ S. Michael Rudolph
    --------------------------
Name:  S. Michael Rudolph
Title: CFO

Shares of Common Stock: 30,000
Warrants: 9,000
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 195,000

Address for Notice:

                                       600 Montgomery Street, 44th Floor
                                       San Francisco, CA 94111

Tax ID No. (if applicable)__________________________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:
Longview International Equity Fund, LP

By: /s/ Wayne Coleson
    ---------------------
Name:  Wayne Coleson
Title: Investment Manager

Shares of Common Stock: 23,100
Warrants: 6,930
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 150,150

Address for Notice:

                                             c/o Redwood Grove Cap Management
                                             600 Montgomery Street, 44th Floor
                                             San Francisco, CA 94111

Tax ID No. (if applicable)____________________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:
Longview Special Finance Inc.

By: /s/ Francois Morax
    ----------------------
Name:  Francois Morax
Title: Director

Shares of Common Stock: 153,809
Warrants: 46,142
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 999,758.50

Address for Notice:

                                                     Trident Chambers
                                                     P.O. Box 146
                                                     Road Town Tordola
                                                     British Virgin Islands

Tax ID No. (if applicable)______________________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:

/s/ Heinz Hofliger
--------------------------
Heinz Hofliger

Shares of Common Stock: 100,000
Warrants: 30,000
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 650,000

Address for Notice:

Tax ID No. (if applicable)_______________________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:
Deephaven Small Cap Growth Fund LLC

By: /s/ Bruce Lieberman
    -----------------------
Name:  Bruce Lieberman
Title: Director Private Placements

Shares of Common Stock: 538,500
Warrants: 161,550
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 3,500,250

Address for Notice:

Tax ID No. (if applicable)________________________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:
Elektroprododuktions Maschinen AG

By: /s/ Kurt Freimann
    -----------------------------
Name:  Kurt Freimann
Title: Sole Director

Shares of Common Stock: 16,000
Warrants: 4,800
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 104,000

Address for Notice:

                                         c/o Interglobe Finance SA
                                         General Guisan-Quai 36
                                         CH-8002 Zurich

Tax ID No. (if applicable)_______________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:

/s/ Kurt Freimann
---------------------------
Kurt Freimann

Shares of Common Stock: 3,000
Warrants: 900
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 19,500

Address for Notice:

Tax ID No. (if applicable)______________________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:

/s/ Kurt Freimann
------------------------------------
Kurt Freimann Attorney-in-Fact for Gudron Eiz

Shares of Common Stock: 3,000
Warrants: 900
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 19,500

Address for Notice:

                                            c/o Interglobe Finance SA
                                            General Guisan-Quai 36
                                            CH-8002 Zurich

Tax ID No. (if applicable)___________________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:
EPM Holding AG

By: /s/ Kurt Freimann
    ---------------------
Name:  Kurt Freimann
Title: Sole Director

Shares of Common Stock: 22,000
Warrants: 6600
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 143,000

Address for Notice:

                                            c/o Interglobe Finance SA
                                            General Guisan-Quai 36
                                            CH-8002 Zurich

Tax ID No. (if applicable)_______________________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:

/s/ Judith Locher
------------------------------
Dr. Judith Locher

Shares of Common Stock: 10,000
Warrants: 3,000
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 65,000

Address for Notice:

                                            c/o Interglobe Finance SA
                                            General Guisan-Quai 36
                                            CH-8002 Zurich

Tax ID No. (if applicable)__________________

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

PURCHASER:
Berkin Business SA

By: /s/ K. Meyer
    ---------------------------
Name:  K. Meyer
Title: Attorney-at-Fact

Shares of Common Stock: 16,000
Warrants: 4,800
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 104,000

Address for Notice:

                                             c/o Interglobe Finance SA
                                             General Guisan-Quai 36
                                             CH-8002 Zurich

Tax ID No. (if applicable)__________________EXHIBIT 4.2

                          REGISTRATION RIGHTS AGREEMENT

            This Registration Rights Agreement (this "Agreement") is made and
entered into as of May 3, 2004, by and between Axonyx, Inc., a Nevada
corporation (the "Company"), and each investor signatory hereto (each a
"Purchaser" and collectively, the "Purchasers").

            This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof between the Company and each Purchaser
(the "Purchase Agreement").

            The Company and each Purchaser hereby agree as follows:

      1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:

            "Effectiveness Date" means, with respect to the Registration
      Statement required to be filed hereunder, the earlier of (a) the 90th
      calendar day following the Closing Date (120th calendar day in the event
      of a full review by the Commission) and (b) the fifth Trading Day
      following the date on which the Company is notified by the Commission that
      the Registration Statement will not be reviewed or is no longer subject to
      further review and comments.

            "Effectiveness Period" shall have the meaning set forth in Section
      2(a).

