Document:

ex10-1

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

Among

ANTEX BIOLOGICS INC.

and

THE PURCHASERS LISTED ON SCHEDULE I

Dated as of July 3, 2001

 

SECURITIES PURCHASE AGREEMENT

            THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of July
3, 2001, among Antex Biologics Inc., a Delaware corporation (the “Company”),
and the various purchasers identified and listed on Schedule I hereto (each
referred to herein as a “Purchaser” and, collectively, the “Purchasers.”)

            WHEREAS, the Company and the Purchasers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Rule 506 under Regulation D as promulgated by the United States Securities
and Exchange Commission (the “Commission”) under Section 4(2) of the Securities
Act of 1933, as amended (the “Securities Act”);

            WHEREAS, subject to the terms and conditions set forth in this Agreement,
the Company desires to issue and sell to the Purchasers, and the Purchasers
desire to acquire from the Company, 3,000 shares of the Company’s Series B
Convertible Preferred Stock, par value $.01 per share, liquidation value $1,000
per share (the “Preferred Stock”), Class E warrants (the “Class E Warrants”) to
purchase up to 750,000 shares of the Company’s common stock, par value $.01 per
share (the “Common Stock”), in the form of Exhibit B-1 attached hereto, and
Class F warrants (the “Class F Warrants”) to purchase up to 375,000 shares of
the Common Stock, in the form of Exhibit B-2 attached hereto (the Class E
Warrants and the Class F Warrants, together the “Warrants”);

            WHEREAS, it is contemplated that the Company will sell 2,000 shares of
Preferred Stock and Class E warrants to purchase up to 500,000 shares of the
Company’s Common Stock and Class F warrants to purchase up to 250,000 shares of
the Common Stock in a separate transaction, subject to substantially the same
terms and conditions set forth in this Agreement, on or before July 31, 2001
(the “Additional Investment”); and

            WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement in substantially the form of Exhibit C attached hereto (the
“Registration Rights Agreement”) pursuant to which the Company has agreed to
provide certain registration rights under the Securities Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.

            NOW THEREFORE, in consideration of the promises and mutual covenants and
agreements hereinafter, the Company and the Purchasers hereby agree as follows:

ARTICLE I.

PURCHASE AND SALE OF THE PREFERRED STOCK

AND WARRANTS

      1.1 Purchase and Sale. Subject to the terms and conditions set forth
herein, the Company shall issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, shall purchase from the Company on the Closing Date
(as defined below), the number of shares of

 

 Preferred Stock as set forth for such Purchaser on Schedule I. The
Preferred Stock shall have the respective rights, preferences and privileges
set forth in the Certificate of Designation (the “Certificate of Designation”),
in the form of Exhibit A annexed hereto, which shall be approved by the
Purchasers and the Company’s Board of Directors and filed on or prior to the
Closing Date by the Company with the Secretary of State of Delaware.

      1.2 Closings.

            a. The Closing. The closing of the purchase and sale of the Preferred
Stock and the issuance of the Warrants (the “Closing”) shall take place at the
offices of Akin, Gump, Strauss, Hauer & Feld, L.L.P., 590 Madison Avenue, New
York, New York 10022, or by transmission by facsimile and overnight courier,
immediately following the execution hereof, or such later date or different
location as the parties shall agree, but not prior to the date that the
conditions set forth in Section 4.1 have been satisfied or waived by the
appropriate party (the “Closing Date”). At the Closing:

                  (i) Each Purchaser shall deliver, as directed by the Company, its portion
of the purchase price as set forth next to its name on Schedule I in United
States dollars in immediately available funds to an account or accounts
designated in writing by the Company;

                  (ii) The Company shall deliver to each Purchaser a certificate(s)
representing the shares of Preferred Stock purchased by such Purchaser as set
forth on Schedule I hereto;

                  (iii) The Company shall deliver to each Purchaser Class E Warrants, in the
form of Exhibit B-1 hereto and Class F Warrants in the form of Exhibit B-2
hereto, representing the right to acquire the number of shares of Common Stock
purchased by such Purchaser as set forth on Schedule I hereto; and

                  (iv) The parties shall execute and deliver each of the documents referred
to in Section 4.1 hereof.

ARTICLE II.

REPRESENTATIONS AND WARRANTIES

      2.1 Representations, Warranties and Agreements of the Company. The
Company hereby makes the following representations and warranties to each of
the Purchasers:

            a. Organization and Qualification. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, with the requisite corporate power and authority to own and use
its properties and assets and to carry on its business as currently conducted.
Except as set forth on Schedule 2.1(a), the Company has no subsidiaries
(collectively, the “Subsidiaries”). Each of the Subsidiaries (which for
purposes of this Agreement means any Person (as defined below) in which the
Company, directly or indirectly, owns the majority of such Person’s capital
stock or holds an equivalent equity or

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similar interest) is a corporation duly incorporated, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, with
the requisite corporate power and authority to own and use its properties and
assets and to carry on its business as currently conducted. Each of the
Company and its Subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing as a foreign corporation 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, individually or in the aggregate,
(i) adversely affect the legality, validity or enforceability of this Agreement
or any of the Transaction Documents (as defined in Section 2.1(b)) or any of
the transactions contemplated hereby or thereby, (ii) have or result in a
material adverse effect on the business, results of operations, assets,
prospects, or financial condition of the Company and its Subsidiaries, taken as
a whole or (iii) impair the Company’s ability to perform fully on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or
(iii), being a “Material Adverse Effect”).

            b. Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by this Agreement and the Certificate of Designation, the Warrants
and the Registration Rights Agreement (collectively, the “Transaction
Documents”), and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action and no further action is required by the Company,
its Board of Directors or its stockholders in connection therewith. The
Company has full corporate power and authority to issue, sell and deliver the
Preferred Stock, the Conversion Shares (as defined below), the Warrants and the
Warrant Shares (as defined below) pursuant to this Agreement and the
Transaction Documents. This Agreement and each of the Transaction Documents
have been duly executed by the Company and when delivered in accordance with
the terms hereof or thereof will constitute the valid and binding obligations
of the Company enforceable against the Company in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally the enforcement of, creditors’ rights and remedies
or by other equitable principles of general application, and except that rights
to indemnification and contribution may be limited by federal or state
securities laws or public policy relating thereto.

            c. Capitalization. As of the date hereof, the authorized and issued
capital stock of the Company and its Subsidiaries and the ownership thereof is
as set forth in Schedule 2.1(c). All of such outstanding shares of capital
stock have been, or upon issuance will be, duly authorized and validly issued,
fully paid and nonassessable and were issued in accordance with the
registration or qualification provisions of the Securities Act, or pursuant to
valid exemptions therefrom. Except as disclosed on Schedule 2.1(c), (i) no
shares of the Company’s capital stock are subject to preemptive rights or any
other similar rights or any liens, claims or encumbrances suffered or permitted
by the Company, nor is any holder of the Common Stock entitled to preemptive or
similar rights arising out of any agreement or understanding with the Company
by virtue of any Transaction Document, (ii) there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or
exchangeable or exercisable for, or giving any Person (as defined

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 below) any right to subscribe for or acquire, any shares of capital stock
of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries or options, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, (iii) there are no outstanding debt
securities of the Company or any of its Subsidiaries, (iv) there are no
contracts, commitments, understandings, agreements or arrangements under which
the Company or any of its Subsidiaries is obligated to register the sale of any
of their securities under the Securities Act (except the Registration Rights
Agreement), (v) there are no outstanding securities of the Company or any of
its Subsidiaries which contain any redemption or similar provisions, and there
are no contracts, commitments, understandings, agreements or arrangements by
which the Company or any of its Subsidiaries is or may become bound to redeem a
security of the Company or any of its Subsidiaries, (vi) there are no
securities or instruments containing anti-dilution or similar provisions that
will be triggered by the issuance of the shares of Preferred Stock or Warrants,
or upon the conversion of the Preferred Stock or exercise of the Warrants,
(vii) the Company does not have any stock appreciation rights or “phantom
stock” plans or agreements, or any similar plan or agreement and (viii) to the
knowledge of the Company, except as specifically disclosed in the SEC Documents
(as defined in Section 2.1(k)), no Person or group of related Persons
beneficially owns (as determined pursuant to Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and no Person
or group of related Persons has the right to acquire by agreement with or by
obligation binding upon the Company beneficial ownership of in excess of 5% of
the Common Stock. As used herein, “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.

            d. Authorization, Validity and Issuance of Shares. The shares of Common
Stock issuable upon conversion of the Preferred Stock and exercise of the
Warrants (collectively, the “Underlying Shares”) are duly authorized and
reserved for issuance and the shares of Common Stock issued upon conversion of
the Preferred Stock (the “Conversion Shares”) and exercise of the Warrants (the
“Warrant Shares”) will be validly issued, fully paid and nonassessable, free
and clear of all liens and encumbrances, other than liens and encumbrances
created by the Purchasers (collectively, “Liens”), and are not subject to any
preemptive or similar rights existing on the date hereof. Assuming the
accuracy of the representations and warranties of the Purchasers under Section
2.2 hereof, the issuance by the Company of the Preferred Stock, the Warrants
and the Underlying Shares is exempt from registration under the Securities Act.
When issued by the Company in accordance with the terms of this Agreement, the
Preferred Stock and the Warrants will be validly issued, fully paid and
nonassessable.

            e. No Conflicts. The execution, delivery and performance of this
Agreement and each of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including the issuance of the Underlying Shares) do not (i) conflict with or
violate any provision of the certificate of incorporation of the Company (the
“Certificate of Incorporation”), the bylaws of the Company (the “Bylaws”) or
other organizational documents of the Company or any of the Subsidiaries, (ii)
subject to obtaining the consents referred to in Section 2.1(f), conflict with,
or constitute a material breach

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or a default (or an event which with notice or lapse of time or both would
become a default) under, or give to other Persons any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, patent,
license or instrument (evidencing a Company or Subsidiary debt or otherwise) to
which the Company or any of its Subsidiaries is a party or by which any
property or asset of the Company or any of its Subsidiaries is bound or
affected, or (iii) result in a material violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or any of its Subsidiaries is
subject (including federal and state securities laws and regulations and the
rules and regulations of the principal market, system or exchange on which the
Common Stock is traded, quoted or listed), applicable to the Company or any of
its Subsidiaries, or by which any material property or asset of the Company or
any of its Subsidiaries is bound or affected.

            f. Consents and Approvals. Neither the Company nor any of its
Subsidiaries is 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, regulatory or self
regulatory agency, or other Person in connection with the execution, delivery
and performance by the Company of this Agreement or the Transaction Documents,
other than (i) the filing of a registration statement with the Commission,
(ii) the application(s) or any letter(s) acceptable to the American Stock
Exchange (“AMEX”) for the listing or quoting of the Underlying Shares on AMEX
(and with any other national securities exchange or market on which the Common
Stock is then traded, listed or quoted), (iii) any filings, notices or
registrations under applicable state securities laws and (iv) the filing of the
Certificate of Designation with the Secretary of State of Delaware (the
“Required Approvals”).

            g. Litigation; Proceedings. There is no action, suit, notice of
violation, proceeding or investigation pending or, to the knowledge of the
Company or any of its Subsidiaries, threatened against or affecting the Company
or any of its Subsidiaries or any of their respective properties or assets
before or by any court, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) or any arbitrator, which
(i) challenges the legality, validity or enforceability of this Agreement or
any of the Transaction Documents or (ii) could reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect.

            h. No Default or Violation. Neither the Company nor any of its
Subsidiaries (i) is in default under or in violation of any indenture, loan or
other credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties or assets is bound and which is
required to be included as an exhibit to any SEC Document (as defined in
Section 2.1(k)) or will be required to be included as an exhibit to the
Company’s next filing under either the Securities Act or the Exchange Act, (ii)
is in material violation of any law, rule, regulation order, judgment,
injunction, decree or other restriction of any court, arbitrator or
governmental authority applicable to it, (iii) is in material violation of any
law, statute, ordinance, rule or regulation of any governmental authority to
which it is subject (iv) is in default under or any material violation of any
of the provisions of its respective certificate of incorporation, bylaws or
other organizational documents or (v) is in default under or in violation of
any of the listing or quotation requirements of AMEX as in effect on the date
hereof and the Company is not aware of any facts which would reasonably lead to
delisting or suspension of the Common Stock by AMEX in the foreseeable future.
The business of the Company and its

