Document:

EXHIBIT
10.1

     

    
      SECURITIES
PURCHASE AGREEMENT

    

     

    This
Securities Purchase Agreement (this “Agreement”) is dated
as of January 13, 2010, between Rosetta Genomics Ltd., a company organized under
the laws of the State of Israel (the “Company”), and each
purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and
collectively the “Purchasers”).

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
an effective registration statement under the Securities Act of 1933, as amended
(the “Securities
Act”), the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase from the Company,
securities of the Company as more fully described in this
Agreement.

     

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

     

    ARTICLE
I.

    DEFINITIONS

     

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

     

    “Acquiring Person” shall have the
meaning ascribed to such term in Section 4.5.

     

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

     

    “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person as such terms are
used in and construed under Rule 405 under the Securities Act.

     

    “Board of Directors”
means the board of directors of the Company.

     

    “Business Day” means
any day except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which banking institutions in the
State of New York are authorized or required by law or other governmental action
to close.

     

    “Closing” means the
closing of the purchase and sale of the Securities pursuant to Section
2.1.

     

    “Closing Date” means
the Trading Day on which all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i)
the Purchasers’ obligations to pay the Subscription Amount and (ii) the
Company’s obligations to deliver the Securities, in each case, have been
satisfied or waived, but in no event later than the third Trading Day following
the date hereof.

    
      
         

      

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

     

    “Company Israeli
Counsel” means Yigal Arnon & Co., with offices located at 22 J.
Rivlin Street, Jerusalem 94240, Israel.

     

    “Company U.S. Counsel”
means Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., with offices located
at One Financial Center, Boston, MA 02111.

     

    “Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently
herewith.

     

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

    

    “Exempt Issuance”
means the issuance of (a) Ordinary Shares or options to employees, officers,
directors or consultants of the Company pursuant to any stock or option plan
duly adopted for such purpose, by a majority of the non-employee members of the
Board of Directors or a majority of the members of a committee of non-employee
directors established for such purpose, (b) securities upon the exercise or
exchange of or conversion of any Securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into Ordinary Shares
issued and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise price, exchange price
or conversion price of such securities, (c) securities issued pursuant to stock
splits, stock dividends or distributions, recapitalizations and similar events
affecting the Ordinary Shares, and (d) securities issued pursuant to mergers,
acquisitions or strategic transactions approved by a majority of the
disinterested directors of the Company, provided that any such issuance shall
not include a transaction in which the Company is issuing securities primarily
for the purpose of raising capital or to an entity whose primary business is
investing in securities.

     

     “FDA” shall have the
meaning ascribed to such term in Section 3.1(gg).

     

     “GAAP” shall have the
meaning ascribed to such term in Section 3.1(h).

     

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

     

    “Liens” means a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction, other than restrictions imposed by securities
laws.

     

    “Material Adverse
Effect” shall have the meaning assigned to such term in Section
3.1(b).

     

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

    
      
         

      

      
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    “Ordinary Shares”
means the ordinary shares of the Company, par value NIS 0.01 per share, and any
other class of securities into which such securities may hereafter be
reclassified or changed.

     

    “Ordinary Share
Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Ordinary Shares,
including, without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive,
Ordinary Shares.

     

    “Per Share Purchase
Price” equals $2.00, subject to adjustment
for reverse and forward stock splits, stock dividends, stock combinations and
other similar transactions of the Ordinary Shares that occur after the date of
this Agreement.

     

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

     

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

     

    “Prospectus” means the
base prospectus included in the Registration Statement.

     

    “Prospectus
Supplement” means the supplement to the Prospectus complying with Rule
424(b) of the Securities Act that is filed with the Commission and delivered by
the Company to each Purchaser at or prior to the Closing.

     

    “Purchaser Party”
shall have the meaning ascribed to such term in Section 4.8.

     

    “Registration
Statement” means the effective registration statement with Commission
file No. 333-163063 which registers the sale of the Shares, the Warrants and the
Warrant Shares by the Purchasers.

     

    “Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).

     

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

     

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

    
      
         

      

      
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    “Securities” means the
Shares, the Warrants and the Warrant Shares.

     

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

     

    “Shares” means the
Ordinary Shares issued or issuable to each Purchaser pursuant to this
Agreement.

     

    “Short Sales” means
all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
Act (but shall not be deemed to include the location and/or reservation of
borrowable Ordinary Shares). 

     

    “Subscription Amount”
means, as to each Purchaser, the aggregate amount to be paid for Shares and
Warrants purchased hereunder as specified below such Purchaser’s name on the
signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.

     

    “Subsidiary” means any
subsidiary of the Company as set forth on Schedule 3.1(a), and
shall, where applicable, also include any direct or indirect subsidiary of the
Company formed or acquired after the date hereof.

     

    “Trading Day” means a
day on which the principal Trading Market is open for trading.

     

    “Trading Market” means
any of the following markets or exchanges on which the Ordinary Shares are
listed or quoted for trading on the date in question: the NYSE AMEX, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange or the OTC Bulletin Board (or any successors to any of
the foregoing).

     

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

     

    “Transfer Agent” means
American Stock Transfer & Trust Company, the current transfer agent of the
Company, with a mailing address of 59 Maiden Lane New York, New York 10038 and a
facsimile number of 718-236-4588, and any successor transfer agent of the
Company.

     

    “Warrants” means,
collectively, the Ordinary Shares purchase warrants delivered to the Purchasers
at the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be
exercisable immediately upon issuance and have a term of exercise equal to five
years from the date of issuance, in the form of Exhibit A attached
hereto.

     

    “Warrant Shares” means
the Ordinary Shares issuable upon exercise of the Warrants.

    
      
         

      

      
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    “WS” means Weinstein
Smith LLP with offices located at 420 Lexington Avenue, Suite 2620, New York,
New York 10170-0002.

     

    ARTICLE
II.

    PURCHASE
AND SALE

     

    2.1          Closing.  On
the Closing Date, upon the terms and subject to the conditions set forth herein,
substantially concurrent with the execution and delivery of this Agreement by
the parties hereto, the Company agrees to sell, and the Purchasers, severally
and not jointly,  agree to purchase, up to an aggregate of $5,060,000
of Shares and Warrants (as determined in accordance with Section 2.2(a)
below).  Each Purchaser shall deliver to the Company, via wire
transfer or a certified check of immediately available funds equal to such
Purchaser’s Subscription Amount as set forth on the signature page hereto
executed by such Purchaser and the Company shall deliver to each Purchaser its
respective Shares and a Warrant as determined pursuant to Section 2.2(a), and
the Company and each Purchaser shall deliver the other items set forth in
Section 2.2 deliverable at the Closing.  Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at the offices of Company U.S. Counsel or such other location as the
parties shall mutually agree.