            "Filing Date" means, with respect to the Registration Statement
      required to be filed hereunder, the 30th calendar day following the
      Closing Date.

            "Holder" or "Holders" means the holder or holders, as the case may
      be, from time to time of Registrable Securities that are at such time
      issued or issuable.

            "Indemnified Party" shall have the meaning set forth in Section
      5(c).

            "Indemnifying Party" shall have the meaning set forth in Section
      5(c).

            "Losses" shall have the meaning set forth in Section 5(a).

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

            "Prospectus" means the prospectus included in the Registration
      Statement (including, without limitation, a prospectus that includes any
      information previously omitted from a prospectus filed as part of an
      effective registration statement in reliance upon Rule 430A promulgated
      under the Securities Act), as amended or supplemented by any prospectus
      supplement, with respect to the terms of the offering of any portion of
      the

<PAGE>

      Registrable Securities covered by the Registration Statement, and all
      other amendments and supplements to the Prospectus, including
      post-effective amendments, and all material incorporated by reference or
      deemed to be incorporated by reference in such Prospectus.

            "Registrable Securities" means (i) the Shares, (ii) the Warrant
      Shares and (iii) any shares of Common Stock issuable upon the exercise of
      warrants issued to any placement agent or financial advisor of the Company
      in connection with the transactions contemplated by the Transaction
      Documents, together with any shares of Common Stock issued or issuable
      upon any stock split, dividend or other distribution, recapitalization or
      similar event with respect to the foregoing.

            "Registration Statement" means the registration statements required
      to be filed hereunder, including (in each case) the Prospectus, amendments
      and supplements to the registration statement or Prospectus, including
      pre- and post-effective amendments, all exhibits thereto, and all material
      incorporated by reference or deemed to be incorporated by reference in the
      registration statement.

            "Rule 415" means Rule 415 promulgated by the Commission pursuant to
      the Securities Act, as such Rule may be amended from time to time, or any
      similar rule or regulation hereafter adopted by the Commission having
      substantially the same effect as such Rule.

            "Rule 424" means Rule 424 promulgated by the Commission pursuant to
      the Securities Act, as such Rule may be amended from time to time, or any
      similar rule or regulation hereafter adopted by the Commission having
      substantially the same effect as such Rule.

            "Securities Act" means the Securities Act of 1933, as amended.

      2. Registration.

            (a) On or prior to the Filing Date, the Company shall prepare and
      file with the Commission the Registration Statement covering the resale of
      all of the Registrable Securities for an offering to be made on a
      continuous basis pursuant to Rule 415. The Registration Statement required
      hereunder shall be on Form S-3 (except if the Company is not then eligible
      to register for resale the Registrable Securities on Form S-3, in which
      case the Registration shall be on another appropriate form in accordance
      herewith, provided that the Company will convert such registration
      statement to, or file a new registration statement on, Form S-3 as soon as
      it is eligible to do so). The Registration Statement required hereunder
      shall contain (except if otherwise directed by the Holders) the "Plan of
      Distribution" attached hereto as Annex A. The Company shall cause the
      Registration Statement to become effective and remain effective as
      provided herein. The Company shall use its commercially reasonable efforts
      to cause the Registration Statement to be declared effective under the
      Securities Act as promptly as possible after the filing thereof, but in
      any event not later than the Effectiveness Date, and shall use its
      commercially reasonable efforts to keep the Registration Statement
      continuously effective under the Securities Act until the date which is
      two years after the Closing Date

                                      -2-
<PAGE>

      or such earlier date when all Registrable Securities covered by the
      Registration Statement have been sold or may be sold without volume
      restrictions pursuant to Rule 144(k) as determined by the counsel to the
      Company pursuant to a written opinion letter to such effect, addressed and
      acceptable to the Company's transfer agent and the affected Holders (the
      "Effectiveness Period").

            (b) If: (i) a Registration Statement is not filed on or prior to its
      Filing Date (if the Company files a Registration Statement without
      affording the Holder the opportunity to review and comment on the same as
      required by Section 3(a), the Company shall not be deemed to have
      satisfied this clause (i)), or (ii) a Registration Statement filed or
      required to be filed hereunder is not declared effective by the Commission
      on or before the Effectiveness Date, or (iii) after a Registration
      Statement is first declared effective by the Commission, it ceases for any
      reason to remain continuously effective as to all Registrable Securities
      for which it is required to be effective, or the Holders are not permitted
      to utilize the Prospectus therein to resell such Registrable Securities
      for, in either such case, fifteen Trading Days (which need not be
      consecutive days) in the aggregate during any thirty day period (any such
      failure or breach being referred to as an "Event," and for purposes of
      clause (i) or (ii) the date on which such Event occurs, or for purposes of
      clause (iii) the date on which such fifteen Trading Day period is exceeded
      being referred to as "Event Date"), then in addition to any equitable
      rights or remedies a Holder may have hereunder or under applicable law:
      (x) on each such Event Date the Company shall pay to each Holder an amount
      in cash, as liquidated damages and not as a penalty, equal to 1% of the
      aggregate purchase price paid by such Holder pursuant to the Purchase
      Agreement for any Registrable Securities then held by such Holder; and (y)
      on each monthly anniversary of each such Event Date (if the applicable
      Event shall not have been cured by such date) until the applicable Event
      is cured, the Company shall pay to each Holder an amount in cash, as
      liquidated damages and not as a penalty, equal to 1.5% of the aggregate
      purchase price paid by such Holder pursuant to the Purchase Agreement for
      any Registrable Securities then held by such Holder; provided, however,
      that liquidated damages payable to any Holder hereunder shall not exceed
      10% of the aggregate purchase price paid by such Holder pursuant to the
      Purchase Agreement..