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Subsidiaries has not been conducted in violation of any law, statute,
ordinance, rule or regulation of any governmental authority, except where such
violations have not resulted or would not reasonably result, individually or in
the aggregate, in a Material Adverse Effect. Neither the Company nor any of
its Subsidiaries is in breach of any agreement where such breach, individually
or in the aggregate, would have a Material Adverse Effect

            i. Disclosure; Absence of Certain Changes. None of this Agreement, the
Schedules to this Agreement, the Transaction Documents, the SEC Documents (as
defined in Section 2.1(k)) or any other written or formally presented
information, report, exhibit, schedule or document identified on Schedule
2.1(i), furnished by or on behalf of the Company in connection with the
negotiation of the transactions contemplated hereby contained at the time it
was or is so furnished any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements made herein
and therein, in light of the circumstances under which they were made, not
misleading. Except as disclosed in SEC Documents filed on EDGAR at least five
business days prior to the date hereof, since March 31, 2001, there has been no
material adverse change and no material adverse development in the business,
properties, operations, financial condition, liabilities or results of
operations of the Company or the Subsidiaries. The Company has not taken any
steps, and does not currently expect to take any steps, to seek protection
pursuant to any bankruptcy law nor does the Company or any of its Subsidiaries
have any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy proceedings. No event, liability, development or
circumstance has occurred or exists, or is contemplated to occur, with respect
to the Company or its Subsidiaries or their respective businesses, properties,
operations or financial condition or, insofar as can reasonably be foreseen,
prospects, that would be required to be disclosed by the Company under
applicable securities laws on a registration statement (including by way of
incorporation by reference) filed with the Commission under the Securities Act,
on the date this representation is made, relating to an issuance and sale by
the Company of its Common Stock and which has not been publicly disclosed.

            j. Private Offering. The Company and, to the knowledge of the Company,
all Persons acting on its behalf have not made, directly or indirectly, offers
or sales of any securities or solicited any offers to buy any securities under
circumstances that would require registration of the Preferred Stock, the
Warrants, the Conversion Shares, the Warrant Shares or the Underlying Shares or
the issuance of such securities under the Securities Act. The offer, sale and
issuance of the Preferred Stock, the Warrants, the Conversion Shares and the
Warrant Shares to the Purchasers will not be integrated with any other offer,
sale and issuance of the Company’s securities.

            k. SEC Documents; Financial Statements. The Common Stock of the Company
is registered pursuant to Section 12(b) of the Exchange Act. The Company has
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the Commission pursuant to the reporting requirements of
the Exchange Act, including pursuant to Sections 13, 14 or 15(d) thereof (the
foregoing materials and all exhibits included therein and financial statements
and schedules thereto and documents (other than exhibits to such documents)
incorporated by reference therein being collectively referred to herein as the
“SEC Documents”), on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Documents prior to the expiration of
any such extension. As of their respective dates, the

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SEC Documents 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 Documents, when filed,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. All agreements to which the Company or any of its Subsidiaries
is a party or to which the property or assets of the Company or any of its
Subsidiaries are subject and which are required to be filed as exhibits to the
SEC Documents have been filed as exhibits to the SEC Documents as required and
neither the Company nor any of its Subsidiaries nor, to the Company’s
knowledge, any other party is in breach of any such agreement. As of their
respective dates, the financial statements of the Company included in the SEC
Documents comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods
involved, except as may be otherwise specified in such financial statements or
the notes thereto, and fairly present in all material respects the financial
position of the Company 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.
Neither the Company nor any of its Subsidiaries nor, to the knowledge of the
Company, any of their officers, directors, employees or agents has provided the
Purchasers with any material, nonpublic information, except as set forth on
Schedule 2.1(i). The Company acknowledges that the Purchasers will be trading
in the securities of the Company in reliance on the foregoing representation
and warranty.

            l. Broker’s Fees. No fees or commissions or similar payments with respect
to the transactions contemplated by this Agreement and the Transaction
Documents have been paid or will be payable by the Company to any broker,
financial advisor, finder, investment banker, or bank, other than as set forth
on Schedule 2.1(l).

            m. Form S-3 Eligibility. The Company is eligible to register securities
(including the Underlying Shares) for resale with the Commission on Form S-3
(or any successor form) promulgated under the Securities Act.

            n. Listing and Maintenance Requirements Compliance. The principal market
on which the Common Stock is currently traded is AMEX. The Company has not in
the three years preceding the date hereof received notice (written or oral)
from AMEX (or any stock exchange, market or trading facility on which the
Common Stock is or has been traded or listed (or on which it has been quoted))
to the effect that the Company is not in compliance with the listing or
maintenance requirements of such market, trading facility or exchange. The
Company is not aware of any facts that would reasonably lead to delisting or
suspension of the Common Stock by AMEX. As of the date hereof, the Company is
in compliance with all such maintenance requirements.

            o. Intellectual Property Rights. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all trademarks, trademark
applications, trade names and service marks, whether or not registered, and all
patents, patent applications, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and intellectual

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property rights (collectively, “Intellectual Property Rights”) which are
necessary for use in connection with their respective businesses as now
conducted and as described in the SEC Documents. None of the Company’s
Intellectual Property Rights is expected to expire or terminate within two
years from the date of this Agreement. To the knowledge of the Company,
neither the Company nor any of its Subsidiaries has infringed or is infringing
on any of the Intellectual Property Rights of any Person and there is no claim,
action or proceeding which has been made or brought or alleged against, or to
the Company’s knowledge, is being made, brought or threatened against, the
Company or any of its Subsidiaries regarding the infringement of any of the
Intellectual Property Rights, and the Company and its Subsidiaries are unaware
of any facts or circumstances which might give rise to any of the foregoing,
except where any of the foregoing would not have a Material Adverse Effect.
The Company and its Subsidiaries have taken reasonable security measures to
protect the secrecy, confidentiality and value of all of their Intellectual
Property Rights.

            p. Registration Rights; Rights of Participation. (i) the Company has not
granted or agreed to grant to any Person any rights (including “piggy-back”
registration rights) to have any securities of the Company registered with the
Commission or any other governmental authority which have not been satisfied
and (ii) no Person, including, but not limited to, current or former
stockholders of the Company, underwriters, brokers or agents, has any right of
first refusal, preemptive right, right of participation, or any similar right
to participate in the transactions contemplated by this Agreement or any
Transaction Document.

            q. Internal Accounting Controls. The Company and each of the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
United States generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorizations 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.

            r. Tax Status; Firpta. The Company and each of its Subsidiaries have made
or filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith,
and have set aside on their books provisions reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due from the Company or any of its Subsidiaries
by the taxing authority of any jurisdiction, and the Company knows of no basis
for any such claim. The Company is not a “United States real property holding
corporation” within the meaning of Section 847(c)(2) of the Internal Revenue
Code of 1986, as amended.

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            s. Application to Takeover Protection. 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 or other
similar anti-takeover provision under the Certificate of Incorporation, Bylaws
or the laws of the state of incorporation of the Company which is or could
become applicable to the Purchasers or the Transaction Documents as a result of
the transactions contemplated by this Agreement and the Transaction Documents.
None of the transactions contemplated by this Agreement and the Transaction
Documents, including the conversion of the Preferred Stock and the exercise of
the Warrants, will trigger any poison pill provisions of any of the Company’s
stockholders’ rights or similar agreements.

            t. Solicitation Materials. The Company has not (i) distributed any
offering materials in connection with the offering and sale of the Preferred
Stock or the Warrants, other than the SEC Documents, the Schedules to this
Agreement, any amendments and supplements thereto or (ii) solicited any offer
to buy or sell the Preferred Stock or the Warrants by means of any form of
general solicitation or advertising. Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf, has engaged or will
engage in any form of general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act) in connection with the offer
or sale of the Preferred Stock or the Warrants.

            u. Seniority; Exclusivity. No class of equity securities of the Company
will be senior to the Preferred Stock in right of payment, whether upon
liquidation, dissolution or otherwise. So long as any Preferred Stock issued
hereunder remain outstanding, the Company shall not exchange, redeem or convert
any of the Company’s capital stock for or into indebtedness, including
convertible debt, of the Company.

            v. Other Agreements. The Company has not, directly or indirectly, made
any agreements with any Purchasers relating to the terms and conditions of the
transactions contemplated by the Transaction Documents except as set forth in
the Transaction Documents.

      Each Purchasers acknowledges and agrees that the Company makes no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.1.

      2.2 Representations and Warranties of the Purchasers. Each of the
Purchasers, severally and not jointly, hereby represents and warrants to the
Company (as to itself) as follows:

            a. Organization; Authority. Such Purchaser is a corporation or a limited
duration company or a limited liability company or limited partnership duly
formed, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, organization or formation with the requisite
power and authority, corporate or otherwise, to enter into and to consummate
the transactions contemplated hereby and by the Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder. The purchase
by such Purchaser of the Preferred Stock and the Warrants hereunder has been
duly authorized by all necessary action on the part of such Purchaser. Each of
this Agreement and the Registration Rights Agreement has been duly executed and
delivered by such Purchaser and constitutes the valid and legally binding
obligation of such Purchaser, enforceable against such Purchaser in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization,

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moratorium, liquidation or similar laws relating to, or affecting
generally the enforcement of, creditors’ rights and remedies or by other
equitable principles of general application, and except that rights to
indemnification and contribution may be limited by federal or state securities
laws or public policy relating thereto.

            b. Investment Intent. Such Purchaser is acquiring the Preferred Stock and
the Warrants for its own account and not with a present view to or for
distributing or reselling the Preferred Stock, the Warrants, the Conversion
Shares or the Warrant Shares or any part thereof or interest therein in
violation of the Securities Act; provided, however, that by making the
representations herein, such Purchaser does not agree to hold any of the
Preferred Stock, the Warrants, the Conversion Shares or the Warrant Shares for
any minimum or other specific term and reserves the right to dispose of the
Preferred Stock at any time in accordance with or pursuant to a registration
statement or an exemption under the Securities Act.

            c. Purchaser Status. At the time such Purchaser was offered the Preferred
Stock and the Warrants, at the Closing Date and on the date or dates of
exercise of the warrants, (i) it was and will be an “accredited investor” as
defined in Rule 501 under the Securities Act and (ii) such Purchaser, either
alone or together with its representatives, had and will have 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
Preferred Stock and the Warrants.

            d. Reliance. Such Purchaser understands and acknowledges that (i) the
Preferred Stock and the Warrants are being offered and sold to such Purchaser
without registration under the Securities Act in a private placement that is
exempt from the registration provisions of the Securities Act under Section
4(2) of the Securities Act or Regulation D promulgated thereunder and (ii) the
availability of such exemption depends in part on, and the Company will rely
upon the accuracy and truthfulness of, the representations set forth in this
Section 2.2 and such Purchaser hereby consents to such reliance.

            e. Information. Such Purchaser and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Preferred
Stock and the Warrants which have been requested by such Purchaser or its
advisors. Such Purchaser and its advisors, if any, have been afforded the
opportunity to ask questions of the Company. Neither such inquiries nor any
other due diligence investigation conducted by such Purchaser or any of its
advisors or representatives shall modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained in
Section 2.1 above or representations and warranties of the Company contained in
any other Transaction Document. Such Purchaser understands that its investment
in the Preferred Stock and the Warrants involves a significant degree of risk.

            f. Governmental Review. Such Purchaser understands that no United States
federal or state agency or authority any other government or governmental
agency has passed upon or made any recommendation or endorsement of the
Preferred Stock or Warrants.

            g. Residency. Such Purchaser is a resident of the jurisdiction set forth
immediately below such Purchaser’s name on Schedule II hereto.

10

      The Company acknowledges and agrees that the Purchasers make no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.2.

ARTICLE III.

OTHER AGREEMENTS

      3.1 Transfer Restrictions; Legends.

            a. Transfer Restrictions. If any Purchaser should decide to transfer or
dispose of the Preferred Stock, the Warrants, the Conversion Shares or the
Warrant Shares held by it, such Purchaser understands and agrees that it may do
so only pursuant to an effective registration statement under the Securities
Act, to the Company or pursuant to an available exemption from the registration
requirements of the Securities Act (including Rule 144 promulgated under the
Securities Act (“Rule 144”)). The Company shall announce any material
nonpublic information that it legally is required to announce on or prior to
the Effectiveness Date (as defined in the Registration Rights Agreement) of the
registration statement filed pursuant to the Registration Rights Agreement. In
connection with any transfer or disposition of any Preferred Stock, Warrants,
Conversion Shares or Warrant Shares other than pursuant to an effective
registration statement or to the Company, the Company may require the
transferor thereof to provide to the Company a written opinion of counsel
experienced in the area of United States securities laws selected by the
transferor, the form and substance of which opinion shall be customary for
opinions of counsel in comparable transactions and reasonably acceptable to the
Company, to the effect that such transfer or disposition does not require
registration of such transferred securities under the Securities Act; provided,
however, that if the Preferred Stock, Warrants, Conversion Shares or Warrant
Shares may be sold pursuant to Rule 144(k), no written opinion of counsel shall
be required from the Purchaser if such Purchaser provides reasonable assurances
that such security can be sold pursuant to Rule 144(k). Notwithstanding the
foregoing, the Company hereby consents to and agrees to register any transfer
by any Purchaser to an Affiliate of such Purchaser, provided that the
transferee certifies to the Company that it is an “accredited investor” as
defined in Rule 501(a) under the Securities Act. 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 Transaction Documents. If a
Purchaser provides the Company with an opinion of counsel, the form and
substance of which opinion shall be customary for opinions of counsel in
comparable transactions and reasonably acceptable to the Company, to the effect
that a public sale, assignment or transfer of the Preferred Stock, the
Conversion Shares, the Warrants and the Warrant Shares may be made without
registration under the Securities Act or the Purchaser provides the Company
with reasonable assurances that the Warrants, the Conversion Shares and/or the
Warrant Shares can be sold pursuant to Rule 144(k), the Company shall permit
the transfer, and, in the case of the Conversion Shares and the Warrant Shares,
promptly instruct its transfer agent to issue one or more certificates in such
name and in such denominations as specified by such Purchase and without any
restrictive legend. Notwithstanding the foregoing or anything else contained
herein to the contrary, the Preferred Stock, the Warrants, the Conversion
Shares and the Warrant Shares may be pledged as collateral in connection with a
bona fide margin account or other lending arrangement.