     

    2.2          Deliveries.

     

    (a)          On
or prior to the Closing Date, the Company shall deliver or cause to be delivered
to each Purchaser the following:

     

    (i)           
this Agreement duly executed by the Company;

     

    (ii)           a
legal opinion of Company U.S. Counsel, in form and substance reasonably
satisfactory to WS;

     

    (iii)          a
legal opinion of Company Israeli Counsel, in form and substance reasonably
satisfactory to WS;

     

    (iv)          a
copy of the irrevocable instructions to the Transfer Agent instructing the
Transfer Agent to deliver via the Depository Trust Company Deposit Withdrawal
Agent Commission System (“DWAC”) a number of
Shares equal to such Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, registered in the name of such Purchaser;

     

    (v)  
        a Warrant registered in the name
of such Purchaser to purchase up to a number of Ordinary Shares equal to 50% of
such Purchaser’s Shares issuable to Purchaser on the Closing Date, with an
exercise price equal to $2.50, subject to adjustment
therein (such Warrant certificate may be delivered within three Trading Days of
the Closing Date); and

     

    (vi)
         the Prospectus and
Prospectus Supplement (which may be delivered in accordance with Rule 172 under
the Securities Act).

    
      
         

      

      
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    (b)          On
or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company the following:

     

    (i)       
    this Agreement duly executed by such Purchaser;
and

     

    (ii)           such
Purchaser’s Subscription Amount by wire transfer to the account as specified in
writing by the Company.

     

    2.3          Closing
Conditions.

     

    (a)          The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:

     

    (i) 
          the accuracy in all
material respects when made and on the Closing Date of the representations and
warranties of the Purchasers contained herein (unless as of a specific date
therein);

     

    (ii)           all
obligations, covenants and agreements of each Purchaser required to be performed
at or prior to the Closing Date shall have been performed in all material
respects; and

     

    (iii)          the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this
Agreement.

     

    (b)          The
respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met:

     

    (i) 
          the accuracy in all
material respects when made and on the Closing Date of the representations and
warranties of the Company contained herein (unless as of a specific date
therein);

     

    (ii)           all
obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing Date shall have been performed in all material
respects;

     

    (iii)          the
delivery by the Company of the items set forth in Section 2.2(a) of this
Agreement;

     

    (iv)          there
shall have been no Material Adverse Effect with respect to the Company since the
date hereof; and

     

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

    
      
         

      

      
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    ARTICLE
III.

    REPRESENTATIONS
AND WARRANTIES

     

    3.1          Representations and
Warranties of the Company.  Except as disclosed in the SEC
Reports or the Registration Statement or as set forth in the Disclosure
Schedules, which Disclosure Schedules shall be deemed a part hereof and shall
qualify any representation or otherwise made herein to the extent of the
disclosure contained in the corresponding section of the Disclosure Schedules,
the Company hereby makes the following representations and warranties to each
Purchaser:

     

    (a)          Subsidiaries.  All
of the direct and indirect subsidiaries of the Company are set forth on Schedule
3.1(a).  The Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and clear of any
Liens, and all of the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase
securities.

     

    (b)          Organization and
Qualification.  The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good
standing (where such concept is recognized) under the laws of the jurisdiction
of its incorporation or organization, with the requisite power and authority to
own and use its properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation nor
default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter
documents.  Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, would not
have or reasonably be expected to result in: (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as
a whole, or (iii) a material adverse effect on the Company’s ability to perform
in any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no
Proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.

    
      
         

      

      
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    (c)          Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder.  The execution and delivery of 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 action on the part of the Company and no further action is required by
the Company, the Board of Directors or the Company’s stockholders in connection
therewith other than in connection with the Required Approvals.  Each
Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, assuming due authorization, execution and delivery by
the applicable Purchaser thereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in respect of such
Purchaser in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law or public policy.

     

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

    
      
         

      

      
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    (e)          Filings, Consents and
Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii)
the filing with the Commission of the Prospectus Supplement, (iii)
application(s) to each applicable Trading Market for the listing of the
Securities for trading thereon in the time and manner required thereby and (iv)
such filings as are required to be made under applicable state securities laws
or FINRA (collectively, the “Required Approvals”).

     

    (f)           Issuance of the Securities;
Registration.  The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company.  The Warrant Shares, when issued in
accordance with the terms of the Warrants, will be validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the
Company.  The Company has reserved from its duly authorized capital
stock the maximum number of Ordinary Shares issuable pursuant to this Agreement
and the Warrants. The Registration Statement was declared effective
on November 24, 2009 (the “Effective Date”), including the Prospectus, and
such amendments and supplements thereto as may have been required to the date of
this Agreement.  The Registration Statement is effective under the
Securities Act and no stop order preventing or suspending the effectiveness of
the Registration Statement or suspending or preventing the use of the Prospectus
has been issued by the Commission and no proceedings for that purpose have been,
to the knowledge of the Company, instituted or are threatened by the
Commission.  The Company, if required by the rules and regulations of
the Commission, proposes to file the Prospectus Supplement, with the Commission
pursuant to Rule 424(b).  At the time the Registration Statement and
any amendments thereto became effective, at the date of this Agreement and at
the Closing Date, the Registration Statement and any amendments thereto
conformed and will conform in all material respects to the requirements of the
Securities Act and did not and 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 not misleading; and the Prospectus
and any amendments or supplements thereto, at the time the Prospectus or any
amendment or supplement thereto was issued and at the Closing Date, conformed
and will conform in all material respects to the requirements of the Securities
Act and did not and will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading.

    
      
         

      

      
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    (g)          Capitalization.  The
authorized capitalization of the Company is as set forth in the SEC
Reports.  The Company has not issued any capital stock since its most
recently filed periodic report under the Exchange Act, other than pursuant to
the exercise of employee stock options under the Company’s stock option plans,
the issuance of Ordinary Shares to employees pursuant to the Company’s employee
stock purchase plans and pursuant to the conversion and/or exercise of Ordinary
Share Equivalents outstanding as of the date of the most recently filed periodic
report under the Exchange Act.  Except as set forth on Schedule 3.1(g), no
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the
Transaction Documents.  Except as set forth on Schedule 3.1(g),
pursuant to the Company’s stock plans and a result of the purchase and sale of
the Securities, there are no outstanding options, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any Ordinary Shares, or contracts, commitments, understandings or arrangements
by which the Company or any Subsidiary is or may become bound to issue
additional Ordinary Shares or Ordinary Share Equivalents.  The
issuance and sale of the Securities will not obligate the Company to issue
Ordinary Shares or other securities to any Person (other than the Purchasers)
and will not result in a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price under any of such securities. All
of the outstanding shares of capital stock of the Company are validly issued,
fully paid and nonassessable, have been issued in compliance with all applicable
federal and state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for
or purchase securities.  No further approval or authorization of any
stockholder, the Board of Directors or others is required for the issuance and
sale of the Securities.  There are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.

     

    (h)          SEC Reports; Financial
Statements.  The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company under
the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
two years preceding the date hereof (or such shorter period as the Company was
required by law or regulation to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) on a timely basis or
has received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension.  As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Exchange Act, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The Company has never been an issuer subject to the disqualification
provisions set forth in Rule 144(i) under the Securities Act. The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of
filing.  Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by
GAAP, and fairly present in all material respects the financial position of the
Company and its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments.