            (c) Notwithstanding the provisions of Section 2(b)(iii) above, the
      Company may suspend sales of Registrable Securities under a Registration
      Statement for a period of not more than sixty (60) days in any twelve (12)
      month period, with no more than two (2) periods of thirty (30) consecutive
      days, with respect to such Registration Statement if, at any time the
      Company is engaged in confidential negotiations or other confidential
      business activities, the disclosure of which would be required if such
      sales were not suspended and the Board of Directors of the Company
      determines in good faith that such suspension would be in the Company's
      best interest at such time, provided that such suspension shall not be
      effective for more than thirty (30) consecutive days, with a minimum of
      ten (10) Trading Days between any two periods. In order to suspend sales
      pursuant to this Section 2(c), the Company shall promptly (but in any
      event within five (5) business days), upon determining to seek such
      suspension, deliver to each Holder of Registrable Securities a certificate
      signed by an executive officer of the Company stating that the Company is
      suspending such filing pursuant to this Section 2(c), but in no event,
      without the prior written consent of such Holder, shall the Company
      disclose to such

                                      -3-
<PAGE>

      Holder any of the facts or circumstances regarding any material non-public
      information. Each holder of Registrable Securities hereby agrees to keep
      confidential any information disclosed to it in any such certificate
      (including the fact that a certificate was delivered).

            (d) If the Company suspends a Registration Statement pursuant to
      section 2(c) above, the Company shall, as promptly as practicable
      following the termination of the circumstances which entitled the Company
      to do so but in no event more than fifteen (15) days thereafter, take such
      actions as may be necessary to file or reinstate the effectiveness of such
      Registration Statement and/or give written notice to the Holders
      authorizing them to resume sales pursuant to such Registration Statement.
      If, as a result thereof, the prospectus included in such Registration
      Statement has been amended to comply with the requirements of the
      Securities Act, the Company shall enclose such revised prospectus with the
      notice to the Holders given pursuant to this Section 2(d), and the Holders
      shall make no offers or sales of securities pursuant to such Registration
      Statement other than by means of such revised prospectus.

      3. Registration Procedures.

            In connection with the Company's registration obligations hereunder,
the Company shall:

            (a) Not less than two Trading Days prior to the filing of the
      Registration Statement or any related Prospectus or any amendment or
      supplement thereto, the Company shall, (i) furnish to each Holder copies
      of all such documents proposed to be filed (including documents
      incorporated or deemed incorporated by reference to the extent requested
      by such Person) which documents will be subject to the review of such
      Holder, and (ii) cause its officers and directors, counsel and independent
      certified public accountants to respond to such inquiries as shall be
      necessary, in the reasonable opinion of respective counsel to conduct a
      reasonable investigation within the meaning of the Securities Act. The
      Company shall not file the Registration Statement or any such Prospectus
      or any amendments or supplements thereto to which the Holders of a
      majority of the aggregate Registrable Securities then issued or issuable
      shall reasonably object in good faith.

            (b) (i) Prepare and file with the Commission such amendments,
      including post-effective amendments, to the Registration Statement and the
      Prospectus used in connection therewith as may be necessary to keep the
      Registration Statement continuously effective as to the applicable
      Registrable Securities for the Effectiveness Period; (ii) cause the
      related Prospectus to be amended or supplemented by any required
      Prospectus supplement, and as so supplemented or amended to be filed
      pursuant to Rule 424; (iii) respond as promptly as reasonably possible to
      any comments received from the Commission with respect to the Registration
      Statement or any amendment thereto and, as promptly as reasonably
      possible, upon request, provide each Holder true and complete copies of
      all correspondence from and to the Commission relating to the Registration
      Statement; and (iv) comply in all material respects with the provisions of
      the Securities Act and the Exchange Act with respect to the disposition of
      all Registrable Securities covered by the Registration Statement during
      the applicable period in accordance with

                                      -4-
<PAGE>

      the intended methods of disposition set forth in the Registration
      Statement as so amended or in such Prospectus as so supplemented.