11

            b. Legend. Each Purchaser agrees to the imprinting, so long as is
required by this Section 3.1(b), of the following legend on the Preferred
Stock, the Warrants, the Conversion Shares and the Warrant Shares:

		
	 	      THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION 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.

            Neither the Preferred Stock, the Warrants, the Conversion Shares nor the
Warrant Shares shall contain the legend set forth above (or any other legend)
(i) at any time while a registration statement is effective under the
Securities Act covering such security, (ii) if in the written opinion of
counsel to the Company experienced in the area of United States securities laws
such legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of
the Commission) or (iii) if such Preferred Stock, Warrants, Conversion Shares
or Warrant Shares may be sold pursuant to Rule 144(k). The Company agrees that
it will provide each Purchaser, upon request, with a certificate or
certificates representing Securities, Warrants, Conversion Shares or Warrant
Shares, free from such legend at such time as such legend is no longer required
hereunder. If such certificate or certificates had previously been issued with
such a legend or any other legend, the Company shall, upon request issue such
certificate or certificates free of any legend.

      3.2 Stop Transfer Instruction. The Company may not make any notation on
its records or give instructions to any transfer agent of the Company which
enlarge the restrictions on transfer set forth in Section 3.1, except as
required by law.

      3.3 Furnishing of Information. As long as any Purchaser owns the
Preferred Stock, the Warrants, the Conversion Shares or the Warrant Shares, the
Company will cause the Common Stock to continue at all times to be registered
under Section 12 of the Exchange Act, will 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 Sections
13, 14 or 15(d) of the Exchange Act and will not take any action or file any
document (whether or not permitted by the Exchange Act or the rules thereunder)
to terminate or suspend such reporting and filing obligations. As long as any
Purchaser owns the Preferred Stock, the Warrants, the Conversion Shares or the
Warrant Shares, if the Company is not required to file reports pursuant to
Sections 13(a) or 15(d) of the Exchange Act, it will prepare and make publicly
available in accordance with Rule 144(c) promulgated under the Securities Act
annual and quarterly financial statements, together with a discussion and
analysis of such financial statements in form and substance substantially
similar to those that would otherwise be required to be included in reports
required by Sections 13(a) or 15(d) of the Exchange Act, as well as any other
information required thereby, in the time period that such filings would have
been required to have been made under the Exchange Act. The Company also
agrees to send the following to each Purchaser prior to

12

and during the Effectiveness Period (as defined in the Registration Rights
Agreement): (i) either electronic notice that the Company has issued a press
release or a copy of the press release and (ii) copies of any notices and other
information made available or given to the stockholders of the Company
generally, contemporaneously with the making available or giving thereof to the
stockholders. The Company further covenants that it will take such further
action as any holder of the Preferred Stock, the Warrants, the Conversion
Shares or the Warrant Shares may reasonably request at no cost to the Company,
all to the extent required from time to time to enable such Person to sell the
Preferred Stock, the Warrants, the Conversion Shares, or the Warrant Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities Act, including
delivering the legal opinion referenced above in Section 3.1(a). Upon the
request of any such Person, the Company shall deliver to such Person a written
certification of a duly authorized officer as to whether it has complied with
such requirements.

      3.4 Blue Sky Laws. In accordance with the Registration Rights Agreement,
the Company shall (a) qualify the Conversion Shares and the Warrant Shares
under the securities or “blue sky” laws of such jurisdictions as the Purchasers
may request (or obtain an exemption from such qualification), (b) shall provide
evidence of any such action so taken to each Purchaser on or prior to the
Closing Date and (c) shall continue such qualification at all times through the
resale of all Conversion Shares or Warrant Shares, but in any event not past
the third anniversary of the Closing Date.

      3.5 Integration. Other than in connection with the Additional Investment,
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
Preferred Stock, the Warrants, the Conversion Shares or the Warrant Shares in a
manner that would require the registration under the Securities Act of the sale
of the Preferred Stock, the Warrants, the Conversion Shares or the Warrant
Shares to any Purchaser or cause the offering of such securities to be
integrated with any other offering of securities by the Company for the purpose
of any stockholder approval provision applicable to the Company or its
securities.

      3.6 Listing, Registration and Reservation of Conversion Shares and Warrant
Shares.

            a. The Company shall (i) not later than five (5) business days after the
closing date of the Additional Investment or August 5, 2001, whichever is
earlier, prepare and file with AMEX (as well as any other national securities
exchange or market on which the Common Stock is then listed, traded or quoted)
additional shares listing applications or letters acceptable to AMEX covering
and listing a number of shares of Common Stock which is at least equal to the
maximum number of Underlying Shares then issuable, assuming that the payment of
all future dividends on such shares then outstanding were made in shares of
Common Stock and assuming the maximum adjustment to the Initial Conversion
Price in Section 5(a)(i) of the Certificate of Designation, without regard to
any limitation on the Holder’s ability to convert the Preferred Stock or
exercise the Warrants, (ii) take all steps necessary to cause the Underlying
Shares to be approved for listing or quotation on AMEX (as well as any other
national securities exchange or market on which the Common Stock is then
listed, traded or quoted) as soon as possible thereafter, (iii) use its
reasonable efforts to maintain, so long as any other shares of Common

13

Stock shall be so listed, such listing of all such Underlying Shares on
AMEX (as well as on any other national securities exchange or market on which
the Common Stock is then listed, traded or quoted), and (iv) provide to the
Purchasers evidence of such listing. Neither the Company nor any of its
Subsidiaries shall take any action that may result in the delisting or
suspension of the Common Stock on AMEX. The Company shall promptly provide to
each Purchaser copies of any notices it receives from AMEX regarding the
continued eligibility of the Common Stock for listing, so long as such notice
does not include material, nonpublic information. The Company shall pay all
fees and expenses in connection with satisfying its obligations under this
Section 3.6(a).

            b. The Company at all times shall reserve a sufficient number of shares of
its authorized but unissued Common Stock to provide for the full conversion of
the outstanding Preferred Stock (including the payment of all dividends
thereon) and exercise of the outstanding Warrants. If at any time the number
of shares of Common Stock authorized and reserved for issuance is insufficient
to cover the number of Conversion Shares and Warrant Shares issued and issuable
upon conversion of the Preferred Stock and exercise of the Warrants (based on
the Conversion Price (as defined in the Certificate of Designation) of the
Preferred Stock in effect from time to time and the Exercise Price (as defined
in the Warrants) of the Warrants in effect from time to time) without regard to
any limitation on conversions or exercises, the Company will promptly take all
corporate action necessary to authorize and reserve 100% of the maximum number
of Underlying Shares then issuable, assuming that the payment of all future
dividends on such shares then outstanding were made in shares of Common Stock
and assuming the maximum adjustment to the Initial Conversion Price in Section
5(a)(i) of the Certificate of Designation, without regard to any limitation on
the Holder’s ability to convert the Preferred Stock or exercise the Warrants,
including, without limitation, calling a special meeting of stockholders to
authorize additional shares to meet the Company’s obligations under this
Section 3.6(b), in the case of an insufficient number of authorized shares, and
using its reasonable efforts to obtain stockholder approval of an increase in
such authorized number of shares.

      3.7 Notice of Breaches; and Violations; Purchaser Default.

            a. Notice of Breach. The Company and each Purchaser shall give prompt
written notice to the each other of any material breach by it of any
representation, warranty or other agreement contained in this Agreement or in
the Transaction Documents, as well as any events or occurrences arising after
the date hereof and prior to the Closing Date, which would reasonably be likely
to cause any representation or warranty or other agreement of such party, as
the case may be, contained herein to be incorrect or breached as of the Closing
Date, provided such notice will not constitute material nonpublic information.
However, no disclosure by any party pursuant to this Section 3.7 shall be
deemed to cure any breach of any representation, warranty or other agreement
contained herein or in the Transaction Documents.

            b. Notice of Violation. Notwithstanding the generality of Section 3.7(a),
the Company shall promptly notify (provided such notification will not
constitute material nonpublic information) each Purchaser of any notice or
claim (written or oral) that it receives from any lender of the Company or any
of its Subsidiaries to the effect that the consummation of the transactions
contemplated hereby and by the Transaction Documents violates or would violate
any written agreement or understanding between such lender and the Company or
any of its

14

Subsidiaries, and the Company shall promptly furnish by facsimile to the
Purchasers a copy of any written statement in support of or relating to such
claim or notice.

            c. Purchaser Default. The default by any Purchaser of any of its
obligations, representations or warranties under this Agreement or the
Transaction Documents shall not be imputed to, and shall have no effect upon,
any other Purchaser or affect the Company’s obligations under this Agreement or
any Transaction Document to any non-defaulting Purchaser.

      3.8 Form D. The Company agrees to file a Form D with respect to the
Preferred Stock and the Warrants as required by Rule 506 under Regulation D
under the Securities Act and to provide a copy thereof to each Purchaser
promptly after such filing.

      3.9 Future Financings.

            a. During the ninety (90) days following the date of the Closing (the
“Financing Restriction Period”), the Company shall not issue any privately
placed discounted, variable priced or re-setting equity or equity-like
securities, including debt securities with an equity feature, except in
connection with the Additional Investment or in connection with a transaction
issuing additional securities to the Purchasers.

            b. After the Financing Restriction Period, except for (i) the issuance of
the Underlying Shares, (ii) shares of Common Stock deemed to have been issued
by the Company in connection with any plan which has been approved by the Board
of Directors of the Company prior to the date hereof, pursuant to which the
Company’s securities may be issued to any employee, officer, director or
consultant of the Company, (iii) shares of Common Stock issuable upon the
exercise of any options or warrants outstanding on the date hereof and listed
on Schedule 2.1(c) (iv) securities to be issued in transactions set forth on
Schedule 2.1(c) or (v) additional securities to be issued in connection with a
transaction with the Purchasers, if the Company agrees to issue shares of
Common Stock or other securities convertible into or exchangeable or
exercisable for Common Stock (the “New Security”) within six (6) months of the
Effectiveness Date (as defined in the Registration Rights Agreement), on the
date of such issuance or sale (a “Future Financing”), the Company shall provide
to the Purchasers by 5:00 p.m. (New York time) on or before the third (3rd)
Trading Day (as defined below) after the decision to issue the New Security has
been made, written notice of the Future Financing containing in reasonable
detail (x) the proposed terms of the Future Financing, (y) the amount of the
proceeds that will be raised and (z) the Person with whom such Future Financing
shall be effected, and attached to which shall be a term sheet or similar
document relating thereto (the “Future Financing Notice”). Upon receiving the
Future Financing Notice, each Purchaser shall have the right to purchase, on
the same terms as the Future Financing, an amount of New Securities having a
purchase price which shall not exceed the sum of (1) the aggregate purchase
price of the Preferred Stock purchased by such Purchaser and (2) the aggregate
purchase price of the Warrants purchased by such Purchaser. In the event a
Purchaser desires to exercise the right granted under this Section 3.9, such
Purchaser must notify the Company on or prior to the fifth (5th)Trading Day
after such Purchaser has received the Future Financing Notice. In the event
the terms and conditions of a proposed Future Financing are amended in any
respect after delivery of the Future Financing Notice but prior to the closing
of the proposed Future Financing to which such Future Financing Notice relates,
the Company shall deliver a new notice to each Purchaser

15

describing the amended terms and conditions of the proposed Future
Financing and each Purchaser thereafter shall have an option during the five
(5) Trading Days following delivery of such new notice to purchase its share of
the New Securities being offered on the same terms as contemplated by such
proposed Future Financing, as amended. The foregoing sentence shall apply to
successive amendments to the terms and conditions of any proposed Future
Financing. In the event one or more Purchasers elect not to exercise their
rights granted hereby, the Company shall permit those Purchasers electing to
exercise the right granted under this Section 3.9 to purchase, on a pro rata
basis equal to its percentage ownership of the then outstanding Preferred
Stock, the number of New Securities that the non-participating Purchaser(s)
would have been eligible to purchase, if they had exercised their right
hereunder. Those Purchasers desiring to purchase New Securities must notify
the Company of their intention to do so within five (5) Trading Days after the
Company has informed the Purchasers of their right to purchase New Securities.
Within five (5) Trading Days of the closing of the Future Financing, the
transactions contemplated by this Section 3.9 shall close, subject to the
completion of mutually satisfactory documentation, and the Company shall tender
to each Purchaser certificates representing the New Securities that it agreed
to purchase and the Purchasers shall make payment for the entire purchase price
in immediately available funds at the closing of such sale. As used herein,
“Trading Day” shall mean a day on which the AMEX (or in the event the Common
Stock is not quoted on AMEX, such other securities market on which the Common
Stock is listed, traded or quoted) is open for trading.

      3.10 Use of Proceeds. The Company shall use the proceeds from the sale of
the Preferred Stock and the exercise of the Warrants for research and
development and general corporate purposes in the biotechnology industry.