    
      
         

      

      
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    (i)           Material Changes;
Undisclosed Events, Liabilities or Developments.  Since the
date of the latest audited financial statements included within the SEC Reports,
except as disclosed in a subsequent SEC Report filed prior to the date hereof,
(i) there has been no event, occurrence or development that has had or that
could reasonably be expected to result in a Material Adverse Effect, (ii) the
Company has not incurred any material liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial statements pursuant to GAAP
or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock
plans.  The Company does not have pending before the Commission any
request for confidential treatment of information.  Except for the
issuance of the Securities contemplated by this Agreement, no event, liability,
or development has occurred or exists with respect to the Company or its
Subsidiaries or their respective business, properties, operations or financial
condition that would be required to be disclosed by the Company under applicable
securities laws at the time this representation is made or deemed made that has
not been disclosed in the Registration Statement and the
Prospectus.

     

    (j)           Litigation.  There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect.  Except as set forth in Schedule 3.1(j),
neither the Company nor any Subsidiary, nor, to the Company’s knowledge, any
director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty.  There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or, to the Company’s
knowledge, any current director or officer of the Company.  The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act.

     

    (k)          Labor
Relations.  No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company, which could reasonably be expected to result in a Material Adverse
Effect.  None of the Company’s or its Subsidiaries’ employees is a
member of a union that relates to such employee’s relationship with the Company
or such Subsidiary, and neither the Company nor any of its Subsidiaries is a
party to a collective bargaining agreement, and the Company and its Subsidiaries
believe that their relationships with their employees are good.  To
the knowledge of the Company, no executive officer is, or is now expected to be,
in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or
any other contract or agreement or any restrictive covenant in favor of any
third party, and the continued employment of each such executive officer does
not subject the Company or any of its Subsidiaries to any liability with respect
to any of the foregoing matters.  The Company and its Subsidiaries are
in compliance with all applicable U.S. federal, state, local and foreign laws
and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in
compliance would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

    
      
         

      

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

     

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

     

    (n)          Title to
Assets.  The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens created under license or collaboration agreements
relating to the Company’s products or Intellectual Property Rights and Liens as
do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and the Subsidiaries and Liens for the payment of federal, state or
other taxes, the payment of which is neither delinquent nor subject to
penalties.  Any real property and facilities held under lease by the
Company and the Subsidiaries are held by them under valid, subsisting and
enforceable leases with which the Company and the Subsidiaries are in
compliance, except where such non-compliance would not have or reasonably be
expected to result in a Material Adverse Effect.

    
      
         

      

      
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    (o)          Patents and
Trademarks.  The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights necessary or
material for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have could have a Material Adverse
Effect (collectively, the “Intellectual Property Rights”).  None of,
and neither the Company nor any Subsidiary has received a notice (written or
otherwise) that any of, the Intellectual Property Rights has expired, terminated
or been abandoned, or is expected to expire or terminate or be abandoned, within
two (2) years from the date of this Agreement.  Neither the Company
nor any Subsidiary has received, since the date of the latest audited financial
statements included within the SEC Reports, a written notice of a claim or
otherwise has any knowledge that the Intellectual Property Rights violate or
infringe upon the rights of any Person, except as would not have a Material
Adverse Effect.  To the knowledge of the Company, all such
Intellectual Property Rights are enforceable.  The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties, except where
failure to do so would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

     

    (p)          Insurance.  The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries are
engaged.  Neither the Company nor any Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have or
reasonably be expected to result in a Material Adverse Effect.

     

    (q)          Transactions With Affiliates
and Employees.  Except as set forth in the SEC Reports, none of
the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, that would be required
to be disclosed in the Registration Statement or the Prospectus and is not so
disclosed.

     

    (r)           Sarbanes-Oxley; Internal
Accounting Controls.  The Company is in material compliance
with any and all requirements of the Sarbanes-Oxley Act of 2002 that are
applicable to the Company and effective as of the date hereof, and any and all
rules and regulations promulgated by the Commission thereunder that are
applicable to the Company and effective as of the date hereof and as of the
Closing Date. The Company and 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 GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to provide reasonable assurance that
information required to be disclosed by the Company in the reports it files or
submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission’s rules and
forms.

    
      
         

      

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

     

    (t)           Investment Company.
The Company is not, and is not an Affiliate of, and immediately after receipt of
payment for the Securities, will not be or be an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.  The Company shall conduct its business in a manner so that
it will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.

     

    (u)          Registration
Rights.  No Person has the right to require registration of
Ordinary Shares or other securities of the Company or any of its Subsidiaries
because of the filing or effectiveness of the Registration Statement, except for
persons and entities who have expressly waived such right in
writing.

     

    (v)          Listing and Maintenance
Requirements.  The Ordinary Shares are registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to, or which to its knowledge is likely to have the effect of,
terminating the registration of the Ordinary Shares under the Exchange Act nor
has the Company received any notification that the Commission is contemplating
terminating such registration.  The Company has not, in the 12 months
preceding the date hereof, received notice from any Trading Market on which the
Ordinary Shares are or have been listed or quoted to the effect that the Company
is not in compliance with the listing or maintenance requirements of such
Trading Market. Except as set forth in Schedule 3.1(v),
Company is in compliance with all such listing and maintenance
requirements.

     

    (w)          Application of Takeover
Protections.  The Company and the Board of Directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Purchasers
solely  as a result of the Company’s issuance of the Securities and
the Purchasers’ ownership of the Securities.

    
      
         

      

      
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    (x)           Disclosure.  Except
with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms that neither it
nor any other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that it believes constitutes or
might constitute material, non-public information which is not otherwise
disclosed in the Prospectus Supplement.   The Company understands
and confirms that the Purchasers will rely on the foregoing representation in
effecting transactions in securities of the Company.  All of the
disclosure furnished by or on behalf of the Company to the Purchasers regarding
the Company, its business and the transactions contemplated hereby, including
the Disclosure Schedules to this Agreement, is true and correct and does not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Company
acknowledges and agrees that no Purchaser makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in Section 3.2 hereof.

     

    (y)          No Integrated
Offering. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
any applicable shareholder approval provisions of any Trading Market on which
any of the securities of the Company are listed or designated.

     

    (z)          Solvency.  The
Company has no knowledge of any facts or circumstances which lead it to believe
that it will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within 6 months from the Closing
Date.

     

    (aa)        Tax
Status.  Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and each Subsidiary has filed all necessary United States
federal and state income and all foreign income and franchise tax returns and
has paid or accrued all taxes shown as due thereon.  There are no
unpaid taxes in any material amount claimed to be overdue by the Company by the
taxing authority of any jurisdiction, and the officers of the Company or of any
Subsidiary know of no basis for any such claim.