            (c) Notify each Holder of Registrable Securities to be sold as
      promptly as reasonably possible (and, in the case of (i)(A) below, not
      less than two Trading Days prior to such filing) and (if requested by any
      such Person) confirm such notice in writing promptly following the day
      (i)(A) when a Prospectus or any Prospectus supplement or post-effective
      amendment to the Registration Statement is proposed to be filed; (B) when
      the Commission notifies the Company whether there will be a "review" of
      the Registration Statement and whenever the Commission comments in writing
      on the Registration Statement (the Company shall upon request provide true
      and complete copies thereof and all written responses thereto to each of
      the Holders); and (C) with respect to the Registration Statement or any
      post-effective amendment, when the same has become effective; (ii) of any
      request by the Commission or any other Federal or state governmental
      authority during the period of effectiveness of the Registration Statement
      for amendments or supplements to the Registration Statement or Prospectus
      or for additional information; (iii) of the issuance by the Commission or
      any other federal or state governmental authority of any stop order
      suspending the effectiveness of the Registration Statement covering any or
      all of the Registrable Securities or the initiation of any Proceedings for
      that purpose; (iv) of the receipt by the Company of any notification with
      respect to the suspension of the qualification or exemption from
      qualification of any of the Registrable Securities for sale in any
      jurisdiction, or the initiation or threatening of any Proceeding for such
      purpose; and (v) of the occurrence of any event or passage of time that
      makes the financial statements included in the Registration Statement
      ineligible for inclusion therein or any statement made in the Registration
      Statement or Prospectus or any document incorporated or deemed to be
      incorporated therein by reference untrue in any material respect or that
      requires any revisions to the Registration Statement, Prospectus or other
      documents so that, in the case of the Registration Statement or the
      Prospectus, as the case may be, it will not contain any untrue statement
      of a material fact or omit to state any material fact required to be
      stated therein or necessary to make the statements therein, in light of
      the circumstances under which they were made, not misleading.

            (d) Use its commercially reasonable efforts to avoid the issuance
      of, or, if issued, obtain the withdrawal of (i) any order suspending the
      effectiveness of the Registration Statement, or (ii) any suspension of the
      qualification (or exemption from qualification) of any of the Registrable
      Securities for sale in any jurisdiction, at the earliest practicable
      moment.

            (e) Furnish to each Holder, without charge, at least one conformed
      copy of the Registration Statement and each amendment thereto, including
      financial statements and schedules, all documents incorporated or deemed
      to be incorporated therein by reference to the extent requested by such
      Person, and all exhibits to the extent requested by such Person (including
      those previously furnished or incorporated by reference) promptly after
      the filing of such documents with the Commission.

                                      -5-
<PAGE>

            (f) Promptly deliver to each Holder, without charge, as many copies
      of the Prospectus or Prospectuses (including each form of prospectus) and
      each amendment or supplement thereto as such Holder may reasonably request
      in connection with resales by such Holder of Registrable Securities. The
      Company hereby consents to the use of such Prospectus and each amendment
      or supplement thereto by each of the selling Holders in connection with
      the offering and sale of the Registrable Securities covered by such
      Prospectus and any amendment or supplement thereto, except after the
      giving on any notice pursuant to Section 3(c).

            (g) Prior to any resale of Registrable Securities by a Holder, use
      its commercially reasonable efforts to register or qualify or cooperate
      with such Holder in connection with the registration or qualification (or
      exemption from the Registration or qualification) of such Registrable
      Securities for the resale by such Holder under the securities or Blue Sky
      laws of such jurisdictions within the United States as any Holder
      reasonably requests in writing, to keep each the Registration or
      qualification (or exemption therefrom) effective during the Effectiveness
      Period and to do any and all other acts or things reasonably necessary to
      enable the disposition in such jurisdictions of the Registrable Securities
      covered by the Registration Statement; provided, that the Company shall
      not be required to qualify generally to do business in any jurisdiction
      where it is not then so qualified, subject the Company to any material tax
      in any such jurisdiction where it is not then so subject or file a general
      consent to service of process in any such jurisdiction.

            (h) If requested by a Holder, cooperate with such Holder to
      facilitate the timely preparation and delivery of certificates
      representing Registrable Securities to be delivered to a transferee
      pursuant to the Registration Statement, which certificates shall be free,
      to the extent permitted by the Purchase Agreement, of all restrictive
      legends, and to enable such Registrable Securities to be in such
      denominations and registered in such names as any such Holders may
      request.

            (i) Upon the occurrence of any event contemplated by Section
      3(c)(v), as promptly as reasonably possible, prepare a supplement or
      amendment, including a post-effective amendment, to the Registration
      Statement or a supplement to the related Prospectus or any document
      incorporated or deemed to be incorporated therein by reference, and file
      any other required document so that, as thereafter delivered, neither the
      Registration Statement nor such Prospectus will contain an untrue
      statement of a material fact or omit to state a material fact required to
      be stated therein or necessary to make the statements therein, in light of
      the circumstances under which they were made, not misleading.