      3.11 Transactions with Affiliates. So long as any Preferred Stock or
Warrants are outstanding, the Company shall not, and shall cause each of its
Subsidiaries not to, enter into, amend, modify or supplement, or permit any of
its Subsidiaries to enter into, amend, modify or supplement, any agreement,
transaction, commitment or arrangement with any of its or any of its
Subsidiaries’ officers, directors or persons who were officers or directors at
any time during the previous two (2) years, stockholders who beneficially own
10% or more of the Common Stock, or Affiliates or any individual related by
blood, marriage or adoption to any such individual or with any Person in which
any such Person owns a 10% or more beneficial interest (each, a “Related
Party”), except for (a) customary employment arrangements and benefit programs
approved by the Board, (b) any agreement, transaction, commitment or
arrangement on an arm’s length basis on terms no less favorable than terms
which would have been obtainable from a Person other than such Related Party,
(c) any agreement, transaction, commitment or arrangement which is approved by
a majority of the disinterested directors of the Company, or (d) any transfer
of assets to a wholly-owned subsidiary. For purposes hereof, any director who
is also an officer of the Company or any of its Subsidiaries of the Company
shall not be a disinterested director with respect to any such agreement,
transaction, commitment or arrangement. “Affiliate” for purposes of this
Agreement means, with respect to any Person, another Person that, directly or
indirectly, (i) controls that Person, (ii) is controlled by that Person or
(iii) is under common control with that Person. “Control” for purposes of this
Agreement, when used with respect to any Person, means the possession, direct
or indirect, of the power to cause the direction of the management and policies
of such Person, whether through the

16

ownership of voting securities, by contract or otherwise; and the terms
“affiliated”, “controlling” and “controlled” have meanings correlative to the
foregoing.

      3.12 Transfer Agent Instructions. At the Closing the Company shall issue
irrevocable instructions to its transfer agent (and shall issue to any
subsequent transfer agent as required), to issue certificates, registered in
the name of each such Purchaser or its respective nominee(s), for the
Conversion Shares and/or the Warrant Shares (the “Irrevocable Transfer Agent
Instructions”). So long as required pursuant to Section 3.1(b), all such
certificates shall bear the restrictive legend specified in Section 3.1(b) of
this Agreement. The Company warrants that no instruction other than the
Irrevocable Transfer Agent Instructions referred to in this Section 3.12, and
stop transfer instructions to give effect to Section 3.1 hereof (in the case of
the Conversion Shares and the Warrant Shares, prior to registration of the
Conversion Shares and the Warrant Shares under the Securities Act) will be
given by the Company to its transfer agent (except as required by law) and that
the Preferred Stock, the Warrants, the Conversion Shares and the Warrant Shares
shall otherwise be freely transferable on the books and records of the Company
as and to the extent provided in this Agreement and the Transaction Documents.
If a Purchaser provides the Company with an opinion of counsel, the form and
substance of which opinion shall be customary for opinions of counsel in
comparable transactions and reasonably acceptable to the Company, to the effect
that a public sale, assignment or transfer of the Preferred Stock, the
Conversion Shares, the Warrants and/or the Warrant Shares may be made without
registration under the Securities Act or the Purchaser provides the Company
with reasonable assurances that the Preferred Stock, the Warrants, the
Conversion Shares and/or the Warrant Shares can be sold pursuant to Rule
144(k), the Company shall permit the transfer, and, in the case of the
Conversion Shares and the Warrant Shares, promptly instruct its transfer agent
to issue one or more certificates in such name and in such denominations as
specified by such Purchaser and without any restrictive legend.

      3.13 Ordinary Course Brokerage and Trading. Subject to compliance with
all applicable securities laws and AMEX regulations, no Purchaser shall be
prohibited from engaging in its ordinary course brokerage and trading
activities in respect of the Company’s Common Stock.

      3.14 Reasonable Efforts. Each of the parties hereto shall use its
reasonable efforts to satisfy each of the conditions to be satisfied by it as
provided in Article IV of this Agreement.

      3.15 Corporate Existence. Until such time as all of the Purchasers
provide the Company with written notice that they do not beneficially own any
Preferred Stock or Warrants, the Company shall maintain its corporate existence
and shall not sell all or substantially all of the Company’s assets, except in
the event of a merger or consolidation or sale of all or substantially all of
the Company’s assets, where the surviving or successor Person in such
transaction assumes the Company’s obligations hereunder and under the
agreements and instruments entered into in connection herewith.

      3.16 No Violation of Applicable Law. Notwithstanding any provision of
this Agreement to the contrary, if the redemption of Preferred Stock otherwise
required under this Agreement, the Certificate of Designation or any other
Transaction Document would be prohibited by the relevant provisions of the
Delaware General Corporation Law, such

17

redemption shall be effected as soon as it is permitted under such law;
provided, however, that from the fifth (5th) day after such redemption notice
until such redemption price is paid in full, interest on any such unpaid amount
shall accrue and be payable at the rate of 1% per month in accordance with the
Certificate of Designation.

ARTICLE IV.

CONDITIONS

      4.1 Closing Conditions.

            a. Conditions Precedent to the Obligation of the Company to Sell. The
obligation of the Company to sell the Preferred Stock and the Warrants
hereunder is subject to the satisfaction or waiver (with prior written notice
to each Purchaser) by the Company, at or before the Closing, of each of the
following conditions:

                  (i) Accuracy of the Purchasers’ Representations and Warranties. The
representations and warranties of each Purchaser set forth in this Agreement
shall be true and correct in all material respects (except for representations
and warranties that speak as of a specific date) as of the Closing Date;

                  (ii) Performance by the Purchasers. Each Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or
complied with by such Purchaser at or prior to the Closing; and

                  (iii) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated,
endorsed or threatened or is pending by or before any court or governmental
authority of competent jurisdiction which prohibits or threatens to prohibit
the consummation of any of the transactions contemplated by this Agreement and
the Transaction Documents.

            b. Conditions Precedent to the Obligation of the Purchasers to Purchase
the Preferred Stock and Warrants. The obligation of each Purchaser hereunder
to acquire and pay for the Preferred Stock and Warrants is subject to the
satisfaction or waiver (with prior written notice to the Company and each other
Purchaser) by such Purchaser, at or before the Closing, of each of the
following conditions:

                  (i) Accuracy of the Company’s Representations and Warranties. The
representations and warranties of the Company set forth in this Agreement and
in the Registration Rights Agreement shall be true and correct in all material
respects (except for representations and warranties that speak as of a specific
date) as of the Closing Date;

                  (ii) Performance by the Company. The Company shall have performed,
satisfied and complied in all respects with all covenants, agreements and
conditions required by this Agreement and the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the
Closing;

18

                  (iii) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated,
endorsed or threatened or is pending by or before any court or governmental
authority of competent jurisdiction which prohibits or threatens to prohibit
the consummation of any of the transactions contemplated by this Agreement and
the Transaction Documents;

                  (iv) No Suspensions of Trading in Common Stock. The trading in the Common
Stock shall not have been suspended by the Commission or on AMEX (except for
any suspension of trading of limited duration solely to permit dissemination of
material information regarding the Company);

                  (v) Listing of Common Stock. The Common Stock, on the Closing Date, shall
be listed for trading on AMEX;

                  (vi) [Intentionally Omitted];

                  (vii) Shares of Common Stock. The Company shall have duly reserved the
number of Underlying Shares required by this Agreement and the Transaction
Documents to be reserved for issuance upon conversion of the Preferred Stock
and the exercise of the Warrants;

                  (viii) Adverse Changes. As of the Closing Date, no event, liability,
development or circumstance has occurred or exists, or is contemplated to
occur, with respect to the Company or its Subsidiaries or their respective
businesses, properties, operations or financial condition or, insofar as can
reasonably be foreseen, prospects, that would be required to be disclosed by
the Company under applicable securities laws on a registration statement
(including by way of incorporation by reference) filed with the Commission,
relating to an issuance and sale by the Company of its Common Stock and which
has not been publicly disclosed;

                  (ix) Litigation. No action, proceeding or litigation shall have been
instituted or threatened against the Company which could reasonably be expected
to, individually or in the aggregate, have a Material Adverse Effect;

                  (x) [Intentionally Omitted];

                  (xi) Transfer Agent Instructions. The Irrevocable Transfer Agent
Instructions, in a form acceptable to the Purchasers, shall have been delivered
to the Company’s transfer agent with a copy forwarded to each Purchaser; and

                  (xii) Resolutions. The Board of Directors of the Company shall have
adopted resolutions consistent with Section 2.1(b) and in a form reasonably
acceptable to each Purchaser (the “Resolutions”).

            c. Documents and Certificates. At the Closing, the Company shall have
delivered to the Purchasers the following in form and substance reasonably
satisfactory to the Purchasers:

19

                  (i) Opinion. An opinion of the Company’s legal counsel in the form
attached hereto as Exhibit D dated as of the Closing Date;

                  (ii) Security. A Security(ies) representing the Preferred Stock purchased
by each Purchaser as set forth next to such Purchaser’s name on Schedule I,
registered in the name of such Purchaser, with a Conversion Price equal to
$2.00, each in form satisfactory to the Purchaser;

                  (iii) Warrant. Class E Warrants and Class F Warrants substantially in the
form of Exhibits B-1 and B-2 hereto, with the Exercise Price equal to $2.50,
with regard to the Class E Warrants and $3.00, with regard to the Class F
Warrants, representing the Warrants being purchased by each Purchaser as set
forth next to such Purchaser’s name on Schedule I, registered in the name of
such Purchaser;

                  (iv) Registration Rights. The Company shall have executed and delivered
the Registration Rights Agreement, substantially in the form of Exhibit C
hereto;

                  (v) Officer’s Certificate. An Officer’s Certificate dated the Closing
Date and signed by an executive officer of the Company confirming the
compliance by the Company with the conditions precedent set forth in this
Section 4.1 as of the Closing Date;

                  (vi) Secretary’s Certificate. A Secretary’s Certificate dated the Closing
Date and signed by the Secretary or Assistant Secretary of the Company
certifying (A) either (1) that attached thereto are true and complete copies of
the Certificate of Incorporation and Bylaws, as in effect on the Closing Date
or (2) that such true and complete copies of the Certificate of Incorporation
and Bylaws, as in effect on the Closing Date have previously been filed with
the Commission and (B) that attached thereto is a true and complete copy of the
Resolutions duly adopted by the Board of Directors of the Company authorizing
the execution, delivery and performance of this Agreement and of the
Transaction Documents, and that such Resolutions have not been modified,
rescinded or revoked;

                  (vii) Certificates of Incorporation. The Company shall have delivered to
each of the Purchasers a copy of a certificate evidencing the incorporation and
good standing of the Company in the State of Delaware issued by the Secretary
of State of the State of Delaware as of a date within ten (10) days of the
Closing Date. The Company shall have delivered to each of the Purchasers a
copy of its Certificate of Incorporation as certified by the Secretary of State
of the State of Delaware within ten (10) days of the Closing Date;

                  (viii) Certificates of Designation. The Certificate of Designation shall
have been duly approved by the Company’s Board of Directors and filed with the
Secretary of State of Delaware, and the Company shall have delivered a copy
thereof to the Purchasers certified as filed by the office of the Secretary of
State of Delaware.

                  (ix) Lockup Letters. Each of the directors and executive officers of the
Company shall have delivered to the Purchasers a letter in the form of Exhibit
E hereto pursuant to which he or she agrees not to offer or sell more than 5%
of their aggregate ownership of Common Stock from the Closing Date until six
months following the Effectiveness Date; and

20

                  (x) Other Documents. The Company shall have delivered to each Purchaser
such other documents relating to the transactions contemplated by this
Agreement and the Transaction Documents as the Purchasers or their counsel may
reasonably request.

ARTICLE V.

INDEMNIFICATION

      5.1 Indemnification.

            a. Except to the extent that matters which could be covered by this
Article V are covered by Section 5 of the Registration Rights Agreement, in
consideration of the Purchasers’ execution and delivery of this Agreement and
the Transaction Documents and acquiring the Preferred Stock, the Conversion
Shares, the Warrants and the Warrant Shares hereunder and thereunder and in
addition to all of the Company’s other obligations under this Agreement and the
Transaction Documents, the Company shall defend, protect, indemnify and hold
harmless each Purchaser, its present Affiliates and their successors and
assigns (in accordance with the provisions of Section 6.6 hereof), and all of
their stockholders, officers, directors and employees (collectively, the
“Indemnitees”) from and against any and all actions, causes of action, suits,
claims, losses, proceedings, costs, penalties, fees (including reasonable legal
fees and expenses), liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including interest,
penalties and attorneys’ fees, expenses and disbursements (the “Indemnified
Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or
relating to (a) any misrepresentation or breach of any representation or
warranty made by the Company in this Agreement or in any of the Transaction
Documents, or in any other certificate, instrument or document contemplated
hereby or thereby, (b) any breach of any covenant, agreement or obligation of
the Company contained in this Agreement or any of the Transaction Documents, or
any other certificate, instrument or document contemplated hereby or thereby,
or (c) any cause of action, suit or claim brought or made or threatened, other
than by the Company, against such Indemnitee and arising out of or resulting
from (i) the execution, delivery, performance or enforcement of this Agreement
or the Transaction Documents, (ii) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance
of the Preferred Stock or the Warrants or (iii) solely the status of such
Purchasers or holder of the Preferred Stock, the Conversion Shares, the
Warrants or the Warrant Shares as an investor in the Company. The
indemnification obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have. The Company
also agrees that neither the Purchasers nor any Affiliates, partners,
directors, agents, employees or controlling Persons of the Purchaser shall have
any liability to the Company or any Person asserting claims on behalf of or in
the right of the Company in connection with or as a result of the consummation
of this Agreement or any of the Transaction Documents except to the extent that
any losses, claims, damages, liabilities or expenses incurred by the Company
result from the negligence or willful misconduct of such Purchaser or Person.
To the extent that the foregoing undertakings by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.