     

    (bb)       Foreign Corrupt
Practices.  Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

    
      
         

      

      
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    (cc)        Accountants.  To
the knowledge of the Company, Kost, Forer, Gabbay & Kasierer, a member of
Ernst & Young Global, (i) is a registered public accounting firm as required
by the Exchange Act and (ii) shall express its opinion with respect to the
financial statements to be included in the Company’s Annual Report on Form 20-F
for the year ending December 31, 2009.

     

    (dd)        Acknowledgment Regarding
Purchasers’ Purchase of Securities.  The Company acknowledges
and agrees that each of the Purchasers is acting solely in the capacity of an
arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated thereby.  The Company further acknowledges
that no Purchaser is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or any
of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Purchasers’ purchase of the Securities.  The Company further
represents to each Purchaser that the Company’s decision to enter into this
Agreement and the other Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.

     

    (ee)        Acknowledgement Regarding
Purchaser’s Trading Activity.  Anything in this Agreement or
elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and
4.14 hereof), it is understood and acknowledged by the Company that: (i) none of
the Purchasers have been asked by the Company to agree, nor has any Purchaser
agreed, to desist from purchasing or selling, long and/or short, securities of
the Company, or “derivative” securities based on securities issued by the
Company or to hold the Securities for any specified term; (ii) past or future
open market or other transactions by any Purchaser, specifically including,
without limitation, Short Sales or “derivative” transactions, before or after
the Closing, may negatively impact the market price of the Company’s
publicly-traded securities; (iii) any Purchaser, and counter-parties in
“derivative” transactions to which any such Purchaser is a party, directly or
indirectly, presently may have a “short” position in the Ordinary Shares, and
(iv) each Purchaser shall not be deemed to have any affiliation with or control
over any arm’s length counter-party in any “derivative”
transaction.  The Company further understands and acknowledges that
(y) one or more Purchasers may engage in hedging activities at various times
during the period that the Securities are outstanding, including, without
limitation, during the periods that the value of the Warrant Shares deliverable
with respect to Securities are being determined, and (z) such hedging activities
(if any) could reduce the value of the existing stockholders' equity interests
in the Company at and after the time that the hedging activities are being
conducted.  The Company acknowledges that such aforementioned hedging
activities do not constitute a breach of any of the Transaction
Documents.

    
      
         

      

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

     

    (gg)       
FDA.  No
test conducted in the Company’s laboratory is currently being promoted or sold
in a manner that would require the Company to submit a premarket notice or
premarket approval application to the U.S. Food and Drug Administration
(“FDA”).  There is no pending, completed or, to the Company's
knowledge, threatened, action (including any lawsuit, arbitration, or legal or
administrative or regulatory proceeding, charge, complaint, or investigation)
against the Company or any of its Subsidiaries, and none of the Company or any
of its Subsidiaries has received any notice, warning letter or other
communication from the FDA or any other governmental entity, which alleges that
any Company test is being offered in violation of any laws, rules or
regulations.  The Company has not been informed by the FDA that the FDA
will prohibit the marketing, sale, license or use in the United States of any
product proposed to be developed, produced or marketed by the
Company.

     

    (hh)        Office of Foreign Assets
Control.  Neither the Company nor, to the Company's knowledge,
any director, officer, agent, employee or affiliate of the Company is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”).

     

    (ii)          U.S. Real Property Holding
Corporation.  The Company is not and has never been a U.S. real
property holding corporation within the meaning of Section 897 of the Internal
Revenue Code of 1986, as amended, and the Company shall so certify upon
Purchaser’s request.

     

    (jj)          Bank Holding Company
Act.  Neither the Company nor any of its Subsidiaries or
Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the
“BHCA”) and to regulation by the Board of Governors of the Federal Reserve
System (the “Federal Reserve”).  Neither the Company nor any of its
Subsidiaries or Affiliates owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities
or twenty-five percent or more of the total equity of a bank or any entity that
is subject to the BHCA and to regulation by the Federal
Reserve.  Neither the Company nor any of its Subsidiaries or
Affiliates exercises a controlling influence over the management or policies of
a bank or any entity that is subject to the BHCA and to regulation by the
Federal Reserve.

    
      
         

      

      
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    (kk)        Money
Laundering.  The operations of the Company are and have been
conducted at all times in compliance with applicable financial record-keeping
and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, applicable money laundering statutes and applicable
rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.

     

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

     

    (a)          Organization;
Authority.  Such Purchaser is either an individual or an entity
duly organized, validly existing and in good standing (where such concept is
recognized) under the laws of the jurisdiction of its organization with full
right, corporate or partnership power and authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement and performance by such Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate, partnership, limited liability company or similar action, as
applicable, on the part of such Purchaser.  Each Transaction Document
to which it is a party has been duly executed by such Purchaser, and when
delivered by such Purchaser in accordance with the terms hereof, assuming due
authorization, execution and delivery by the Company thereof, will constitute
the valid and legally binding obligation of such Purchaser, enforceable against
it in accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.

     

    (b)          No
Conflicts.  The execution, delivery and performance by such
Purchaser of the Transaction Documents and the consummation by it of the
transactions contemplated hereby and thereby to which it is a party do not and
will not (i) conflict with or violate any provision of such Purchaser’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result
in the creation of any Lien upon any of the properties or assets of such
Purchaser, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any
agreement, credit facility, debt or other instrument (evidencing a Purchaser
debt or otherwise) or other understanding to which such Purchaser is a party or
by which any property or asset of such Purchaser is bound or affected, or (iii)
conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which such Purchaser is subject (including federal and state
securities laws and regulations), or by which any property or asset of such
Purchaser is bound or affected except in the case of each of clauses (ii) and
(iii), such as would not reasonably be expected to have a material adverse
effect on such Purchaser’s ability to perform in any material respect its
obligations under any Transaction Documents.

    
      
         

      

      
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    (c)          Purchaser
Status.  At the time such Purchaser was offered the Securities,
it was, and as of the date hereof it is, and on each date on which it exercises
any Warrants, it will be an “accredited investor” as defined in Rule
501.  Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.

     

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

     

    (e)          Information.  Such
Purchaser and its advisors, if any, have been furnished with all materials
relating to the business, financial condition and results of operations of the
Company, and materials relating to the offer and sale of the Securities, that
have been requested by such Purchaser or its advisors, if any.  Such
Purchaser acknowledges and understands that its investment in the Securities
involves a significant degree of risk.

     

    (f)           Certain Transactions and
Confidentiality.  Other than consummating the transactions
contemplated hereunder, such Purchaser has not, nor has any Person acting on
behalf of or pursuant to any understanding with such Purchaser, directly or
indirectly executed any purchases or sales, including Short Sales, of the
securities of the Company during the period commencing as of the time that such
Purchaser first became aware of the transactions contemplated hereunder and
ending immediately prior to the execution hereof.  Notwithstanding the
foregoing, in the case of a Purchaser that is a multi-managed investment vehicle
whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such
Purchaser’s assets, the representation set forth above shall only apply with
respect to the portion of assets managed by the portfolio manager that made the
investment decision to purchase the Securities covered by this
Agreement.  Other than to other Persons party to this Agreement, such
Purchaser has maintained the confidentiality of all disclosures made to it in
connection with this transaction (including the existence and terms of this
transaction). Notwithstanding the foregoing, for avoidance of doubt,
nothing contained herein shall constitute a representation or warranty, or
preclude any actions, with respect to the identification of the availability of,
or securing of, available shares to borrow in order to effect Short Sales or
similar transactions in the future.