            (j) Comply with all applicable rules and regulations of the
      Commission.

            (k) The Company may require each selling Holder to furnish to the
      Company a certified statement as to the number of shares of Common Stock
      beneficially owned by such Holder and, if required by the Commission, the
      person thereof that has voting and dispositive control over the Shares.

                                      -6-
<PAGE>

      4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.

      5. Indemnification

            (a) Indemnification by the Company. The Company shall,
      notwithstanding any termination of this Agreement, indemnify and hold
      harmless each Holder, the officers, directors, agents and employees of
      each of them, each Person who controls any such Holder (within the meaning
      of Section 15 of the Securities Act or Section 20 of the Exchange Act) and
      the officers, directors, agents and employees of each such controlling
      Person, to the fullest extent permitted by applicable law, from and
      against any and all losses, claims, damages, liabilities, costs
      (including, without limitation, reasonable attorneys' fees) and expenses
      (collectively, "Losses"), as incurred, to the extent arising out of or
      relating to any untrue or alleged untrue statement of a material fact
      contained in the Registration Statement, any Prospectus or any form of
      prospectus or in any amendment or supplement thereto or in any preliminary
      prospectus, or arising out of or relating to any omission or alleged
      omission of a material fact required to be stated therein or necessary to
      make the statements therein (in the case of any Prospectus or form of
      prospectus or supplement thereto, in light of the circumstances under
      which they were made) not misleading, except to the extent, but only to
      the extent, that (1) such untrue statements or omissions are based solely
      upon information regarding such Holder furnished in writing to the Company
      by such Holder expressly for use therein, or to the extent that such
      information relates to such Holder or such Holder's proposed method of
      distribution of Registrable Securities and was reviewed and expressly
      approved in writing by such Holder expressly for use in the Registration
      Statement, such Prospectus or such form of Prospectus or in any amendment
      or supplement thereto (it being understood that the Holder has approved
      Annex A hereto for this purpose) or (2) in the case of an occurrence of an
      event of the type specified in Section 3(c)(ii)-(v), the use by such
      Holder of an outdated or defective Prospectus after the Company has
      notified such Holder in writing that the Prospectus is outdated or
      defective and prior to the receipt by such

                                      -7-
<PAGE>

      Holder of the Advice contemplated in Section 6(c). The Company shall
      notify the Holders promptly of the institution, threat or assertion of any
      Proceeding of which the Company is aware in connection with the
      transactions contemplated by this Agreement.

            (b) Indemnification by Holders. Each Holder shall, severally and not
      jointly, indemnify and hold harmless the Company, its directors, officers,
      agents and employees, each Person who controls the Company (within the
      meaning of Section 15 of the Securities Act and Section 20 of the Exchange
      Act), and the directors, officers, agents or employees of such controlling
      Persons, to the fullest extent permitted by applicable law, from and
      against all Losses, as incurred, to the extent arising out of or based
      upon: (x) such Holder's failure to comply with the prospectus delivery
      requirements of the Securities Act or (y) any untrue or alleged untrue
      statement of a material fact contained in any Registration Statement, any
      Prospectus, or any form of prospectus, or in any amendment or supplement
      thereto or in any preliminary prospectus, or arising out of or relating to
      any omission or alleged omission of a material fact required to be stated
      therein or necessary to make the statements therein not misleading (i) to
      the extent, but only to the extent, that such untrue statement or omission
      is contained in any information so furnished in writing by such Holder to
      the Company specifically for inclusion in the Registration Statement or
      such Prospectus or (ii) to the extent that (1) such untrue statements or
      omissions are based solely upon information regarding such Holder
      furnished in writing to the Company by such Holder expressly for use
      therein, or to the extent that such information relates to such Holder or
      such Holder's proposed method of distribution of Registrable Securities
      and was reviewed and expressly approved in writing by such Holder
      expressly for use in the Registration Statement (it being understood that
      the Holder has approved Annex A hereto for this purpose), such Prospectus
      or such form of Prospectus or in any amendment or supplement thereto or
      (2) in the case of an occurrence of an event of the type specified in
      Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
      Prospectus after the Company has notified such Holder in writing that the
      Prospectus is outdated or defective and prior to the receipt by such
      Holder of the Advice contemplated in Section 6(c). In no event shall the
      liability of any selling Holder hereunder be greater in amount than the
      dollar amount of the net proceeds received by such Holder upon the sale of
      the Registrable Securities giving rise to such indemnification obligation.