21

            b. All fees and expenses (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) of the Indemnitees
shall be paid to the Indemnitees as incurred, within ten (10) business days of
written notice thereof to the Company, which notice shall be delivered no more
frequently than on a monthly basis; provided, that the Indemnitee shall
reimburse the Company for any and all such fees and expenses to the extent it
is finally judicially determined that such Indemnitee is not entitled to
indemnification hereunder.

ARTICLE VI.

MISCELLANEOUS

      6.1 Entire Agreement. This Agreement, together with the Exhibits and
Schedules hereto and the Transaction Documents, contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral or written, with
respect to such matters.

      6.2 Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement shall be in
writing and shall be deemed to have been delivered (a) upon receipt, when
delivered personally; (b) upon receipt, when sent by facsimile, provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party (if received by 5:30 p.m. EST where such
notice is received) or the first business day following such delivery (if
received on or after 5:30 p.m. EST where such notice is received); or (c) two
business days after deposit with a nationally recognized overnight courier, in
each case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:

                  If to the Company:

                                    Antex Biologics Inc.

                                    300 Professional Drive

                                    Gaithersburg, Maryland 20879

                                    Telephone: (301) 590-0129

                                    Facsimile: (301) 590-1252

                                    Attention: V.M. Esposito, Chairman and CEO

                  With a copy to:

                                    Covington & Burling

                                    1201 Pennsylvania Avenue, N.W.

                                    Washington, D.C. 20004

                                    Telephone: (202) 662-6000

                                    Facsimile: (202) 662-6291

                                    Attention: D. Michael Lefever, Esq.

22

                  If to the Transfer Agent:

                                    American Stock Transfer and Trust Company

                                    40 Wall Street

                                    New York, New York 10005

                                    Telephone: (718) 921-8293

                                    Facsimile: (718) 921-8334

                                    Attention: Isaac Freilich

                  If to Xmark Fund, Ltd. or Xmark Fund, L.P. to:

                                    Brown Simpson Asset Management, LLC

                                    152 West 57th Street, 21st Floor

                                    New York, New York 10029

                                    Telephone: (212) 247-8200

                                    Facsimile: (212) 247-1329

                                    Attention: Peter Greene

                  With a copy, in the case of Notice to Xmark Fund, Ltd. or Xmark Fund, L.P., to:

                                    Akin, Gump, Strauss, Hauer & Feld, L.L.P.

                                    590 Madison Avenue

                                    New York, New York 10022

                                    Telephone: (212) 872-1000

                                    Facsimile: (212) 872-1002

                                    Attention: James Kaye

                  If to S.A.C. Capital Associates, LLC to:

                                    S.A.C. Capital Advisors, LLC

                                    777 Long Ridge Road

                                    Stamford, Connecticut 06902

                                    Telephone: (203) 614-2000

                                    Facsimile: (203) 614-2393

                                    Attention: Peter Nussbaum

                  If to SDS Merchant Fund, LP to:

                                    One Sound Drive, Second Floor

                                    Greenwich, Connecticut 06830

                                    Telephone: (203) 629-8400

                                    Facsimile: (203) 629-0345

                                    Attention: Steve Derby

23

                  If to OTATO, L.P. to:

                                    OTA Limited Partnership

                                    1 Manhattanville Road

                                    Purchase, New York 10577

                                    Telephone: (914) 694-5857

                                    Facsimile: (914) 694-6342

                                    Attention: Vinny DiGeso

Each party shall provide written notice to the other party of any change in
address or facsimile number in accordance with the provisions hereof.

      6.3 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
both the Company and each of the Purchasers or, in the case of a waiver, by the
party against whom enforcement of any such waiver 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 other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right accruing to it thereafter. Notwithstanding the
foregoing, no such amendment shall be effective to the extent that it applies
to less than all of the holders of the Preferred Stock outstanding. The
Company shall not offer or pay any consideration to a Purchaser for consenting
to such an amendment or waiver unless the same consideration is offered to each
Purchaser and the same consideration is paid to each Purchaser which consents
to such amendment or waiver.

      6.4 Titles Headings. The titles and 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.

      6.5 References. References herein to Articles or Sections are to Articles
or Sections of this Agreement, unless otherwise expressly provided.

      6.6 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 this Agreement or any rights or obligations
hereunder without the prior written consent of each of the Purchasers. The
Purchasers may assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Company; provided that any assignees
must make the representations and warranties set forth in Section 2.2 and
otherwise comply with the terms of this Agreement otherwise applicable to its
assignor. This provision shall not limit a Purchaser’s right to transfer
securities in accordance with all of the terms of this Agreement or the
Transaction Documents.

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

24

      6.8 Governing Law. 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 hereby
irrevocably submits to the nonexclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or
that such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH
OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN.

      6.9 Survival. The representations and warranties of the Company and the
Purchasers contained in Sections 2.1 and 2.2, the agreements and covenants set
forth in Article III, and the indemnification provisions set forth in Article
V, shall survive the Closing and any conversion of the Preferred Stock or
exercise of the Warrants regardless of any investigation made by or on behalf
of the such Purchaser or by or on behalf of the Company. In the case of
representations and warranties contained in Sections 2.1, such survival shall
be limited to a period of three (3) years following the Closing Date, except
that Sections 2.1 (a), (b), (c), (d), (e), (f) and (j), shall survive for a
period of five (5) years following the Closing Date. In the case of
representations and warranties contained in Sections 2.2, such survival shall
be limited to a period of five (5) years following the Closing Date. This
Section shall have no effect on the survival of the indemnification provisions
of the Registration Rights Agreement.

      6.10 Counterparts. 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 parties, it being understood that the
parties need not sign the same counterpart. In the event that any 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) the same with the same force and effect as if such facsimile
signature page were an original thereof.

      6.11 Publicity. The Company and the Purchasers shall consult with each
other in issuing any press releases or otherwise making public statements with
respect to the transactions contemplated hereby and no party shall issue any
such press release or otherwise make any such public statement without the
prior written consent of the other parties which consent shall not be
unreasonably withheld or delayed, except that no prior consent shall be
required if such disclosure is required by law, in which such case the
disclosing parties shall provide the other party with prior notice of such
public statement. The Company shall not publicly or otherwise disclose the
names of any of the Purchasers without each such Purchaser’s prior written
consent. The Purchasers and their affiliated companies shall, without further
cost or consent, have the

25

right to use the Company’s logo and trademarks and all or parts of the
Company’s press releases that focus on the transaction contemplated hereby
forming the subject matter of this Agreement or which make reference to the
transaction contemplated hereby in their materials which are provided to their
existing investors or potential investors or used on the restricted access
portions of their website, provided that, in connection with such use, the
Purchasers will not represent themselves as agents of the Company. The
Purchasers understand that this grant by the Company only waives objections
that the Company might have to the use of such materials by the Purchasers and
in no way constitutes a representation by the Company that references in such
materials to the activities of third-parties have been cleared or constitute a
fair use.

      6.12 Severability. In case any one or more of the provisions of this
Agreement shall 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 which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.

      6.13 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law or in equity, including recovery of damages,
the Purchasers will be entitled to seek an injunction or injunctions to prevent
breaches by the Company of the provisions of this Agreement and to seek to
enforce specifically this Agreement and its terms and provisions in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the parties and the matter.

      6.14 Independent Nature of Purchasers’ Obligations and Rights. The
obligations of each Purchaser hereunder are several and not joint with the
obligations of the 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 Person, 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 or out of the
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.

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

[Signature Page Follows]

26

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

Company:

ANTEX BIOLOGICS INC.

	 	 	 
	By:		
/s/ V. M. Esposito
	
	
	
	

			
V. M. Esposito

Chairman and Chief Executive Officer

Purchasers:

XMARK FUND, LTD.

	 	 	 
	By:

By:		
Brown Simpson Asset Management, LLC, its Investment Manager

/s/ Peter D. Greene

Name: Peter D. Greene

Title: Managing Principal

XMARK FUND, L.P.

	 	 	 
	By:

By:		
Brown Simpson Capital, LLC, its General Partner

/s/ Peter D. Greene

Name: Peter D. Greene

Title: Managing Principal

S.A.C. CAPITAL ASSOCIATES, LLC

	 	 	 
	By: S.A.C. Capital Advisors, LLC
	By:		
/s/ Peter Nussbaum

Name: Peter Nussbaum

Title: General Counsel

SDS MERCHANT FUND, LP

	 	 	 
	By:		
/s/ Steve Derby

Name: Steve Derby

Title: Managing Member

1

OTATO, L.P.

	 	 	 
	By:		
/s/ James W. Santori

Name: James W. Santori

Title: CFO

2

Schedule I

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
			Shares of		Class E		Class F
	Purchaser	Preferred Stock	Warrants		Warrants		Purchase Price
	Xmark Fund, L.P.			277.125				69,281				34,641			$	277,125	
	
	
	
	

	Xmark Fund, Ltd.			472.875				118,219				59,109			$	472,875	
	
	
	
	

	S.A.C. Capital Associates, LLC			1,250				312,500				156,250			$	1,250,000	
	
	
	
	

	SDS Merchant Fund, LP			750				187,500				93,750			$	750,000	
	
	
	
	

	OTATO, L.P.			250				62,500				31,250			$	250,000	

 

Schedule II

	 	 	 
	Name of Purchaser		
Address
	 
	Xmark Fund, Ltd.		
152 West 57th Street, 21st Floor
	
	
	
	

			
New York, New York 10019
	
	
	
	

			
Attn: Peter Greene
	
	
	
	

			
Fax: (212) 247-1329
	
	
	
	

			
Residence: Grand Cayman, Cayman Islands
	 
	Xmark Fund, L.P.		
152 West 57th Street, 21st Floor
	
	
	
	

			
New York, New York 10019
	
	
	
	

			
Attn: Peter Greene
	
	
	
	

			
Fax: (212) 247-1329
	
	
	
	

			
Residence: New York, New York
	 
	S.A.C. Capital Associates, LLC		
777 Long Ridge Road
	
	
	
	

			
Stamford, Connecticut 06902
	
	
	
	

			
Attention: Peter Nussbaum
	
	
	
	

			
Fax: (203) 614-2393
	
	
	
	

			
Residence: Anguilla
	 
	SDS Merchant Fund, LP		
One Sound Drive, Second Floor
	
	
	
	

			
Greenwich, Connecticut 06830
	
	
	
	

			
Attention: Steve Derby
	
	
	
	

			
Fax: (203) 629-0345
	
	
	
	

			
Residence: Connecticut
	 
	OTATO, L.P.		
c/o OTA Limited Partnership
	
	
	
	

			
1 Manhattanville Road
	
	
	
	

			
Purchase, New York 10577
	
	
	
	

			
Attention: Vinny DiGeso
	
	
	
	

			
Fax: (914) 694-6342
	
	
	
	

			
Residence: New York

1

Exhibit A

[Form of Certificate of Designation]

 

Exhibit B-1

[Form of Class E Warrant]

1

Exhibit B-2

[Form of Class F Warrant]

 

Exhibit C

[Registration Rights Agreement]

1

Exhibit D

[Company’s Legal Opinion]

 

Exhibit E

[Form of Lockup Letter]

1ex10-2

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

            This Registration Rights Agreement (this “Agreement”) is made and entered
into as of July 3, 2001, among Antex Biologics Inc., a Delaware corporation
(the “Company”), and the parties who have executed this Agreement and whose
names appear on Schedule I hereto (each party listed on Schedule I hereto is
sometimes individually referred to herein as a “Purchaser” and all such parties
are sometimes collectively referred to herein as the “Purchasers”).

            This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof among the Company and the Purchasers (the “Purchase
Agreement”).

            The Company and the Purchasers hereby agree as follows:

      1.   Definitions

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

            “Additional Investment” has the meaning set forth in the Purchase
Agreement.

            “Advice” has the meaning set forth in Section 3(n) hereof.

            “Affiliate” means, with respect to any Person, another Person that,
directly or indirectly, (i) controls that Person, (ii) is controlled by that
Person or (iii) is under common control with that Person. “Control” for
purposes of this Agreement, when used with respect to any Person, means the
possession, direct or indirect, of the power to cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise; and the terms “affiliated”, “controlling”
and “controlled” have meanings correlative to the foregoing.

            “AMEX” means the American Stock Exchange.

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

            “Certificate of Designation” has the meaning set forth in the Purchase
Agreement.

            “Commission” means the Securities and Exchange Commission.

            “Common Stock” means the Company’s common stock, par value $.01 per share.