     

    The
Company acknowledges and agrees that the representations contained in Section
3.2 shall not modify, amend or affect such Purchaser’s right to rely on the
Company’s representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction
Document.

    
      
         

      

      
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    ARTICLE
IV.

    OTHER
AGREEMENTS OF THE PARTIES

     

    4.1          Warrant
Shares.  If all or any portion of a Warrant is exercised at a
time when there is an effective registration statement to cover the issuance or
resale of the Warrant Shares or if the Warrant is exercised via cashless
exercise, the Warrant Shares issued pursuant to any such exercise shall be
issued free of all legends.  If at any time following the date hereof
the Registration Statement (or any subsequent registration statement registering
the sale or resale of the Warrant Shares) is not effective or is not otherwise
available for the sale or resale of the Warrant Shares, the Company shall
immediately notify the holders of the Warrants in writing that such registration
statement is not then effective and thereafter shall promptly notify such
holders when the registration statement is effective again and available for the
sale or resale of the Warrant Shares (it being understood and agreed that the
foregoing shall not limit the ability of the Company to issue, or any Purchaser
to sell, any of the Warrant Shares in compliance with applicable federal and
state securities laws).  The Company shall use best efforts to keep a
registration statement (including the Registration Statement) registering the
issuance or resale of the Warrant Shares effective during the term of the
Warrants.

     

    4.2          Furnishing of
Information.  Until the earliest of the time that (i) no
Purchaser owns Securities or (ii) the Warrants have expired, the Company
covenants to use commercially reasonable efforts to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act.

     

    4.3          Integration.  The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities for
purposes of the rules and regulations of any Trading Market such that it would
require shareholder approval prior to the closing of such other transaction
unless shareholder approval is obtained before the closing of such subsequent
transaction.

     

    4.4          Securities Laws Disclosure;
Publicity.  The Company shall, by 9:30 a.m. (New York City
time) on the Trading Day immediately following the date hereof, issue a press
release disclosing the material terms of the transactions contemplated hereby.
The Company shall, within four Business Days following the date hereof, file a
Report on Form 6-K disclosing the material terms of the transactions
contemplated hereby, which Form 6-K shall include the Transaction Documents as
exhibits thereto.  From and after the issuance of such press release,
the Company shall have publicly disclosed all material, non-public information
delivered to any of the Purchasers by the Company or any of its subsidiaries, or
any of their respective officers, directors, employees or agents in connection
with the transactions contemplated by the Transaction Documents.  The
Company and each Purchaser shall consult with each other in issuing any other
press releases with respect to the transactions contemplated hereby, and neither
the Company nor any Purchaser shall issue any such press release nor otherwise
make any such public statement without the prior consent of the Company, with
respect to any press release of any Purchaser, or without the prior consent of
each Purchaser, with respect to any press release of the Company, which consent
shall not unreasonably be withheld or delayed, except if such disclosure is
required by law, in which case the disclosing party shall promptly provide the
other party with prior notice of such public statement or
communication.  Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (a) as
required by federal securities law in connection with the filing of final
Transaction Documents (including signature pages thereto) with the Commission
and (b) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under this clause (b).

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    4.5           Shareholder Rights
Plan.  No claim will be made or enforced by the Company or,
with the consent of the Company, any other Person, that any Purchaser is an
“Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan
or arrangement, solely by virtue of receiving Securities under the Transaction
Documents or under any other agreement between the Company and the
Purchasers.

     

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

     

    4.7           Use of
Proceeds.  The Company shall use the net proceeds from the sale
of the Securities hereunder substantially as set forth in the Registration
Statement and the Prospectus Supplement.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    4.8           Indemnification of
Purchasers.   Subject to the provisions of this Section
4.8, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur due to
a claim by a third party as a result of or relating to any action instituted
against a Purchaser in any capacity, or any of them or their respective
Affiliates, by any stockholder of the Company who is not an Affiliate of such
Purchaser, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of such
Purchaser’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser may have with any
such stockholder or any violations by such Purchaser of state or federal
securities laws or any conduct by such Purchaser which constitutes fraud, gross
negligence, willful misconduct or malfeasance).  If any action shall
be brought against any Purchaser Party in respect of which indemnity may be
sought pursuant to this Agreement, such Purchaser Party shall promptly notify
the Company in writing, and the Company shall have the right to assume the
defense thereof with counsel of its own choosing reasonably acceptable to the
Purchaser Party.  Any Purchaser Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Purchaser
Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel or (iii)
in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the
position of such Purchaser Party, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate counsel
for all Purchaser parties entitled to indemnification hereunder.  The
Company will not be liable to any Purchaser Party under this Agreement (y) for
any settlement by a Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or (z) to the
extent, but only to the extent that a loss, claim, damage or liability is
attributable to any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by such Purchaser Party in this
Agreement or in the other Transaction Documents. The Company will have the
exclusive right to settle any claim or proceeding, provided that the Company
will not settle any such claim, action or proceeding without the prior written
consent of the Purchaser Party, which will not be unreasonably withheld or
delayed; provided, however, that such consent shall not be required if the
settlement includes a full and unconditional release satisfactory to the
Purchaser Party from all liability arising or that may arise out of such claim
or proceeding and does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any Purchaser
Party.

     

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

     

    4.10         Listing of Ordinary
Shares. The Company hereby agrees to use commercially reasonable efforts
to list or quote all of the Shares and Warrant Shares on the Trading Market and
promptly secure the listing of all of the Shares and Warrant Shares on the
Trading Market. The Company further agrees, if the Company applies to have the
Ordinary Shares traded on any other Trading Market, it will then include in such
application all of the Shares and Warrant Shares, and will take such other
action as is reasonably necessary to cause all of the Shares and Warrant Shares
to be listed or quoted on such other Trading Market as promptly as
possible.  The Company will then take all action reasonably necessary
to continue the listing and trading of its Ordinary Shares on a Trading Market
and will comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Trading Market.

     

    4.11         [RESERVED]

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    4.12        
Subsequent Equity
Sales.

     

    (a)           From
the date hereof until 90 days after the Closing Date, neither the Company nor
any Subsidiary shall issue, enter into any agreement to issue or announce the
issuance or proposed issuance of any Ordinary Shares or Ordinary Share
Equivalents.

     

    (b)           Notwithstanding
the foregoing, this Section 4.12 shall not apply in respect of an Exempt
Issuance.