            (c) Conduct of Indemnification Proceedings. If any Proceeding shall
      be brought or asserted against any Person entitled to indemnity hereunder
      (an "Indemnified Party"), such Indemnified Party shall promptly notify the
      Person from whom indemnity is sought (the "Indemnifying Party") in
      writing, and the Indemnifying Party shall have the right to assume the
      defense thereof, including the employment of counsel reasonably
      satisfactory to the Indemnified Party and the payment of all fees and
      expenses incurred in connection with defense thereof; provided, that the
      failure of any Indemnified Party to give such notice shall not relieve the
      Indemnifying Party of its obligations or liabilities pursuant to this
      Agreement, except (and only) to the extent that it shall be finally
      determined by a court of competent jurisdiction (which determination is
      not subject to appeal or further review) that such failure shall have
      materially prejudiced the Indemnifying Party.

                                      -8-
<PAGE>

            An Indemnified Party shall have the right to employ separate counsel
      in any such Proceeding and to participate in the defense thereof, but the
      fees and expenses of such counsel shall be at the expense of such
      Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed
      in writing to pay such fees and expenses; (2) the Indemnifying Party shall
      have failed promptly to assume the defense of such Proceeding and to
      employ counsel reasonably satisfactory to such Indemnified Party in any
      such Proceeding; or (3) the named parties to any such Proceeding
      (including any impleaded parties) include both such Indemnified Party and
      the Indemnifying Party, and such Indemnified Party shall have been advised
      by counsel that a conflict of interest is likely to exist if the same
      counsel were to represent such Indemnified Party and the Indemnifying
      Party (in which case, if such Indemnified Party notifies the Indemnifying
      Party in writing that it elects to employ separate counsel at the expense
      of the Indemnifying Party, the Indemnifying Party shall not have the right
      to assume the defense thereof and the reasonable fees and expenses of one
      separate counsel shall be at the expense of the Indemnifying Party). The
      Indemnifying Party shall not be liable for any settlement of any such
      Proceeding effected without its written consent, which consent shall not
      be unreasonably withheld. No Indemnifying Party shall, without the prior
      written consent of the Indemnified Party, effect any settlement of any
      pending Proceeding in respect of which any Indemnified Party is a party,
      unless such settlement includes an unconditional release of such
      Indemnified Party from all liability on claims that are the subject matter
      of such Proceeding.

            All reasonable fees and expenses of the Indemnified Party (including
      reasonable fees and expenses to the extent incurred in connection with
      investigating or preparing to defend such Proceeding in a manner not
      inconsistent with this Section) shall be paid to the Indemnified Party, as
      incurred, within ten Trading Days of written notice thereof to the
      Indemnifying Party; provided, that the Indemnified Party shall promptly
      reimburse the Indemnifying Party for that portion of such fees and
      expenses applicable to such actions for which such Indemnified Party is
      not entitled to indemnification hereunder as finally determined by a court
      of competent jurisdiction (which determination is not subject to appeal or
      further review).

            (d) Contribution. If a claim for indemnification under Section 5(a)
      or 5(b) is unavailable to an Indemnified Party (by reason of public policy
      or otherwise), then each Indemnifying Party, in lieu of indemnifying such
      Indemnified Party, shall contribute to the amount paid or payable by such
      Indemnified Party as a result of such Losses, in such proportion as is
      appropriate to reflect the relative fault of the Indemnifying Party and
      Indemnified Party in connection with the actions, statements or omissions
      that resulted in such Losses as well as any other relevant equitable
      considerations. The relative fault of such Indemnifying Party and
      Indemnified Party shall be determined by reference to, among other things,
      whether any action in question, including any untrue or alleged untrue
      statement of a material fact or omission or alleged omission of a material
      fact, has been taken or made by, or relates to information supplied by,
      such Indemnifying Party or Indemnified Party, and the parties' relative
      intent, knowledge, access to information and opportunity to correct or
      prevent such action, statement or omission. The amount paid or payable by
      a party as a result of any Losses shall be deemed to include, subject to
      the limitations set forth in Section 5(c), any reasonable attorneys' or
      other reasonable fees or

                                      -9-
<PAGE>

      expenses incurred by such party in connection with any Proceeding to the
      extent such party would have been indemnified for such fees or expenses if
      the indemnification provided for in this Section was available to such
      party in accordance with its terms.

            The parties hereto agree that it would not be just and equitable if
      contribution pursuant to this Section 5(d) were determined by pro rata
      allocation or by any other method of allocation that does not take into
      account the equitable considerations referred to in the immediately
      preceding paragraph. Notwithstanding the provisions of this Section 5(d),
      no Holder shall be required to contribute, in the aggregate, any amount in
      excess of the amount by which the proceeds actually received by such
      Holder from the sale of the Registrable Securities subject to the
      Proceeding exceeds the amount of any damages that such Holder has
      otherwise been required to pay by reason of such untrue or alleged untrue
      statement or omission or alleged omission, except in the case of fraud by
      such Holder.