 

            “Effectiveness Date” means the date on which the Commission declares the
Registration Statement effective.

            “Effectiveness Period” has the meaning set forth in Section 2(a) hereof.

            “Event” has the meaning set forth in Section 2(d) hereof.

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

            “Filing Date” means the date on which the Registration Statement is filed
with the Commission, which shall be as soon as practicable, but no later than
30 days, after the closing date of the Additional Investment (as defined in the
Purchase Agreement) or August 30, 2001, whichever is earlier.

            “Holder” or “Holders” means the holder or holders, as the case may be,
from time to time of Registrable Securities.

            “Indemnified Party” has the meaning set forth in Section 5(c) hereof.

            “Indemnifying Party” has the meaning set forth in Section 5(c) hereof.

            “Initial Registration Statement” has the meaning set forth in Section 2(a)
hereof.

            “Liquidity Impairment Payment” has the meaning set forth in Section 2(d)
hereof.

            “Losses” has the meaning set forth in Section 5(a) hereof.

            “Majority Holders” means the Holders of more than fifty percent (50%) of
the Registrable Securities.

            “Material Condition” has the meaning set forth in Section 3(q) hereof.

            “National Market” means the AMEX, the NASDAQ National Market, the NASDAQ
SmallCap Market or the New York Stock Exchange.

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

            “Proceeding” means an action, claim, suit, arbitration, 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

2

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 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 in such Prospectus.

                  “Registrable Securities” means the shares of Common Stock issued or
issuable upon (i) conversion of the Securities, (ii) payment of dividends in
respect of the Securities, (iii) exercise of the Warrants, and (iv) any shares
of the Company’s capital stock issued with respect to (i), (ii) or (iii) as a
result of any stock split, stock dividend, recapitalization, exchange,
anti-dilution adjustment or similar event or otherwise.

            “Registration Statement” means the Initial Registration Statement and any
additional registration statements contemplated herein, including (in each
case) the Prospectus, amendments and supplements to such registration statement
or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference in such registration
statement.

            “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.

            “Rule 158” means Rule 158 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 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.

            “Securities” means the Company’s Series B Convertible Preferred Stock
issuable pursuant to the Purchase Agreement and in connection with the
Additional Investment.

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

            “Special Counsel” means one special counsel to the Holders designated from
time to time by the Majority Holders.

            “Stated Value” has the meaning set forth in the Certificate of
Designation.

            “Trading Day” shall mean a day on which the National Market on which the
Common Stock is listed, traded or quoted is open for trading.

            “Underlying Shares” means the shares of Common Stock issuable upon
conversion of the Securities and exercise of the Warrants.

3

            “Underwritten Registration or Underwritten Offering” means a registration
in connection with which securities of the Company are sold to an underwriter
for reoffering to the public pursuant to an effective registration statement,
whether on a firm commitment or reasonable efforts basis.

            “Warrants” means the Class E warrants and Class F warrants issuable
pursuant to the Purchase Agreement and in connection with the Additional
Investment.

      2.   Registration Requirements

            (a)   Filing and Effectiveness Obligations. On or prior to the Filing Date,
the Company shall prepare and file with the Commission a Registration Statement
(the “Initial Registration Statement”) which shall cover all Registrable
Securities for an offering to be made on a continuous basis pursuant to a
“Shelf” registration statement under Rule 415. The Initial Registration
Statement shall be on Form S-3 or any successor form (except if the Company is
not then eligible to register for resale the Registrable Securities on Form
S-3, in which case such registration shall be on Form S-1 or any successor
form). The Company shall use its reasonable efforts to cause the Initial
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event prior to the
120th day following the closing date of the Additional Investment (as defined
in the Purchase Agreement) or November 28, 2001, whichever is earlier, and to
keep such Initial Registration Statement continuously effective under the
Securities Act, (subject to Section 3(q)) from the Effectiveness Date until the
date when all Registrable Securities covered by such Initial Registration
Statement have been sold or may be sold without volume restrictions pursuant to
Rule 144 as determined by counsel to the Company pursuant to a written opinion
letter, addressed to the Holders and the Company’s transfer agent to such
effect (the “Effectiveness Period”). The number of shares of Common Stock
initially included in the Initial Registration Statement shall be no less than
100% of the maximum number of Underlying Shares then issuable, assuming that
the payment of all future dividends on such shares then outstanding were made
in shares of Common Stock and assuming the maximum adjustment to the Initial
Conversion Price in Section 5(a)(i) of the Certificate of Designation, without
regard to any limitation on the Holder’s ability to convert the Securities or
exercise the Warrants.

            (b)   [Intentionally Omitted]

            (c)   Underwriter. If any of the Registrable Securities are to be sold in
an Underwritten Offering, the investment banker that will administer the
offering shall be selected by the Holders of a majority of the Registrable
Securities included in such offering. No Holder may participate in any
Underwritten Offering hereunder unless such Holder (i) agrees to sell its
Registrable Securities on the basis provided in any underwriting agreements
approved by the Persons entitled hereunder to approve such arrangements and
(ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of such arrangements.

            (d)   Penalties. If (i) the Initial Registration Statement covering all the
applicable Registrable Securities and required to be filed by the Company
pursuant to this Agreement is not filed with the Commission on or before the
Filing Date, (ii) the Effectiveness

4

Date does not occur within 120 days of the closing date of the Additional
Investment (as defined in the Purchase Agreement) or by November 28, 2001,
whichever is earlier or (iii) on any day after the Registration Statement has
been declared effective by the Commission (A) sales of all the Registrable
Securities required to be included on a Registration Statement cannot be made
pursuant to the Registration Statement because of a failure to keep the
Registration Statement effective, to disclose such information as is necessary
for sales to be made pursuant to the Registration Statement, or to register
sufficient shares of Common Stock, but excluding any “black-out periods”
pursuant to Section 3(q) hereof or (B) the Common Stock is not listed or
included for quotation on a National Market (each such event specified in (i),
(ii) and (iii) above, an “Event”), then, as its sole monetary relief for the
damages to any Holder by reason of any such delay in or reduction of its
ability to sell the Registrable Securities (which remedy shall not be exclusive
of any other remedies available in equity), the Company shall pay to each
Holder, upon the occurrence of each such Event, an amount (a “Liquidity
Impairment Payment”) equal to the product of (a) the Stated Value, (b) the
number of Securities outstanding on the date of the Event, (c) (.015/365) and
(d) the actual number of business days that such Event has occurred and is
continuing, provided, however, that in determining whether an Event has
occurred, there shall be excluded any delays or any inability to sell
Registrable Securities that are solely attributable to changes required by the
Holders in the Registration Statement with respect to information relating to
the Holders, to the failure of the Holders to conduct their review of the
Registration Statement pursuant to Section 3(a), or to the failure to include
in a Registration Statement Registrable Securities issued or issuable under the
Warrants or the Purchase Agreement, unless the Company has failed to timely
file an amendment to a Registration Statement or a new Registration Statement.
The Company shall pay such Liquidity Impairment Payments to each Holder in cash
or, at the Holder’s election, in shares of Common Stock, on the last Business
Day of each month during which an Event has occurred and is continuing. For
the purposes of this Section 2, the value of the Common Stock shall equal the
greater of: (i) the average closing bid price of the Common Stock as reported
on the National Market for each of the ten Trading Days immediately preceding
the date on which the Liquidity Impairment Payment is due or paid, or (ii) the
Stated Value. In the event the Company fails to make a Liquidity Impairment
Payment within ten (10) Business Days of the date such Liquidity Impairment
Payment is due, such Liquidity Impairment Payment shall bear interest at the
rate of 1.0% per month until paid in full.

      3.   Registration Procedures

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

            (a)   Preparation of Registration Statement. Prepare and file with the
Commission on or prior to the Filing Date a Registration Statement on Form S-3
or its successor form (or if the Company is not then eligible to register the
resale of the Registrable Securities on Form S-3, the Registration Statement
shall be made on Form S-1 or its successor form)(which shall include a Plan of
Distribution substantially in the form of Exhibit A annexed hereto, unless in
connection with an Underwritten Offering) or in connection with an Underwritten
Offering hereunder, such other form agreed to by the Company and by the holders
of a majority of the Registrable Securities to be covered by such Registration
Statement), and cause the Registration Statement to become effective and remain
effective as provided herein; provided, however, that

5

not less than three (3) Business Days prior to the filing of the Registration
Statement or any related Prospectus or any amendment or supplement thereto
(including any document that would be incorporated therein by reference), the
Company shall, (i) furnish to the Holders, their Special Counsel and any
managing underwriters, copies of all such documents for review, and (ii) cause
its officers and directors, counsel and independent public accountants to
respond to such inquiries as shall be necessary, in the reasonable opinion of
respective counsel to such Holders and such underwriters, 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 Majority Holders, their Special
Counsel or any managing underwriters shall reasonably object within three (3)
business days after any such document is so furnished, and will not request
acceleration of such Registration Statement without prior notice to such
counsel. The sections of such Registration Statement covering information with
respect to the Holders, the Holders’ beneficial ownership of securities of the
Company or the Holders’ intended method of disposition of Registrable
Securities shall conform to the information provided to the Company by each of
the Holders.

            (b)   Amendments. (i) Prepare and file with the Commission, in accordance
with the requirements and in the time periods set forth in the Securities Act,
such amendments, including post-effective amendments, to the Registration
Statement as may be necessary to keep the Registration Statement continuously
effective for the Effectiveness Period and prepare and file with the Commission
such additional Registration Statements as are required to be filed hereunder
in order to register for resale under the Securities Act all of the Registrable
Securities, (ii) cause the related Prospectus to be amended or supplemented by
any required Prospectus supplement, and as so supplemented or amended to be
filed, if required, pursuant to Rule 424 (or any similar provisions then in
force) promulgated under the Securities Act, (iii) respond as promptly as
possible to any comments received from the Commission with respect to the
Registration Statement or any amendment thereto and as promptly as practicable,
and as promptly as possible provide the Holders 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 the intended methods of disposition by the
Holders thereof set forth in the Registration Statement as so amended or in
such Prospectus as so supplemented. In the event the number of shares
available under a Registration Statement filed pursuant to this Agreement is
insufficient to cover 100% of the maximum number of Underlying Shares then
issuable, assuming that the payment of all future dividends on such shares then
outstanding were made in shares of Common Stock and assuming the maximum
adjustment to the Initial Conversion Price in Section 5(a)(i) of the
Certificate of Designation, without regard to any limitation on the Holder’s
ability to convert the Securities or exercise the Warrants, the Company shall
amend the Registration Statement, or file a new Registration Statement (on the
short form available therefor, if applicable), or both, so as to cover 100% of
the maximum number of Underlying Shares then issuable, assuming that the
payment of all future dividends on such shares then outstanding were made in
shares of Common Stock and assuming the maximum adjustment to the Initial
Conversion Price in Section 5(a)(i) of the Certificate of Designation, without
regard to any limitation on the Holder’s ability to convert the Securities or
exercise the Warrants, in each case as soon as practicable, but in any event
within twenty (20) Business Days

6

after the necessity therefor arises, unless a majority of the Holders consent
to a longer period, which consent shall not be unreasonably withheld. The
Company shall use its reasonable efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following the
filing thereof.

            (c)   Notifications. Notify the Holders of Registrable Securities to be
sold, their Special Counsel, and any managing underwriters, as promptly as
possible (and, in the case of (i)(A) below, not less than three (3) days prior
to such filing and, in the case of (i)(C) below, not later than the first
Business Day after effectiveness) 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 such Registration Statement and whenever
the Commission comments in writing on such Registration Statement 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 for amendments or supplements to the
Registration Statement or Prospectus or for additional information, (iii) of
the issuance by the Commission 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) any of the
representations and warranties of the Company contained in any agreement
(including any Transaction Document, as defined in the Purchase Agreement)
contemplated hereby ceases to be true and correct in all material respects, (v)
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, (vi) of the occurrence of any
event that makes 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, and
(vii) the beginning and end of a black-out period pursuant to Section 3(q).

            (d)   Suspensions. Use its 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)   Supplements and Post-Effective Amendments. (i) Upon the occurrence of
any event contemplated by Section 3(c)(vi), as promptly as 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 the Registration Statement or the
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 and (ii) If requested by any

7

managing underwriter or the Holders of a majority of the Registrable Securities
to be sold in connection with an Underwritten Offering (A) promptly incorporate
in a Prospectus supplement or post-effective amendment to the Registration
Statement such information as the Company reasonably agrees should be included
therein and (B) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such Prospectus supplement or
post-effective amendment; provided, however, that the Company shall not be
required to take any action pursuant to this Section 3(e)(ii) that would, in
the written opinion of counsel for the Company (addressed to the Holder’s
Special Counsel), violate applicable law.

            (f)   Copies of Prospectus. Promptly deliver to each Holder, their Special
Counsel, and any underwriters, without charge, as many copies of the Prospectus
or Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request; and the Company
hereby consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders and any underwriters in connection with
the offering and sale of the Registrable Securities covered by such Prospectus
and any amendment or supplement thereto.