     

    4.13         Equal Treatment of
Purchasers.  No consideration (including any modification of
any Transaction Document) shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration is also offered to all of the parties to
the Transaction Documents.  For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and
negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

     

    4.14         Certain Transactions and
Confidentiality. Each Purchaser, severally and not jointly with the other
Purchasers, covenants that neither it nor any Affiliate acting on its behalf or
pursuant to any understanding with it will execute any purchases or sales,
including Short Sales of any of the Company’s securities during the period
commencing with the execution of this Agreement and ending at such time that the
transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.4.  Each
Purchaser, severally and not jointly with the other Purchasers, covenants that
until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company pursuant to the initial press release as described in
Section 4.4, such Purchaser will maintain the confidentiality of the existence
and terms of this transaction and the information included in the Disclosure
Schedules.  Notwithstanding the foregoing and notwithstanding anything
contained in this Agreement to the contrary, the Company expressly acknowledges
and agrees that (i) no Purchaser makes any representation, warranty or covenant
hereby that it will not engage in effecting transactions in any securities of
the Company after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the initial press release as described
in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from
effecting any transactions in any securities of the Company in accordance with
applicable securities laws from and after the time that the transactions
contemplated by this Agreement are first publicly announced pursuant to the
initial press release as described in Section 4.4 and (iii) no Purchaser shall
have any duty of confidentiality to the Company or its Subsidiaries after the
issuance of the initial press release as described in Section 4.4. 
Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s assets, the covenant set forth above
shall only apply with respect to the portion of assets managed by the portfolio
manager that made the investment decision to purchase the Securities covered by
this Agreement.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    ARTICLE
V.

    MISCELLANEOUS

     

    5.1           Termination. 
This Agreement may be terminated by any Purchaser, as to such Purchaser’s
obligations hereunder only and without any effect whatsoever on the obligations
between the Company and the other Purchasers, by written notice to the other
parties, if the Closing has not been consummated on or before January 21, 2010;
provided, however, that no such
termination will affect the right of any party to sue for any breach by the
other party (or parties).

     

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

     

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

     

    5.4           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto on a day that is not a Trading Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
(2nd)
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such
notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached
hereto.

     

    5.5           Amendments;
Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers holding at least 67% in
interest of the Shares then outstanding (which amendment shall be binding on all
Purchasers) or, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought.  No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right.

     

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

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    5.7           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 Purchaser (other
than by merger, consolidation or sale or all or substantially all of the
Company’s assets).  Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers
any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction
Documents that apply to the “Purchasers.”

     

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

     

    5.9           Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive 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 (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is
improper or is an inconvenient venue for such proceeding.  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
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner
permitted by law.  If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then, in
addition to the obligations of the Company under Section 4.8, the prevailing
party in such action or proceeding shall be reimbursed by the other party for
its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or
proceeding.

     

    5.10           Survival.  The
representations and warranties contained herein shall survive the Closing and
the delivery of the Securities.

     

    5.11           Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

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

     

    5.13           Rescission and Withdrawal
Right.  Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) any of the other Transaction
Documents, whenever any Purchaser exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights; provided, however, that in the
case of a rescission of an exercise of a Warrant, the applicable Purchaser shall
be required to return any Ordinary Shares subject to any such rescinded exercise
notice concurrently with the return to such Purchaser of the aggregate exercise
price paid to the Company for such shares and the restoration of such
Purchaser’s right to acquire such shares pursuant to such Purchaser’s Warrant
(including, issuance of a replacement warrant certificate evidencing such
restored right).

     

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

     

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

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

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

     

    5.17           Independent Nature of
Purchasers’ Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document.  Nothing contained herein or
in any other Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser shall be entitled to
independently protect and enforce its rights including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.  Each Purchaser
has been represented by its own separate legal counsel in their review and
negotiation of the Transaction Documents.  For reasons of
administrative convenience only, each Purchaser and its respective counsel have
chosen to communicate with the Company through WS.  WS does not
represent any of the Purchasers and only represents Rodman & Renshaw, LLC,
the placement agent.  The Company has elected to provide all
Purchasers with the same terms and Transaction Documents for the convenience of
the Company and not because it was required or requested to do so by any of the
Purchasers.

     

    5.18           Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day.

     

    5.19           Construction. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto. In addition, each and
every reference to share prices and Ordinary Shares in any Transaction Document
shall be subject to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the Ordinary
Shares that occur after the date of this Agreement.

     

    5.20           WAIVER OF
JURY TRIAL.  IN ANY
ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY
OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST
EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

     

    (Signature
Pages Follow)

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

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

     

    
      
        
          	
                  ROSETTA GENOMICS LTD.
      

                	 
      	
                  Address for Notice:

                
	 
      	 
      	 
      
	
                  By:

                	
                  /s/ Kenneth A. Berlin

                	 
      	
                  Rosetta
      Genomics Ltd.

                
	 
      	
                  Name:  Kenneth
      A. Berlin

                	 
      	
                  10
      Plaut St.

                
	 
      	
                  Title:  President
      and CEO

                	 
      	
                  Rehovot,
      Israel, 76706

                
	 
      	 
      	 
      	
                  Attn:
      Tami Fishman Jutkowitz

                
	 
      	 
      	 
      	
                           General
      Counsel

                
	 
      	 
      	 
      	
                  Fax:
      +972-73-222-0701

                
	 
      	 
      	 
      	 
      
	
                  With
      a copy to (which shall not constitute notice):

                	 
      	 
      
	 
      	 
      	
                    

                	
                  Mintz,
      Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.

                
	 
      	 
      	 
      	
                  One
      Financial Center

                
	 
      	 
      	 
      	
                  Boston,
      MA 02111

                
	 
      	 
      	 
      	
                  Attn:
      Brian P. Keane

                
	 
      	 
      	 
      	
                  Fax:
      617-542-2241

                
	 
      	 
      	 
      	 
      
	
                  and
      to:

                	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      	
                  Yigal
      Arnon & Co.

                
	 
      	 
      	 
      	
                  22
      J. Rivlin Street

                
	 
      	 
      	 
      	
                  Jerusalem
      94240, Israel

                
	 
      	 
      	 
      	
                  Attn:
      Barry Levenfeld

                
	 
      	 
      	 
      	
                  Fax:
      +972-2-623-9236

                

        

      

    

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    [PURCHASER
SIGNATURE PAGES TO ROSG SECURITIES PURCHASE AGREEMENT]

    

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

     

    Name of
Purchaser: ________________________________________________________

     

    Signature of Authorized Signatory of
Purchaser: _________________________________

     

    Name of
Authorized Signatory:
_______________________________________________

     

    Title of
Authorized Signatory:
________________________________________________

     

    Email
Address of Authorized
Signatory:_________________________________________

     

    Facsimile
Number of Authorized Signatory:
__________________________________________

     

    Address
for Notice of Purchaser:

    

    Address
for Delivery of Securities for Purchaser (if not same as address for
notice):

    

    Subscription
Amount: $_________________

    

    Shares:
_________________

    

    Warrant
Shares: __________________

     

    [SIGNATURE
PAGES CONTINUE]

     

    
      
         

      

      
        29EXHIBIT
10.1

    

    AGREEMENT

     

    THIS AGREEMENT is dated as of
January 12, 2010 (this “Agreement”),

     

    AMONG:

     

    PALO ALTO INVESTORS, LLC, a
limited liability company organized under the laws of the State of California,
and certain of its affiliates listed on the signature pages hereto
(collectively, “Palo
Alto”),

     

    AND:

     

    GASTAR EXPLORATION LTD., a
corporation amalgamated under the laws of Alberta, Canada (the “Company”).