            The indemnity and contribution agreements contained in this Section
      are in addition to any liability that the Indemnifying Parties may have to
      the Indemnified Parties.

      6. Miscellaneous

            (a) Remedies. In the event of a breach by the Company or by a
      Holder, of any of their obligations under this Agreement, each Holder or
      the Company, as the case may be, in addition to being entitled to exercise
      all rights granted by law and under this Agreement, including recovery of
      damages, will be entitled to specific performance of its rights under this
      Agreement. The Company and each Holder agree that monetary damages would
      not provide adequate compensation for any losses incurred by reason of a
      breach by it of any of the provisions of this Agreement and hereby further
      agrees that, in the event of any action for specific performance in
      respect of such breach, it shall waive the defense that a remedy at law
      would be adequate.

            (b) No Piggyback on Registrations. Neither the Company nor any of
      its security holders (other than the Holders in such capacity pursuant
      hereto) may include securities of the Company in a Registration Statement
      other than the Registrable Securities, and the Company shall not after the
      date hereof enter into any agreement providing any such right to any of
      its security holders. The Company shall not file any other registration
      statement until after the Effective Date (other than on Form S-4 or Form
      S-8, each as promulgated under the Securities Act).

            (c) Compliance. Each Holder covenants and agrees that it will comply
      with the prospectus delivery requirements of the Securities Act as
      applicable to it in connection with sales of Registrable Securities
      pursuant to the Registration Statement.

            (d) Discontinued Disposition. Each Holder agrees by its acquisition
      of such Registrable Securities that, upon receipt of a notice from the
      Company of the occurrence of any event of the kind described in Section
      3(c), such Holder will forthwith discontinue disposition of such
      Registrable Securities under the Registration Statement until such

                                      -10-
<PAGE>

Holder's receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement or until it is advised in writing (the "Advice") by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.

            (e) Piggy-Back Registrations. If at any time during the
      Effectiveness Period there is not an effective Registration Statement
      covering all of the Registrable Securities and the Company shall determine
      to prepare and file with the Commission a registration statement relating
      to an offering for its own account or the account of others under the
      Securities Act of any of its equity securities, other than on Form S-4 or
      Form S-8 (each as promulgated under the Securities Act) or their then
      equivalents relating to equity securities to be issued solely in
      connection with any acquisition of any entity or business or equity
      securities issuable in connection with the stock option or other employee
      benefit plans, then the Company shall send to each Holder a written notice
      of such determination and, if within fifteen days after the date of such
      notice, any such Holder shall so request in writing, the Company shall
      include in such registration statement all or any part of such Registrable
      Securities such Holder requests to be registered, subject to customary
      underwriter cutbacks applicable to all holders of registration rights.

            (f) Amendments and Waivers. The provisions of this Agreement,
      including the provisions of this sentence, may not be amended, modified or
      supplemented, and waivers or consents to departures from the provisions
      hereof may not be given, unless the same shall be in writing and signed by
      the Company and the Holders of at least two-thirds (2/3) of the
      Registrable Securities issued or issuable and not yet sold under the
      Registration Statement or pursuant to Rule 144 under the Securities Act.

            (g) Notices. Any and all notices or other communications or
      deliveries required or permitted to be provided hereunder shall be in
      writing and shall be deemed given and effective on the earliest of (i) the
      date of transmission, if such notice or communication is delivered via
      facsimile at the facsimile number provided for below prior to 6:30 p.m.
      (New York City time) on a Trading Day, (ii) the Trading Day after the date
      of transmission, if such notice or communication is delivered via
      facsimile at the facsimile number provided for below later than 6:30 p.m.
      (New York City time) on any date and earlier than 11:59 p.m. (New York
      City time) on such date, (iii) the Trading Day following the date of
      mailing, if sent by nationally recognized overnight courier service, or
      (iv) upon actual receipt by the party to whom such notice is required to
      be given. The address for such notices and communications shall be
      delivered and addressed as set forth in the Purchase Agreement

            (h) Successors and Assigns. This Agreement shall inure to the
      benefit of and be binding upon the successors and permitted assigns of
      each of the parties and shall inure to the benefit of each Holder. Each
      Holder may assign their respective rights hereunder in the manner and to
      the Persons as permitted under the Purchase Agreement.

                                      -11-
<PAGE>

            (i) Execution and Counterparts. This Agreement may be executed in
      any number of counterparts, each of which when so executed shall be deemed
      to be an original and, all of which taken together shall constitute one
      and the same Agreement. In the event that any signature is delivered by
      facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile
      signature were the original thereof.

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

            (k) Cumulative Remedies. The remedies provided herein are cumulative
      and not exclusive of any remedies provided by law.

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

                                      -12-
<PAGE>

            (m) Headings. The headings in this Agreement are for convenience of
      reference only and shall not limit or otherwise affect the meaning hereof.