            (g)   Blue Sky. Prior to any public offering of Registrable Securities, use
its reasonable efforts to register or qualify or cooperate with the selling
Holders, any underwriters and their Special Counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Holder or underwriter requests in writing, to keep each such registration
or qualification (or exemption therefrom) effective during the Effectiveness
Period and to do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities
covered by a Registration Statement; provided, however, that the Company shall
not be required to qualify to do business in any jurisdiction where it is not
then so qualified or to take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
subject the Company to any tax in any such jurisdiction where it is not then so
subject.

            (h)   Certificates. Cooperate with the Holders and any managing
underwriters to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold pursuant to a Registration
Statement, which certificates shall be free, to the extent permitted by
applicable law and 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 managing underwriters or Holders may request at least
two (2) Business Days prior to any sale of Registrable Securities.

            (i)   Copies of Registration Statement. Furnish to each Holder, their
Special Counsel, and any managing underwriters, without charge, at least one
conformed copy of each Registration Statement and each amendment thereto,
including financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference, 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.

8

            (j)   Listing. Cause all Registrable Securities relating to such
Registration Statement to be listed or quoted on AMEX and any other National
Market, if any, on which the securities of the same class issued by the Company
are then listed, traded or quoted as and when required pursuant to the Purchase
Agreement subject to compliance with AMEX Rule 713(a).

            (k)   Underwriting Agreement. Enter into such agreements (including an
underwriting agreement in form, scope and substance as is customary in
Underwritten Offerings) and take all such other actions in connection therewith
(including those reasonably requested by any managing underwriters and the
Holders of a majority of the Registrable Securities being sold) in order to
expedite or facilitate the disposition of such Registrable Securities, and
whether or not an underwriting agreement is entered into, (i) make such
representations and warranties to such Holders and such underwriters as are
customarily made by issuers to underwriters in underwritten public offerings,
and confirm the same if and when requested, (ii) in the case of an Underwritten
Offering obtain and deliver copies thereof to the managing underwriters, if
any, or in the case of non-Underwritten Offerings, if reasonably requested by
the selling Holders, obtain and deliver copies thereof to such selling Holders,
of opinions of counsel to the Company and updates thereof addressed to each
such underwriter, in form, scope and substance reasonably satisfactory to any
such managing underwriters and Special Counsel to the selling Holders covering
the matters customarily covered in opinions requested in Underwritten Offerings
and such other matters as may be reasonably requested by such Special Counsel
and underwriters, (iii) immediately prior to the effectiveness of the
Registration Statement, and, in the case of an Underwritten Offering, at the
time of delivery of any Registrable Securities sold pursuant thereto, and, in
the case of non-Underwritten Offerings, at such time as the selling Holders may
reasonably request, obtain and deliver copies to the Holders and the managing
underwriters, if any, of “cold comfort” letters and updates thereof from the
independent public accountants of the Company (and, if required, any other
independent public accountants of any subsidiary of the Company or of any
business acquired by the Company for which financial statements and financial
data is, or is required to be, included in the Registration Statement),
addressed to each of the underwriters, if any, in form and substance as are
customary in connection with Underwritten Offerings, (iv) if an underwriting
agreement is entered into, the same shall contain indemnification provisions
and procedures no less favorable to the selling Holders, the underwriters, if
any, and the Company than those set forth in Section 5 (or such other
provisions and procedures acceptable to the managing underwriters, if any, and
Holders of a majority of Registrable Securities participating in such
Underwritten Offering), and (v) deliver such documents and certificates as may
be reasonably requested by the Holders of a majority of the Registrable
Securities being sold, their Special Counsel and any managing underwriters to
evidence the continued validity of the representations and warranties made
pursuant to clause 3(1)(i) above and to evidence compliance with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the Company.

            (l)   Due Diligence. Make available for inspection by the selling Holders,
any representative of such Holders, any underwriter participating in any
disposition of Registrable Securities, and any attorney or accountant retained
by such selling Holders or underwriters, at the offices where normally kept,
during reasonable business hours, all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries, and
cause the officers, directors, agents and employees of the Company and its
subsidiaries to supply all

9

information in each case reasonably requested by any such Holder,
representative, underwriter, attorney or accountant in connection with the
Registration Statement; provided, however, that if any information is
determined in good faith by the Company (in writing) to be of a confidential
nature at the time of delivery of such information, then prior to delivery of
such information, the Company and the Holders shall enter into a
confidentiality agreement reasonably acceptable to the Company and the Holders
providing that such information shall be kept confidential, unless (i)
disclosure of such information is required by court or administrative order or
is necessary to respond to inquiries of regulatory authorities (provided,
however, that the Company shall be given notice of any such pending disclosure
so that the Company may seek a protective order), (ii) disclosure of such
information, in the opinion of counsel to such Person, is required by law,
(iii) such information becomes generally available to the public other than as
a result of a disclosure or failure to safeguard by such Person, or (iv) such
information becomes available to such Person from a source other than the
Company and such source is not bound by a confidentiality agreement with the
Company.

            (m)   Earnings Statement. Comply in all material respects with all
applicable rules and regulations of the Commission and make generally available
to its securityholders earning statements satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 not later than 45 days after the end
of any 3-month period (or 90 days after the end of any 12-month period if such
period is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm commitment or
reasonable efforts Underwritten Offering and (ii) if not sold to underwriters
in such an offering, commencing on the first day of the first fiscal quarter of
the Company after the effective date of the Registration Statement, which
statement shall conform to the requirements of Rule 158.

            (n)   Information. The Company may require each selling Holder to furnish
to the Company information regarding such Holder and the distribution of such
Registrable Securities as is required by law to be disclosed in the
Registration Statement, and the Company may exclude from such registration the
Registrable Securities of any such Holder who unreasonably fails to furnish
such information within a reasonable time after receiving such request.

            The Company shall hold in confidence and not make any disclosure of
information concerning a Holder provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct
a misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction or is otherwise required by law,
or (iv) such information has been made generally available to the public other
than by disclosure in violation of this Agreement or any other agreement. The
Company agrees that it shall, upon learning that disclosure of such information
concerning a Holder is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to such
Holder prior to making such disclosure, and allow the Holder, at its expense,
to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, such information.

10

            If the Registration Statement refers to any Holder by name or otherwise as
the holder of any securities of the Company, then such Holder shall have the
right to require (if such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar federal statute then in force)
the deletion of the reference to such Holder in any amendment or supplement to
the Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.

            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)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v), 3(c)(vi), or
3(c)(vii), such Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such Holder’s
receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement contemplated by Section 3(i), 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.

            (o)   Responses to the Commission. The Company agrees to respond fully and
completely to any and all comments on a Registration Statement received from
the Commission staff as promptly as possible after the receipt of such
comments, regardless of whether such comments are in oral or written form.

            (p)   Confirmation of Effectiveness. Within two (2) Business Days after a
Registration Statement which covers applicable Registrable Securities is
ordered effective by the Commission, the Company shall deliver, and shall cause
legal counsel for the Company to deliver, to the transfer agent for such
Registrable Securities (with copies to the Holders whose Registrable Securities
are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the Commission in the
form attached hereto as Exhibit B.

            (q)   Black-out Periods. Subject to the last sentence of this Section 3(q),
the Company may by written notice require that the Holders immediately cease
sales of Registrable Securities (for a period not to exceed twenty (20)
consecutive days in any one instance and for a period not to exceed forty (40)
calendar days in any twelve-month period) pursuant to a Registration Statement
at any time that (i) the Company becomes engaged in a business activity or
negotiation which is not disclosed in that Registration Statement which the
Company reasonably believes must be disclosed therein under applicable law and
which the Company desires to keep confidential for business purposes, (ii) the
Company determines that a particular disclosure so determined to be required to
be disclosed therein would be premature or would adversely affect the Company
or its business or prospects or (iii) the Registration Statement can no longer
be used under the existing rules and regulations promulgated under the
Securities Act (each of (i), (ii) or (iii), a “Material Condition”). The
Company shall not be required to disclose to the Holders which of the reasons
specified in (i), (ii) or (iii) above is the basis for requiring a suspension
of sales due to the occurrence of a Material Condition. The Company will use
its commercially reasonable reasonable efforts to ensure that the use of the
Registration Statement may be resumed as soon as it is practicable. The
Company may not suspend sales of Registrable

11

Securities under a Registration Statement pursuant to this Section 3(q) more
than two times during any twelve-month period.

            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
pursuant to an Underwritten Offering and whether or not the Registration
Statement is filed or becomes effective and 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 with respect to filings required to be made with
AMEX and each other securities exchange or market on which Registrable
Securities are required hereunder to be listed or quoted), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is requested by the managing underwriters, if any, or by the
Holders of a majority of the Registrable Securities included in the
Registration Statement), (iii) messenger, telephone and delivery expenses, (iv)
reasonable 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;
provided, however that such fees and expenses shall not include any
underwriting discounts and selling commissions applicable to any sale). 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, system or
market 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
directors, officers, agents and employees of such Holder, each Person who
controls any such Holder (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act), and the directors, officers, agents
and employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against any and all joint or several losses, claims,
damages, liabilities, costs (including, without limitation, costs of
preparation and reasonable attorneys’ fees) and expenses pertaining to any
Proceeding (collectively “Losses”), as incurred, arising out of or relating to
(i) 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 amendment or supplement
thereto, in light of the circumstances under which they were made) not
misleading, except to the extent that such untrue statements or omissions are
based solely upon and in conformity with information regarding such Holder
furnished in writing to the Company by such

12

Holder expressly for inclusion in the Registration Statement, such Prospectus,
or any form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, 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 any form
of prospectus or in any amendment or supplement thereto or in any preliminary
prospectus (provided that the Company amended any disclosure with respect to
the method of distribution upon written notice from the Holders that such
section of the Prospectus should be revised in any way) or (ii) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act,
any other law, including, without limitation, any state securities law, or any
rule or regulation thereunder relating to the offer or sale of Registrable
Securities. The Company shall not, however, be liable to any Holder for any
Losses with respect to any untrue or alleged untrue statement of material fact
or omission or alleged omission of material fact in connection with delivery by
the Holder of the Prospectus as required by the Securities Act if such
statement or omission was made in a preliminary Prospectus and the untrue or
alleged untrue statement of material fact or omission or alleged omission of
material fact contained in such preliminary Prospectus was corrected in the
final Prospectus (or any amendment or supplement thereto) and such Holder
received a copy of the final Prospectus (or any amendment or supplement
thereto) at or prior to the confirmation of the sale of the Registrable
Securities in compliance with Section 3(f) of this Agreement. 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 and employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising out of or relating to any 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 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 amendment or supplement
thereto, in light of the circumstances under which they were made) not
misleading 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, such Prospectus, or
any form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, 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 (provided that the Company amended any disclosure with respect to
the method of distribution upon written notice from the Holders that such
section of the Prospectus should be revised in any way); provided, however,
that the indemnity agreement contained in this Section 5(b) shall not apply to
amounts paid in settlement of any Losses if such settlement is effected without
the prior written consent of such Holder, which consent shall not be
unreasonably withheld. No Holder shall be liable to the Company for any

13

Losses with respect to any untrue or alleged untrue statement of material fact
or omission or alleged omission of material fact in connection with delivery by
such Holder of the Prospectus as required by the Securities Act, provided that
if such statement or omission was made in a preliminary Prospectus and the
untrue or alleged untrue statement of material fact or omission or alleged
omission of material fact contained in such preliminary Prospectus was
corrected in the final Prospectus (or any amendment or supplement thereto) and
such Holder received a copy of the final Prospectus (or any amendment or
supplement thereto) at or prior to the confirmation of the sale of the
Registrable Securities in compliance with Section 3(f) of this Agreement, then
the such Holder shall be liable for such Losses. 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 promptly shall notify the Person
from whom indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment
of counsel reasonably satisfactory to the Indemnified Party and the payment of
all reasonable fees and expenses incurred in connection with defense thereof;
provided, however, 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 proximately and materially adversely prejudiced the Indemnifying
Party.

            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
Indemnified Parties unless: (i) the Indemnifying Party has agreed in writing to
pay such fees and expenses; (ii) 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
(iii) 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
such counsel shall be at the reasonable 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 fees
and expenses to the extent incurred in connection with investigating or
preparing to defend such

14

Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten (10) Business Days of written notice
thereof to the Indemnifying Party, which notice shall be delivered no more
frequently than on a monthly basis (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such Indemnified
Party to undertake to reimburse all such fees and expenses to the extent it is
finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).

            (d)   Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party because of a failure or refusal of
a court of competent jurisdiction to enforce such indemnification in accordance
with its terms (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
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. In no event shall any selling Holder be required
to contribute an amount under this Section 5(d) in excess of the net proceeds
received by such Holder upon sale of the Registrable Securities pursuant to the
Registration Statement giving rise to such contribution obligation.

            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. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.

            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 addition to being entitled to exercise all rights
provided herein or granted by law or in equity, including recovery of damages,
the Holders will be entitled to seek an injunction or injunctions to prevent
breaches by the Company of the provisions of this

15

Agreement and to seek to enforce specifically this Agreement and its terms and
provisions in any action instituted in any court of the United States or any
state thereof having jurisdiction over the parties and the matter.