     

    RECITALS

     

    WHEREAS:

     

    A.           The
Company is an oil and gas exploration and production company, the common shares
of which are traded on the NYSE Amex;

     

    B.           Palo
Alto is an investment advisory firm based in Palo Alto, California which owns or
exercises control or direction over 4,674,744 common shares of the Company,
representing approximately 9.3% of the Company’s outstanding
shares;

     

    C.           The
Company and Palo Alto have discussed potential additions to the Board of
Directors and other corporate governance issues, including the separation of the
Chairman of the Board of Directors position from the Chief Executive Officer
position; and

     

    D.           The
Company and Palo Alto have determined that it is in their respective best
interests to enter into this Agreement.

     

    NOW THEREFORE, in
consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:

     

    1.           Definitions.

     

    Capitalized
terms shall have the following meanings for purposes of this Agreement (and
shall apply equally to both the singular as well as the plural
forms):

     

    “2010 Annual Meeting” means the
annual general meeting of the Company’s shareholders to be held in 2010, or any
adjournment thereof;

     

    “Affiliate” of any specified
Person means any other Person which, directly or indirectly, is in control of,
is controlled by, or is under common control with, such specified
Person.  For purposes of this definition, control of a Person means
the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise; and the
terms “controlling” and “controlled” have meanings correlative to the
foregoing;

     

    “Board of Directors” means the
board of directors of the Company;

     

    “Business Day” means any day
other than a Saturday, a Sunday or a day on which commercial banks in New York,
New York or Houston, Texas are required or authorized to be closed;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Fall-Away Date” shall mean the
earlier to occur of:  (i) December 31, 2010; (ii) the date 90 days
following the date on which Palo Alto and its Affiliates own Voting Securities
that represent, in the aggregate, 5% or less of the Company’s then-outstanding
common stock, provided that such ownership has remained at or below 5% for the
entire 90-day period; (iii) such
date as the Board of Directors publicly announces its intention to solicit a
Sale Proposal, or publicly approves or recommends to the Company's stockholders
their approval of, or their conveyance of any Voting Securities pursuant to, any
Sale Proposal; (iv) such date that the Company has entered into a letter of
intent, agreement in principle, definitive agreement, or any similar agreement
with any party (other than a customary confidentiality agreement), with respect
to a Sale Proposal; or (v) such date that any Person or group shall have
acquired or announced its intention to acquire, including by commencement of a
tender offer or exchange offer, beneficial ownership of more than 50% of the
Voting Securities;

     

    “New Director” means Randy
Coley;

     

    “Person” shall mean any
individual, partnership (limited or general), joint venture, limited liability
company, corporation, association, business entity, trust, business trust,
unincorporated organization, government or department or agency of a
government;

     

    “Sale Proposal” means (i) any
merger, consolidation, amalgamation, arrangement, share exchange, business
combination, liquidation, dissolution, recapitalization, reorganization or other
similar transaction involving the Company, other than any such transaction where
the Company is the surviving Person or immediately after such transaction the
former shareholders of the Company own a majority of the equity interest of the
surviving Person, (ii) the sale or issuance of more than 50% of the capital
stock of the Company or its subsidiaries or (iii) the sale of more than 50% of
the assets or businesses of the Company and its subsidiaries; and

     

    “Voting Securities” shall mean
at any time shares of any class of capital stock of the Company that are then
entitled to vote generally in the election of directors.

     

    2.           Representations
and Warranties.

     

    (a)           Palo
Alto represents and warrants to the Company that (a) Palo Alto is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of California and has the power and authority to enter
into this Agreement and to carry out its obligations hereunder, (b) the
execution and delivery of this Agreement by Palo Alto and the consummation
thereby of the transactions contemplated hereby have been duly authorized by all
necessary action on its part and no other proceedings on its part are necessary
to authorize this Agreement or any of the transactions contemplated hereby and
(c) this Agreement has been duly executed and delivered by Palo Alto and
constitutes a valid and binding obligation of it, and is enforceable against it
in accordance with its terms.

     

    (b)           The
Company represents and warrants to Palo Alto that (a) the Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of Alberta, Canada, and has the corporate power and authority to enter into
this Agreement and to carry out its obligations hereunder, (b) the execution and
delivery of this Agreement by the Company has been duly authorized by all
necessary corporate action on the part of the Company (including approval by its
Board of Directors) and (c) this Agreement has been duly executed and delivered
by the Company and constitutes a valid and binding obligation of the Company,
and is enforceable against the Company in accordance with its
terms.

     

    3.           Company
Actions.

     

    (a)           Election of New
Director.  The Company agrees that the Board of Directors will
as soon as reasonably practicable, and in no event later than January 15, 2010,
take all actions necessary to appoint the New Director to: (i) the Board of
Directors and (ii) the Nominating Committee of the Board of
Directors.

     

    (b)           Election of Additional New
Director.  The Company agrees that the Board of Directors will
(i) authorize an increase in the size of the Board of Directors to six directors
for election at the 2010 Annual Meeting and (ii) take all actions necessary to
cause one new independent director (who shall be selected and nominated by the
Nominating Committee of the Board of Directors) to be recommended to the
shareholders of the Company for election to the Board of Directors at the 2010
Annual Meeting.

     

    
      
         

      

      
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    (c)           Separation of the Chairman
and CEO Positions. The Company agrees that the Board of Directors and
management will as soon as reasonably practicable, and in no event later than
January 15, 2010, cause the positions of the Chief Executive Officer and
Chairman of the Board of Directors to be held by different individuals and will
amend the Company’s by-laws to prohibit any one Person from holding both
positions concurrently.

     

    (d)           2010 Annual
Meeting.  The Company shall hold the 2010 Annual Meeting no
later than June 15, 2010.

     

    4.           Standstill.

     

    Until the
Fall-Away Date:

     

    (a)           neither
Palo Alto nor any of its Affiliates shall initiate or propose any stockholder
proposal or action or make any “solicitation” of “proxies” (as such terms are
defined in Regulation 14A under the Exchange Act, as in effect on the date
hereof) with respect to the voting of or consenting with respect to, any Voting
Securities, or become a “participant” in a “solicitation” (as such terms are
defined in Regulation 14A under the Exchange Act, as in effect on the date
hereof) in any election contest with respect to the election or removal of any
director of the Company or in opposition to the publicly disclosed
recommendation of the majority of the directors of the Company with respect to
the election of directors of the Company or make any public statement (or take
any action which would reasonably be expected to require or result in disclosure
publicly of their position) regarding any of the foregoing;

     

    (b)           neither
Palo Alto nor any of its Affiliates shall initiate (solicit or knowingly
encourage other Persons to initiate), any tender offer or exchange offer for
Voting Securities, or any merger, consolidation, amalgamation, arrangement, sale
of substantially all the assets or recapitalization, restructuring, liquidation
or dissolution involving the Company or any of its subsidiaries;

     

    (c)           neither
Palo Alto nor any of its Affiliates shall publicly disclose any intention, plan
or arrangement inconsistent with any of the foregoing; or

     

    (d)           neither
Palo Alto nor any of its Affiliates shall request the Company (or any of its
directors or executive officers), directly or indirectly, to amend or waive any
of the provisions of this Agreement (except in a manner that does not require or
result in disclosure publicly or to third parties).