            (n) Independent Nature of Purchasers' Obligations and Rights. The
      obligations of each Purchaser hereunder are several and not joint with the
      obligations of any other Purchaser hereunder, and no Purchaser shall be
      responsible in any way for the performance of the obligations of any other
      Purchaser hereunder. Nothing contained herein or in any other agreement or
      document delivered at any closing, and no action taken by any Purchaser
      pursuant hereto or thereto, shall be deemed to constitute the Purchasers
      as a partnership, an association, a joint venture or any other kind of
      entity, or create a presumption that the Purchasers are in any way acting
      in concert with respect to such obligations or the transactions
      contemplated by this Agreement. Each Purchaser shall be entitled to
      protect and enforce its rights, including without limitation the rights
      arising out of this Agreement, and it shall not be necessary for any other
      Purchaser to be joined as an additional party in any proceeding for such
      purpose.

                            *************************

                                      -13-
<PAGE>

            IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.

                                         AXONYX, INC.

                                         By: /s/ S. Colin Neill
                                             ----------------------------------
                                             Name: S. Colin Neill
                                             Title: Chief Financial Officer

               [PURCHASERS' COUNTERPART SIGNATURE PAGES TO FOLLOW]

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

Provident Premier Master Fund Ltd.

By: /s/ Steven W. Winters
   ---------------------------
Name:  Steven W. Winters
Title: Attorney-in-Fact

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

Satellite Strategic Finance Associates, LLC.

By: Satellite Asset Management, L.P., its Manager

By: /s/ Brian S. Kriftcher
        ------------------------------------
Name:  Brian S. Kriftcher
Title: Chief Operating Officer and Principal

<PAGE>

         [PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

UBS O'Conner LLC F/B/O/
O'Conner PIPES Corporate Strategies Master Ltd.

By: /s/ Jeffrey Putman
    ----------------------
Name:  Jeffrey Putman
Title: Executive Director

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

SF Capital Partners

By: /s/ Brian Davidson
   --------------------------
Name:  Brian Davidson
Title: Authorized Signatory

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

Longview Equity Fund, LP

By: /s/ Wayne Coleson
    ----------------------------
Name:  Wayne Coleson
Title: Investment Manager

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

Longview Fund, L.P.

By: Viking Asset Mangement, LLC, its General Partner

By: /s/ S. Michael Rudolph
    --------------------------
Name:  S. Michael Rudolph
Title: CFO

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

Longview International Equity Fund, LP

By: /s/ Wayne Coleson
     ---------------------
Name:  Wayne Coleson
Title: Investment Manager

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

Longview Special Finance Inc.

By: /s/ Francois Morax
    ----------------------
Name:  Francois Morax
Title: Director

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

/s/ Heinz Hofliger
---------------------
Heinz Hofliger

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

Deephaven Small Cap Growth Fund LLC

By: /s/ Bruce Lieberman
   -----------------------
Name:  Bruce Lieberman
Title: Director Private Placements

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

Elektroprododuktions Maschinen AG

By: /s/ Kurt Freimann
   ------------------------
Name:  Kurt Freimann
Title: Sole Director

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

/s/ Kurt Freimann
-----------------------
Kurt Freimann

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

/s/ Gudron Eiz
--------------------
Gudron Eiz

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

EPM Holding AG

By: /s/ Kurt Freimann
   ---------------------
Name:  Kurt Freimann
Title: Sole Director

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

/s/ Judith Locher
-----------------------
Dr. Judith Locher

<PAGE>

[PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

PURCHASER:

Berkin Business SA

By: /s/ K. Meyer
   -------------------------
Name:  K. Meyer
Title: Attorney-at-Fact

<PAGE>

                                                                         ANNEX A

                              Plan of Distribution

      The Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:

      o     ordinary brokerage transactions and transactions in which the
            broker-dealer solicits purchasers;

      o     block trades in which the broker-dealer will attempt to sell the
            shares as agent but may position and resell a portion of the block
            as principal to facilitate the transaction;

      o     purchases by a broker-dealer as principal and resale by the
            broker-dealer for its account;

      o     an exchange distribution in accordance with the rules of the
            applicable exchange;

      o     privately negotiated transactions;

      o     settlement of short sales entered into after the date of this
            prospectus;

      o     broker-dealers may agree with the Selling Stockholders to sell a
            specified number of such shares at a stipulated price per share;

      o     a combination of any such methods of sale; and

      o     any other method permitted pursuant to applicable law.

      The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

      Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

      The Selling Stockholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock from time to time under
this prospectus, or under an amendment to this

<PAGE>

prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act of 1933 amending the list of Selling Stockholders to include the pledgee,
transferee or other successors in interest as Selling Stockholders under this
prospectus.

      The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The Selling Stockholders have
informed the Company that it does not have any agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock.

      The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}]]