            (b)   No Inconsistent Agreements. Neither the Company nor any of its
subsidiaries has, as of the date hereof, nor shall the Company or any of its
subsidiaries, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions
hereof. Except as disclosed in Schedule 2.1(c) of the Purchase Agreement,
neither the Company nor any of its subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its
securities to any Person. Without limiting the generality of the foregoing,
without the written consent of the Holders of a majority of the then
outstanding Registrable Securities, the Company shall not grant to any Person
the right to request the Company to register any securities of the Company
under the Securities Act unless the rights so granted are subordinated in all
respects to the rights in full of the Holders set forth in Section 2 herein,
and are not otherwise in conflict or inconsistent with the provisions of this
Agreement that are currently in effect. This Agreement, together with the
Purchase Agreement, 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.

            (c)   No Piggyback on Registrations. Neither the Company nor any of its
securityholders (other than the Holders in such capacity pursuant hereto) may
include securities of the Company in the Registration Statement and the Company
shall not after the date hereof enter into any agreement providing such right
to any of its securityholders.

            (d)   [Intentionally Omitted]

            (e)   Amendments and Waivers. The provisions of this Agreement, including
the provisions of this section, 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
Majority Holders; provided, however, that for the purposes of this sentence,
Registrable Securities that are owned, directly or indirectly, by the Company,
or an Affiliate of the Company are not deemed outstanding. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of a Holder and that
does not directly or indirectly affect the rights of any other Holders may be
given by the Holder to which such waiver or consent relates. Any amendment or
waiver effected in accordance with this Section shall be binding upon each
Holder, each future Holder, and the Company. Upon effectiveness of each such
amendment or waiver, the Company shall promptly give written notice thereof to
the Holders who have not previously consented thereto in writing.

            (f)   Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement shall be in
writing and shall be deemed to have been delivered (a) upon receipt, when
delivered personally; (b) upon receipt, when sent by facsimile, provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party (if received by 5:30 p.m. EST where such
notice

16

is received) or the first business day following such delivery (if
received on or after 5:30 p.m. EST where such notice is received); or (c) two
business days after deposit with a nationally recognized overnight courier, in
each case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:

	 	If to the Company:

	 	Antex Biologics Inc.

300 Professional Drive

Gaithersburg, Maryland 20879

Telephone: (301) 590-0129

Facsimile: (301) 590-1252

Attention: V.M. Esposito, Chairman and CEO

	 	With a copy to:

	 	Covington & Burling

1201 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

Telephone: (202) 662-6000

Facsimile: (202) 662-6291

Attention: D. Michael Lefever, Esq.

	 	If to the Transfer Agent:

	 	American Stock Transfer and Trust Company

40 Wall Street

New York, New York 10005

Telephone: (718) 921-8293

Facsimile: (718) 921-8334

Attention: Isaac Freilich

	 	If to Xmark Fund, Ltd. or Xmark Fund, L.P. to:

	 	Brown Simpson Asset Management, LLC

152 West 57th Street, 21st Floor

New York, New York 10029

Telephone: (212) 247-8200

Facsimile: (212) 247-1329

Attention: Peter Greene

	 	With a copy, in the case of Notice to Xmark Fund, Ltd. or Xmark Fund, L.P., to:

	 	Akin, Gump, Strauss, Hauer & Feld, L.L.P.

590 Madison Avenue

New York, New York 10022

Telephone: (212) 872-1000

17

	 	Facsimile: (212) 872-1002

Attention: James Kaye

	 	If to S.A.C. Capital Associates, LLC to:

	 	S.A.C. Capital Advisors, LLC

777 Long Ridge Road

Stamford, Connecticut 06902

Telephone: (203) 614-2000

Facsimile: (203) 614-2393

Attention: Peter Nussbaum

	 	If to SDS Merchant Fund, LP to:

	 	One Sound Drive, Second Floor

Greenwich, Connecticut 06830

Telephone: (203) 629-8400

Facsimile: (203) 629-0345

Attention: Steve Derby

	 	If to OTATO, L.P. to:

	 	OTA Limited Partnership

1 Manhattanville Road

Purchase, New York 10577

Telephone: (914) 694-5857

Facsimile: (914) 694-6342

Attention: Vinny DiGeso

      Each party shall provide written notice to the other party of any change
in address or facsimile number in accordance with the provisions hereof.

            (g)   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. The Company may not assign its
rights or obligations hereunder without the prior written consent of the
Majority Holders. Each Holder may assign its rights hereunder in the manner
and to the Persons as permitted under the Purchase Agreement. In addition, the
rights of each Holder hereunder, including the right to have the Company
register for resale Registrable Securities in accordance with the terms of this
Agreement, shall be automatically assignable by each Holder if: (i) the Holder
agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company within a reasonable time
after such assignment, (ii) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (A) the name and
address of such transferee or assignee, and (B) the securities with respect to
which such registration rights are being transferred or assigned, (iii)
following such transfer or assignment the further disposition of such
securities by the transferee or assignees is restricted under the Securities
Act and applicable state securities laws, (iv) at or before the time the
Company receives the written notice

18

contemplated by clause (ii) of this Section, the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions of this
Agreement, and (v) such transfer or assignment shall be made in accordance with
all applicable federal and state securities laws and with the applicable
requirements of the Purchase Agreement. The rights to assignment, and the
corresponding obligations, shall apply to the Holders (and to subsequent)
successors and assigns.

            (h)   Counterparts. 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 parties, it being understood that the
parties need not sign the same counterpart. In the event that any 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) the same with the same force and effect as if such facsimile
signature page were an original thereof.

            (i)   Governing Law. 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 hereby
irrevocably submits to the nonexclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or
that such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH
OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN.

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

            (k)   Severability. In case any one or more of the provisions of this
Agreement shall 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 which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.

            (l)   Titles/Headings. The titles and 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.

19

            (m)   Shares Held by The Company and its Affiliates. Whenever the consent
or approval of Holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company or its
Affiliates (other than any Holder or transferees or successors or assigns
thereof if such Holder is deemed to be an Affiliate solely by reason of its
holdings of such Registrable Securities) shall not be included in the
denominator in determining whether such consent or approval was given by the
Holders of such required percentage.

            (n)   Revision of SEC Position on Warrants. In the event the Company
determines in good faith that it may be practicable, legal and in the interests
of the Company and the Holders to register the exercise of the Warrants so that
the Warrant Shares may be freely resold without maintaining an effective
registration statement under the Securities Act for resales, the Company and
the Holders agree to cooperate in good faith to effect such amendments to this
Agreement as may be appropriate to provide that the Company may fulfill its
obligations hereunder with respect to the Warrants and the Warrant Shares by
maintaining an effective registration statement under the Securities Act
covering the exercise of the Warrants rather than the resale of the Warrant
Shares.

[Signature Page Follows]

20

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

Company:

ANTEX BIOLOGICS INC.

By: _______________________

         V. M. Esposito

         Chairman and Chief Executive Officer

Purchasers:

XMARK FUND, LTD.

By: Brown Simpson Asset Management, LLC, its Investment Manager

By: _______________________

         Name:

         Title:

XMARK FUND, L.P.

By: Brown Simpson Capital, LLC, its General Partner

By: _______________________

         Name:

         Title:

S.A.C. CAPITAL ASSOCIATES, LLC

By: _______________________

         Name:

         Title:

SDS MERCHANT FUND, LP

By: _______________________

         Name:

         Title:

21

OTATO, L.P.

By: _______________________

         Name:

         Title:

22

SCHEDULE I

Company

Antex Biologics Inc.

300 Professional Drive

Gaithersburg, Maryland 20879

Attn: V.M. Esposito, Chairman and CEO

Fax: (301) 590-1252

Holders:

Xmark Fund, L.P.

152 West 57th Street, 21st Floor

New York, New York 10019

Attn: Peter Greene

Fax: (212) 247-1329

Xmark Fund, Ltd.

152 West 57th Street, 21st Floor

New York, New York 10019

Attn: Peter Greene

Fax: (212) 247-1329

S.A.C. Capital Associates, LLC

c/o S.A.C. Capital Advisors, LLC

777 Long Ridge Road

Stamford, Connecticut 06902

Attention: Peter Nussbaum

Fax: (203) 614-2393

SDS Merchant Fund, LP

One Sound Drive, Second Floor

Greenwich, Connecticut 06830

Attention: Steve Derby

Fax: (203) 629-0345

OTATO, L.P.

c/o OTA Limited Partnership

1 Manhattanville Road

Purchase, New York 10577

Attention: Vinny DiGeso

Fax: (914) 694-6342

EXHIBIT A

PLAN OF DISTRIBUTION

            Our company is registering the shares of common stock on behalf of the
selling stockholders. All costs, expenses and fees in connection with the
registration of the shares offered by this prospectus will be borne by our
company, other than brokerage commissions and similar selling expenses, if any,
attributable to the sale of shares which will be borne by the selling
stockholders. Sales of shares may be effected by selling stockholders from
time to time in one or more types of transactions (which may include block
transactions) on the American Stock Exchange, in the over-the-counter market,
in negotiated transactions, through put or call options transactions relating
to the shares, through short sales of shares, or a combination of such methods
of sale, at market prices prevailing at the time of sale, or at negotiated
prices. Such transactions may or may not involve brokers or dealers. The
selling stockholders have advised our company that they have not entered into
any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities, nor is there an
underwriter or coordinated broker acting in connection with the proposed sale
of shares by the selling stockholders.

            The selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with such
transactions, broker-dealers or other financial institutions may engage in
short sales of the shares or of securities convertible into or exchangeable for
the shares in the course of hedging positions they assume with selling
stockholders. The selling stockholders may also enter into options or other
transactions with broker-dealers or other financial institutions which require
the delivery to such broker-dealers or other financial institutions of shares
offered by this prospectus, which shares such broker-dealer or other financial
institution may resell pursuant to this prospectus (as amended or supplemented
to reflect such transaction).

            The selling stockholders may make these transactions by selling shares
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from selling stockholders and/or the
purchasers of shares for whom such broker-dealers may act as agents or to whom
they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).

            The selling stockholders and any broker-dealers that act in connection
with the sale of shares may be “underwriters” within the meaning of Section
2(11) of the Securities Act, and any commissions received by such
broker-dealers or any profit on the resale of the shares sold by them while
acting as principals might be deemed to be underwriting discounts or
commissions under the Securities Act. The selling stockholders may agree to
indemnify any agent, dealer or broker-dealer that participates in transactions
involving sales of the shares against certain liabilities, including
liabilities arising under the Securities Act.

24

            Because selling stockholders may be “underwriters” within the meaning of
Section 2(11) of the Securities Act, the selling stockholders may be subject to
the prospectus delivery requirements of the Securities Act. Our company has
informed the selling stockholders that the anti-manipulative provisions of
Regulation M promulgated under the Exchange Act may apply to their sales in the
market.

            Selling stockholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of Rule 144.

            Upon our company being notified by a selling stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing:

	 	•	 	the name of each such selling stockholder and of
the participating broker-dealer(s);
	 
	 	•	 	the number of shares involved;
	 
	 	•	 	the initial price at which such shares were sold;
	 
	 	•	 	the commissions paid or discounts or concessions
allowed to such broker-dealer(s), where applicable;
	 
	 	•	 	that such broker-dealer(s) did not conduct any
investigation to verify the information set out or
incorporated by reference in this prospectus; and
	 
	 	•	 	other facts material to the transactions.

In addition, upon our company being notified by a selling stockholder that a
donee or pledgee intends to sell more than [500] shares, a supplement to this
prospectus will be filed.

25

EXHIBIT B

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

American Stock Transfer and Trust Company

40 Wall Street

New York, New York 10005

Attn.: Isaac Freilich

            Re:    Antex Biologics Inc.

Ladies and Gentlemen:

      We are counsel to Antex Biologics Inc., a Delaware corporation (the
“Company”), and have represented the Company in connection with that certain
Securities Purchase Agreement (the “Purchase Agreement”) entered into by and
among the Company and the buyers named therein (collectively, the “Holders”)
pursuant to which the Company issued to the Holders its Series B Convertible
Preferred Stock (the “Securities”) convertible into shares of the Company’s
common stock, par value $.01 per share (the “Common Stock”), and Class E
warrants (the “Class E Warrants”) and Class F warrants (the “Class F
Warrants”)(the Class E Warrants and the Class F Warrants, together the
“Warrants”) to acquire shares of Common Stock. Pursuant to the Purchase
Agreement, the Company also has entered into a Registration Rights Agreement
with the Holders (the “Registration Rights Agreement”) pursuant to which the
Company agreed, among other things, to register for resale the Registrable
Securities (as defined in the Registration Rights Agreement), consisting of the
shares of Common Stock to be issued upon the conversion of the Securities and
the exercise of the Warrants, under the Securities Act of 1933, as amended (the
“1933 Act”). In connection with the Company’s obligations under the
Registration Rights Agreement, on _______________, 2001, the Company filed a
Registration Statement on Form [S-3/S-1] (File No. 333-_____________) (the
“Registration Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to the Registrable Securities which names each of the Holders
as a selling stockholder thereunder.

      In connection with the foregoing, we advise you that a member of the SEC’s
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC’s staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC.

	 	Very truly yours,

[ISSUER’S COUNSEL]

cc: [LIST NAMES OF HOLDERS]

26

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