     

    5.           Enforcement.  The
parties acknowledge and agree that irreparable harm would result if any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, the parties will be
entitled to seek an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically its provisions in any court having
jurisdiction, this being in addition to any other remedy to which they may be
entitled at law or in equity.

     

    6.           Entire Agreement;
Waivers.  This Agreement constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written, of the parties with respect to such
subject matter. The parties expressly disclaim reliance on any information,
statements, representations, or warranties regarding the subject matter of this
Agreement other than the terms of this Agreement. No waiver of any provision of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), shall constitute a continuing waiver
unless otherwise expressly provided, or shall be effective unless in writing and
executed by the party against which enforcement of such waiver is
sought.

     

    
      
         

      

      
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    7.           Amendment or Modification;
Severability.  The parties hereto may not amend or modify this
Agreement without the written consent of the other party. If any provision of
this Agreement is held by a court of competent jurisdiction to be unenforceable,
the remaining provisions shall remain in full force and effect. It is declared
to be the intention of the parties that they would have executed the remaining
provisions without including any that may be declared
unenforceable.

     

    8.           Successors and
Assigns.  All the terms and provisions of this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors, and each successor shall be deemed to be a party hereto
for all purposes hereof.

     

    9.           Headings; Interpretation;
Counterparts.  Descriptive headings are for convenience only
and will not control or affect the meaning or construction of any provision of
this Agreement. The words “include,” “includes,” and “including” shall be deemed
to be followed by the phrase “without limitation.”  For the
convenience of the parties, any number of counterparts of this Agreement may be
executed by the parties, and each such executed counterpart will be an original
instrument.

     

    10.           Notices.  Any
notices or other communications required or permitted hereunder shall be
sufficiently given if in writing (including by email), addressed as
follows:

     

    If to the
Company, to:  Gastar Exploration Ltd., 1331 Lamar Street
Suite 1080, Houston, Texas 77010, Attention: Chief Executive Officer,
Facsimile No.: (713) 739-0458; with a copy to:  Vinson & Elkins
LLP, First City Tower, 1001 Fannin Street, Suite 2500, Houston, Texas
77002-6760, Attention: T. Mark Kelly, Facsimile No.: (713) 758-2346

     

    If to
Palo Alto, to:  Palo Alto Investors, LLC, 470 University Ave., Palo
Alto, CA 94301, Attention: David Anderson, Facsimile No.: (650) 325-5028; with a
copy to:  Blake, Cassels & Graydon LLP, 199 Bay Street, Suite
2800, Commerce Court West, Toronto, Ontario M5L 1A9, Attention: David J.
Toswell, Facsimile No.: (416) 863-2653; and O’Melveny & Myers LLP, Times
Square Tower, 7 Times Square, New York, New York 10036, Attention: Paul
Scrivano, Facsimile No.: (212) 326-2061

     

    Any
notice or other communication so given shall be deemed to have been given and
received on the day of delivery if delivered, or on the day of faxing or sending
by other means of recorded electronic communication. Any notice or other
communication sent by registered mail shall be deemed to have been given and
received on the fifth business day following the mailing thereof.

     

    11.           Governing Law.  This
Agreement shall be construed in accordance with the laws of the Province of
Alberta and the federal laws of Canada applicable in the Province of Alberta and
shall be treated in all respects as an Alberta contract. Each of the parties
irrevocably attorns to the jurisdiction of the courts of the Province of
Alberta.

     

    12.           Further
Assurances.  Each party hereto shall promptly do, execute,
deliver or cause to be done, execute and delivered all further acts, documents
and things in connection with this Agreement necessary or desirable in order to
give full effect to this Agreement and every part hereof.  The Company
and Palo Alto shall act in good faith and shall not take any steps or actions
that would seek to frustrate this Agreement or the intent hereof.

     

    13.           Disclosure Required by
Law.  Nothing in this Agreement shall prohibit Palo Alto or the
Company from making any disclosure required under federal securities laws or
other applicable laws, including the filing of any documents that such party
reasonably determines are required by the Securities and Exchange Commission
(the “SEC”); provided, that the
content of any document so filed does not violate any of the other terms and
conditions of this Agreement unless such content constitutes disclosure required
by any securities laws or rules or regulations promulgated from time to time by
the SEC.

     

    [Signature
pages follow]

    
      
         

      

      
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    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as
of the date first referred to above.

     

    
      	 
      	
              PALO
      ALTO INVESTORS, INC.

            
	 
      	 
      
	 
      	
              By:

            	
              /s/  MARK
  SHAMIA

            
	 
      	 
      	
              Name:

            	
              Mark
      Shamia

            
	 
      	 
      	
              Title:

            	
              Chief
      Operating Officer

            
	 
      	 
      	 
      
	 
      	
              PALO
      ALTO INVESTORS, LLC

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/  MARK
  SHAMIA

            
	 
      	 
      	
              Name:

            	
              Mark
      Shamia

            
	 
      	 
      	
              Title:

            	
              Chief
      Operating Officer

            
	 
      	 
      	 
      
	 
      	
              PALO
      ALTO SMALL CAP MASTER FUND, L.P.

            
	 
      	 
      	 
      
	 
      	
              By:
      Palo Alto Investors, LLC, its general partner

            
	 
      	 
      	 
      
	 
      	
              By:
      Palo Alto Investors, its manager

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/  MARK
  SHAMIA

            
	 
      	 
      	
              Name:

            	
              Mark
      Shamia

            
	 
      	 
      	
              Title:

            	
              Chief
      Operating Officer

            
	 
      	 
      	 
      
	 
      	
              PALO
      ALTO SMALL CAP FUND, L.P.

            
	 
      	 
      	 
      
	 
      	
              By:
      Palo Alto Investors, LLC, its general partner

            
	 
      	 
      	 
      
	 
      	
              By:
      Palo Alto Investors, its manager

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/  MARK
  SHAMIA

            
	 
      	 
      	
              Name:

            	
              Mark
      Shamia

            
	 
      	 
      	
              Title:

            	
              Chief
      Operating Officer

            

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    
      	 
      	
              GASTAR
      EXPLORATION LTD.

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/  J. RUSSELL
      PORTER

            
	 
      	 
      	
              Name:

            	
              J.
      Russell Porter

            
	 
      	 
      	
              Title:

            	
              President
      & CEO

            

    

     

    
      
         

      

      
        6

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